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THE 


Annotated  Corporation  Laws 


OF 


ALL   THE   STATES 


GENERALLY  APPLICABLE  TO  STOCK  CORPORATIONS 

INCLUDING 

Statutes  and  Constitutional  Provisions  relating  to  Receivers,  Practice, 

Taxation,  Trusts  and  Combinations,  Labor,  and  Crimes 

by  Corporations  and  their  Officers. 


IN    THREE    VOLUMES. 


COMPILED   AKD   EDITED    BY 

ROBERT  C.  CUMMIXG,  FRAXK  B.  GILBERT  AND  HENRY  L.  WOODWARD 

OF  THE  Albany,  N.  Y.,  Bar. 


Vol.   I. 


ALBAXY : 

J.  B.  LYOX  COMPAXY,  PUBLISHERS. 

1899. 


Copyright  by 

J.  B.  LYON  COMPANY, 

1899. 


r 


INTRODUCTORY   NOTE 


In  addition  to  the  general  statutes  providing  for  the  creation,  management 
and  liabilities  of  stock  corporations,  the  provisions  of  the  constitutions  and 
statutes  of  the  several  States  relating  to  the  following  subjects  are  included: 

1.  The  appointment  and  powers  and  duties  of  receivers  on  dissolution  or  in 
insolvency. 

2.  Actions  against  corporations  and  their  officers  in  the  nature  of  quo 
warranto. 

3.  The  duties  of  employers  in  respect  to  their  employes,  including  liabilities 
of  stockholders  for  wages,  factory  regulations  and  other  kindred  subjects. 

4.  Taxation  of  the  property,  earnings  and  franchises  of  corporations. 

5.  Practice  in  actions  by  or  against  corporations,  including  the  commence- 
ment of  actions,  pleadings,  attachments,  executions,  enforcement  of  stock- 
holders' and  directors'  liabilities,  etc. 

6.  Restrictions  and  limitations  upon  the  creation  and  operation  of  trusts  or 
combines  for  the  regulation  of  trade,  fixing  of  prices  of  commodities  and  pre- 
vention of  competition. 

7.  Punishments  for  frauds  and  malfeasance  of  corporations  and  their  officers 
and  agents. 

The  character  of  this  work  will  declare  itself  by  a  cursory  examination.  In 
this  prefatory  note  it  is  only  necessary  to  call  attention  to  some  of  its  distinguish- 
ing features. 

It  has  not  been  attempted  to  include  the  statutes  of  the  several  States  which 
are  exclusively  applicable  to  special  classes  of  corporations.  The  scope  of  the 
work  is  confined  to  those  statutes  which  are  generally  applicable  to  all  stock 
corporations.  This  includes,  however,  all  general  statutes  providing  for  the 
creation  and  management  of  corporations  for  ordinary  business  purposes. 

The  statutes  are  not  digested.  They  are  included  verbatim.  The  arrange- 
ment of  the  statutes,  for  convenience  of  reference,  is  made  to  conform  to  the 
official  editions  of  the  statutes  of  the  several  States.  At  the  end  of  each  State 
are  appended  the  several  acts,  in  chronological  order,  which  have  been  passed 
since  the  enactment  of  the  official  edition.  Such  parts  of  the  several  State  Con- 
stitutions as  relate  to  the  rights,  powers,  duties  and  limitations  of  stock  corpora- 
tions and  their  officers  and  stockholders  are  inserted  in  full.  One  of  the 
important  objects  of  this  work  is  to  enable  corporations  seeking  to  do  busmess 

7292(51 


iv  INTEODUCTORY  XOTE. 

outside  of  the  State  of  their  domicile  to  know  what  their  duties,  powers  and 
liabilities  are  in  other  States.  To  accomplish  this,  especial  attention  has  been 
given  to  the  statutes  relative  to  foreign  corporations. 

All  of  these  statutes  are  as  amended  and  in  force  on  January  1,  1899. 

Xotes  are  inserted  at  the  end  of  each  section  of  the  statutes,  containing  cross 
references  to  other  provisions  of  the  statutes  of  the  State  which  refer  or  relate 
to  a  similar  subject.  All  of  the  leading  cases  decided  by  the  Appellate  Courts 
of  the  several  States  which  construe  or  are  applicable  to  any  part  of  the  statutes 
included,  are  digested  and  inserted  in  connection  with  the  provisions  of  the 
statute  to  which  they  relate. 

The  statutes  of  each  State  are  separately  treated,  with  a  complete  and  care- 
fully prepared  index  added  at  the  end  of  each  State.  This  arrangement  seems 
best  for  convenience  of  use. 

The  compiling  of  these  statutes  has  been  a  task  of  no  small  dimensions. 
Every  possible  precaution  has  been  taken  to  secure  accuracy,  with  the  realization 
that  the  value  of  the  work  depends  upon  its  reliability  and  convenience  of  use. 
The  search  for  statutes  bearing  upon  corporations  and  decisions  construing  such 
statutes  has  necessitated  the  perusal  and  careful  examination  of  hundreds  of 
volumes.  The  editors  have  had  at  their  disposal  the  most  excellent  facilities 
of  the  Xew  York  State  Library,  and  have  been  assisted  from  time  to  time  by  the 
courtesy  of  the  secretaries  of  state  and  attorneys-general  of  the  several  States. 
While  it  would  be  fool-hardy  to  claim  for  a  work  of  this  character  absolute  per- 
fection and  accuracy,  the  editors  are  confident  that  its  accuracy  and  complete- 
ness can  bo  relied  on,  and  are  hopeful  that  corporations,  attorneys  and  others 
interested  in  extended  corporate  transactions  will  find  it  of  practical  use  and 
value. 


ALABAMA. 


TABLE  OF  CONTENTS. 


CONSTITUTIONAL  PROVISIONS.  Page 

Art.          I.  Declaration  of  ri>;lits    3 

IV.  Legislative   department    4 

XI.  Taxation    4 

XIV.  rrlvate  corporations    4 

CODE   PROVISIONS. 

The  Civil  Code. 

Ch.       1.  General  provisions  applicable  to  tlie  whole  Ciiile 11 

2.  Atlacliments 11 

Art.   1.  Issue  of  attachnieiits 11 

28.  Corporations   11 

Art.     5.   Mining,    quarrying    and    manufacturing  companies 11 

11.  Corporations  not  specially  prov  ided  for 14 

12.  General  provisions 21 

13.  Charter  fees  required  of  domes  tie  corporations 26 

14.  Dissolution  of  business  corpora  tioiis 27 

16.   Conditions  upon  which  foreign  corporations  may  do  Inisinoss  in  tliis  State...  28 

29.  Costs  and  fees 29 

Art.     2.  Security  for  costs 20 

46.  Evidence    30 

Art.     1.  General  rules -50 

54.  Garnishments 30 

Art.     1.  Garnishment  defined;  wl>on  and  luiw  Issued  and  dissolved 30 

2.  Answer  of  garnishee  and  proce  'dings  thereon 31 

91.  Pleading  and  practice 31 

Art.     1.  The  summons 31 

ll-l.   (^uo   \v:irranto,   actions  in   tlie   nature  of 32 

110.  Taxation 34 

Art.     1.  Definition  of  terms 34 

2.  Exemptions  from  taxation 34 

3.  Subjects,    rates,   maturity   and    lien  of  taxes 34 

5.  Assessments;  when  and  and  how  made 36 

14.  Venue 36 

Art.     1.  Venue  of  actJons   36 

Rules  of  Practice  in  Chancery  Courts. 

The  Criminal   Code. 

Ch.  153.   Forgery  and  counterfeiting 37 

154.   Frauds 37 

Art.     6.  Depreciating  stock  or  bonds  of  corporation   with   Intent   to  l)uy :!7 

180.  Proceedings  after  Indictment;   trial  and    Its  Incidents 37 

Art.  17.  Process  on  Indictment  against  corporation;  frial  and  judgment   37 


ALABAMA. 


COXSTlTUTiOX  OF  ALABAMA-  1875. 


PROVISIONS  RELATING  TO  CORPORATIONS. 


ARTICLE  I. 

Declaration  of  Rights. 

Sec.  23.  Laws    Impairing    the    obligation    of    con- 
tracts or  making  Irrevocable   grants  of 
privileges,  prohibited. 
24.  Private    property    not    to    be    taken    for 
public  use  without  compensation. 

ARTICLE  IV. 

Legislative  Department. 

Sec.  23.  Special  laws  for  benefit  of  corporations 
prohibited. 

24.  No  local  or  special  law  shall  be  passed, 
unless,  etc. 

26.  General  assembly  shall  pass  general  laws 
for  protection  of  local  and  private  in- 
terests. 

36.  Trust  funds  not  to  be  invested  In  bonds 
or  stock   of  any   private  corporation. 

54.  State  shall  not  lend  its  money  or  credit 
to  any  corporation. 

56.  General  assembly  has  no  power  to  au- 
thorize any  county  or  other  subdivision 
of  this  S"tate  to  lend  its  money  or 
credit  in  aid  of  any  corporation. 


ARTICLE  XI. 
Taxation. 

2.  Power  to  levy  taxes  shall  not  be  dele- 
gated to  private  corporations. 

6.  Property  of  private  corporations  Bhall 
forever  be  taxed. 


Sec. 


S..C. 


ARTICLE  XIV. 
Private  Corporations. 

1.  How  corporations  may  be  formed.     Laws 

that    may    be    altered,    amended   or   re- 
pealed. 

2.  In  regard  to  validity  of  existing  charters 

or  grants. 
8.  Power   of   general   assembly   to  remit   the 
forfeiture  of   the   charter  of  any   exist- 
ing corporation. 

4.  Requirements  of  foreign  corporation. 

5.  Corporation    not    to    engage    In    any    busi- 

ness not  authorized  by  its  charter. 

6.  No  corporation  shall  issue  stock  or  bonds 

except  for  value.     Fictitious  increase  of 
stock  or  indebtedness  shall  be  void. 


7.  I'rivntf    property    taken     for   public     use. 

Right  to  appeal  from  an  assessment. 

8.  How  dues  from  private  corporations  shall 

be     secured.       Individual     liability     of 
stockholders. 
0.  The  Issue  of  preferred  stock  by  corpora- 
tions. 

10.  Power   of   general    assembly   to   alter,    re- 

voke or  amend  any  charter  of  incorpo- 
ration now  existing. 

11.  Rights  of  telegraph  companies. 

12.  All    corporations    shall   have   the   right   to 

sue  and  be  sued. 
18.   "  Corporation  "  defined. 


ARTICLE  I. 
Declaration  of  Risrlits. 

§  23.  No  ex  post  facto  law,  or  law  impair- 
ing the  obligatiou  of  contracts,  or  making 
any  irrevocable  grants  of  special  privileges 
or  immunities,  shall  be  passed  by  the  gen- 
eral assembly. 

Corporate  property  shall  forever  be  taxed.  Art. 
XI,  §  6.  All  laws  creating  corporations  are  sub- 
ject to  repeal.  Art.  XIV,  §§  1,  10.  Actions  to 
vacate  charters.    Statutes,  §§  31G7  et  seq. 

[An  act  of  the  general  assembly  incorporating 
a  company  with  authority  to  construct  a  toll 
bridge,  is  a  contract  whicli  cannot  be  impaired. 
Micou  V.  Bridge  Co.,  47  Ala.  652. 

The  test  of  the  power  of  the  legislature  to  confer 
franchises  on  particular  individuals  is  whether  the 
privilege  conduces  to  public  good  and  is  such  as 
must  be  committed  to  a  few  in  order  to  be  avail- 
able.    Horst  V.  Moses,  48  Ala.  129. 

AN'henever  the  State  grants  a  charter  of  incor- 
poration the  presumption  is  that  an  equivalent  is 
received  —  that  the  grant  !.'<  not  without  a  quid  pro 
quo.  Aldridge  v.  R.  R.  Co..  Stew.  &  Port.  199. 
Tiierefore  tlie  grant  is  a  contract,  into  which  the 
State  enters  in  consideration  of  public  lienefit  re- 
ceived or  expected  to  accrue.  Daughdrill  v.  Ins. 
&  Tr.  Co.,  81  Ala.  91;  Logwood  v.  Bank,  Minor. 
23;  State  v.  Bank,  2  Stew.  30;  Jemison  v.  Bank, 
23  Ala.  IfiS. 

A  statute  which  declares  a  forfeiture  of  a  char- 
ter, with  consent  of  the  company,  does  not  impair 
the  obligation  of  a  contract.  R.  R.  Co.  v.  State, 
29  Ala.  57S. 

The  legislature  cannot  deprive  creditors  of  a  cor- 
poration of  their  rights  imder  the  charter.  R.  R. 
i'n.  V.  Branch,  59  Ala.  139;  s.  c,  6  Am.  Corp.  Cas. 
130. 

Where  a  law  when  a  corporation  is  formed  exacti 
certain  duties  of  it.  and  subsequent  statutes  im- 
posing a  penalty,  where  none  existed  before,  for 
failure  to  perform  such  duties,  does  not  Impair  any 


ALABAMA. 


rowers  of  legislature  —  Const.,  Art.  i,  §  24,  Art.  iv,  §§  23-25,  35,  54,  55. 


corporate  right  or  otherwise  violate  the  Constitxi- 
tlon.     Ry.  Co.  v.  Stelner,  Gl  Ala.  559. 

Charter  by  a  private  cori)oratlon,  when  ac- 
cepted, Is  aii  executed  contract  between  a  State 
and  the  corporators,  and  within  the  protection  of 
the  constitutional  provlHlon,  State  and  Federal, 
against  laws  Impairing  obligation  of  contracts.  R. 
R.   Co.  V.   Kenncrly,  74  Ala.  5('>i). 

But  a  corporation  takes  nothing  by  Its  charter, 
except  what  Is  plainly,  exurcssly.  and  unequivo- 
cally granted,  or  necessarily  lnii)lied;  and  In  all 
things  else  the  State  mav  exorcise  ovt-r  It  full  and 
Implied  powers  as  over  Individual.  Id.  Repeal  of 
general  corporation;  etTcct  as  to  corporations 
formed  thereunder.  Bibb  v.  Hall,  101  Ala.  70; 
B.  c,  14  8o.  Hep.  98;  Kahn  v.  Hall,  101  Ala.  102; 
a.  c,  14  8o.  Rep.  105.] 


S  24.  Thnt  the  exercise  of  the  right  of 
eminent  domain  shall  never  be  abridged,  nor 
80  construed  as  to  prevent  the  general 
assembly  from  taking  the  property  and 
franchises  of  incorporated  companies,  and 
subjecting  them  to  public  use  the  same  as 
individuals.  But  private  property  shall  not 
be  talien  or  applied  for  public  use,  unless 
just  compensation  be  first  made  therefor; 
nor  shall  private  property  be  taiien  for 
private  use,  or  for  the  use  of  corporations, 
other  than  municipal,  without  the  consent 
of  the  owner:  Provided,  hoAvever,  That  the 
general  assembly  may,  by  law,  secure  to  per- 
sons or  corporations  the  right  of  way  over 
the  lands  of  other  persons  or  corporations, 
and  l)y  general  laws  provide  for  and  regu- 
late the  exercise  by  persons  and  corporations 
of  the  rights  herein  reserved;  but  Just  com- 
pensation shall,  in  all  cases,  be  first  made  to 
the  owner;  And  provided.  That  the  right 
of  eminent  domain  shall  not  be  so  construed 
as  to  allow  taxation  or  forced  subscriptions 
for  the  benefit  of  railroads  or  any  other 
kind  of  corporations  other  than  municipal,  or 
for  the  benefit  of  any  Individual  or  associa- 
tion. 

See  Art.  XIV,  §  7. 

[Principle  upon  which  court  of  equity  proceeds 
In  Interfering  to  prevent  corporations  Invested 
■with  right  of  eminent  domain  from  entering  upon 
lands.  R.  R.  Co.  v.  R.  R.  Co.,  75  Ala.  275.  The 
power  of  condemnation  can  only  be  exercised  by 
the  general  assembl}',  and  Is  not  conferred  on  tlie 
courts  by  general  statutory  provisions  requiring 
the  taking  of  private  propertv  for  public  use.  R. 
R.  Co.  V.  R.  R.  Co.,  82  Ala.  297;  s.  c,  2  So.  Rep. 
710.] 

ARTICLE  IV. 

Legislative  Department. 

S  23.  No  special  or  local  law  shall  be  en- 
acted for  the  benefit  of  Individuals  or  cor- 
porations. In  cases  wliich  are  or  can  be 
provided  for  by  a  general  law,  or  where  the 
relief  sought  can  be  given  by  any  coiu't  of 
this  State;  nor  siiali  tlie  operation  of  any 
general  law  be  suspended  by  the  general 
assembly  for  the  benefit  of  any  individual, 
corporation  or  association. 

Bee  g|  24.  25.  post.  Corporations  must  be  cre- 
ated by  general  laws.  Art.  XIV,  {  1. 


§  24.  No  local  or  special  law  shall  be 
passed,  on  a  subject  which  cannot  be  pro- 
vided for  by  a  general  law,  unless  notice  of 
the  intention  to  apply  therefor  shall  have 
been  published  in  the  locality  where  the 
matter  or  thing  to  be  affected  may  be 
situated;  whicli  notice  shall  be  at  least 
twenty  days  prior  to  the  introduction  into 
the  general  assemblj'  of  such  bill,  and  the 
evidence  of  such  notice  having  been  given 
shall  be  exhibited  to  the  general  assembly 
before  such  bill  shall  be  passed;  Provided, 
That  tiie  provisions  of  tills  Constitution,  as 
to  special  or  local  laws,  shall  not  apply  to 
public  or  educational  institutions  of  or  in 
this  State,  nor  to  Industrial,  mining,  immi- 
gration, or  manufacturing  corporations  or 
interests,  or  corporations  for  constructing 
canals,  or  improving  navigable  rivers  or 
harbors  of  this  State. 

See  preceding  section,  and  cross-references. 


§  25.  The  genei-al  assembly  shall  pass  gen- 
eral laws,  under  which  local  and  private 
interests  shall  be  provided  for  and  protected. 

See  i  23,  ante,  and  cross-references. 


§  35.  No  act  of  the  general  assembly  shall 
authorize  the  investment  of  any  trust  fund 
by  executors,  administrators,  guardians,  and 
other  trustees,  in  the  bonds  or  stock  of  any 
private  coi-poration;  and  any  such  acts  now 
existing  are  avoided,  saving  Investments 
heretofore  made. 

§  54.  The  State  shall  not  engage  in  works 
of  internal  improvement,  nor  lend  money  or 
its  credit  in  aid  of  such;  nor  shall  the  State 
be  interested  in  any  private  or  corporate 
enterprise,  or  lend  money  or  its  credit  to  any 
individual,  association  or  corporation. 

See  S  55,  post. 


8  55.  The  general  assembly  shall  have  no 
power  to  authorize  anj'  countj%  city,  town,  or 
other  sulidivlslon  of  this  State,  to  lend  Its 
credit,  or  to  grant  public  money  or  thing  of 
value,  in  aid  of,  or  to  any  individual,  asso- 
ciation or  corporation  wliatsoever  or  to  be- 
come a  stoclcholder  in  any  such  corporation, 
association  or  conipanj',  bj'  issuing  bonds,  or 
otherwise. 

See  §  54,  ante. 

ARTICLE  XI. 

Taxation. 

§  2.  No  power  to  levy  taxes  shall  be  dele- 
gated to  individuals  or  private  corporations. 

§  0.  The  property  of  private  corporations, 
associations  and  individuals  in  this  State 
shall   forever  be   taxed   at   the   same   rate; 


ALABAMA. 


I'rivato  corporations  —  Con.st.,  Art.  xiv,  §§  1^. 


Provided,  This  section  shall  not  apply  to  In- 
stitutions or  enterprises  devoted  exclusivelj^ 
to  religious,  educational  or  charitable  pur- 
poses. 

See  Code,  §§  3906  et  seq. 

[/ny  exemption  from  taxation,  total  or  partial, 
dallied  by  a  private  corporation  under  Its  charter, 
or  net  of  incorporation,  the  courts  require  that  the 
legislative  Intent  to  confer  such  exemption  shall 
be  •:'xpressed  in  clear  and  unambiguous  terms; 
nnd  If  there  Is  a  just  and  reasonable  doubt  as  to 
RucI  Intent,  it  is  resolved  against  the  corporation. 
R.  I:.   Co.  V.   Kennerly,  74  Ala.  .^^)(;. 

Tie  Constitution  does  not  authorize  the  l(>gis!a- 
tnre  to  prescribe  an  arbitrary  and  nrtiflcial  value 
of  tie  property  of  corporations,  and  assess  taxes 
on  6uch  valuation.  Hoard  of  Assessment  v.  I{.  R. 
Co.,  59  AIn.  551.  National  banks  are  not  subject 
to  St.'ite  taxes,  except  in  so  far  as  Congress  au- 
ttiorlzea  It,  but  shares  in  such  banks  are  subject 
to  State  taxation  against  the  individual  holders. 
Sumter  Co.  v.  Bank,  02  Ala.  464.] 


ARTICLE    XIV. 
Private  Corporations. 

8  1.  Corporations  may  be  formed  under 
general  laws,  but  shall  not  be  created  by 
Rpeolal  act,  except  for  municipal,  maiiu- 
facturlnp,  miniuK.  immlftration,  industrial 
and  educational  purposes,  or  for  construct- 
ing canals,  or  Improving  navigable  rivers 
and  harliors  of  this  State,  and  in  cases 
"^^-here,  in  the  judgment  of  the  general  as- 
sembly, the  objects  of  the  corporation  can- 
not be  attained  under  general  laws.  All 
general  laws  and  special  acts  passed  pur- 
suant to  this  section  may  be  altered, 
amended  or  repealed. 

Laws  Impairing  obligation  of  contracts,  pro- 
hlljlted.  Art.  I.  {  23.  Special  laws  prohibited. 
Art.  IV,  f5  23,  24,  2.").  General  laws  for  creation 
of  corporations.     Code,  §§  1251  et  seq. 

FExerclse  of  the  privileges  granted  by  charter, 
will  be  almost  conclusive  evidence  of  acceptance. 
Ina.  Co.  V.  Landers,  43  Ala.  115.  So  also  of 
amendment  to  charter.  R.  R.  Co.  v.  Bingham,  5 
Ala.  (\f>7. 

The  test  of  the  power  of  the  legislature  to 
confer  franchises  on  particular  Individuals  Is, 
whether  the  iirivilege  conduces  to  pulilic  good, 
and  Is  such  as  nmst  be  committed  to  the  few  In 
order  to  be  available.  Ilorst  v.  Moses,  4S  Ala.  129. 
Statute  held  valid  under  fibo\o  section.  A.  &  M. 
Assn.  V.  Ins.  Co.,  70  Ala.  121.] 


§  2.  All  existing  charters  or  grants  of 
special  or  exclusive  privileges,  under  which 
a  bona  fide  organization  sliall  not  have 
taken  place  and  business  becMi  commenced 
In  good  faitli,  at  the  time  of  the  ratification 
of  this  Constitution,  shall  thereafter  have  no 
validity. 

Existing  charters  may  be  altered  or  revoked. 
J  10,  pest.  Ferfelture  for  nonn.ser.  Code,  §  1273. 
Actions  to  vacate  charters.     Code,  §§  3417  et  seq. 


§  3.  The  general  assembly  sliall  not  remit 
the  forfeiture  of  the  charter  of  any  corpora- 


tion now  existing,  or  alter  or  amend  the 
same,  or  pass  any  general  or  special  law  for 
the  benefit  of  such  corporation,  other  than  in 
execution  of  a  trust  created  by  law  or  by 
contract,  except  upon  the  condition  that 
such  corporation  shall  thereafter  hold  its 
cliarter  subject  to  the  provisions  of  this  Con- 
stitution. 

LSce  State  v.  Light  Co.,  15  So.  Rep.  347.] 


§  4.  Xo  foreign  corporation  shall  do  any 
business  in  tliis  State  without  having  at 
least  one  known  place  of  business  and  an 
authorized  agent  or  agents  therein;  and  such 
corjioratiou  may  be  sued  in  any  county 
where  it  does  business  by  service  of  procesa 
upon  an  agent  anywhere  in  this  State. 

Attachments  against  foreign  corporation,  §  53.5. 
Requirements  of  foreign  corporations  to  do  busi- 
ness.    See  §§  1316  et  seq. 

[What  is  sutflclent  compliance  with  requirements 
of  this  section.  Security  Co.  v.  Ingram.  91  A!a. 
337;  s.  c,  9  So.  Rep.  140.  A  corporation  chartered 
in  one  State  for  any  purpose  may  lawfully  make 
a  contract  in  furtherance  of  that  purpose  In  any 
other  State;  laws  do  not  prohibit  such  contracts. 
Hall  V.  Engine  Co.,  91   Ala.  363. 

A  foreign  corporation  doing  business  in  this 
State  through  a  managing  agent  or  employe,  may 
be  sued  by  summons  and  complaint,  served  on 
such  agent  or  employe,  upon  a  cause  of  action 
which  accrued  in  the  State.  Tel.  Co.  v.  Pleasants, 
40  Ala.  641. 

A  foreign  corporation  Is  entitled  to  sue  In  courts 
of  this  State.  Eslava  v.  IMow  Co.,  47  Ala.  384. 
"A  corporate  body  duly  Incorpoiated  by  the  laws 
of  Massachusetts,"   Is  sufficient  description.     Id. 

As  a  general  rule,  a  foreign  corporation  may 
prosecute  a  suit  in  the  courts  of  this  State,  when- 
ever the  Individual  corporators  would  be  permitted 
to  do  so;  tliough  the  court  may  withdraw  Its  aid, 
on  clear  proof  of  the  treasonable  character  of  the 
corporation.  I.  &  E.  Co.  v.  Locke,  50  Ala.  332; 
s.  c,  5  Am.  Corp.  Cas.  135. 

Corporations  created  by  other  States  may,  within 
this  State,  make  any  contract  which  they  have 
capacity  to  make,  unless  prohibited  by  our  laws. 
Mayor  v.  Rogers,  10  Ala.  37. 

A  foreign  corporation  seeking  enforcement  of  a 
contract  made  here,  must  show  that  It  had  cajiac- 
Ity  to  make  the  contract.  JMorrls  v.  Hall,  41  A  a. 
510.  A  foreign  corjioration  has  the  right  of  «;uit 
in  courts  of  this  State.  Lucas  v.  Bank.  2  Stew. 
147.  A  foreign  corporation,  exercising  any  of  i*^" 
corjiorate  functions  by  comity  of  this  State  within 
its  limits,  must  conform  to  our  laws.  A  prohibi- 
tion in  its  cliarter  against  taking  more  than  a  pre- 
scribed rate  of  interest,  will  not  affect  a  contract 
made  in  this  State,  payable  here.  Admr.  v.  Bank, 
7  Ala.  386. 

As  a  general  rule,  a  foreign  corporation  may, 
with  safety  nnd  propriety,  be  allowed  to  prose- 
cute a  suit  when  corjiorators,  themselves,  would 
be  permitted  to  do  so.  Ini.  &  Ex.  Co.  v.  Locke,  50 
A!a.  332;  s.  c,  5  Am.  Corp.  Cas.  135.  A  foreign 
corporation,  having  a  known  place  of  business 
here,  and  an  authorized  agent  ui)on  wliom  pro'-ess 
c;ni  be  served,  may  plead  statute  of  limitatii>ns  in 
like  manner  as  a  domestic  corporation.  Huss  v. 
C.  R.  &  B.  Co.,  06  Ala.  472.  The  above  provision 
of  the  Constitution  (art.  XIV,  §  4)  is  not  In  con- 
flict with  anv  act  of  Congress  or  the  Federal  Con- 
stitution, a".  U.  Tel.  Co.  v.  \V.  U.  Tel.  Co..  67  Ala. 
26;  s.  c,  6  Am.  Corp.  Cas.  180.  And  equity  will 
not  aid  by  Iiijunction  any  corporation  wliich  <l.>eH 
not  show  In  Its  plea  that  it  has  complied  with 
this  constitutional  provision.  Id.  .\bove  prcv 
vision  construed.  Beard  v.  I'ub.  Co.,  71  Ala.  6o.  A 
corporation  can  have  no  leg.ii  existence  beyond  the 
territorial  boundaries  of  the  sovereignty  by  whicU 


8 


ALABAMA. 


Private  corporations;  foreign  —  Const.,  Art.  xiv,  §  5. 


M  iB  created,  and  can  transact  business  In  otber 
»overelgntles  only  upon  such  terms  and  ondkions 
as  such  sovereignties  may  provide.  Ins.  Co.  v. 
Knmper,  73  Ala.  325. 

AVhen  special  net  creates  a  corporation  and  not 
Hierely  confers  on  a  foreign  corporation  a  license 
to  transact  business.    Id. 

A  corporation  chartered  under  the  laws  of  an- 
•ther  State  necessarily  has  Its  residence  there,  and 
cannot  exercise  powers  in  Alabama  except  by 
romitv.  R.  &  B.  Co.  V.  Carr,  70  Ala.  3SS;  s.  c,  10 
Am.  C'orp.  Cns.  35.  But  corporation  operated  un- 
der charter  procured  from  each  of  two  States  has 
a  legal  residence  in  each  of  the  States.  Id.  This 
section  does  not  authorize  suits  against  foreign 
eorporation  except  on'  causes  of  action  originating 
here,  or  on  contracts  entered  into  with  reference 
to  a  subject-matter  within  the  State.     Id. 

A  corporation  has  its  domicile,  as  to  debts  con- 
tracted bv  it,  in  State  by  which  its  charter  was 
f ranted:  but  may  subject  itself  to  suit  in  another 
tate  by  appointment  of  an  agent  upon  whom 
process  "may  be  legally  served.  Soc.  v.  Vogel,  70 
Aln.  441. 

Tills  section  does  not  render  void  a  contract  made 
by  a  corporation  which  has  not  complied  with  its 
terms;  and  the  other  party  to  the  contract,  having 
received  the  benefits,  cannot  be  lieard  to  question 
the  capncitv  of  the  corporation  on  this  account  to 
inalce  it.  Sherwood  v.  Alvis,  83  Ala.  115;  s.  c,  3 
So.  Kep.  307. 

Suit  by  foreign  corpoi-ation ;  necessary  proof  of 
corporate  existence.  Savage  v.  llussell,  84  Ala. 
103;  s.  c,  4  So.   Rep.  2:io. 

T'nder  Alabama  Code  court  of  equity  has  no 
Jurisdiction  to  enforce  specific  performance  of  a 
contract  made  Mith  a  foreign  corporation,  or  to 
prevent  Its  breach  by  process  of  injunction 
against  residents,  when  contracts  relate  to  per- 
sonal services  only,  and  it  is  not  alleged  that  It 
was  made  in  Alabama,  or  that  it  was  to  be  per- 
formed there.  I'ub.  Co.  v.  Tel.  Co.,  83  Ala.  498; 
».  c,  3  So.   Rep.  449. 

Agent  of  a  foreign  corporation  which  has  not 
complied  with  comiitions  impoi^ed  l)y  above  section 
of  Constitution,  cannot  m.-iintaiu  an  action  to  re- 
cover compensation.  Dudley  v.  Collier,  87  Ala. 
431;   s.   c,   6  So.   Rep.   304. 

Above  section  prohibits  the  malcing  of  a  single 
contract  or  the  doing  of  a  single  act  of  business, 
by  such  foreign  corporation,  as  well  as  engaging  In 
or  carrying  on  Its  business  generally.  Farrior  v. 
Security  Co.,  88  Ala.  Ii75;  s.  c,  7  So.  Rep.  200. 
Under  this  provision  a  cuntract  made  with  a  for- 
eign curporation,  and  fully  executed,  cannot  be 
afterwUrd  assailed  by  party  who  receives  the  bene- 
fits of  it;  but.  so  long  as  contract  remains  execu- 
tory, ctiurts  will  not  enforce  it  at  instance  of  either 
party.  Id.  A  bill  to  foreclose  mortgage  given  to 
a  foreign  corporation,  and  executed  in  this  State, 
must  attirmatively  show  that,  wlien  contract  was 
made,  the  corporation  had  an  authorized  agent  and 
known  place  of  business  in  this  State.  JIulleus  v. 
Mortg.   Co.,  88  Ala.  280;  s.  c,  7  So.  Rep.  201. 

Person  who  made  contract  with  a  foreign 
corporation  prior  to  the  passage  of  act  ap- 
proved February  28,  1887,  received  benefits 
thereof,  and  suflered  it  to  be  executed,  cannot 
then  be  heard  to  assail  its  validity  on  accoimt  of 
failure  of  corporation  to  comply  with  art.  XIV,  §  4, 
of  (,'onstltution.  Craddoclv  v.  Mortg.  Co.,  88  Ala. 
282.  In  bill  filed  by  foreign  corporation  to  fore- 
close mortgage,  or  to  enforce  any  otlier  contract, 
compliance  witli  art.  XIV,  §  4,  must  be  alleged,  as 
essential  to  right  to  relief;  otherwise,  fact  of 
noncompliance  is  matter  of  defense,  and  must  be 
taken  by  plea  or  answer.  Christian  v.  Mortg.  Co., 
K)   Ala.    198.      An    alien    corporation    having    com- 

Jilied  with  this  provision  (art.  XIV,  9  4)  may  own 
and,  or  talie  mortgage  on  land  here.     Id. 

A  foreign  corporation  may  litigate  in  Alabama 
without  comi)lying  with  constitutional  ami  statu- 
tory provisions  and  regulating  its  right  to  do 
bnsiness  here.     Id. 

In  bill  to  foreclose  mortgage,  filed  by  foreign 
corporation,  or  its  receiver,  not  necessary  to  aver 
er  show  aliirniatively  that  corporation  had  capac- 
ity to  make  tlie  contract,  the  onus  of  showing 
Itft  Invalidity  Iteing  on  party  who  assails  it.  Roul- 
ware  v.  Davis,  90  Ala.  207;  s.  c,  8  So.  Rep.  84. 

When  foreign  corporation  files  bill  in  equity  to 


enforce  contract  made  here,  It  should  allege  com- 
pliance with  constitutional  and  statutory  pro- 
visions requiring  iiiiown  place  of  business  and  an 
authorized  agent;  but  the  want  of  such  an  aver- 
ment is  only  a  ground  of  demurrer,  and  Is  waived 
if  not  so  taiien.  Ginn  v.  Security  Co.,  92  Ala.  135; 
s.  c,  8  So.  Rep.  388. 

In  the  matter  of  contracts  corporations  are  rot 
within  art.  IV,  5  2,  of  Federal  Constitution,  but  »re 
dependent  on  laws  of  the  State  for  privilege  of 
doing  business  within  its  limits;  yet  contracts  of 
foreign  corporation  with  a  citizen  are  subject  to 
constitutional  power  of  Congress  to  regulate  com- 
merce among  the  several  States,  and  contricts 
within  scope  of  that  power  are  not  subject  to 
restrictions  imposed  by  State  laws.  Ware  v.  Shoe 
Co,,  92  Ala.  145;  s.  c,  9  So.  Rep.  130;  Nelms  v. 
Mortg.  Co.,  92  Ala.  157;  s.  c,  9  So.  Rep.  141. 

This  provision  has  no  reference  to  extent  of 
agent's  authority,  but  is  only  intended  to  provide 
for  the  Institution  of  suits  and  service  of  pro- 
cess.    Id. 

A\  hen  foreign  corporation  files  a  bill  to  fore- 
close mortgage  given  for  money  loaned,  averring 
compliance  with  constitutional  and  statutory  pro- 
visions as  to  resident  agents  and  liuown  place  of 
business,  not  necessary  to  also  allege  corpora- 
tion's power  to  loan  money.     Id. 

Making  a  loan  of  money  in  Alabama,  secured,  by 
note  and  mortgage  of  laud,  is  "  doing  business 
within  the  meaning  of  constitutional  and  statu- 
torj-  provisions,  and  is  not  a  matter  of  interstate 
commerce.  Id.;  (.iinn.  v.  Sec.  Co.,  id.  135.  But 
tlie  institution  and  prosecution  of  a  suit  Is  not. 
Id.;  Cook  V.  Brick  Co.,  9S  Ala.  409;  s.  c,  12  So. 
Rep.  918;  McCall  v.  Mortg.  Co.,  99  Ala.  427;  s.  c, 
12  So.  Rep.  800.  What  is  a  proper  compliance 
with  laws  as  to  foreign  corporation  filing  declara- 
tion in  olHce  of  secretary  of  State  and  distinguish- 
ing person  as  agent.  Falls  v.  BIdg.  Co.,  97  Ala. 
417:  s.   c,  13  So.  Rep.  25. 

The  sale  of  brick  In  another  State,  delivered  In 
Alabama,  is  an  act  of  interstate  commerce,  which 
is  not  affected  l)y  laws  of  Alabama,  requiring  for- 
eign corporation  to  have  place  of  business  and  an 
agent  in  State.  Cook  v.  Brick  Co.,  98  A,la.  409; 
s.  c,  12  So.  Rep.  918.  The  single  act  of  making  a 
iiiau  and  taking  mortgage  security  therefor  by  a 
foreign  corporation  on  land  in  this  State,  is  the 
doing  of  business  within  the  prohibition  of  above 
section  of  Constitution.  State  v.  Bank,  18  So. 
Rep.  533.  Requisites  of  agent  under  above  sec- 
tion of  Constitution.  McCall  v.  Mortgage  Co., 
99  Ala.  427;  s.  c.  12  So.  Rep.  800.  Action  against 
foreign  railroad  company;  when  propertv  brought 
in  this  State.  R.  R.  Co.  v.  Trousdale,  99  Ala.  389; 
s.  c,   13  So.   Rep.  23.] 


§  5.  No  coi'poratiou  shall  engage  In  any 
business  other  than  that  expresslj*  author- 
ized in  its  charter. 

Powers  in  general.  Code,  §  12.50.  General  pur- 
poses must  be  stated  in  declaration.     §  1252. 

[Corporations  can  only  exercise  the  powers  which 
are  expressly  granted  to  them,  such  implied  pow- 
ers as  are,  necessary  and  i)roper  to  carry  into 
effect  the  powers  expressly  granted,  and  such  in- 
cidental powers  as  pertain  to  the  purposes  for 
which  the  corporation  was  created.  Livingston  v. 
I'ipitin,  31  Ala.  542;  Montgomery  v.  Plankroad  Co., 
Id.  70;  Ex  parte  Burnett,  30  id.  401;  Lodge  v. 
Waddlll,  30  id.  :U3;  Morris  v.  Mall,  41  id.  510; 
Smitli  V.  Ins.  &  Tr.  Co.,  4  id.  558:  State  v.  Mayor, 
5  Port.  279;  State  v.  Stebbins.  1  Stew.  2i)9. 

Grants  of  power  to  corporations,  unlike  grants  of 
individuals,  are  to  be  strictly  construed  in  favor 
of  the  government  and  against  the  grantee.  Cor- 
porations can  claim  nothing  that  is  not  clearly 
given,  .\mbiguities  ojierate  against  them.  Lodge 
V.  Waddlll,  30  Ala.  313;  Powell  v.  Sammons,  31 
id.  .'')52.  A  corporation  is  clothed  with  power  to 
do  all  acts  necessary  and  proper  to  carry  into  ef- 
fect the  purposes  of  its  creation,  and  when  neces- 
sary to  accomplish  such  puri)ose,  may  appoint 
agents.     R.   R.   (.;(>    v.   KIdd,  2V  Ala.  221.     A  cor- 


ALABAMA. 


Private  corporations;  stock;  eminent  domain  —  Const.,  Art.  xiv,  §§  G,  7. 


poratlon  cnn  make  no  contract  which  is  not  neces- 
Barv,  direct! V  or  Indirectly,  to  serve  the  purpose 
of  its  creation;  nor  can  it  apply  Its  funds  to  any 
purpose  which  Is  not  within  the  legitimate  pur- 
poses for  which  it  was  created.  Montgomery  v. 
I'iankroad  C'o.,  31  Ala.  7t.2;  Morris  v.  Hall,  41 
Id.  510;   Smith   v.   Ins.   &  Tr.   Co.,  4  id.  558. 

Contracts  of  corporation  which  it  has  no  power 
to  make  are  void,  and  courts  will  not  enforce  them. 
So  also  promissory  notes  and  otlier  Instruments 
given  to  secure  performance  of  contract  are  void. 
Lodge  v.  AVaddlll.  30  Ala.  313;  Smith  v.  Ins.  &  Tr. 
Co.,  4  Id.  558.  Agent  of  a  corporation  who  con- 
tracts a  debt  for  It  which  it  has  no  power  to  con- 
tract, is  made  personallv  liuble  thereby.  Drake 
V.  Flewellen,  33  Ala.  106;  Harwood  v.  Humes,  9 
Id.  6.59. 

Prima  facie  no  presumption  of  Illegality,  abuse 
or  excess  of  corporate  powers  attaches  to  cor- 
porate contracts,  and  the  burden  of  showing 
their  Invallditv  rests  on  him  who  assails  them. 
Ins.  Co.  V.  A.  '&  M.  Assn.,  54  Ala.  73;  s.  c,  6  Am. 
X:orp.  Cas.  109. 

One  dealing  with  a  corporation  In  matters  not 
following  within  the  purview  of  its  delegated 
powers,  is  not  thereby  estopped  from  pleading  its 
want  of  authority  to  make  the  contract  .sought  to 
be  enforced  against  him.  Hank  v.  Dunkln.  54 
Ala.  471;  s.  c,  6  Am.  Corp.  Cas.  113.  Otherwise,  if 
the  contract  Is  within  the  delegated  powers.  Id.; 
Pond  V.  Bldg.  Assn.,  01  Ala.  2:32. 

A  person  who  has  made  a  contract  with  a  cor- 
poration which  is  ultra  vires,  though  he  has  re- 
ceived the  benefit  of  it.  Is  not  estopped  from  set- 
ting up  Its  Invalidltv.  Chambers  v.  Falkner,  65 
Ala.  440;  s.  c,  G  Am.  Corp.  Cas.  182.  When  cor- 
poration has  no  power  to  lend  money,  a  promis- 
sory note  given  to  it  for  borrowed  money,  and  a 
mortgage  to  secure  such  note,  are  both  void,  and 
cannot  be  enforced  in  ecjuity.     Id. 

As  to  whether  party  who  contracts  with  a  cor- 
portatlon  thereby  estops  himself  from  denying 
power  of  corporation  to  make  such  contracts,  the 
decided  cases  are  conflicting.  "Wilkes  v.  R.  11.  Co., 
70  Ala.  180. 

A  contract  made  by  or  with  a  corporation,  if 
ultra  vires,  cannot  be  enforced,  and  the  other 
party  Is  not  estopped  from  setting  up  its  invalid- 
ity; but.  If  tlie  contract  Is  not  ultra  vires,  he  Is 
estoi)ped  from  dispntlng  the  regular  and  complete 
organization  of  the  corporation.  Sherwood  v.  Al- 
vis.  K3  Ala.  115;  s.  c,  3  So.  Rep.  :j07.  A  corpora- 
tion wliich  has  received  benefits  of  a  contract  ultra 
vires  is  not  thereby  estopped  from  setting  up  the 
invalidity.  Lime  Works  v.  Dismukes,  87  Ala. 
344;  s.  c,  6  So.  Rep.  122.  Corporation  organized 
to  mine  and  manufacture  lime  rock  has  no  inci- 
dental power  to  carry  on  a  mercantile  bu.siness. 
Id.  If  organized  under  general  statutes,  for  pur- 
pose of  manufacturing  and  selling  machinery,  it 
has  no  i>ower,  express  f)r  Implied,  to  engage  in 
Itusiness  of  manufacturing,  buying  or  selling  ice. 
Simmons  v.  Iron  Works,  02  Ala.  427;  s.  c,  9  So. 
Rep.  lOo. 

Construction  and  Interpretation  of  charter  and 
by-laws  is  a  question  of  law  for  the  court;  but 
determining  nature  of  business  and  property,  and 
•  usage  of  that  business,  and  extent  of  powers  con- 
ferred on  agents,  are  ijucstions  of  fact  for  the 
jury.  Transp.  Co.  v.  Kavauaugh,  93  Ala.  324;  s.  c, 
9  So.  Rep.  395. 

.\uthority  and  powers  of  corporation  engaged  in 
river  navigation.  Id.  Plea  of  ultra  vires  no  de- 
fense to  suit.  when.  Hank  v.  Roden,  97  Ala.  404; 
s.  c,  11  So.  Rep.  883.] 


§  0.  No  corporation  shall  issue  stock  or 
bonds  except  for  money,  labor  done,  or 
money  or  property  actually  received;  and  all 
fictitious  increase  of  stock  or  indebtedness 
shall  be  void.  The  stock  and  bonded  in- 
debtedness of  corporations  shall  not  be  in- 
creased, except  in  pursuance  of  general  laws, 
nor  without  the  consent  of  the  persons  hold- 
ing the  larger  amount  in  value  of  stock, 
first  obtained  ji>  ;    meeting  Ir.  be  held  after 


thirty  days'  notice  is  given  in  pursuance  of 
law. 

Issue  of  preferred  stock.  §  9,  post.  Capital 
stock,  how  increased.  Code,  §§  11.54,  1259,  1270, 
Preference  to  prior  stockholders  in  issue  of  in- 
crease. Code,  §  1272.  Subscriptions  to  stock  must 
be  paj-able  in  money.     §  1254. 

[See  Fitzpatrick  v.  Pub.  Co.,  83  Ala.  604;  s.  c, 
2  So.  Rep.  727.  Fictitious  stock  in  private  corpo- 
ration is  illegal  and  void  under  above  constitu- 
tional provision.  William*  y.  Evans,  87  Ala.  725; 
s.  c.  6  So.   Rep.   702. 

Fictitious  or  fraudulent  issue  of  stock;  who 
mav  assail.  Parsons  v.  Joseph,  02  Ala.  403;  s.  c, 
8  So.  Rep.  788.  Stockholder  participating  iu  ficti- 
tious issue  of  stock,  or  other  fraudulent  act,  is 
estopped  from  assailing  its  validity;  but  estoppel 
Is  not  binding  on  innocent  tninsferee  of  the  stock. 
Id. 

A  pledge  by  private  corporation  of  its  bonds, 
secured  by  mortgage  of  property,  if  made  with- 
out fraud"  and  solely  for  bona  fide  purpose  of  se- 
curing payment  of  a  debt  owing  by  corporation, 
Is  not  a  violation  of  this  provision.  Nelson  v. 
Hubbard;  Cotton  .Mills  v.  I>iuimick,  OG  Ala.  238; 
s.  c,  11  So.  Rep.  428.  I'rovisious  of  above  section 
are  requirements  for  benefit  of  stockholders,  and 
compliance  therewith  may  be  waived  by  them. 
Id. 

Certificates  of  stock  Issued  on  fictitious  increase 
of  capital  stock,  void,  lieitman  v.  Steiner,  98  Ala. 
241;  s.  c,  13  So.  Rep.  87.  Kut  the  law  does  not 
avoid  the  entire  issue,  but  the  vitiating  operation 
of  the  Constitution  is  confined  to  the  fictitious  ex- 
cess. Id.  Risk  of  liability  voluntarily  increased 
bv  purchase  of  certificates  issued  in  excess  of  capi- 
tal. Id. 

An  original  issue  of  shares  of  stock  as  paid  up, 
at  less  than  their  nominal  value,  is  in  violation 
of  law,  agaiust  public  policy,  and  violative  of  con- 
stitutional provisions.  Perry  v.  Mill  Co.,  93  Ala. 
304;  s.   c,  9  So.   Rep.  217. 

-Mortgage  bonds  of  a  face  value  in  excess  of  the 
debt,  issued  as  collateral,  held  uot  a  fictitious  Is- 
sue.    Dexter  v.   McClellau,  22  So.  Rep.  451.] 

§  7.  Municipal  and  other  corporations  and 
Individuals  invested  with  the  privilege  of 
taking  private  property,  for  public  use, 
shall  make  just  compeu-satiou  for  the  prop- 
erty taken,  injured,  or  destroyed  by  the  con- 
struction or  enlargement  of  its  works,  high- 
ways, or  improvements,  which  compensation 
shall  be  paid  before  such  taking,  injury,  or 
destruction.  The  general  assembly  is  hereby 
prohibited  from  depriving  any  person  of  an 
appeal  from  any  preliminary  assessment  of 
damages  against  any  such  corporations  or 
individuals  made  by  viewers,  or  otherwise; 
and  the  amount  of  such  damages  in  all 
cases  of  appeal  shall,  on  the  demand  of 
either  party,  be  determined  by  a  jury  ac- 
cording to  law. 


See  art.  I,   §  24. 


fa 


fAbove  section  should  be  liberally  construed  In 
vor  of  the  citizen.  Montgomery  v.  Townsend, 
80  Ala.  480;  Rv.  Co.  v.  Witherow,  82  id.  190;  s.  c, 
3  So.  Rep.  23."  It  was  intended  to  secure  a  just 
compensation  to  owner  of  property  taken,  and  to 
compel  its  payment  before  the  appropriation  was 
complete;  also,  to  secure  the  right  of  appeal  from 
the  preliminary  assessment  of  ilamages.  without 
regard  to  the  "character  of  the  tribunal  or  body 
by  which  the  assessment  may  be  luade;  and  the 
right  to  a  trial  by  jury,  on  the  demand  of  either 
party,  when  the  error  or  matter  complained  of  is 
the  "amount  of  damages  assessed.  Say  re  v.  Ry. 
Co.,  72  Ala.  443.1 


10 


ALABA:\rA. 


Private  corporatious  —  Const.,  Art.  xiv,  §§  8-13. 


8  8.  Dues  from  private  coi-poratlons  shall 
be  secured  by  such  menus  as  ma.v  be  pre- 
scrlbtHl  l).v  law;  but  \u  uo  <'aso  shall  any 
stockholder  be  ludividually  liable  otherwise 
than  for  the  unpaid  stocli  owued  by  him 
or  her. 

Proceedings  by  Judgment  creditor  of  corporation. 
Code,  §  2182. 

[See  rimniborlin  v.  Broniberg,  83  Ala.  5TG;  s.  c, 
3   So.    K.'p.   4.S4. 

Liability  of  stockholders,  or  siibscribors  for 
stock,  Is  iroverned  by  law  of  State  by  which  char- 
ter Is  frrantod,  as  if  incorporated  in  the  subscrip- 
tion as  part  thereof.  Morris  v.  Glenn.  87  Ala.  028; 
s.  c,  7  So.  Hep.  00.  Liability  of  transferror  of 
stock  under  statutes  of   Virginia.     Id.] 


§  9.  No  corporation  shall  issue  preferred 
stock  without  the  consent  of  the  owners  of 
two-thirds  of  the  stock  of  said  corporation. 


Fictitious  Increase  of  stock  prohibited. 
and  cross-references. 


G,  ante. 


§  10.  The  general  assembly  shall  have  the 
power  to  alter,  revoke,  or  amend  any  charter 
of  incorporation  now  existing,  and  revocable 
at  the  ratification  of  this  Constitution,  or 
any  that  may  hereafter  be  created,  when- 
ever, in  their  opinion,  it  may  be  injurious  to 
the  citizens  of  tliis  State;  iu  sucli  luanner, 
however,  that  no  injustice  shall  be  done  to 
the  corporators.  No  law  hereafter  enacted 
shall  create,  renew,  or  extend  the  charter  of 
more  than  one  corporation. 

See  art.  I,  §  23;  art.  XIV,   §  1. 


§  11.  Any  association  or  corporation  organ- 
ized for  the  ptu'pose,  or  any  individual,  sliall 
have  the  right  to  construct  and  maintaiu 
lines  of  telegraph  within  this  State,  and  con- 
lect  the  same   with  other  lines;    and    the 


general  assembly  shall,  by  general  law  of 
uniform  operation,  provide  reasonable  regu- 
lations to  give  full  effect  to  tliis  section.  No 
tt'legraph  company  sliall  consolidate  with,  or 
hold  a  controlling  interest  in  tlie  stock  or 
bonds  of  any  other  telegrapli  company  own- 
ing a  competing  line,  or  acquire,  l)y  purchase 
or  otherwise,  any  other  competing  line  of 
telegraph. 

§  12.  All  corporations  sliall  liave  the  right 
to  sue,  and  shall  be  subject  to  be  sued  in  all 
courts,  in  like  cases  as  natural  persons. 

See  Code.  §  1256,  and  note.  Foreign  corporation 
may  be  sued,  how.     Const.,  art.  XIV,  §  4. 

[This  provision  forbids  unjust  and  odious  dis- 
criminations against  corporations,  under  the  foriD_ 
and  guise  of  laws  regulating  judicial  procedure;' 
but  It  has  no  reference  to  venue  in  civil  actions, 
Avhich  belong  only  to  the  remedy  or  form  of  pro- 
cedure: and  it  does  not  Inhibit  the  passage  of  a 
general  law  authorizing  a  corporation  to  be  sued 
in  any  county  in  wliich  it  transacts  business 
through  its  agents,  though  an  individual  license 
can  onlv  be  used  in  the  county  of  his  residence. 
Home  Protection  v.  Richards.  74  Ala.  487.  This 
provision  must  mean  that  where  the  cases  are 
alike,  there  must  bo  no  discrimination  between 
corporations  and  natural  persons  in  tho  matter  of 
prosecuting  or  defending  suits.  Smith  v.  R.  R. 
Co.,  7')  Ala.  449.  "  The  American  Mortgage  Co. 
of  Scotland  "  and  "  The  American  Mortgage  Co." 
are  prima  facie  different  corporations;  and  an  as- 
sessment of  taxes  against  the  latter  will  not  sup- 
nort  an  action  against  an  agent  of  the  former. 
State  V.  Sloss,  87  Ala.   Ill);  s.  c,  G  So.  Rep.  309.] 


§  13.  The  term  "  corporation,"  as  used  In 
this  article,  shall  be  construed  to  include  all 
joint-stoclv  companies,  or  any  associations 
having  any  of  the  powers  or  privileges  of 
corporations,  not  possessed  by  individuals  or 
partnerships. 

"  Person  "  includes  corporations,  Cude,  §§  1,  3306. 

[Corporation  defined.  Paschall  v.  VThltsett,  11 
Ala.   472:    R.    R.    Co.   v.   Kidd.   29  id.   221. 

No  i)articular  words  or  expressions  are  essential 
to  the  creation  of  a  corporation.  Ins.  Co.  v.  Kam- 
per,  73  Ala.  325:  s.  c.,  10  Am.  Corp.  Cas.  21.] 


ALABAMA. 


11 


Attachment  — Code,  §§  533-534,  539,  1139. 


THE  CODE  OF  ALABAMA. 


The  Civil  Code. 

CHAPTER  I. 

General     Provisions     Applicable     to     the 
Whole  Code. 

Sec.  1.  Signification  of  words. 

§  1.    *     *    ♦     The  word  "  persan  "  includes 
a  corporation  as  well  as  a  nattiral   person; 


"  Corporation  "  defined.  Const.,  art.  XIV,  §  13. 
See  §  3906. 

["  Person  "  Includes  not  only  natural  but  arti- 
ficial persons,  unless  such  an  interpretation  ren- 
ders the  statute  inharmonious.  Selma  v.  Mullen, 
46  Ala.  411:  Mayor  v.  Rowland,  26  id.  498. 

Punctuation  marks  have  no  controlling  Influence 
in  construing  statutes.  Danzy  v.  State.  68  Ala. 
296:  Cook  v.  State,  110  id.  40;  s.  c,  20  So.  Rep. 
360.]  ; 

CHAPTER  II. 

Attachment. 

ARTICLE  I.     ISSUE  OF  ATTACHMENTS. 

Sec.  5.33.  Corporations  may  sue  out  attachment. 
534.   Security  for  costs,   how  given. 
.53.3.  I'oreign  corporations,  attachment  against. 
539.  Provisions  of  chapter  applicable  to  pri- 
vate corporations. 


§  533.  Corporations,  either  foreijrn  or 
domestic,  are  entitled  to  proce.ss  of  attach- 
ment for  the  recovery  of  the  debts  or  as- 
certained demands  due  them,  the  president, 
cashier  of  the  corporation,  or  an  atrent  or 
attorney  thereof,  malting  the  affidavit  and 
executing  bond  as  in  other  cases. 

See  §  1256,  subd.  2,  note.  Execution  may  be  is- 
sued against  shares  of  stoclc  in  a  corporation.  See 
§§  1266,  1267. 


§  5.34.  When  an  attachment  is  sued  out 
in  favor  of  a  non-resident,  or  a  foreign  cor- 
poration, security  for  the  costs  of  the  suit 
may  be  taken  and  approved  by  the  officer 
issuing  the  same,  or  may  be  indorsed  with 
his  approval  on  the  attachment. 

§  ."iM.").  I'rofess  of  iittiichnient  may  issue 
against  foreitrn  corporations,  having  prop- 
erty In  this  State,  for  the  recovery  of  debts, 
or  to  recover  damages  for  a  breach  of  con- 
tract when  the  damages  are  not  certain  or 
liquidated,  or  in  cases  where  the  action 
sounds  in  damages  merely,  in  the  same  man- 
ner,   and    subject   to   tlie   same   rules   as   in 


case  of  natural  persons  residing  without  this 
State. 

Requirements  of  foreign  corporations.  Const., 
art.  XIV,  §  4. 

[The  affldavit  need  not  state  that  the  corpora- 
tion against  which  the  attachment  is  sought  is 
a  domestic  one.  Central  M.  &  M.  Co.  v.  Steven,. 
45  Ala.  594.] 


§  539.  The  provisions  of  this  chapter  are 
applicable  to  all  i^rlvate  corporations,  and  all 
affidavits  or  answers,  required  to  be  made 
under  any  of  Its  provisions,  may  be  made 
by  the  president,  cashier,  secretary,  or  any 
other  dtily  authorized  agent  of  such  cor- 
poration; and  such  corporation  may  do  and 
be  dealt  with  under  its  provisions,  In  the 
same  manner  as  If  they  were  natural 
persons. 

CHAPTER  XXVIII. 

Corporations. 

Art.     5.  Mining,     quarrying     and     manufacturing 
r'om  panics. 

11.  Cdrporations  not  specially  provided  for. 

12.  General   provisions. 

13.  Charter  fees  required  of  domestic  corpo- 

rations. 

14.  Dissolution  of  business  corporations. 

16.  Conditions   upon    which   foreign    corpora- 
tions may  do  business  in  this  State. 

ARTICLE    V.      MIXING,    QUARRYING    AND 
MANUFACTURING   CORI'ORATIONS. 


Sec.  1139. 
114t». 

1141. 
1142. 
1143. 
1144. 
114.5. 
1146. 

1147. 

1148. 

1149. 
11.50. 

1151. 

11.52. 
11.5.3. 
11.54. 
1155. 


Corporations  may   be  formed. 

Declaration  filed  in  court  of  probate; 
contents. 

Commission  issued  by  judge  of  probate. 

Subscriptions  for  stock. 

Organization. 

General   powers. 

.\dditional  powers. 

Crossing  public  roads,  streets,  navi- 
gable waters. 

Consolidation  of  mining,  quarrying  and 
manufacturing    corporations. 

How  proposal  adopted;  entry  of  min- 
utes. 

Consolidation,   how  consummated. 

Name  of  charter  of  new  corporation; 
changes. 

Property,  rights  and  liabilities  of  new 
corporation;   pending  suits. 

Roard  of  directors;  election;  powers. 

Stockholders  meet  annually. 

Increase  of  capital  stock. 

I'rovisions  applicable  to  corporations 
organized  under  special  charter. 


§  11.39.  Two  or  more  persons,  associating 
for  the  purpose  of  mining,  quarrying,  or 
manufactining,  may  form  themselves  Into  a 
corporation,  in  the  mode,  and  having  the 
capacity  and  powders  in  this  article  ex- 
pressed. 

See  §  1251. 


12 


ALABAMA. 


Milling,  etc.,  corporations  —  Code,  §§  1140-1144. 


§  1140.  The  persons  so  associatins  must 
file  in  the  office  of  the  judge  of  probate 
of  the  county  in  whicli  it  is  proposed 
such  corporation  shall  have  its  principal 
jilace  of  business,  a  declaration  in  writ- 
ing, signed  by  each  of  them,  stating  the 
names  and  residences  of  the  subscribers,  the 
name  and  style  of  the  proposed  corporation, 
the  amount  of  its  capital  stock,  and  the 
number  of  shares  Into  Avhich  it  is  divided, 
tht;  general  purposes  of  the  corporation,  and 
the  nature  of  the  business  proposed,  an<l  the 
prt)posed  principal  place  of  business  of  the 
corporation,  with  such  other  matters  as  they 
may  deem  it  desirable  to  state. 

See  §  1252,  and  note.  Charters  may  be  amended. 
S§   1283-1284. 


§  1141.  On  the  filing  of  the  declaration,  the 
Judge  of  probate  must  issue  to  two  or  moi'e 
of  the  subscribers,  a  commission  authorizing 
them,  as  commissioners,  to  open  books  of 
subscription  to  the  capital  stock  of  the  pro- 
posed corpoi'atiou,  at  such  time  and  place, 
and  upon  such  notice  as  they  may  appoint. 

See  §  1253. 

§  1142.  All  subscriptions  to  or  for  the 
capital  stock  must  be  payable  in  mouej"  but 
the  commissioners  may  receive  subscriptions 
payable  In  money,  the  subscriber  having  the 
privilege  of  discharging  the  same  by  the  ren- 
dition of  stipulated  necessary  services,  or  the 
performance  of  stipulated  necessary  labor 
for  the  corporation,  at  the  reasonable  value 
of  such  services  or  labor;  or  in  property,  at 
the  reasonable  value  thereof,  the  corporation 
has  capacity  to  acquire  and  hold;  the  sub- 
scription stating  the  nature  and  character 
of  such  property,  and  when  it  is  to  be  trans- 
ferred or  convejed  to  the  corporation. 

S  1143.  Fifty  per  cent,  of  the  capital  stock 
having  been  subscribed  in  good  faith  by 
subscribers  of  whose  solvency  the  commis- 
sioners are  satisfied,  they  shall  call  the  sub- 
scribers together,  at  such  time  and  place  as 
they  may  appoint,  for  the  election  of  a  board 
of  directors  and  other  officers,  and  the  fur- 
ther organization  of  the  proposed  corpora- 
tion; a  majority  in  value  of  the  subscribers 
being  present  in  person  or  by  proxy  at  such 
time  and  place,  they  must  elect  a  board  of 
directors  from  the  subscribers,  consisting  of 
not  less  than  three  nor  more  than  nine 
members,  and  such  other  officers  as  they  may 
deem  necessary;  the  directors  holding  office 
for  a  term  of  twelve  months  tliereaffer,  and 
until  their  successors  are  elected  and  quali- 
fied: and  shall  designate  an  officer  of  their 
election,  or  .some  person  of  their  appoint- 
ment, to  receive  from  the  commissioners  the 
subscrii)tiona  for  stock.  T^pon  the  delivery 
of  the  subscrijitions  to  such  officer  or  person, 
lie  shall  require  of  the  sul>scril)ers  whose 
subscriptions  are  payable  in  money,  without 


the  privilege  of  discharge  in  services,  or 
labor,  or  property,  the  pajnneut  in  cash  of 
t  went  J-  per  cent,  thereof;  and  of  the  sub- 
scribers whose  subscriplions  are  payable  in 
money,  with  the  privilege  of  discharging  the 
same  in  stipulated  service,  or  labor,  or  In 
the  transfer  or  conveyance  of  property,  con- 
tracts in  writing  signed  by  them,  expressing 
such  privilege,  and  binding  them  to  the  ren- 
dition of  the  services,  or  the  performance  of 
the  labor,  or  the  transfer  or  conveyance  of 
tlie  property,  at  such  times  as  the  board  of 
directors  may  appoint;  the  proceedings  of  the 
meeting  of  the  subscribers  must  be  reduced 
to  writing,  and  must  be  signed  by  them,  and 
delivered  to  the  commissioners,  who  must  re- 
turn and  file  the  same  in  the  office  of  the 
judge  of  probate;  and  the  officer  or  person, 
to  whom  the  subscriptions  for  stock  have 
been  delivered,  must  make  a  copy  thereof, 
and  verify  the  same  by  affidavit,  stating  in 
such  affidavit  from  which  of  the  subscribers 
he  has  received  payment  in  cash  of  twenty 
per  cent,  and  from  which  he  has  received 
contracts  In  writing,  as  hereinbefore  speci- 
fied. Upon  the  filing  of  such  papers,  the 
judge  of  prol)ate  must  issue  to  the  sub- 
scribers, their  associates,  and  their  succes- 
sors, a  certificate  stating  that  they  are  duly 
organized  as  a  corporation,  mider  the  name 
and  style,  and  for  the  purposes  expressed  In 
the  declnratlon,  having  the  power,  capacity 
and  authority  confeiTed  by  law. 

See  §   1255. 


§  1144.  When  duly  organized  such  corpora- 
tion has  power,^ 

1.  To  have  succession  by  the  coiT»orate 
name  for  the  period  expressed  in  the  dec- 
laration; and  if  a  period  of  time  be  not 
expressed,  perpetually. 

2.  To  sue  and  be  sued;  and  if  deemed 
necessary,  to  have  a  corporate  seal,  and  the 
same  to  alter  at  pleasure. 

3.  To  hold,  purchase,  dispose  of,  and  convey 
such  real  and  personal  property,  as  the 
nature  of  its  business,  and  the  purposes  for 
which  it  is  formed  may  require. 

4.  To  appoint  such  officers  and  agents  as 
may  be  deemed  necessary  for  the  transaction 
of  its  business,  and  tlie  management  and 
control  of  its  affairs  and  property. 

.'').  To  make  all  needful  by-laws,  rules  and 
regulations  for  the  transaction  of  its  busi- 
ness, the  management  and  control  of  Its 
affairs,  and  the  uses  and  disposition  of  its 
property;  and  for  the  transfer  of  its  stock, 
and  for  the  creation  and  preservation  of  a 
lien  upon  the  shares  of  its  stockholders  for 
the  i)ayment  of  any  debt  or  liability  they 
may  incur  to  the  corporation. 

r>.  To  carry  on  the  business,  or  accomplish 
the  purposes  expressed  in  the  declaration. 

7.  To  borrow  money,  and  to  mortgage,  or 
otherwise  convey  or  pledge  its  property, 
real  or  personal,  and  its  franchises,  to  secure 
the  payment  of  the  money  so  borrowed,  or 


ALABAMA. 


13 


Mining,  etc.,  corporations  —  Code,  §§  1145-1150. 


any  other  debt  contracted  by  it;  but  it  has 
not  power  to  borrow  a  sum  exceeding  its 
capital  stoclc,  or  at  a  rate  of  intereHt  ex- 
ceeding eight  per  cent.,  payable  semi-annu- 
ally; nor  must  such  mortgage,  conveyance, 
or  pledge  be  made  otherwise  than  by  the 
consent  of  the  holders  of  the  larger  part  in 
value  of  the  capital  stock,  expressed  by  vote 
at  a  meeting  of  the  stockholders  called  for 
that  purpose,  of  the  time  and  place  of  which 
meeting,  and. of  the  purpose  for  which  it  is 
called,  thirty  days'  notice  is  given  each 
stockholder  personally,  whose  residence  is 
known,  and  by  publication  for  four  con- 
secutive weeks  in  the  newspaper  published 
nearest  to  the  place  of  business  of  the  cor- 
poration. 

See  §  1256,  cross-references  and  notes. 

§  1145.  Such  corporation,  when  duly  or- 
ganized, has,  in  addition,  power  to  locate, 
construct  and  operate  to  and  from  its  mines, 
furnaces,  mills,  factories,  quarries  or  other 
works,  railways,  tramways,  canals,  tun- 
nels, underground  passages,  or  roads,  or 
to  acquire  by  purchase  railways,  tram- 
ways, canals,  tunnels,  underground  pas- 
sages, or  roads,  whei*eDy  a  connection 
may  be  made  to  and  with  the  principal  place 
of  its  business,  its  mines,  furnaces,  mills, 
factories,  quarries,  or  other  works,  and 
any  public  highway,  turnpike,  macadam- 
ized, plank,  or  other  graded  road,  or 
railroad,  or  navigable  waters,  or  to  or 
with  its  mines,  ore-beds,  coking  or  cooling 
grounds,  or  timber  lands;  or  canals  or 
aqueducts  to  and  from  its  mills  or  factories, 
or  furnaces,  or  quarries,  and  any  waters  or 
water-courses;  and  such  corporation  has 
also  power  to  transport,  as  a  common  carrier, 
persons  or  property  on  any  railroad,  or  other 
road,  or  on  any  canal,  or  aqueduct,  con- 
structed or  purchased  by  it,  talking  reason- 
able compensation.  If  necessary  in  the 
construction  of  such  canals,  aqueducts,  rail- 
ways, tramways,  tunnels,  underground  pas- 
sages, or  roads,  the  conioration  has  power 
to  condemn  lands,  or  an  interest  or  ease- 
ment therein,  or  thereunder,  private  property, 
for  a  way  and  right  of  way,  iu  the  mode  pre- 
scribed by  law,  such  way  and  right  of  way 
not  exceeding  one  hundred  feet  in  width 
throughout  the  whole  length  of  such  canal, 
aqueduct,  railway,  tramway,  tunnel,  under- 
ground passage,  or  road;  and  with- 
out the  consent  of  the  owner  of  the  land, 
the  same  must  not  be  constructed  through 
the  yard,  garden,  orchard,  stable- lot,  gin- 
house,  barn,  or  through  the  curtilage  of  a 
dwelling-house;  and  such  corporation  has 
power  to  erect,  at  such  place  as  may  be 
deemed  convenient  for  its  uses,  depots,  or 
other  buildings,  or  structures,  or  wharves; 
and  may  purchase,  hire,  or  charter  vessels 
or  boats  for  the  transportation  of  its  pro- 
ducts or  property;  and  may  aid  in  the  con- 
struction of  railroads,   or  iu  the   establish- 


ment of  lines  of  vessels  or  boats,  running  to 
and  from  such  depots,  or  other  buildings,  or 
structures  or  wharves;  but  the  owner  of  any 
land  which  may  be  taken  under  the  pro- 
visions of  this  section,  shall  have  the  right 
to  have  all  his  property,  of  like  kind  with 
that  transported  by  the  corporation,  carried 
by  such  corporation  over  or  upon  such  canal, 
railway  or  tramway,  upon  the  payment  of 
a  just  and  reasonable  compensation  for  such 
carriage. 

See  §  1155. 


§  1146.  Iu  the  construction  of  its  railway.s. 
tramways,  or  roads,  the  corporation  may 
cross  any  public  road  or  highway,  but  must 
place  such  i-oad  or  highway  in  a  condition 
satisfactory  to  the  proper  authorities  of  the 
county  having  control  thereof;  and  may, 
with  the  consent  of  the  proper  authorities 
of  a  town  or  city,  and  upon  such  terms  and 
conditions  as  may  be  agreed  on  with  such 
authorities,  use  or  cross  the  streets  of  such 
town  or  city;  and  may  cross  any  navigable 
streams,  but  must  not  impair  the  navigation 
thereof. 

§  1147.  Any  two  or  more  mining,  quarry- 
ing, or  manufacturing  corporations  may 
unite  and  consolidate  their  capital  stock, 
property,  and  l)usiness  in  the  manner  herein- 
after provided. 

[Electric-light  companies  are  "  manufacturing 
corporations  "  within  meaning  of  above  section. 
Beggs  V.  Elec.  Ilium.  Co.,  [)Q  Ala.  295;  s.  c,  11  >;o. 
Kep.  381.] 


§  114S.  Such  consolidation  shall  be  made 
on  the  recommendation  of  the  board  of  di- 
rectors of  each  of  the  corporations  proposed 
to  be  consolidated,  when  adopted  by  a  vote 
of  the  persons  holding  the  larger  amount  in 
value  of  the  capital  stock  of  each  corpora- 
tion. Such  recommendation  shall  be  sub- 
mitted in  writing  by  the  board  of  directors 
to  the  meeting  of  stockholders,  and,  witli  tlie 
vote  of  the  stockholders  thereon,  shall  be 
entered  on  the  minutes. 

§  1149.  When  a  proposal  for  consolid-ition 
has  been  thus  adopted,  the  consolid;itiou 
shall  be  carried  out  by  an  agreement  in  writ- 
ing, sealed  with  the  coiiDorate  seals,  and 
signed  by  the  presidents  of  the  contra ctinir 
corporations,  reciting  that  such  agreement 
Is  made  with  the  consent  of  the  stockholders 
of  each  of  the  corporations,  given  as  i)ro- 
vided  above,  and  stating  the  terms  and  con- 
ditions of  such  consolidation.  This  auree- 
ment  must  be  recorded  in  the  office  of  tin* 
judge  of  probate  of  the  county  in  wliich 
such  corporations  are  located;  or  if  they  ho 
located  in  different  counties,  in  tlie  office  of 
the  judge  of  probate  in  each  county;  and 
ui)on  the  filing  of  such  agreement  as  above 
provided,  the  consolidation   Is  complete. 

§  11.50.  On  such  consolidation,  the  parties 
may,   by   their  agreement  of  consolidation, 


14 


ALABAMA. 


Business  corporations  —  Code,  §§  1151-1155,  1251,  1252. 


adopt  the  name  and  charter  of  either  cor- 
poration as  the  name  and  charter  of  the 
consolidated  corporation,  and  may  make 
such  clianges  and  provisions,  as  to  the 
amount  of  stock,  and  the  number  of  directors 
of  tlie  consolidated  corporation,  as  thej-  may 
think  proper. 

S  ll.tl.  The  corporation  so  formed  by  con- 
solidation shall  be  entitled  to  all  the  prop- 
erty and  rights  of  each  of  tlic  corporations 
so  uniting,  and  liable  to  the  debts  and  ob- 
ligations of  each  of  them.  Suits  pending  for 
or  against  either  of  such  original  corpora- 
tions, nt  the  time  of  consolidation,  are  not 
abated,  and  shall  not  be  delayed  thereby, 
but  shall  proceed  in  the  name  of  the  con- 
solidated corporation. 

S  ll.')ii.  A  boanl  of  directors,  consisting  of 
such  number  as  may  be  prescriVted  by  the 
by-laws,  must  be  elected  annually  bj-  the 
stockholders,  and  must  hold  ottice  for  a  term 
of  twelve  months,  and  until  their  successors 
are  elected  and  <iualifled;  vacancies  occurring 
In  the  board  must  be  filled  by  the  remaining 
directors;  and  the  management  of  the  prop- 
erty and  business  of  the  corporation  is  un- 
der th^  control  of  the  directors,  who  have 
power  to  elect  and  appoint  all  officers, 
agents,  and  servants,  removing  them  at 
pleasure,  fixing  their  compensation,  and  pre- 
scribing their  duties,  and  to  exercise  such 
other  powers  as  may  be  delegated  to  them 
by  the  by-laws  of  the  adoption  of  the  stock- 
holders. 

See  §  1257,  note. 

§  n."».'i.  The  stockholders  must  meet  annu- 
ally at  such  time  and  place,  and  on  such 
notice  as  maj-  be  prescribed  by  the  bj--laws. 

See  §  1258. 

§  ll.>4.  The  capital  stock  of  the  coiiiora- 
tlon  may  be  Increased  to  a  sum  not  ex- 
ceeding ten  millions  of  dollars,  by  the  vote 
of  the  persons  liolding  the  larger  amount  In 
value  of  the  capital  stock,  at  a  meeting  of 
the  stockholders  called  for  that  purpose,  of 
which  meeting,  and  the  purpose  for  which 
it  Is  called,  thirty  days'  notice  must  be  given 
each  stockholder  personally,  whose  residence 
Is  known,  and  by  pul)llcation  for  four  con- 
secutive weeks,  in  some  newspaper  pul)llshed 
in  the  town  or  city  In  which  the  corporation 
Is  located;  and  if  at  siifh  meeting  the  per- 
sons holding  the  larger  amount  In  value  of 
the  stock  vote  for  such  Increase,  the  proceed- 
ings of  the  meeting  must  be  reduced  to  writ- 
ing, signed  by  the  president,  or  chief 
executive  officer  of  the  corporation,  and  filed 
and  recorded  In  the  office  of  the  Judge  of 
probate  of  the  countj';  each  stockholder  is 
entitled  to  a  preference  In  taking  of  tlie  In- 
creased stock  an  amount  in  proportion  to  the 
amount  of  the  original  stock  he  mnj*  own. 

See    5   12.'59,    niul   cross-referenees. 


§  1155.  Any  corporation  organized  under 
any  special  charter  for  mining,  quarrying, 
or  manufacturing,  may  exercise,  in  addition 
to  the  rights  and  powers  conferred  under 
its  special  charter,  all  the  rights,  powers 
and  privileges  of  corporations  organized  for 
mining,  quarrying,  or  manufacturing  under 
the  article.     [Act  of  February  21,  1SD8.] 

ARTICLE  II. 
Corporations  not   Specially  Provided  For. 

Sec.  1251.  Wbo  may  form. 

1252.  Declaration  to  be  filed  in  oflice  of  judge 

of  probate;  f()ntent.s. 
125.S.  Commission  issued  by  judge  of  probate. 
12.54.   Subsrrii)tlons  for  stock. 

1255.  Organization  of  corporation. 

1256.  General  powers. 

1257.  Board   of   directors;   election;   powers. 

1258.  Annual   meeting  of  stocliholders. 

1259.  Limit  of  capital  stock:  increase  thereof. 

1260.  Renewal  of  incorporation. 

8  1251.  T^\-o  or  more  persons,  associating 
themselves  for  the  carrying  on  of  any  in- 
dustrial business,  or  for  any  lawful  enter- 
prise, if  not  otherwise  provided  by  law,  may 
form  themselves  into  a  private  corporation, 
in  the  mode  and  with  the  capacity  and  pow- 
ers in  this  article  expressed. 

"  Corporntic"  "  defined.  Const.,  art.  XIV,  §  13. 
Must  be  formed  under  general  laws.  Id.,  §  1. 
r.usiness  confined  to  purposes  for  which  created. 
Id.,  §  5.  Limit  of  corporate  existence.  Code, 
g  1256,  subd.  1.     See  §  1137. 

[Judicial  notice  cannot  be  taken  of  the  charter 
or  act  incorporating  a  jirivnte  corporation.  City 
V.  Plankroad  Co.,  31  Ala.  70;  Drake  v.  Flewellen, 
38  Id.  106;  Church  v.  I'rlce,  42  id.  39.] 


§  1252.  The  persons  so  associating  must  file 
in  the  office  of  the  Judge  of  probate  of  the 
county  in  which  it  is  proposed  the  corpora- 
tion shall  have  Its  principal  place  of  busi- 
ness, a  declaration  In  writing,  signed  by 
each  of  them,  stating  — 

1.  The  names  and  residences  of  the  Hub- 
scril)ers,  and  the  name  and  style  of  the  pro- 
posed corporation. 

2.  The  general  purposes  of  the  corporation, 
the  nature  of  the  btisiuess  intended,  and  the 
piincipal  place  of  business  or  location  of  the 
corporation. 

3.  The  amount  of  the  capital  stock  and  the 
number  of  shares  into  which  It  Is  divided. 

4.  Any  other  matter  It  Is  deemed  desirable 
to  state. 

Limit  of  capital  stock.  §  1259.  Increase  thereof. 
Id.,  and  cross-references.  Charters  may  be 
amended.  §§  128.^-1284.  Limit  of  corporate  ex- 
istence may  be  stated.     §  1256.     See  f  1140. 

fPerson  who  contracts  with  n  corporation  de 
fncto  is  estopped  to  deny  Its  corporate  clinracter, 
nnd  cannot  mnlntnln  an  action  against  tlie  cor- 
porators Indlvldunllr  ns  partners.  Snlder's  Hniis 
(Vi.  V.  Trov,  91  .Ma.  224;  s.  c.  8  So.  Rop.  658. 
Corporatiiin"  do  facto  defined.  Id.  What  l«i  not 
such  denling  as  will  so  estop  a  person.  Pond  v. 
Rldg.  Assn.,  61  Ala.  232. 


ALABAMA. 


15 


P.iisiiu'S.s  corporations;  subscriptious  —  Code,  §§  12o3-1255. 


The  dcclnration  Is  an  acceptance  by  the  corpo- 
rators, under  the  name  designated,  and  for  the 
objects  expressed,  of  the  corporate  powers  and 
cupncit.v  the  hiw  confers.  If  more  be  introduced 
in  the  declaration  than  the  statute  requires  it  is 
mere  surplusage,  and  neither  adds  to  nor  detracts 
from  the  force  of  the  declaration.  Ins.  Co.  v. 
Kaniper,  73  Ala.  325;  s.  c,  10  Am.  Corp.  Cas.  21. 

Wliat  constitutes  the  charter  of  a  corporation 
under  the  general  law.  Id.  See  A.  &  M.  Assn.  v. 
Ins.  Co.,  70  Ala.  120.] 


S  12.":^.  I'pon  tli(»  filinc  of  tho  dcolnration. 
the  jiul.ce  of  probate  must  issue  to  two  or 
more  of  the  s^ubscriliers  to  the  declaration  a 
commission,  authorizing  them,  as  commis- 
sioners, to  open  books  of  subscription  to  the 
capital  stock  of  the  corporation  at  such  times 
antl  places  as  they  may  appoint. 

Subscriptions  must  be  payable  In  money.  Const., 
art.  XIV,  §  6;  Code,  §  1254.     See  §  1141. 

[Legislature,  under  present  Constitution,  has 
power  to  autliorlze  a  county  to  subscribe  for  stoclj 
In  a  railroad  company  if  the  people  chose  to  do  so 
by  a  popular  vote  to  tliat  eftect.  Kx  jjarte  R.  R. 
Co..  45  Ala.  r>;>(>.  A  county  may  be  authorized  and 
required  to  issue  l)onds  to  railroad  company  for 
I>ayment  of  stocic  so  subscriljed.'    Id. 

Wlien  a  person's  name  api)ears  on  Ijooljs  of  a 
corporation  as  a  stockholder,  presumption  is  tliat 
he  is  owner  of  stocli,  and  onus  is  on  liim  to  sliow 
tliiit  his  name  was  not  subscribed  ijy  liiniself.  nor 
by  his  autliority:  and  the  l)ool<s  are  admissible  as 
evidence  against  him.  Sempie  v.  Glenn,  [)1  Ala. 
2-15;  s.  c,   G  Su.  Rep.  46;  9  id.  265.] 


S  12."4.  All  subscriptions  to  or  for  the 
capital  stock  must  be  payable  In  money;  btit 
the  commissioners  may  receive  subscrip- 
tions payable  in  money,  the  subscriber  hav- 
ing the  privilege  of  discharging  the  same  by 
the  rendition  of  stipulated  necessary  ser- 
vices, or  the  performance  of  stipulated 
necessarj-  labor  for  the  corporation,  at  the 
reasonable  value  of  such  services  or  labor, 
or  in  property  at  the  reasonable  value 
thereof,  the  corporation  has  capacity  to  ac- 
quire and  hf>ld,  the  subscription  stating  the 
nature  and  character  of  such  property,  and 
when  It  is  to  be  transfeired  or  conveyed  to 
the  corporation. 

See  Const.,  art.  XIV,  §  C. 

fSurrender  and  cancellation  of  stoclt  is  valid  and 
binding  as  Jjetween  the  cori)oration  and  stoclj- 
liolders  who  avail  tlieniselves  of  It.  Glenn  v. 
I'^nchett,  91  Ala.  316;  s.  c,  8  So.  Rep.  40;  9  id. 
265. 

The  act  of  subscribing  for  shares  creates  con- 
tract with  cor[)oration  to  pay  for  shares  suli- 
scrllied  In  manner  provided  by  charter:  and  action 
may  be  maintained  to  recover  installments  called 
for  by  a  corporation,  notwithstanding  anotli'-r 
remedy  may  be  given  l)y  ch;irter.  lieene  v.  U.  R. 
Co..  .T  Ala.  600.  In  action  against  stocliholder  for 
Installments  upon  his  shares,  it  should  be  alleged 
by  corporation  that  defendant  had  notice  of  re- 
quisition. Carlisle  v.  R.  R.  Co..  4  Ala.  70.  Right 
to  claim  forfeiture  of  stock,  and  proceedings  con- 
sequent tliereujjon  Is  merol.v  a  cumulative  rem- 
edy, and  an  action  will  lie  to  recover  subscription, 
n.  R.  Co.  V.  Tipton.  5  Ala.  787. 

A  regul.nr  subseription  for  shares  imports  in 
itself  a  sufllclent  consideration,  and  mi^y  be  de- 
clared on  as  the  foundation  of  an  action.     Id. 

Wiiere  charter  does  not  re(piire  written  notice 
of  calls  for  stock,  a  verbal  notice  by  the  secri'tary. 


by  order  of  president.  In  pursuance  of  a  resolu- 
tion of  board  of  directors,  is  sutRcient.  Smith  v. 
riankroad  Co.,  30  Ala.  650.  Fraudulent  manage- 
ment of  corporation,  althongli  it  might  oei.-asion 
a  forfeiture  of  charter,  is  not  avallaljle  as  a  de- 
fense to  delinquent  stockholder  when  sued  by 
the  cori)oration.  Id.  Prescription;  presumption 
of  payment  for  stock  from  lapse  of  time.  Sempie 
v.  Glenn,  91  Ala.  245;  s.  c.  8  So.  Rep.  40;  9  id.  :^65. 

M'hen  stockholder  cannot  witlidraw  subscrip- 
tion, or  deny  corporate  existence.  Leliman  v. 
Warner,  61  Ala.  455:  s.  c,  6  Am.  Corp.  Cas.  155. 

Subscription  to  stock  is  a  contract,  and  must  be 
supported  by  a  consideration.  The  consideration 
is  the  riglit  secured  by  it  of  membership;  and 
when  these  are  not  secured  it  Is  wanting  In  con- 
sideration, as  are  notes  or  otlier  obligations  given 
for  its  payment.  Ins.  Co.  v.  Kauiper,  73  Ala.  325; 
s.  c,  10  Am.   Corp.   Cas.  21. 

IMll  by  sul)scribers  to  stock  to  have  vacated 
their  subscription,  and  to  liave  cancelled  notes 
given  therefor;  wlien  without  equity^  rights  of 
assignee  under  general  assignments.     Id. 

Unpaid  suliscription  for  stock  is  a  legal  liability 
on  which  an  action  of  delit  or  assumpsit  may  be 
maintained  by  the  corpf>ration.  Woldridge  v. 
Holmes.  78  Ala.  568.  Wliere  land  Is  conveyed 
by  stockholder  to  corporation  in  payment  of  sub- 
scription, the  company  Is  a.purchaseV  for  full  con- 
sideration, whether  certificates  of  stock  are  iss\ied 
to  him  or  not.  Frenkel  v.  Hudson,  82  Ala.  15.'"!; 
s.  c,  5  So.  Rep.  57S.  Alx)ve  section  (I0t>2)  con- 
strued. Knox  v.  Land  Co.,  86  Ala.  180;  s.  c,  2 
So.    Rep.    7.58. 

Agreement  to  take  shares  In  future  corporation 
Is  not  a  completed  contract  of  subscription;  and  if 
corporation  is  not  organized  within  reasonable 
time,  or  there  is  a  material  departure  from  the 
original  purpo.se,  court  of  equity  will  not  enforce 
it.  Knox  v.  Land  Co.,  86  Ala.  180;  s.  c,  5  So. 
Rep.    57.S. 

.^s  a  general  rule,  liability  of  stockholder  on  sub- 
scription does  not  mature  "until  call  is  made,  and 
he  cannot  be  sued  without  a  previous  call;  but 
otherwise  where  subscription  is  made  pavable  at 
specified  times.  Ruse  v.  Hromberg,  88  Ala.  619; 
s.   c,  7  So.   Rep.  HS4. 

When  subscription  for  stock  Is  made  pavable  In 
property,  the  property  must  be  taken  at  its"  reason- 
able money  valuation;  and  though  a  margin  will 
be  allowed  for  an  honest  dlflerence  of  opinion  as 
to  its  value,  a  valuation  grossly  excessive, 
knowingly  made,  wlille  its  acceptan"ce  mav  bind 
the  corporation,  is  a  fraud  on  creditors,  and 
they  may  proceed  against  the  stockholders  indi- 
vidually as  for  an  unpaid  subscription.  Land  Co. 
V.  B.  W.  &  E.  Co.,  92  Ala.  407;  s.  c,  9  So.  Rep. 
129.  ^ 

Where  one  has  contributed  property  In  exchange 
for  stock,  such  contribution  gives  him  no  valid 
c'aim  against  the  corporation  until  all  its  debts 
are  paid.  Gibson  v.  Furniture  Co.,  96  Ala.  357; 
s.  c.  11  So.  Rep.  .365. 

Evidence  of  suliscriptlon  for  stock  sufficient  to 
constitute  complainant  a  stockholder  and  entitle 
him  to  a  decree  for  dividends  earned.  Bank  v. 
Roden,  97  Ala.  404;  s.  c,  11  So.  Rep.  883.  In  an 
a<tion  on  a  note  for  a  conditioiuil  subscription  to 
stock,  the  fact  that  the  conditions  have  been  per- 
formed can  be  shown.  Hall  v.  Sims.  17  So.  Rep. 
5.34.  And  reasonable  performance  only  of  such 
conditions  is  required  liefore  payment  of  sul>serip- 
tiou  can  be  enforced.  Id.  Li.ibility  on  subscrip- 
tion to  stock.  Brockwav  v.  Land  Co.,  15  So.  Ren. 
431. 

The  Issuance  of  fictitious  stock  Is  a  defense  to 
an  action  on  a  note  given  for  a  su)>scription 
tliereto.      Bank   v.    alsey.    19   So.    Rep.    522. 

riea  in  action  on  subscription  to  corporate  stock, 
held  not  subject  to  demurrer.  Haas  v.  Hall,  111 
Ala.  442;  s.  c,  20  So.  Rep.  78. 


§  12.".">.  Fifty  per  cent,  of  tlie  proposed 
capital  stock  having  been  subscrilied  in  good 
faith  by  subscribers,  of  whose  solvency  the 
commissioners  are  satisfied,  they  shali  call 
the  subscribers  together  at  such  time  and 


16 


ALABAMA. 


Business  corporations;  general  powers  —  Code,  §  1256. 


place  as  thej'  inaj'  appoint  for  the  election 
of  a  board  of  directors  and  other  officers, 
and  the  further  organization  of  the  proposed 
corporation;  a  majority  in  value  of  the  sub- 
scribers being  present  in  person  or  by  proxy 
at  such  time  and  place,  they  must  elect  a 
board  of  directors  from  the  subscribers,  con- 
sisting of  not  less  than  three,  nor  more  than 
nine  members,  and  such  other  officers  as 
they  may  deem  necessary;  the  directors 
holding  office  for  a  term  of  twelve  months 
thereafter,  and  until  their  successors  are 
elected  and  qualified;  and  shall  designate  an 
officer  of  their  election,  or  some  person  of 
their  appointment,  to  receive  from  the  com- 
missioners the  subscriptions  for  stoclc. 
Upon  the  deliverj-  of  the  subscriptions  to 
Buch  officer  or  person,  he  shall  require  of  the 
subscribers  whose  subscriptions  are  payable 
In  money,  without  the  privilege  of  discharge 
in  services  or  labor,  or  property,  the  pay- 
ment in  cash  of  twenty  per  cent,  thereof; 
and  of  the  subscribers  whose  subscriptions 
are  payable  in  money,  with  the  privilege  of 
discharging  the  same  in  stipulated  services 
or  labor,  or  in  the  transfer  or  conveyance  of 
property,  contracts  in  writing  signed  by 
them,  expressing  such  privilege,  and  binding 
them  to  the  rendition  of  the  services,  or  the 
performance  of  the  labor,  or  the  transfer  or 
conveyance  oi  property,  at  such  times 
as  the  board  of  directors  may  appoint.  The 
proceedings  of  the  meetings  of  the  sub- 
scribers must  be  reduced  to  writing,  and 
must  be  signed  by  them  and  delivered  to 
the  commissioners,  who  must  return  and  file 
the  same  in  the  office  of  the  judge  of  probate; 
and  the  officer  or  person  to  whom  the  sub- 
scriptions for  stock  have  been  delivered, 
must  make  a  copy  thereof,  and  verify  the 
same  by  affidavit,  stating  in  such  affidavit 
from  which  of  the  subscribers  he  has  re- 
ceived payment  in  cash  of  twenty  per  cent., 
and  from  which  he  lias  received  contracts 
in  writing,  as  hereinbefore  specified;  upon 
the  filing  of  such  papers,  the  judge  of  pro- 
bate must  issue  to  the  suliscribers.  their  as.so- 
ciates  and  their  sucessors.  a  certificate  stat- 
ing that  they  are  duly  organized  as  a  cor- 
poration, under  the  name  and  style,  and  for 
the  inn-j)oses  expressed  in  the  declaration, 
having  the  powers,  capacity  and  authority 
conferred  by  law. 

Election  of  directors.  §  12.57.  Defects  in  organ- 
ization may  be  amended.  See  §§  1283-12S4.  See 
§  1143. 

[Above  section  chanffos  tlie  common  law  rule, 
and  a  business  corporation  may  bo  organized  be- 
fore all  capital  stock  has  been  subscribed  for. 
Schloss  V.  IVade  Co.,  87  Ala.  411;  s.  c,  0  So.  Rep. 
VT.. 

Stockholder  who  has  participated  in  corporate 
action,  or  ratified  or  acquiesced  in  it.  is  estopped 
from  impeachins:  validitv  of  such  action.  R.  R. 
Co.  V.   Grayson.  SS  Al:i.  .">72:  s.  c,  7  S<i.    liep    1£2. 

Voting  by  proxy  not  unlawful.  R.  R.  Co.  v. 
Nicholas,  OS  Ala.  02:  s.  c,  12  So.  Rep.  723.  In- 
valid acts  of  proxy:  upou  what  it  depends.  Id. 
The  exchange  of  debentures  for  bonds  did  not 
affect  voting  power  given  the  debenture  holders 
Id.] 


§  125(1.  When  duly  organized  such  cor- 
poration has  power  — 

1.  To  have  succession  by  the  corporate 
name  for  a  period  of  twenty  years,  if  a  less 
period  be  not  expressed  in  the  declaration. 

Name  must  be  stated  in  the  declaration.  §  12o2. 
Corporation  may  be  renewed.     §  12G0. 

[Identity  of  corporation,  under  changed  name, 
in  suit  to  enforce  subscription  to  stock.  Semple 
V.  Glenn.  91  Ala.  245;  s.  c.  6  So.  Rep.  46;  9  id. 
70.5.  Change  of  con^onite  name;  privity  of  con- 
tract. Coal  Co.  v.  Long,  01  Ala.  538:  s.  c..  8  So. 
Rep.  7(5.5.  Xamc  of  corporation  not  being  expressly 
given  by  charter,  may  be  acquired  by  implication 
and  use.     Smith  v.   Plankroad  Co.,  30  Ala.  650. 

Duration  of  corporate  existence  may  be  limited 
by  a  by-la^\'  adopted  at  the  time  of  organization. 
M.  &  r.  Line  v.  Wagauer,  71  Ala.  581;  s.  c.,  10 
Am.   Corp.   Cas.   12. 

The  "American  Mortgage  Co.  of  Scotland  "  and 
the  "American  Mortgage  Co."  are,  pri;na  facie, 
different  corporations.  State  v.  Sloss,  S7  Ala.  110; 
s.  c,   6  So.  Rep.  309.] 


2.  To  sue  and  be  sued;  and,  if  deemed 
necessary,  to  have  a  corporate  seal,  which 
may  be  altered  at  pleasure. 

See  Const.,  art.  XIV,  §  12.  Forgery  of  corpo- 
rate seal.  §  4721.  Senice  of  summons  upon  a 
corporation  (1)  in  chancery.  See  p.  36.  (2)  At  law. 
§  3274.  (3)  On  indictment.  §  5317.  Venue  of  ac- 
tion against.  §  4207.  Attachment.  §§  533,  535. 
Actions  to  vacate  charter.  §§  3417  et  seq.  Re- 
ceiver may  sue.  §  1204.  Dissolved  corporation 
may  close  up  suits.  §§  1298,  1300.  Foreign  cor- 
porations may  be  sued,  how.  Const.,  art.  XIV, 
§  4.  Suits  by  corporation  against  subscribers  to 
stock.     §  1254,  note. 

[A  private  corporation,  authorized  to  "  borrow 
money,  and  issue  their  bonds  therefor,"  may  b!> 
sued  on  the  obligation  they  give  for  the  repay- 
ment of  money  borrowed,  whether  it  be  under 
seal  or  not.  McCullough  v.  Ins.  Co.,  46  Ala.  370. 
When  sued  on  a  contract  made  by  it,  corporation 
cannot  plead  nul  tiel  corporation,  unless  in  case  of 
misnomer  or  dissolution.  Id.  Competency  as  evi- 
dence of  books  of  a  private  corporation.  Id. 
Plea  of  nul  tlel  corporation  irrelevant,  when. 
Ware  v.  Rope  Co.,  47  Ala.  667.  Person  who  eon- 
tracts  with  a  corporation  as  stich  is  estopped  to 
denv  its  corporate  character.  Snider's  Sons'  Co. 
V.  Troy,  01  Ala.  224;  s.  c,  8  So.  Rep.  658.  De 
facto  corporation  defined.  Id.  What  not  such 
dealing  as  will  work  an  estoppel.  Pond  v.  Bldg. 
Assn.,  01  Ala.  232.  Judicial  notice  cannot  be 
taken  of  the  charter,  or  act  incorporating  a  pi'i- 
vate  corporation.  City  v.  Plankroad  Co.,  31  Ala. 
70;  Drake  v.  Flewellen,  33  id.  106;  ("hurch  v. 
Price,  42  id.  30;  Perry  v.  R.  R.  Co.,  55  id.  413. 
Otherwise  if  organized  under  general  law.  Kel'y 
V.  Trustees.  58  Ala.  480.  A  corporation  is  bound 
b.v  same  implications  and  inferences  which  bind 
natural  persons.  Bates  v.  Bank,  2  Ala.  4.51;  R.  R. 
Co.  V.  Hunt,  9  id.  513;  R.  R.  Co.  v.  Tipton,  5  id. 
787. 

If  a  corporation  lends  money,  without  authoilty 
under  charter,  and  takes  promissory  note  to  s(>- 
cure  payment,  it  cannot  recover  under  the  com- 
mon money  counts.  I-odge  v.  Waddill,  38  Ala.  313. 
The  charter  of  a  corporation  cannot  be  declared 
void  in  a  collateral  proceeding,  and  evidence  of 
fraud  in  procurement  of  charter  is.  therefore,  hi- 
admissible  in  such  proceedings.  Duke  v.  Nav.  Co., 
10  Ala.  372.  In  nn  action  l)rought  by  a  corponi- 
lion  it  is  not  necessary,  under  the  general  issu". 
to  prove  its  corporate  character.  Garrett  v.  Bank. 
1  Ala.  241. 


ALABAMA. 


17 


Business  corporations;  general  powers  —  Code,  §  1256. 


Xeceesarv  averments  of  declaration  in  an  action 
bv  a  corporation.     R.  R.  Co.  v.  Tipton,  5  AIn.  787. 

"W'hfn  name  of  a  corporation  Is  changed,  It  may 
sue.  In  Its  new  name,  to  enforce  former  contracts, 
averring  that  they  were  made  with  It  by  Its  former 
name.     Exrs.  v.  "Tuscaloosa,  6  Ala.   327. 

An  action  of  trespass  for  false  Imprisonment 
lies  against  a  corporation,  l>ut  an  action  on  the 
case  for  malicious  prosecution  does  not.  Owsley 
V.  R.  R.  Co.,  37  Ala.  560:  overruled  as  to  last 
proposition  In  Jordan  v.  R.  R.  Co.,  74  Id.  85. 
What  Is  necessary  to  sustain  a  judgment  by  de- 
fault against  a  corporation.  Express  Co.  v.  Car- 
roll, 42  AlQ.  437;  Ins.  Co.  v.  McCullough,  42  Id. 
667;  Lvon  v.  Admrs.,  3  Id.  151;  R.  R.  Co.  v.  Cole, 
6  Id.  6.55;  R.  R.  Co.  v.  Hart  well,  43  Id.  508. 

During  the  existence  and  operation  of  a  corpora- 
tion. Its  general  creditors  have  no  lien  which  will 
entitle  them  to  sue  It  In  a  court  of  equity;  but  Its 
property  can  he  subjected  to  the  payment  of  Its 
debts  bv  actions  at  law.  R.  R.  Co.  v.  Branch,  59 
Ala.  139;  s.  c,  6  Am.  Corp.  Cas.  130. 

A  corporation  Is  liable  for  damages  caused  by 
the  employment  of  unfit  persons.  Ry.  Co.  v. 
Smith.  59  Ala.  245.  And  for  the  improper  selec- 
tion of  Its  officers.  Id.  Who  are  fellow  servants. 
Id.;  Tyson  v.  R.  R.  Co.,  61  Ala.  554.  What  duty 
a  corporation  owes  to  employes  in  relation  of  fel- 
low servants.     Id. 

In  a  suit  against  a  corporation  by  an  employe, 
it  may  recoup  damages  caused  by  lils  fault.  Ry. 
Co.  V.  Clanton,  59  Ala.  392.  A  corporation  may 
sue  an  employe  for  damages  caused  by  his  neg- 
ligence.    Id. 

A  corporation  has  power  to  malie  a  bond  in  a 
judicial  proceeding.  Collins  v.  Hammoclc,  59  Ala. 
448;  s.  c,  6  Am.  Corp.  Cas.  143. 

A  corporation  Is  civilly  liable  for  torts  or  for 
acts  and  negligence  of  its  servants  or  agents,  to 
same  extent  and  under  same  circumstances  as  a 
natural  person;  the  only  limitation  being  that  It 
le  not  liable  civilly  or  criminally  for  torts,  of 
which  malice  Is  an  essential  ingredient.  R.  R. 
Co.  V.  Chappell,  61  Ala.  527;  s.  c,  6  Am.  Corp  Cas. 
161.  And  it  is  so  liable  whether  acting  within  the 
scope  of  Its  corporate  power  or  not.     Id. 

Stockholders  may  obtain  redress  when  interests 
of  corporation  are  endancered.  Manf.  Co.  v.  Cox, 
68  Ala.  71;  s.  c,  9  Am.  Corp.  Cas.  1. 

When  suit  by  Individual  shareholder  will  not  be 
entertained.  Roman  v.  Woolfolk,  98  Ala.  219;  s.  c, 
13  So.  Rep.  212. 

To   obtain   equitable   relief   against   corporation 
and  its    officers,  a  stockholder    must    show  what. 
Perry  v.  Mill  Co..  93  Ala.  3G4;  s.  c,  9  So.  Rep.  217. 

Bill  by  stockholder  to  enjoin  another  corpora- 
tion from  voting  Its  stock  In  election  of  officers, 
etc. ;  laches  for  more  than  six  vears  a  defense. 
George  v.  C.  R.  &  B.  Co.,  101  Ala.  607;  s.  c,  14 
So.  Rep.  752. 

Injunction  against  corporation  at  suit  of  stock- 
holders; previous  request  to  directors  for  action. 
Id. 

Bill  by  minority  of  stockholders  against  a  cor- 
poration and  directors  Is  without  equitv,  when. 
M.  &  P.  Line  v.  Waganer,  71  Ala.  581  ;"8.  c,  10 
Am.  Corp.  Cas.  12.  In  such  proceeding  regular- 
ity of  corporation  cannot  be  questioned.  Id. 
When  such  bill  not  multifarious.     Id. 

When  a  bill  in  equity  is  filed  by  a  creditor 
against  a  corporation.  Its  directors  and  officers 
cannot  be  joined  as  defendants  for  the  sole  pur- 
pose of  discovery.  Norwood  v.  R.  B.  Co.,  72  Ala. 
563. 

Necessary  averments  In  bill  In  equitv  by  corpo- 
ration.   Dennlston  v.  Ins.  Co.,  73  Ala.  465. 

An  action  against  a  corporation,  founded  on  a 
contract  which  Is  ultra  vires,  may  be  defeated  on 
that  ground;  but  this  principle  does  not  apply  to 
an  action  ex  delicto,  founded  on  a  tort  committed 
by  Its  officers  or  agents.  R.  &  B.  Co.  v.  Smith,  76 
Ala.  573.  What  Is  necessary  to  render  a  corpora- 
tion liable,  In  an  action  ex  delicto,  for  damages 
caused  by  negligence  of  agents  or  servants  in  per- 
formance of  a  contract  which  Is  ultra  vires.  It 
must  be  shown  that  the  contract  was  Its  corporate 
act,  and  not  the  unauthorized  act  of  such  officers 
or  agents.  Id.  Duty  of  stockholder  before  bring- 
ing suit  In  equity  in  respect  to  acts  of  directors. 
Nathan  v.  Tompkins,  82  Ala.  427;  s.  c,  2  So.  Rep. 
747.  Multifariousness  In  bill  between  stockholders 
and   corporation.      TutwUer  v.    Land   Co.,   89   Ala. 


391;  s.  c,  7  So.  Rep.  .398.  Necessary  parties  to 
such  bill.  Id.  Injunction  against  corporation  at 
suit  of  stockholders;  previous  request  to  directors 
for  action  is  necessarj-  unless  facts  are  stated 
which  show  that  such  requests  would  be  useless. 
Mack  V.  Coal  &  Iron  Co.,  90  Ala.  396;  s.  c,  8  So. 
Rep.   150. 

Corporation  may  be  liable  for  exemplary  dam- 
ages In  suing  out  a  judgment  wrongfully  and 
maliciously.  Bank  v.  Eboru,  84  Ala.  529;  s.  c,  4 
So.   Rep.  386. 

An  action  cannot  be  maintained  against  a  rail- 
road corporation  in  Alabama  for  a  tort  committed 
in  Mississippi  unless  the  tort  was  actionable  at 
common  law,  or  is  shown  to  be  actionable  by 
statute  in  Mississippi.  Kahl  v.  R.  R.  Co.,  95 
Ala.  337;  s.  c,  lu  So.  Rep.  661.  Negligence  of  em- 
ploye, negligence  of  corporation.  R.  R.  Co.  v. 
Phillips,  98  Ala.  159;  s.  c,  13  So.  Rep.  65;  R.  R.  Co. 
V.  Sanders,  98  Ala.  293;  s.  c,  13  So.   Rep.  57. 

In  suit  to  recover  for  work  done  for  a  corpora- 
tion. It  Is  proper  to  admit  testimony  that  one  of 
the  directors  saw  plaintiff  engaged 'in  the  work, 
and  testimony  of  value  of  such  work  is  admissible. 
Ry.  Co.  v.  Corpenning,  97  Ala.  681;  s.  c,  12  So. 
Rep.    295. 

In  an  action  begun  against  corporation,  plaintiff 
may  amend  complaint  and  correct  misnomer. 
Manf.  Co.  v.  Greeullef,  100  Ala.  272;  s.  c,  14  So. 
Rep.  109. 

Bill  filed  by  corporation  to  quiet  title  not  de- 
murrable because  it  falls  to  aver  that  corporation 
had  power  to  acquire  a  whole  lien ;  and  corpora- 
tion will  be  presumed  to  have  had  such  power. 
Engine  Co.  v.  Mobile,  101  Ala.  559;  s.  c,  14  So. 
Rep.  557. 

Right  of  corporation  to  enforce  a  lien  for  a  debt 
due  It  by  another  corporation  on  stock  purchased 
by  an  officer  of  the  latter  with  the  funds  thereof. 
Lumber  Co.  v.  Ress,  16  So.  Rep.  637. 

A  bank  officer  cannot  testify  to  contents  of 
books  of  the  bank  without  producing  them.  Roden 
V.    Brown.   15  So.   Rep.  598. 

The  books  of  a  corporation  are  evidence  against 
it  and  between  the  members  thereof,  but  not  in 
their  favor,  in  suit  brought  ag.ninst  It  by  a 
stranger.     Tuscaloosa  v.  Wright.  2  Port.  231. 

Court  of  common  law  cannot  compel  officer  or 
agent  of  a  corporation  to  produce  Its  books,  but 
a  court  of  eqnlty  may,  and  necessltv  for  their  pro- 
duction gives  equity  to  a  bill  for  discovery;  but, 
since  a  corporation  cannot  answer  on  oath,  the 
officer  having  custody  of  books  should  be  joined 
as  a  defendant.  Mining  Co.  v.  Hale,  93  Ala.  542; 
s.  c,  9  So.  Rep.  256. 

Books  of  corporation  as  evidence.  Terrv  v. 
Bank,  93  Ala.  599;  s.  c,  9  So.  Rep.  299. 

A  party  not  having  books  of  corporation  in  his 
power  may,   without  notice  to  produce,   prove  its 
transactions  by  other  evidence.     Gaines  v.   Bank, 
Minor,  50.     When  an  efTort  is  made  to  prove  fact 
of  agency  by  an  order  upon  the  corporate  books, 
the   books  themselves   must   be   produced,    or   sec- 
ondary evidence  of  contents,   after  notice  to   pro- 
duce them.     R.   R.   Co.   v.  Hurst,  9  Ala.  513.     The 
organization  of  a  corporation  is  a  matter  properly 
proved    by    books    of    corporation,    and    that,    too, 
when  suit  Is  against  a  stranger.    Duke  v.  Nav.  Co., 
10  Ala.   82.     Person   contracting   with   a   de   facto 
corporation   is  estopped  to  denv  Its  corporate  ex- 
istence.    A.   &  M.  Assn.   V.   Ins.   Co.,  70  Ala.  120; 
s.  c,  9  Am.  Corp.  Cas.  8.     Legal  existence  of  cor- 
Iioration   cannot   be  inquired   into   collaterally  but 
only  by  the  State  In  a  direct  proceeding  instituted 
for  that  purpose.     Id.;  Sherwood  v.  Alvla,  83  Ala. 
115;   s.    c,   3  So.    Rep.   307;   Corv   v.    Lee,   93   Ala. 
468;  s.  c.  8  So.  Rep.  694;  Bibb  v.  Hall.  101  Ala.  79; 
s.  c,  14  So.  Rep.  98;  Kahn  v.  Hall,  101  Ala.  102; 
s.  c,   14  So.   Rep.   liio.     Plea  of  the  general  issue 
by  corporation  admits  what.     Zealv  v.   Rv.   &   E. 
Co.,  99  Ala.  579;  s.  c,  13  So.  Rep.  118.     .\  special 
statute,  amending  charter  of  a  private  corporation 
and  ratifying  its  previous  organization  thereunder, 
is  competent  evidence  of  the  existence  of  a  cor- 
poration.   Boykin  v.  State,  96  Ala.  16;  s.  c,  11  So. 
Rep.  66. 

Execution  of  a  note  to  a  corporation  by  Its  cor- 
porate name.  Is  an  admission  of  the  fact,  and 
prima  facie  evidence  of  existence  of  charter  of 
company,  and  user  under  It,  under  plea  of  nul 
tlel  corporation.  R.  R.  Co.  v.  Hurst,  9  Ala.  513. 
When   plea  of  nul   tlel  corporation  Is  not  estab- 


18 


ALABAMA. 


Business  corporations;  general  powers  —  Code,  §  1256. 


llshed.  Sparks  v.  ■V\"oodwar(1,  87  Aln.  294;  s.  c, 
6  So.  Rep.  1"J5.  AVbon  such  plea  presents  good 
defense.  .Tolinsnn  v.  Bank,  88  Ala.  1271;  s.  c,  6 
So.  Rep.  909.  Evidence  being  adduced  prima  facie 
establishing  a  partnershij),  tlio  onus  is  on  defend- 
ant to  prove  incorporation.  Clark  v.  Jones,  87  Ala. 
474;  s.  c,  6  So.  Kep.  362.] 


3.  To  hold,  purchase,  dispose  of,  and  con- 
vey such  real  and  personal  property  as  the 
nature  of  Its  business  may  require. 

Dissolved  corporation  may  dispose  of  Its  prop- 
erty.    §  1298. 

fQuestlon  as  to  power  of  corporation  to  acquire 
property;  when  and  by  whom  may  be  raised. 
Trustees  v.   Donovan.  58  Ala.  241. 

Stipulation  for  payment  for  lands  "  In  bonds  of 
company  "  does  not  imply  that  preferred  bonds 
shall  be  delivered.  Coal  Co.  v.  Long,  91  Ala.  538; 
s.   c.   8  So.   Rep.   765. 

When  contract  of  corporation  is  ultra  vires, 
neither  party  can  enforce  it,  and  either  of  them 
may  assail  its  validity:  but,  when  fully  executed, 
as  by  execution  of  deed  and  full  payment  of  pur- 
chase mone.v,  a  court  of  equity  will  not  rescind  it, 
nor  grant  relief  against  it.  Long  t.  Ry.  Co,,  91 
Ala.  519:  s.  c.  8  So.    Rop.  706. 

Ratification  by  corporation  of  agent's  execution 
of  deed  operates  as  an  equitable  estoppel  of  which 
courts  of  law  cannot  take  cognizance  in  actions 
involving  the  legal  title.  Standlfer  v.  Swan,  78 
Ala.  88;  10  Am.  Corp.  Cas.  49:  Ware  v.  Swan,  79 
Ala.  330.  Corporation  cannot  appoint  an  agent  to 
convey  lands,  except  by  vote  of  directors.  Id. 
Corporations  are  capable  of  making  every  species 
of  deed,  and  have  general  power  to  execute  mort- 
gages for  security  of  their  debts.  R.  R.  Co.  v. 
Talman,  15  Ala.  472;  Allen  v.  R.  R.  Co.,  11  id. 
437.  When  corporate  seal  Is  afHxed  to  a  deed  by 
proper  officer,  validity  of  deed  will  be  presumed. 
Id.  Power  of  taking  a  disposition  of  real  estate, 
construed.  I'ond  v.  Bldg.  Assn.,  61  Ala.  232. 
Deed  of  a  corporation;  what  is  a  sufficient  execu- 
tion of.     R.  R.  Co.  V.  Lancaster,  62  Ala.  555. 

Where  an  officer  or  agent  of  a  private  corpora- 
tion sells  and  conveys  land  to  it,  his  knowledge 
of  an  outstanding  equity  does  not  charge  the  cor- 
poration with  notice.  Frenkel  v.  Hudson,  82  Ala. 
158;  s.  c,  2  So.   Rep.  758. 

Sale  of  lands  by  a  person  professing  to  act  as 
agent  of  a  corporation,  but  not  shown  to  have 
any  written  authority,  and  whose  appointment  is 
not  evidenced  by  any  vote  of  directors.  Is  without 
any  validity  whatever.  Swan  v.  Miller,  82  Ala. 
530;   s.   c,    1  So.    Rt^p.   65. 

Deed  of  corporation  executed  by  agent  without 
written  authority  from  board  of  directors,  passes 
no  legal  title  as  against  the  corporation.  Swann 
v;  Gaston.  87  Ala.  569;  s.  c,  6  So.  Rep.  386. 

Conveyances  by  corporations  are  to  be  executed 
In  same  manner  as  those  bv  Individuals,  as  pro- 
vided by  the  (^ode.  Jinwrlght  v.  Nelson,  105  Ala. 
399:  s.  c,  17  So.  Rep.  91.  Acknowledgment  of 
deed  by  foreign  corporation,  and  sufficiency  of. 
Id.] 


4.  To  appoint  such  officers  and  agents  as 
may  be  deemed  neces.sary  for  the  trans- 
action of  its  business,  and  the  management 
and  control  of  its  affairs  and  property. 

Directors.  §  1257,  and  cross-references.  Failure 
to  elect  officers.     §§  1276,  1280. 

[When  express  authority  of  agent  of  a  corpo- 
ration need  not  be  proved,  but  may  be  implied. 
Tel.  Co.  V.  Pleasants,  46  Ala.  G41. 

Appointment  of  an  agent  by  a  corporation  need 
not  be  evidenced  by  a  written  note  of  its  func- 
tionaries; it  may  be  inferred  from  the  adoption 
of  acts  of  agent  by  such  functionaries,  or  by  the 
corporation.      R.    R.    Co.    v.    KIdd,    29    Ala.    221; 


Everett  v.  U.  S.,  6  Port.  166;  Curry  v.  Bank.  8  Id. 
r{62:  Bates  v.  Bank,  2  Ala.  451;  R.  R.  Co.  v.  Hurst, 
9  Id.  513. 

("orporation  not  bound  by  declarations  of  Its 
otTicers,  unless  made  when  acting  for  it,  and  about 
the  business  which  tliey  are  transacting  for  it. 
Smith  V.  Plankroad  Co.,  30  Ala.  650;  Rives  v. 
Plankroad  Co.,  id.  92;  Ready  v.  Mayor,  6  Ala.  .^27, 

If  agent  of  private  corporation  contracts  a  debt 
upon  its  supposed  credit,  when  corporation  in 
fact  had  no  authority  to  contract  debts,  the  con- 
tract imposes  an  original  personal  liability  on  the 
agent.  Drake  v.  Flewellen,  33  Ala.  106;  Harwood 
V.  Ilumos,  9  id.  659. 

Reports  of  officers  to  stockholders  or  directors, 
regarding  liabilities,  will  not  bind  corporation, 
when.  Hall  v.  Ry.  Co.,  58  Ala.  10.  An  officer 
whose  term  has  expired  ma.v,  if  no  successor  be 
appointeil,  continue  to  perform  the  duties  of  the 
ollice.  Thorington  v.  Gould,  59  Ala.  461;  s.  c,  6 
Am.  Corp.  Cas.  147.  How  persons  may  be  proved 
to  be  corporate  officers.  Ins.  Co.  v.  Peacock,  67 
Ala.  253.  Liability  of  corrioration  for  loss  arising 
from  acts  of  its  officers.  Id.  Authority  of  secre- 
tary to  borrow  money  for  corporation.  Id.  Rati- 
fication bv  agent  of  corporation,  when  an  estop- 
pel.    Taylor  v.   A.   &   M.   Assn.,  68  Ala.  229. 

Appointment  of  agent  by  or  for  a  corporation 
ma.v  be  implied  from  confirmation  of  his  acts  or 
acceptance  of  his  services.  R.  R.  Co.  v.  Hill,  76 
Ala.  303;  s.  c,  10  Am.  Corp.  Cas.  40;  Reynolds  v. 
Collins,  78  Ala.  94. 

('orporatlon  for  manufacturing  machinery  has 
no  power  to  act  as  agent  of  another  manufacturer 
of  machinery.  Machine  Co.  v.  Wilkinson,  79  Ala. 
312.  Note  taken  by  it  from  a  purchaser  is  void 
and  cannot  be  enforced  either  against  the  maker 
or  against  the  corporation  as  indorser.  Id.  Au- 
thoritv  of  agent  of  a  corporation  construed.  Stan- 
ley V."  Coal  Co..  83  Ala.  260;  s.  c,  4  So.  Rep.  34. 

Contract  of  officer  or  agent  of  corporation  for 
his  own  personal  benefit;  he  Is  liable  to  account 
to  corporation  for  profits  realized.  Perry  v.  Mill 
Co.,  93  Ala.  364;  s.  c,  9  So.  Rep.  217.  No  formali- 
ties are  essential  to  appointments  by  a  corpora- 
tion unless  expressly  provided  by  Its  charter. 
Transp.  Co.  v.  Kavauaugh,  101  Ala.  1;  s.  c,  13  So. 
Rep.  283.  Power  of  general  agent  under  appoint- 
ment by  resolution  of  board  of  directors.  Id. 
Evidence  competent  to  show  that  person  is  agent 
of  a  corporation.  Id.  Exorcise  by  agent  of  powers 
not  expressly  conferred;  when  binding.  Id.  Acts 
and  contracts  of  agents  may  be  ratified  b.v  a  cor- 
poration, how.  Bibb  V.  Hall,  101  Ala.  79;  s.  c, 
14  So.  Rep.  98;  Kahn  v.  Hall.  101  Ala.  102;  s.  c,  14 
So.  Rep.  105.  Ratification  by  corporation  of  acts 
of  Its  stockholders.  Davis  v.  Chemical  Co.,  101 
Ala.  127;  s.  c,  8  So.  Rep.  496.  Stockholders  may 
sue  president  for  an  accounting,  when.  Stelner  v. 
Parsons,  16  So.   Rep.  6. 

It  will  not  be  presumed  that  it  is  the  duty  of 
the  president  of  a  corporation,  as  such,  to  pay  its 
debts.     Sampson  v.  ITox,  19  So.  Rep.  896.] 


5.  To  make  all  needful  by-laws,  rules  and 
regulations  for  the  transaction  of  its  busi- 
ness, the  management  and  control  of  its 
affairs,  and  the  uses  and  disposition  of  its 
property;  and  for  the  transfer  of  its  stock, 
and  the  creation  and  preservation  of  a  lien 
upon  the  shares  of  its  stockholders,  for  the 
payment  of  any  debt  or  liability  they  may 
Incur  to  the  corpoi*ation, 

[Binding  force  of  by-laws.  Weatherly  v.  M.  & 
S.   Soc,  76  Ala.  567.] 

0.  To  carry  on  the  business,  or  accomplish 
the  purposes  expressed  in  the  declaration. 

Powers  limited  to  purposes  of  creation.  Const., 
art,  XIV,  §  5.    Powers  after  dissolution.    §  1298. 

[The  ancient  rule  applied  to  corporations  exist- 
ing by  the  common  law,  that  they  could  act  only 


ALABAMA. 


19 


Ijusiiu-s«  corporations;  powers;  directors  —  Code,  §§  1250,  1257. 


by  their  common  seal,  has  no  application  to  those 
created  by  statute.  Curry  v.  Banij,  8  Port.  361. 
The  making  of  a  note  to  a  corporation  is  an  ad- 
mission by  the  maker  of  the  existence  of  the  cor- 
poration.    R.   R.   Co.   V.   Hunt,   9  Ala.   513. 

Unless  restrained  by  legislative  enactment,  the 
contracts  of  a  corporation  may  be  made  in  the 
aanie  manner  or  form  in  which  similar  contracts 
could  be  made  by  an  Individual.  Trustees  v. 
Moody,  62  Ala.  389;  s.  c,  6  Am.  Corp.  Cas.  166. 

Any  corporation,  public  or  private,  has  capac- 
ity, "if  not  prohibited,  to  take  a  mortgage  as 
gecurity  for  the  debt  contracted  in  furtherance  of 
the  objects  of  its  creation.  State  v.  Hice,  ti.5  Ala. 
83.  I'ower  of  a  corporation  to  borrow  money. 
Ins.  Co.  V.  I'eacock,  67  Ala.  253. 

A  corporation  can  only  exercise  powers  ox- 
pressly  granted,  or  implied  powers  necessary  to 
carry  Into  effect  those  expressed  powers,  and 
such  incidental  powers  as  pertain  to  the  purposes 
of  their  creation.  R.  &  B.  Co.  v.  Smith.  7'i  AK. 
573.  Persons  dealing  with  a  corporation  are 
required,  at  their  peril,  to  inform  themselves  of 
the  fact  that  It  has  a  legal  existence,  and  of  the 
extent  of  its  powers;  and  are  chargeable  with 
notice  of  every  fact  that  would  be  disclosed  by 
the  aet  of  its  inrorporatlon,  or  other  acts  therein 
referred  to.     Spencer  v.  Ry.  Co.,  TS)  Ala.  570. 

Railroad  corporation  cannot,  without  an  ex- 
pressed grant  of  power,  acquire  interests  in 
mineral  lands  not  necessary  for  its  purpose. 
AVilkes  v.  R.  R.  Co.,  79  Ala.  180. 

Unless  restrained  by  statute,  an  insolvent  cor- 
poration, acting  through  its  board  of  directors, 
may  make  an  assignment  for  the  benefit  of  its 
creditors.  Cliamberlin  v.  Bromberg,  83  Ala.  576; 
S.  c.  3_So.  Rep.  4.34. 

A  railroad  corporation  has  authority  to  ofTer  re- 
ward for  arrest  and  conviction  of  offenders 
against  its  property.  R.  R.  Co.  v.  Cheatham.  85 
Ala.  1^92;  s.  c,  4  So.  Rep.  82S.  A  person  earning 
such  reward  may  collect  the  same.  Id.  As  to 
acts  or  contracts  of  stockholders  individually,  be- 
fore incorporation,  see  Hardware  Co.  t.  Hardware 
Co.,  87  Ala.  206;  s.  c,  6  So.  Rep.  41.  Corporation 
organized  to  mine  and  manufacture  lime-rock  has 
no  incidental  power  to  carry  on  a  mercantile  busi- 
ness. Lime  AVorks  v.  Dlsmukes,  87  Ala.  344;  s.  c, 
6  So.  Rep.  122.  Ownership  and  operation  of  one 
corporation  by  another.  Johnson  v.  State,  98  Ala. 
57:  s.  c,  13  So.  Rep.  50.3. 

Employment  of  attorneys  by  or  for  a  corpora- 
tion to  manage  its  legal  business  is  within  au- 
thority of  board  of  directors.  Perrv  v.  Mill  Co.. 
93  Ala.  364;  s.  c,  9  So.  Rep.  217.  When  authority 
of  a  corporation  to  enter  into  and  perform  a  con- 
tract is  to  be  presumed.  E.  L.  &  P.  Co.  v.  Hanby, 
101  Ala.  15;  s.  c,  13  So.  Rep.  343.] 


7.  To  borrow  money,  and  to  mortgage,  or 
otherwise  convey  or  pledge  its  property, 
real  or  personal,  and  its  franchises,  to  secure 
the  payment  of  the  money  so  borrowed,  or 
any  other  debt  contracted  by  it;  but  it  has 
not  power  to  borrow  a  sum  exceeding  its 
capital  stock,  or  at  a  rate  of  interest  ex- 
ceeding eight  per  cent.,  payable  semi-annu- 
ally; nor  must  such  mortgage,  conveyance, 
or  pledge  be  made  otherwise  than  by  the 
consent  of  the  holders  of  the  larger  part  in 
value  of  the  capital  stock,  e.xpressed  by  vote 
at  a  meeting  of  the  stockholders,  called  for 
that  purpose,  of  the  time  and  place  of  which 
meeting,  and  of  the  purpose  for  which  it  is 
called,  thirty  days'  notice  is  given  each 
stockholder  personally,  whose  residence  is 
known,  and  by  publication  for  four  con- 
secutive weeks  in  the  newspaper  published 
nearest  to  the  place  of  business  of  the  cor- 
poration. 

[Corporation  has  power  to  borrow  money  to  pur- 
chase and  improve  real  estate  to  enable  it  to  carry 


Into  effect  the  purpose  of  its  Incorporation.  Ina. 
Co.  V.  A.  &  M.  Assn.,  54  Ala.  73;  s.  c,  6  Am.  Corp. 
Cas.  109. 

Corporations  are  capable  of  making  every  species 
of  deed,  and  have  general  power  to  execute  mort- 
gages for  security  of  their  debts.  R.  R.  Co.  v. 
Talman,  15  Ala.  472;  Allen  v.  R.  R.  Co.,  11  Id. 
437. 

Assignments  executed  by  a  corporation  to  se- 
cure payment  of  debt  are  valid.  Gibson  v.  Gold- 
thwalte,  7  Ala.  282;  Pope  v.  Brandon,  2  Stew.  401. 

Resolution  of  board  of  directors  authorizing  la- 
sue  of  bonds  and  mortgage;  what  sufficient  com- 
pliance with.     R.  R.  Co.  V.  Lancaster,  62  Ala.  555. 

Bonds  of  a  corporation,  public  or  private,  if  is- 
sued by  authority,  and  possess  In  themselves  the 
requisites  of  negotiable  paper,  are  now  recog- 
nized as  on  an  equality  with  bank  notes,  bills  of 
exchange,  and  promissory  notes;  and  the  corpo- 
rate seal  does  not  affect  their  negotiability. 
Blackman  v.  Lehman,  63  Ala.  547.  A  private  cor- 
poration may  transfer  its  bonds  as  collateral  se- 
curity. Lehman  v.  Manf.  Co.,  64  Ala.  567. 
Negotiability  of  bonds  of  private  corporation.  Id. 
Who  is  a  holder  in  good  faith.  Id.  Corporation 
formed  under  general  laws;  power  to  borrow 
money  and  mortgage  property.  Taylor  v.  A.  & 
M.  Assn..  68  Ala.  229. 

Note  of  corporation  may  be  signed  by  president 
without  resolution  of  board  of  directors.  OH  Co. 
V.   I'erry,  85  Ala.  158;  s.  c,  4  So.   Rep.  635. 

Power  of  corporation  to  pledge  its  bonds  se- 
cured by  mortgage  of  property.  Nelson  v.  Hub- 
bard; Cotton  Mills  V.  Dimmick,  96  Ala.  238;  s.  c, 
11  So.   Rep.  428. 

A  bill  in  equity  alleging  execution  of  mortgage 
by  a  corporation,  and  seeking  its  foreclosure,  need 
not  allege  publication  pursuant  to  the  statute,  for 
four  consecutive  weeks;  the  execution  of  mort- 
gage pi:esupposing  the  giving  of  the  notice  and 
the  omission  of  such  perquisites  being  matter  of 
defense.  Id.  Subscribers  to  corporate  bonds; 
when  not  liable  to  stockholders.  Davis  v.  Chemi- 
cal Co.,  101  Ala.  127;  s.  c,  8  So.  Rep.  496.  Only 
stockholders  can  take  advantage  of  §  1664,  subd.  7, 
prohibiting  pledge  of  corporate  property  without 
consent  of  stockholders.  Barrett  v.  Pollack  Co., 
18  So.  Rep.  615.] 


8.  Land  companies  and  corporations  or- 
ganized for  the  purpose  of  buying,  sell- 
ing or  Improving  land,  shall,  in  addition 
to  the  poAvers  above  stated,  have  power 
to  invest  their  money  in  other  prop- 
ertj'  or  assets  in  enterprises  which  they 
deem  calculated  to  advance  their  interests, 
or  to  loan  money  or  property  to  individuals 
or  corporations  buying,  leasing  or  making 
improvements  on  or  near  their  lands,  and  to 
receive  certificates  of  stock,  notes,  bonds, 
mortgages  or  other  security  for  such  invest- 
ments or  loans;  and  all  such  investments  or 
loans  heretofore  made  by  such  companies  In 
good  faith  are  legalized. 

[Power  to  take  disposition  of  real  estate,  con- 
strued.    Pond  V.   Bldg.  Assn.,  61  Ala.  232.] 

§  12."7.  A  board  of  directors,  consisting  of 
such  number  as  may  be  prescribed  by  the 
by-laws,  must  be  elected  annually  by  the 
stockholders,  and  must  hold  office  for  a  term 
of  twelve  months,  and  until  their  successors 
are  elected  and  qualified;  vacancies  occurring 
in  the  board  must  be  filled  by  the  remaining 
directors;  and  the  management  of  the  prop- 
erty and  business  of  the  corporation  is  under 
the  control  of  the  directors,  who  have  power 
to  elect  and  appoint  all  officers,  agents  and 
servants,  removing  them  at  pleasure,  fixing 


20 


ALABAMA. 


Business  corporations;  capital  stock  —  Code,  §§  1258,  1259. 


their  compensation,  and  prescribing  their 
duties;  and  to  exercise  such  other  powers  as 
may  be  delepated  to  them  by  the  by-laws  of 
the  adoption  of  the  stockholders. 

See  §  1152.  Majority  of  board  is  a  quorum. 
§  1275.  Change  of  number  of  directors.  §  1277. 
Powers  of  directors  alter  dissolution.  §§  129y,  V.WO. 
Act  to  prevent  frauds  by  directors  upon  stockhold- 
ers and  bondholders.     See  §  4776. 

rCourt  of  equity  will,  on  application  of  a  stock- 
holder, compel  directors  to  exorcise  discretion  re- 
posed in  them  as  to  declaration  of  dividends,  when, 
^mlth  V.   Manf.   Co.,  29  Ala.  503. 

Responsibility  of  directors  to  stockholders.  Id. 
Powers  and  duties  of  directors.  Manf.  Co.  v. 
Cox,  G8  Ala.  71.  Fiduciary  character  of.  «.  K. 
Co.  V.  AVoods.  SS  Ala.  630;  s.  c.  .  So.  Rep.  lOK 
Stockholder  niav  file  bill  in  chancer?"  to  restrain 
otlicers  of  corporation  from  commission  of  an  un- 
authorized act.  Bliss  y.  Anderson.  31  Ala.  bl^. 
The  acts  of  a  board  of  directors  whose  term  has 
ended  is  valid  as  to  third  parties.  Thonugtony. 
Gould,  59  Ala.  461;  s.  c,  6  Am.  Corp.  Cas.  14 1. 
AVhen  notice  to  director,  or  other  ofUcer,  is  not 
notice  to  the  corporation.  Avhelan  v.  McCreary, 
64  Ala.  319.  ^  .       .     .    ,.  X.  „ 

Court  of  equity  will  not  entertain  jurisdiction 
of  a  suit  for  the  purpose  merely  of  testing  legality 
of  an  election  of  directors,  or  to  remove  an  otlicer 
who  l8  in  actual  possession;  but  will  decide  such 
questions  when  they  arise  Incidentally  and  col- 
laterallv.  Nathan  v.  Tompkins,  82  Ala.  43< ;  s.  c., 
2  So.  Rep.  747;  Moses  v.  Tompkins;  Same  v.  "Wood- 
son, 84  Ala.  613;  s.  c,  4  So.  Rep.  763;  Jerry  y. 
Mill  Co.,  93  Ala.  364;  s.  c,  9  So.  Rep.  21. ;  Elliott 
V    Siblev,   101  Ala.  334;  s.  c,  13  So.   Rep.  500. 

Agreement  among  stockholders  to  hold  and  vote 
stock  as  a  unit  is  not  per  se  illegal.  Moses  v. 
Scott,  84  Ala.  608;  s.  c,  4  So.  Rep.  742.  But  a 
further  stipulation  in  such  agreement  in  general 
restraint  of  alienation  is  condemned  by  principles 
of  the  common  law,  and  a  court  of  equity  will  not 
enforce  it.  Id.  If  a  majority  of  directors  resign 
or  are  disqualified,  a  minority  has  no  power  to  till 
vacancies  thereby  created.  Moses  v.  Tompkins,  84 
Ala  613;  s.  c,  4  So.  Rep.  763.  What  is  requisite 
to  constitute  officers  de  facto  of  a  corporation. 
Id  How  far  their  acts  are  sustaiued,  and  who 
may  impeach  them.  Id.  AVhen  stockholders  may 
obtain  equitable  relief  against  directors.     Id. 

President  or  other  officer  of  a  private  corpo- 
ration cannot  bind  it  by  contract  made  in  its 
name  with  himself  personally.  Oil  Co.  v.  Perry, 
85  Ala.  158;  s.  c,  4  So.  Rep.  635.  But  this  prin- 
ciple does  not  apply  to  promissory  note  signed  by 
a  president,  pavable  to  himself,  and  indorsed  by 
him  for  the  purpose  of  borrowing  money  for  the 
use  of  the  corporation.  Id.  Note  of  corporation 
may  be  signed  by  president  without  resolution  of 
bo.nrd  of  directors.     Id. 

When  court  of  equity  will  interfere  by  injunc- 
tion, at  suit  of  minority  of  stockholders,  to  give 
relief  against  oppressive  and  dishonest  manage- 
ment. R.  R.  Co.  v.  Woods,  88  Ala.  630;  s.  c,  7 
So.  Rep.  108.  .     ^     .    ,. 

Fraudulent  combination  and  misconduct  of  di- 
rectors, as  against  stockholders  and  the  corpora- 
tion; remedies  against.  Tutwiler  v.  Land  Co.,  89 
Ala.  391;  s.  c,  7  So.  Rep.  398.  A  stockholder  can- 
not vote  by  prosy,  unless  authorized  by  charter 
or  by-laws;  and  a  fortiori  a  director  cannot.  Perry 
T.  Mill  Co.,  93  Ala.  304;  s.  c,  9  So.  Rep.  217. 

A  director  who  takes  advantage  of  his  posltitm 
and  Influence  to  serve  his  personal  interests,  or 
the  Interests  of  a  third  person  in  whom  he  is  per- 
sonally Interested,  Is  guilty  of  fraudulent  abuse 
of  trust  and   liable  personally  as  trustio.    Id. 

Transactions  between  two  corporations  acting 
through  same  persons  as  directors  may  be  avoided 
by  either  corporation,  but  cannot  be  assailed  by 
creditors  except  on  ground  of  fraud.  Manf.  Co. 
T.  Furnace  Co.,  95  Ala.  614;  s.  c,  10  So.  Rep.  290. 
When  equity  will  compel  directors  to  declare  divi- 
dends. Wo"lfe  V.  Underwood,  96  Ala.  329:  s.  c, 
B   c,  11  So.  Rep.  344.    Directors  and  officers  of  an 


insolvent  corporation  are  trustees  for  creditors. 
Corev  V.  Wadsworth,  99  Ala.  68;  s.  c,  11  So.  Rep. 
350.  ■ 

Bill  to  remove  directors  from  oflace  is  wanting 
in  equity,  when.  Elliott  v.  Sibley,  101  Ala.  334; 
s.  c,  13  So.  Rep.  500. 

President  of  a  corporation,  without  authority 
from  directors,  cannot  convey  corporate  property 
for  benefit  of  creditors.  Norton  v.  Bank,  102  Ala. 
420:  s.  c,  14  So.  Rep.  872.  Subsequent  ratification 
thereof  bv  directors  insufficient  as  against  attach- 
ing creditors.  Id.  See,  also,  Bibb  v.  Hall,  101 
Ala.  79;  s.  c,  14  So.  Rep.  98;  Kahn  v.  Hall,  101 
Ala.  102;  s.  c,  14  So.  Rep.  105.  Directors  owning 
all  the  stock  of  a  corporation  may  authorize  its 
president  to  sell  the  assets.  Jordan  v.  Collins, 
18  So.  Rep.  137.] 


§  1258.  The  stockholders  must  meet  annu- 
ally, at  such  time  and  place,  and  on  such 
notice,  as  may  be  prescribed  by  the  by-laws. 

See   §§  1153,   1280. 


§   1259.   Any     company      or      corporation 
already     organized,     or     that     may     here- 
after be  organized  under  the  provisions  of 
this    article,     may    have    a    capital     stock 
not     exceeding     ten     millions     of     dollars, 
and    any    corporation     now,     or    hereafter 
organized     imder     the     provisions     of     this 
article,  may  increase  its  capital  stock  to  an 
amount  not  exceeding  ten  millions  of  dol- 
lars by  the  vote  of  the  persons  holding  the 
larger  amount  in  value  of  the  stoclc  thereof, 
at  a  meeting  of  the  stockholders  called  for 
that  purpose,  of  which  meeting  and  the  pur- 
pose  for  whch   it   was   called,   thirty   days' 
notice  must  be  given  each  stockholder  per- 
sonally, whose  residence  is  known,  and  by 
publication  for  four  consecutive    weeks    in 
some  newspaper  published  in  the  town,  city, 
or  county  in  which  the  corporation  is  located; 
and  if  at  such  meetings  the  persons  holding 
the   larger   amount   in   value   of   the   stock 
vote  for  such  increase,  then  such  increase 
shall  be  made  to  amount  stated  in  the  notice, 
or  to  a  less  amount,  as  may  tie  determined. 
The  proceedings  of  the  meeting  must  be  .re- 
duced to  writing,  which  must  besigned  by 
the  president  or  chief   executive   otficer  of 
the   corporation,   filed   and   recorded   in   the 
ottice  of  the  judge  of  probate  of  the  county 
in  which  tne  corporation  is  located.    Each 
stockholder   is   entitled   to   a   preference   in 
taking  of  the  increased  stock  an  amount  in 
proportion    to    the    amount  of  the    original 
stock  he  may  own,  and  shall  have  a  right 
for  sixty  days  after  the  increase  of  stock  has 
been  agreed  upon  to  take  and  pay  for  his  pro 
rata  of  the  stock  in  proportion  to  the  stock 
originally  held  by  him.    And  the  stock  hereto- 
fore issued  by  corporations  organized  under 
this  article  whose  capital  .stock  does  not  ex- 
ceed ten  millions  of  dollars,  is  hereby  legal- 
ized  and  made  valid,   notwithstanding   the 
amount  of  capital  stock  of  such  corporation 
exceeds  the  amount  heretofore  authorized  by 
said  article.   Neither  stock  nor  bonds  shall  be 


ALABAMA. 


21 


Corporations;  shares,  transfer  —  Code,  §§  12G0-1263. 


Issued  by  anj-  private  corporation  except  for 
money,  labor  done,  or  money  or  property 
actually  received;  and  all  fictitious  increase 
of  stock  or  indebtedness  shall  be  void. 

See  §  1154.  Fictitious  increase  of  stock  pro- 
hibited. Const.,  art.  XIV,  §  6.  Issue  of  preferred 
stock.  Id.,  §  9.  Preference  to  old  stockholders  on 
Increased  stock.     §  1272. 

[rrovisions  of  above  section  are  requirements 
for  benetit  of  stockholders,  and  compliance  there- 
with may  be  waived  b.v  them.  Nelson  v.  Hub- 
bard; Cotton  Mills  V.  Dimmick,  96  Ala.  238;  s.  c, 
11  So.   liep.  428.] 

§  126u.  An  incorporation  under  this  chapter 
ma3*  be  renewed  according  to  the  provisions 
hereinbefore  made,  with  the  consent  of  a 
majority  in  value  of  the  stocliholders,  ex- 
pressed at  a  meeting  of  the  stockholders 
called  for  that  purpose. 

Limit  of  corporate  existence.     §  1256. 


ARTICLE    XII.      GENERAL    PROVISIONS. 


Sec. 


1261. 
1202. 
1203. 

1204. 

1265. 
1206. 
1267. 
1268. 

1209. 
1270. 


1271. 
1272. 

1273. 
1274. 
1275. 

1276. 

1277. 

i278. 

12.  J. 


1280. 
1281. 
1282. 
1283. 
1284. 

1285. 
1286. 


Shares  of  stock  personal  property. 

Transfer  on  books. 

Must  require  a  register  of  transfer  on 
hooks;   transfers  not  registered,  void. 

Tausfer  may  be  made  by  personal  rep- 
resentative. 

Stock   subject  to  levy  and   sale. 

Statement  furnished  officer  making  levy. 

Stock  record-books  must  be  kept. 

Lieu  of  corporation  on  shares  of  stock- 
holder. 

Preferred    stock. 

Increase  of  capital  and  bonded  debt  of 
corporations  organized  under  special 
charter. 

Franchise  tax. 

Increased  capital  stock;  preference  of 
stockholder. 

Forfeiture  of  franchise  by  non-user. 

Bijoks  of  corporation  open  to  inspection. 

Majority  of  board  exercise  corporate 
powers. 

Failure  to  elect  officers  does  not  dissolve 
corporation. 

Change  of  number  of  directors. 

Purchase  of  stock  or  bonds  by  officers. 

Actions  by  officers  calculated  to  depre- 
ciate the  value  of  securities;  misde- 
meanor;  remedy;   pleading. 

Stockholders'    meetings. 

Voting  by   proxy. 

Curing  defects  in  organization. 

Altering  and  amending  charter. 

Duties  of  probate  judge  and  secretary 
of  State. 

Record  kept  by  judge  of  probate;  fees. 

Corporate  name  not  to  be  that  of  an- 
other corporation  nor  name  of  a  per- 
son  or  firm. 


§  12<;i.  Shares  or  interest  in  the  stoclv  of 
private  corporations  are  personal  propertj-, 
transferable  on  the  books  of  the  corporation 
in  such  manner  as  is  required  Ijy  the  by- 
laws, or  by  the  rules  and  regulations  of  the 
corporation. 

Taxation  of  shares  of  stock.  §  3911.  Transfer. 
§§  1262-1267.     Levy  and  saio  of.     §  1265. 

[Stock  in  a  pinnkroad  company  is  a  chose  in 
action.     Bank  v.   St.  John.  25  Ala.  500. 

Trover  lies  for  conversion  of  shares  in  a  cor- 
poration; and  pledgee,  when  sued  for  such  con- 
version,  may   recoup  his  debt  from   pledgor.     Na- 


bring  v.  Bank,  58  Ala.  205;  s.  c,  6  Am.  Corp. 
Cas.  124. 

I'ledge  of  stock  as  security,  shares  being  trans- 
ferred to  lender  of  book  of  company;  when  pledgee 
has  no  authority  to  sell.     Id. 

Sometimes  a  court  of  equity  will  decree  specific 
performance  of  contract  for  sale  of  stock  in  a 
private  corporation.  Moses  v.  Scott,  84  Ala.  608; 
s.  c,  4  So.  Rep.  742.  Not  unlawful  to  agree  to 
purchase  controlling  interest  in  corporation.  Beit- 
man  V.  Steiner,  98  Ala.  241;  s.  c,   13  So.   Rep.  87. 

Nature  of  capital  stock;  it  is  a  security  for 
creditors  of  corporation,  and  entitles  holder  to 
participate  in  management  of  corporate  business, 
to  share  in  its  profits,  and  in  its  surplus,  after 
payment  of  corporate  debts.  Jannev  v.  Bank,  98 
Ala.  515;  s.  c,  13  So.  Rep.  761.  Rights  of  parties 
to  pledge  stock.  Id.  Definition  of  capital  stock 
of  a  corporation.  Ins.  Co.  v.  Board  of  Rev.,  99 
Ala.  1;  s.  c,  14  So.  Rep.  490.  Capital  stock  of 
one  corporation  cannot  be  invested  in  the  capital 
stock  of  another.     Id.] 


§  12G2.  When,  by  the  charter,  aritcles  of 
association,  or  by-laws  and  regulations  of  a 
private  corporation,  the  transfer  of  the  stock 
is  required  to  be  made  upon  the  book  or 
books  of  the  corporation,  no  transfer  of 
stock  shall  be  valid  as  against  bona  flde 
creditors,  or  subsequent  purchasers,  without 
notice,  except  from  the  time  that  such  trans- 
fer shall  have  been  registered,  or  made  upon 
the  book  or  books  of  such  corporation. 

See  §§  1263,  1264. 

[Clause  in  act  of  incorporation  providing  that 
stock  shall  be  transferable  only  on  the  books,  is 
for  security  of  corporation,  and  does  not  prevent 
title  from  passing  by  transfer  otherwise  made. 
Duke  V.  Nav.  Co.,  10  Ala.  82.  But,  if  so  provided 
by  charter,  trustees  may  declare  by  a  by-law,  that 
"  No  stockholder  shall  be  permitted  to  transfer 
his  stock  while  he  is  in  default."  Cunningham 
V.  Ins.  &  Tr.  Co.,  4  Ala.  652.  Legal  title  to  stock 
can  only  be  acquired  by  transfer  made  in  mode 
prescribed;  a  complete  equitable  title  may  be 
otherwise  acquired  entitling  transferee  to  demand 
that  he  be  invested  with  legal  title.  Ins.  Co.  v. 
Bank,  63  Ala.  585;  s.  c.  0  Am.  Corp.  Cas.  171. 
Who  are  "  bona  fide  creditors  "  under  above  sec- 
tion. Jones  V.  Latham,  70  Ala.  104;  s.  c,  9  Am. 
Corp.  Cas.  16.  What  is  a  substantial  compliance 
with  above  section.  Fisher  v.  Jones,  82  Ala.  117; 
s.    c,   3  So.   Rep.    13. 

iVfortgage  of  stock  passing  legal  title  as  between 
the  parties,  without  any  transfer  of  the  certifi- 
cates or  of  the  stock  itself  on  the  books  of  the 
corporation.  Campbell  v.  Iron  Co.,  83  Ala.  351; 
s.  c,  3  So.  Rep.  309. 

A  sale  of  stock  under  power  contained  in  a 
mortgage  cuts  off  redemption,  provided  he  was 
informed  of  the  intended  sale,  and  sanctioned  it. 
Id.  Power  of  sale  contained  in  a  mortgage,  con- 
strued.   Id. 

Under  §§  1202-3.  stocks  are  placed  on  same  foot- 
ing as  other  personal  chattels,  as  to  liability  to 
levy  under  execution  or  attachment;  a  transfer 
thereof,  not  recorded  on  books  within  fifteen  days, 
is  void  as  to  bona  fide  creditors,  or  subsequent 
purchasers  without  notice.  Bank  v.  Pinckard,  87 
Ala.  577;  s.  c,  0  So.  Rep.  304.  Statutory  restric- 
tions of  voting  powers  of  stockholders  cannot  be 
fvad''d  by  a  nominal  transfer  ••!  stock  to  other 
persons,  to  be  held  and  voted  in  the  interest  of 
tr.-insf error.  Mack  v.  Coal  &  Iron  Co..  90  Ala. 
390;  s.  c,  8  So.  Rep.  150.  Stock  of  married  woman, 
in  name  of  husband  as  trustee,  has  right  to  trans- 
fer with  or  without  notice.  W'inter  v.  Gaslight 
Co.,  89  Ala.  544;  s.  c,  7  So.  Rep.  773.] 


§  12G.3.  It  is  the  duty  of  every  private  cor- 
poration to  require  the  transfer  of  its  stock 
to  be  made  or  registered  on  the  books  of  the 


22 


ALABAMA. 


Corporations;  shares  of  stock  —  Code,  §§  12G4-1207. 


corporation;  and  persons  holding  stocli  not 
so  transferred  or  registered,  or  holding  any 
stock  under  hypothecation,  mortgage,  or 
other  lien,  must  have  the  transfer,  hypothe- 
cation, mortgage,  or  otlier  lien  made  or 
registered  on  the  books  of  the  corporation, 
or  upon  failing  to  do  so  within  fifteen  days, 
all  such  transfers,  hypothecations,  mort- 
gages, or  other  liens  shall  be  void  as  to  bona 
fide  creditors,  or  subsequent  purchasers  with- 
out notice. 

See  §§  1262,  1264. 

[Compotency  ns  evidence  of  books  of  n  private 
corporation.  IMcCullouph  v.  Ins.  Co.,  46  Ala.  376. 
A  certificate  of  stock  lu  a  private  corporation.  In- 
dorsed In  blank,  Is  not  a  negotiable  instrument, 
and  no  custom  or  usa>;e  among  stock  brokers  to 
the  contrary  is  valid.  Land  Co.  v.  Dennis.  85  Aln, 
565;  s.   c,   5  So.  Rep.  317.] 


§  1264.  An  executor  or  administrator,  de- 
riving his  appointment  from  a  court  of 
probate  of  this  State,  or  if  the  testator  or 
intestate  resided  without  the  State,  from 
the  proper  tribunal  of  his  domicile,  may 
transfer  the  shares  of  stoclc  held  and  owned 
by  such  testator  or  Intestate  in  any  private 
corporation  existing  under  the  laws  of  this 
State;  payment  of  dividends  on  such  stock 
may  be  made  to  such  executor  or  admin- 
istrator. 

Trust  funds  not  to  be  Invested  in  corporate 
stocks.  Const,  Art.  IV,  §  35. 

[An  administrator  of  a  non-resident  may  be  ap- 
pointed in  the  count.v  of  the  residence  of  a  cor- 
poration in  which  his  Intestate  owned  stock  and 
may  transfer  the  shares,  although  the  foreign  ad- 
ministrator might  have  done  so.  Winter  v.  Lou- 
don, 99  Ala.  263;  s.  c,  13  So.  Kep.   118.] 


§  126.5.  The  shares  of  stock  are  subject  to 
levy  and  sale  under  attachment  or  execution, 
as  is  other  personal  property;  and  the  levy 
may  be  made  with  or  without  the  officer 
having  or  obtaining  possession  of  the  cer- 
tificate of  stock,  by  Indorsement  on  the  at- 
tachment or  execution,  stating  the  number 
of  shares,  or  other  interest,  on  which  the 
levy  Is  made,  and  giving  notice  thereof  to 
the  custodian  of  the  books  of  transfer,  if  he 
be  known  and  reside  Avithin  the  State,  or  if 
he  be  unknown,  or  If  he  reside  without  the 
State,  by  posting  notice  at  the  courtliouse 
door  of  the  county,  and  by  publication  for 
three  consecutive  weeks  in  a  newspaper  pub- 
lished at  or  near  the  principal  place  of  busi- 
ness of  such  corporation;  all  transfers  of 
the  stock  made  in  good  faitli  and  for  a  valu- 
able consideration  before  notice  of  the  levy 
Is  given,  are  valid  and  operative,  and  must 
prevail  over  tlie  levy.  The  levy  and  the 
sale  thereunder  may  be  made  in  the  county 
of  the  residence  of  the  defendant,  or  in  the 
county  In  which  the  corporation  has  its 
principal  place  of  business;  and  on  making 
the  sale,  the  sheriff  must  make  to  the  pur- 


chaser a  transfer  of  the  stock  in  writing;  and 
the  purchaser  has  the  right  to  require  the 
proper  officer  to  register  such  transfer  on  the 
books  of  the  corporation,  and,  with  or  with- 
out such  registry,  is  entitled  to  all  the  rights 
and  interests  of  the  defendant  as  whose 
property  such  stock  was  sold. 

See  §§  1266,  1267.  Attachment  of  shares  and 
subscription.  §§  533  et  seq.  Ma.v  be  levied  on 
and  sold  for  taxes.     See  §§  1266,  1267. 

[Execution  cannot  be  levied  upon  shares  of 
stock  of  a  corporation  which  have  been  plfdged 
or  mortgaged  by  defendant,  as  security  for  a  debt, 
and  transferred  on  books  of  company  to  the 
pledgee  or  mortgagee,  and  iiurchaser  .it  sheriff's 
sale,  under  such  levy,  acquires  no  title  to  the 
shares.  Nabring  v.  Rank,  58  Ala.  205;  s.  c,  •>  Am. 
Corp.  Cas.  125.  Transfer  of  stock  In  insolvent 
corporation;  averment  of  notice.  Jones  v.  Latliam, 
70  Ala.  164;  s.  c,  9  Am.  Corp.  Cas.  16. 

Statute  not  requiring  that  notice  to  custodian  of 
books  shall  be  in  writing,  oral  notice  is  suffi- 
cient. Abels  V.  Ins.  Co.,  92  Ala.  382;  s.  c.  9  So. 
Rep.  423.  SS  1202-1265  construed.  Id.;  AVhite  v. 
Rankin,  90  Ala.  541;  s.  c,  S  So.  Rep.   118. 

Shares  of  stock  are  not  subject  to  levy  and  sale 
by  tax  collector  for  unpaid  taxes  assessed  against 
owner.  Kennedy  v.  Ry.  Co.,  93  Ala.  494;  s.  c,  9 
So.   Rep.  608.] 


§  1266.  Whenever  any  sheriff  or  other 
officer,  having  an  execution  or  attachment 
in  his  hands  against  any  person,  makes 
demand  of  the  custodian  of  the  books 
of  any  corporation,  it  shall  be  the  duty 
of  any  cori>oration,  upon  the  officer  ex- 
him  with  a  copy  thereof,  if  demanded,  it 
shall  lie  the  duty  of  such  custodian  to 
furnish  such  officer  a  statement  signed 
his  official  capacity,  of  the  number  of 
shares  or  amount  of  interest  held  by  such 
person  in  such  corporation,  and  also  a  state- 
ment of  all  liens,  mortgages  or  hypotheca- 
tions of  such  stock,  and  the  amount  thereof, 
as  shown  on  the  books  of  such  corporation; 
and  if  such  custodian  of  such  books  neglects 
or  refuses  to  furnish  the  statement,  or  if  he 
shall  wilfully  give  a  false  statement  thereof, 
he  shall  be  liable  to  the  plaintiff  or  other 
person  purchasing  such  stock,  as  the  one  or 
the  other  may  be  damaged,  for  double  the 
amount  of  damages  occasioned  by  such  neg- 
lect, refusal  or  false  statement.  (Act  of  Feb. 
18,  1893.) 

See  §  1265. 


§  1267.  Every  cdiiioration  incorporated 
under  any  law  of  this  State,  general 
or  special,  shall  keep  in  this  State, 
in  the  hands  of  some  officer,  books  show- 
ing who  are  the  holders  of  stock  therein, 
and  all  transfers,  hypothecations,  liens 
or  mortgages  of  such  stock  must  be  en- 
tered u]ion  said  l>ook  within  fifteeti  days 
after  the  same  shall  have  been  made  or 
created,  or  the  same  shall  be  void  agninst  the 
lien  of  such  attachments  and  executions,  un- 
less the  plaintiff  therein  had  notice  of  such 


ALABAMA. 


23 


Lien  on  stock;  preferred  stock;  increase  —  Code,  §§  126&-1271. 


transfer,  hypothecations  or  mortgages  prior 
to  the  levy  of  such  attachment  or  execution. 
(Act  of  Feb.  18,  1«'J3.) 

^0  §  1205. 


§  12(X  All  private  corporations  have  a  lien 
on  the  shares  of  its  stockholders,  for  any  debt 
or  liabllitj'  incurred  to  it  by  a  stockholder 
before  notice  of  a  transfer,  or  of  a  levy  on 
such  shares;  and  if  necessary  for  the  paj'- 
ment  of  such  debt,  or  the  satisfaction  of 
such  liability,  the  corporation  may  sell  the 
shares  after  notice  for  thirtj'  days,  sent 
through  the  mail,  postage  paid,  to  the  stock- 
holder, or  if  he  be  dead,  to  his  personal 
representative,  at  the  post-office  nearest  his 
last  known  place  of  residence,  or  after  per- 
sonal demand  of  •  payment  or  satisfaction 
from  either,  if  such  demand  be  not  complied 
■with  in  thirty  days;  such  sale  to  be  made 
at  public  auction  to  the  higliest  bidder,  after 
ten  days'  notice  of  the  time  and  place,  by 
publication  in  some  newspaper  published  at 
the  principal  place  of  business  of  the  cor- 
poration,  or  nearest   thereto. 

[Lien  of  corporation  on  Rtook  for  debts  due 
from  stnckhoMer;  at  onniiiioii  law  and  nnder  stat- 
utes. Ins.  Co.  V.  rulloni,  40  Ala.  o-'.S.  Above 
statute  construed.  Tutwilor  v.  Land  Co..  Rf>  Ala. 
.^•1] ;  s.  (•.,  7  So.  Rep.  31)S.  Lien  of  corporation  on 
Pharos  of  stocliholder  subsocjuent  to  prior  pledge. 
Tr.  &  Sav.  Co.  v.  Bank,  99  Ala.  379;  s.  c,  13  So. 
Kep.    112. 

This  section  confers  the  lien  to  secTire  debts 
which  had  been  contracted  before  its  enactment, 
as  well  as  those  contracted  afterward.  Tr.  & 
Par.  Co.  V.  Land  Co..  101  Ala.  304;  s.  c,  13  So. 
Kep.  72. 

Necessary  averments  in  bill  by  stockholder  to 
enjoin  sale  bv  corporation  of  his  "stock.  Elliott  v. 
Sibley,  101  Ala.  .^44:  s.  c.  1."?  So.  Rep.  500.  Cor- 
poration is  necessary  party  to  such  bill.  Id.  A 
complainant  must  offer  to  do  eciuity.     Id. 

Enforcenu'iit  l)y  corpi)r;ition  of  li"n  under  §  1674; 
no  action  by  directors  necessary.     Id.] 


§  12G9.  Any  corporation  organized  under 
the  general  incorporation  laws  of  this 
State  may  issue  preferred  stock  by  the 
vote  of  persons  holding  two-thirds  in 
value  of  its  stock,  at  a  meeting  of  the  stock- 
holders called  for  that  purpose,  of  which 
meeting,  and  the  purpose  for  which  it  is 
called,  thirty  daj's'  notice  must  be  given 
each  stockholder  personally,  whose  residence 
is  knoAvn,  and  by  publication  for  four  con- 
secutive weeks  in  some  newspaper  published 
in  the  town  or  city  in  which  the  corporation 
Is  located,  or  if  not  located  in  a  town  or 
city  then  in  some  newspaper  published  in 
the  county  in  which  the  corporation  is  lo- 
cated; and  if,  at  such  meeting,  the  persons 
hoding  two-thirds  in  value  of  the  stock  vote 
for  the  issue,  the  proceedings  of  the  meeting 
must  be  reduced  to  writing,  signed  by  the 
president  or  chief  executive  o.xicer  of  the 
corporation,  and  filed  and  recorded  in  the 
office  of  the  judge  of  proiiate  of  the  county 
in  whicn  the  coi-poration  is  located.  Each 
stockholder  shall  be  first  entitled  to  the  priv- 


ilege of  taking  such  prefen-ed  stock  in  pro- 
portion to  the  amount  of  common  stock 
held  by  him,  or  a  less  amount,  if  he  should 
desire  it,  before  such  preferred  stock  is 
offered  for  sale  to  the  public.  (Act  of  Feb. 
28,  1889.) 

§  1270.  The  capital  stock  and  bonded  in- 
debtedness of  any  private  corporation  or- 
ganized in  this  State  under  special  charter. 
may  be  increased  by  the  consent  of  the 
p(>rsons  holding  the  larger  amount  in  value 
of  the  stock  of  such  corporation  obtained 
in  favor  thereof,  at  a  meeting  of  the  stock- 
holders of  such  corporation  convened  for 
the  purpose  of  voting  upon  the  proposition 
to  increase  such  capital  stock  or  bonded  in- 
debtedness, to  be  held  after  thirty  days' 
notice  thereof  shall  have  been  given  by  pub- 
lication in  a  newspaper  of  general  circula- 
tion, published  in  the  county  where  such 
corporation  has  its  principal  office,  and  if 
no  such  newspaper  be  published  in  that 
county  then  in  a  newspaper  having  general 
circulation  published  in  the  countj'  nearest 
the  principal  office  of  such  corporation,  a 
copy  of  which  shall  be  mailed  to  each  stock- 
holder, which  notice  shall  explicitly  state 
what  increase  is  proposed  to  be  made  to  the 
capital  stock  or  bonded  indebtedness  of  such 
corporation.  If  at  the  meeting  called  in 
pursuance  of  this  notice,  the  consent  of 
the  person  holding  the  larger  amount  in 
value  of  the  stock  of  such  corporation  shall 
ho  obtained  to  a  specified  increase  of  either 
the  capital  stock  or  bonded  indebtedness  of 
such  corporation,  a  report  thereof  specify- 
ing the  amount  of  increase  consented  to, 
shall  be  made  to  the  secretary  of  State,  who 
shall  make  and  keep  a  record  thereof,  and 
It  shall  be  lawful  for  sucli  corporation  to  in- 
crease its  capital  stock  or  bonded  indebted- 
ness in  conformity  with  such  consent  of  the 
stockholders.  Such  increase  may  be  to  a 
less,  but  not  to  a  greater  amount  than 
stated  in  the  published  notice  of  the  meet- 
ing; but  neither  stock  nor  bonds  shall  be 
issued  by  any  private  corporation  except 
for  money,  labor  done,  or  money  or  prop- 
erty actually  received,  and  all  fictitious  in- 
crease of  stock  or  indebtedness  shall  be 
void.  (TOnacted  December  10,  1890,  and 
amended  in  189.3  and  1895.) 

Fictitious  Increase  of  stock  or  Indebtedness  pro- 
hibited. Const.,  art.  XIV,  §  6.  Issue  of  preferred 
stock.  Id.,  §  9.  Mode  of  Increasing  stock.  Code, 
SS  11.54,  1259.  Preference  to  prior  stockholders. 
§  1272. 

[Statutor.v  mode  for  increasing  stock  must  be 
pursued.  Ins.  Co.  v.  Kamper,  73  Ala.  .32.">.  A 
corporation  has  not.  either  at  common  law  or  un- 
der the  statute,  an  implied  power  to  change  Its 
capital:  as  such  change  can  only  be  effected  by 
lesrlslatlve  sanction.  Ins.  Co.  v.  Kamper,  73  Ala. 
325;  s.  c,  10  Am.  Corp.  Cas.  21.] 

§  1271.  A  franchise  tax  of  twenty-five  dol- 
lars shall  be  paid  on  every  fifty  thousand 
dollars  increase  of  capital  stock  until   the 


24 


ALABAMA. 


Corporations;  stockholders,  officers,  directors  —  Code,  §§  1272-1279. 


capital  stock  amounts  to  one  million  dollars. 
The  franchise  tax  for  all  increase  of  capital 
over  one  million  dollars  and  under  live  mil- 
lion dollars,  shall  be  five  hundred  dollars, 
and  for  all  increase  over  hve  million  dol- 
lars, one  thousand  dollars,  to  be  paid  into 
the  State  treasury.  (Enacted  December  10, 
1890,  and  amended  1893  and  1895.) 

§  1272.  The  stockholders  of  a  private  cor- 
poration, on  an  increase  of  the  capital  stock 
thereof,  have  the  preference  of  taking  such 
increased  stock,  in  proportion  to  the  amount 
of  the  original  stock  held  and  owned  by 
them,  each  stockholder  taking  his  pro  I'ata 
share,  or  any  less  amount. 

See  §   1259,   cross-references. 


§  1273.  The  non-user  of  corporate  franchises 
for  a  period  of  five  consecutive  j^ears  is  a 
forfeiture  of  such  franchises;  and,  if  not 
otherv^ise  provided,  the  failure  to  organize 
a  private  corporation  for  a  period  of  two 
years  after  filing  the  declaration  for  incor- 
poration is  a  forfeiture  of  all  right  to  organ- 
ize under  such  declaration. 

Proceedings  to  forfeit  charters.     §§  3417  et  seq. 

[lu  the  creation  of  every  corporation,  it  is  Im- 
plied in  law  that  a  misuser  or  nouuser  shall  effect 
a  forfeiture  of  charter.  State  v.  Bank,  2  Stew. 
30.] 


§  1274.  The  stockholders  of  all  private  cor- 
porations have  the  right  of  access  to,  of  in- 
spection and  examination  of,  the  books, 
records  and  papers  of  the  corporation,  at 
reasonable  and  proper  times. 

[Right  and  duty  of  stockholder  to  obtain  in- 
formation of  proceedings  by  inspection  of  the  rec- 
ords of  the  company.  Thames  v.  Ins.  Co.,  40  Ala. 
577. 

Stockholder  in  a  private  corporation  has  the 
right,  at  reasonable  and  proper  times,  to  inspect 
its  books,  and  this  right  lie  may  exercise  through 
an  agent  or  attorney  in  fact;  nor  is  it  necessary 
that  he  should  show  a  different  and  legitimate 
purpose,  or  negative  an  unlawful  and  improper 
purpose.  Foster  v.  AVliito,  8(5  Ala.  467;  s.  c.,  6 
So.  liep.  88.  And  this  right  may  be  enforced  by 
mandamus.  Id. 

National  banks  are  within  the  purview  of  this 
statute.  Winter  v.  Baldwin,  89  Ala.  483;  s.  c,  7 
So.    Kep.   734. 

A  mandamus  will  be  awarded  against  any  oflicer 
having  custody  of  books  on  his  improper  refusal 
to  allow  stockholder  to  inspect  them.  Id.  But 
not  against  the  corporation,  unless  to  compel  the 
discharge   of  some  corporate   duty.     Id. 

A  court  of  law  cannot  compel  otHcer  or  agent  of 
a  corporation  to  produce  its  books,  but  a  court  of 
equity  may,  and  necessity  for  their  production 
gives  equity  to  a  bill  for  discovery;  but,  since  a 
corporation  cannot  answer  on  oath,  the  otlicer  hav- 
ing custody  of  books  sliould  be  joined  as  a  defend- 
ant. Mining  Co.  v.  Hale,  93  Ala.  542;  s.  c,  9  So. 
Rep.  2r.6. 

Bodks  of  corpf  ration  as  evidence.  Terry  v.  Bank, 
9.^  Ala.  099;  s.   c,  9  So.   Rep.  299.] 


§  1275.  When  the  corporate  powers  are  di- 
rected to  be  exercised  by  any  particular 
body,  or  number  of  persons,  a  majority  of 


such  body  or  persons,  unless  it  is  otherwise 
provided,  form  a  board  for  the  exercise  of 
such  powers. 

See  §  1257,  cross-references. 


§  127(5.  A  failure  to  elect  officers  at  the 
proper  time  does  not  dissolve  the  corpora- 
tion, but  those  in  office  hold  until  the  election 
or  appointment  and  qualification  of  their 
successors. 

[I'^iilure  to  elect  oflicers  does  not  dissolve  the 
coriioration.  Curry  v.  AVoodward,  53  Ala.  371. 
oilicer  whose  term  has  expired  may,  if  no  suc- 
cessor be  appointed,  continue  to  perform  the 
duties  of  the  olhce.  Thorington  v.  Gould,  59  Ala. 
401;  s.  c,  0  Am.  Corp.   Cas.  147.] 


§  1277.  All  private  corporations  have 
power  to  increase  or  diminish  the  number  of 
their  directors,  or  other  managers,  Avith  the 
consent  of  the  persons  holding  the  larger 
amount  in  value  of  the  capital  stock,  ex- 
pressed by  the  vote  of  such  persons  at  a 
regular  meeting  of  the  stockholders,  or  at 
a  meeting  called  for  that  special  purpose,  of 
which,  and  the  purpose  for  which  it  is 
called,  thirty  days'  notice  is  given  each  stock- 
holder personally,  Avhose  residence  is  known, 
and  by  publication  for  four  consecutive 
weeks  in  a  newspaper  published  at  the  prin- 
cipal place  of  business  of  the  corporation,  or 
nearest  thereto. 

See  §§  1257  et  seq. 

§  1278.  Any  purchase  of  the  stock  or 
bonds  of  a  corporation  by  the  president,  or 
any  director  or  other  managing  officer  of 
such  corporation  from  any  person,  other 
than  the  corporation  itself,  shall  be  held  and 
considered  as  a  transaction  between  persons 
in  fiduciarj'  relations,  and  subject  to  all  the 
rules  of  law  governing  a  purchase  by  a 
trustee  from  the  beneficiary  of  the  trust. 
(Enacted  December  10,  1892.) 

§  1279.  The  president  of  any  corporation, 
or  any  director  or  managing  officer  thereof, 
by  whatsoever  title  he  may  be  known  or 
called,  who  shall  do  or  omit  to  do  any  act. 
or  who  shall  make  any  declaration  or  state- 
ment, in  writing  or  otherwise,  AA'ith  the  in- 
tent to  depreciate  the  market  value  of  the 
stock  or  bonds  of  such  corporation,  to  the 
end  that  such  president,  director  or  other 
officer,  or  anj''  other  person,  may  buy  any 
such  stock  or  bonds  at  less  than  the  real 
value  thei'eof,  shall  be  guilty  of  a  misde- 
meanor. And  any  boutlholder  or  stockholder 
of  such  corporation  Avho  shall,  by  reason  of 
such  act,  omission,  declaration  or  statement 
made  with  the  intent  aforesaid,  be  induced 
to  sell  any  bonds  or  stock  of  siicli  corpora- 
tion at  less  than  tlu^  real  value  thereof,  may 
recover  in  an  action  on  the  case,  against 
the  president,  director  or  managing  officer 
of   the   corporation,   guilty   of   such   act  or 


ALABAMA. 


25 


Meetings;  amendment  of  charter  —  Code,  §§  1280-1283. 


omission  or  of  making  such  declaration  or 
statement,  all  damages  sustained  by  such 
sale.  In  such  action  the  plaintiff  must  aver 
and  prove  the  ownership  of  the  stock  or 
bonds  of  the  corporation,  the  act,  omission, 
declaration  or  statement,  and  the  name 
and  oltice  in  the  corporation  of  the  person 
or  persons  who  made  the  same,  and  that 
the  same  was  made  with  the  intent  to  de- 
preciate the  market  value  of  the  stock  or 
bonds  of  such  corporation  to  the  end  that 
some  person  might  buy  the  stock  or  bonds 
of  such  corporation  at  less  than  the  real 
value  thereof,  and  that  by  reason  of  such 
act.  omission,  declaration  or  statement, 
made  with  the  intent  above  stated,  the 
plaintiff  was  induced  to  sell  the  stock  or 
bonds  in  such  corporation  owned  l)j'  him, 
and  the  difference  between  the  real  value 
thereof  and  the  price  obtained  by  the  plain- 
tiff at  such  sale. 

See  §  1257,  and  note. 

§  1280.  The  stockholders  of  every  private 
corporation  must  meet  annually,  at  a  time 
and  place,  and  upon  notice  to  be  prescribed 
by  the  by-laws;  and  the  board  of  directors 
or  other  managers,  have  the  power  to  call 
special  meetings;  and  each  stockholder  is 
entitled  to  one  vote  for  each  share  of  stock 
held  and  owned  by  him;  the  failure  to  hold 
annual  meetings  of  the  stockholders,  or  the 
failure  to  elect  directors  regularly,  shall  not 
operate  a  forfeiture  of  corporate  franchises. 

See   §    12.58. 

[A  stockholder  who  Is  represented  at  a  stock- 
holders' meeting  by  proxy  Is  charKonble  with  no- 
tice of  all  facts  connected  with  the  proceedings 
which  were  known  to  his  proxy;  and  he  cannot 
set  up  his  Ignorance  of  those  facts  as  grounds 
for  equitable  relief  against  the  company.  Thames 
T.    In:s.   Co.,   40    Wci.   577. 

Corporate  existence  is  not  destroyed  by  failure 
to  elect.  Moses  v.  Tompkins,  84  Ala.  613;  s.  c,  4 
So.  Rep.  763.] 


§  1281.  The  capital  stock  in  any  corpora- 
tif)n  organized  under  the  laws  of  this  State, 
may,  at  all  stockholders'  meetings,  be  voted 
■by  proxy,  if  the  right  to  vote  by  proxy  be 
conferred  by  the  charter  of  the  corporation, 
or  claimed  or  reserved  in  its  declaration,  or 
permitted  by  a  by-law  duly  adopted  by  the 
stockliolders  of  the  corporation.  (Enacted 
December  12,   18'J2.) 

[Voting  by  proxy,  not  unlawful.  R.  R.  Co.  v. 
Nicholas,  98  Ala.  92;  s.  c,  12  So.  Rep.  723.  In- 
v.Tlid  acts  of  proxy;  upon  what  it  depends.  Id. 
Ill"  exchange  of  debentures  for  bonds  did  not  af- 
fect voting  power  given  the  debenture  holders.     Id. 

Voting  by  proxy  not  allowable  unless  authorized 
by  charter  or  bv-laws.  I'erry  v.  Tuscaloosa  C.  S. 
O.  M.  Co.,  93  Ala.  mi;  s.  c,  9  So.  Rep.  217. 

Validity  of  "  voting  trusts."  Moses  v.  Scott, 
*4  Ala.  608;  s.  c,  4  So.  Rep.  742;  R.  R.  Co.  v. 
Nicholas,   supra.] 


§  1282.  "Whenever  any  private  corporation 
heretofore   or   hereafter  created   under  the 


laws  of  this  State,  has  accidentally  or  in- 
advertently failed  to  comply  with  the  requi- 
sitions of  the  statute  in  its  organization,  it 
shall  be  lawful  for  the  president  of  such 
coi-poration  to  supply  such  omission  by  fil- 
ing with  tlie  probate  judge  wlio  issued  the 
certilicate  of  incorporation,  a  statement,  un- 
der oath,  setting  forth  such  omission  and 
supplying  the  same,  which  sliall  be  filed 
with  the  other  papers  of  such  incorporation 
and  recorded.  And  such  filing  shall  relate 
back  to  the  date  of  such  incorporation,  ex- 
cept as  to  the  rights  of  third  parties,  which 
may  have  intervened. 

§  1283.  Any  corporation  which  has  here- 
tofore, or  which  may  be  hereafter,  organ- 
ized imder  the  general  incorporation  laws 
of  this  State,  and  any  corporation  which 
has  heretofore  been  chartered  by  an  act 
of  the  general  assembly,  prior  to  the  enact- 
ment of  the  general  incorporation  laws  of 
this  State  of  18G7,  may  alter  or  amend  its 
charter  by  filing  in  the  office  of  the  judge 
of  probate  of  the  county  wherein  the  orig- 
inal declaration  of  incorporation  was  filed, 
or  in  cases  where  the  charter  was  granted 
by  an  act  of  the  general  assembly,  prior  to 
the  enactment  of  the  general  incorporation 
laws  of  this  State  of  1807,  in  the  office  of 
the  judge  of  probate  of  the  county  wherein 
such  corporation  has  its  principal  place  of 
business,  or  in  the  office  of  the  secretary  of 
State,  in  cases  where  the  original  declara- 
tion was  tiled  in  that  office,  a  declaration  in 
writing,  signed  by  not  less  than  three- 
fourths  in  number  of  the  stockholders,  hold- 
ing not  less  than  two-thirds  in  value  of  the 
stock  thereof,  verified  by  the  affidavit  of 
some  one  or  more  of  the  signers  thereof, 
stating  that  the  statements  therein  con- 
tained are  true,  and  that  the  signers  thereof 
signed  the  same  in  the  presence  of  affiant, 
or  acknowledged  their  signatures  thereto  to 
him,  and  setting  forth  — 

1.  When  such  corporation  Avas  organized, 
its  name,  what  change,  if  any,  is  desired  to 
be  made  in  such  name,  and  the  amount  of 
its  capital  stock  which  has  been  subscribed 
for  and  taken. 

2.  The  names  of  the  stockholders  signing 
the  same  and  the  amount  of  stock  held  by 
each. 

3.  The  purposes  of  the  corporation  and  the 
nature  of  its  business,  as  the  same  is  set 
forth  in  the  original  declaration,  and  the 
alterations  and  amendments  thereof  desired. 

4.  The  amount  of  the  capital  stock  as 
shown  by  the  original  declaration,  and  the 
amount  to  which  it  is  proposed  to  decrease 
such  capital  stock,  if  a  decrease  is  proposed. 

But  no  such  change  or  alteration  in  the 
charter  of  any  corporation  shall  authorize  it 
to  exercise  any  powers,  or  do  any  acts  which 
similar  corporations  are  not  authorized  to 
exercise  and  do,  under  the  laws  existing  at 
the  time  such  alteration  or  amendment  is 
made,  nor  to  decrease  its  stock  below  the 
minimum  fixed  by  existing  laws. 


26 


ALABAMA. 


Charter  fees  —  Code,  §§  12S4-120O. 


§  32S4.  T'lHUi  the  liliug  of  the  declaration 
provided  for  by  the  preceding  section  in  tlie 
otfice  of  the  judge  of  probate  or  secretary 
of  State,  as  the  case  may  be,  it  shaJl  be  the 
duty  of  that  otficer  to  issue  a  certificate,  cer- 
tifying tliat  suoli  corporation  under  its  new 
name  and  style,  is  duly  authorized  to  do 
business  with  the  powers  and  capacity  con- 
ferred after  sucli  alterations  and  amend- 
ments, which  declaration  and  certificate  must 
be  recorded  in  tlie  office  of  the  judge  of  pro- 
bate or  the  secretary  of  State,  in  and  from 
which  the  same  are  filed  and  issued. 

§  12S5.  It  is  the  duty  of  the  judge  of  pro- 
bate to  keep  a  well-bound  book,  in  which 
must  be  recorded,  consecutively,  the  declara- 
tion of  incorporation,  the  commission  issued 
to  the  commissioners,  the  proceedings  of  the 
meeting  of  the  subscribers  on  the  appoint- 
ment of  the  commissionei-s,  the  list  of  sub- 
scriptions returned  to,  and  filed  in  bis  office, 
and  the  affidavit  thereto,  and  the  certificate 
of  incorporation  and  organization;  and  for 
the  record  thereof  he  is  entitled  to  fifteen 
cents  for  each  hundred  words,  and  to  a  fee 
of  one  dollar  for  the  certificate  of  incorpora- 
tion and  organization,  and  to  a  fee  of  one 
dollar  and  fifty  cents  for  the  filing  of  the 
declaration,  and  for  the  issue  of  the  com- 
mission to  the  commissioners. 

rCompetoncy  as  evidence  of  books  of  n  private 
corporation.     McCulloiigh  v.  Ins.  Co.,  46  Ala.  376.] 


§  12.S6.  No  certificate  of  incorporation  shall 
issue  to  any  conioration  under  the  same  cor- 
porate name  as  that  already  assumed  by  an- 
other corporation  of  this  State  unless  it  be 
the  successor  of  such  other  corporation;  nor 
when  the  corporate  name  assumed  is  that 
of  a  person  or  firm,  unless  tliere  be  joined 
thereto  some  word  designating  the  business 
to  be  carried  on.  followed  by  the  word 
"  Company  "  or  "  Coi-poration."  If  any  cor- 
poration shall  hereafter  assume  as  its  corpo- 
rate name,  the  name  of  a  person  or  firm  witli- 
out  the  qualification  above  required  in  such 
case,  the  organization  of  such  coriioration  is 
void  and  the  stockliolders  are  liable  as  part- 
ners. 

ARTICLE    Xiri.      PHARTER    FEES    REQUIRED 
OF    DOMESTIC    CORPORATIONS. 

Sec.  1287.  Fees  to  be  paid  by  corporations  orpan- 
izcfl  under  tlie  general  law  before  com- 
niipsion    issiies. 

1288.  I;i)on  increase  of  capital  stock  differ- 
ence between  fees  upon  original  and 
iiiiTeast>d  amounts  to  he  paid. 

1280.  Same,  wlien  organized  by  special  act. 

1200.  Corporations  formed  for  cb.iritablo  or 
religious   purposes   only,    exce'pted. 

§  12S7.  Before  a  commission  shall  issue  to 
any  corporation  organized  under  the  gen(>ral 
incorporation  laws  of  this  State,  authorizing 
such  corporation  to  do  business,  the  parties 
to  wliom  the  same  is  issued  shall  pay  to  the 
judge  of  probate  or  other  otificer  issuing  the 
same,  to  be  reported  to  the  auditor  and  the 


money  paid  into  the  State  treasury  in  the 
same  manner  as  licenses  issued  by  the  judge 
of  probate  are  required  to  be  reported  and 
the  money  paid  into  the  treasury,  the  fol- 
lowing fees  for  the  use  of  the  State:  Where 
the  proposed  capital  stock  does  not  exceed 
fifty  thousand  dollars,  a  fee  of  twenty-five 
dollars;  where  it  exceeds  fifty  thousand  dol- 
lars, but  does  not  exceed  one  hundred  tliou- 
sand  dollars,  a  fee  (»f  fifty  dollars;  where  it 
exceeds  one  hundred  thousand  dollars  Imt 
does  not  exceed  two  hundred  and  fifty  thou- 
sand dollarK,  a  fee  of  seventy-five  dollars; 
where  it  exceeds  two  hundred  and  fifty  thou- 
sand dollars  but  does  not  exceed  five  hun- 
dred thousand  dollars,  a  fee  of  one  hundred 
dollars;  where  it  exceeds  five  hundred  thou- 
sand dollars  but  does  not  exceed  one  million 
dollars,  a  fee  of  two  hundred  dollars;  where 
it  excecHls  one  million  dollars,  a  fee  of  two 
hundred  and  fifty  dollars.  All  corporations 
or  mutual  companies  which  have  no  capital 
stock  shall  pay  a  fee  of  twenty-five  dollars. 

§  1288.  Before  the  report  of  the  proceed- 
ings of  the  stockholders  increasing  the  capi- 
tal stock  of  a  corporation  shall  be  filed,  such 
stockholders  shall  pay  to  the  judge  of  pro- 
bate or  other  officer  filing  the  same,  to  be  re- 
ported to  the  auditor  and  paid  into  the 
treasury  as  provided  in  the  preceding  section, 
the  fee  prescribed  by  the  preceding  section 
upon  the  amoimt  of  the  capital  stock  as  thus 
increased,  less  the  amount  of  the  fee  as 
therein  prescribed  upon  the  amount  of  the 
capital  stock  before  such  increase. 

§  1289.  Before  any  bill  for  the  creation  of 
any  corporation  by  any  special  act  of  the 
general  assembly  of  this  State  shall  be  in- 
troduced, there  shall  l)e  paid  into  the  treas- 
ury of  the  State  by  the  parties  seeking  the 
same,  double  the  fees  required  to  be  paid  by 
corporations  organized  under  the  general  in- 
corporation laws;  and  before  any  bill  for 
enlarging,  amending,  or  correcting  the  cliar- 
ter  of  any  corporation  already  established, 
or  for  confirming  any  such  corporation  by 
special  act  of  the  general  assembly,  shall  be 
introduced,  there  shall  be  paid  into  the  treas- 
ury of  tlie  State,  by  the  parties  seeking  the 
same,  a  fee  of  fifty  dollars.  If  such  cliar- 
ter  should  not  be  granted,  enlarged,  amended, 
or  corrected,  as  tiie  case  may  be.  the  money 
so  paid  shall  be  refunded  to  the  person  pay- 
ing the  same,  under  such  rules  and  regtila- 
tions  as  the  auditor  may  prescribe. 

§  1290.  The  provisions  of  the  three  pre- 
ceding sections  do  not  apply  to  corporations 
organized  solely  for  charitable,  religious,  so- 
cial or  literary  purposes,  nor  to  fraternal 
beneficiary  organizations  and  orders  ojierat- 
ing  upon  the  lodge  system  and  providing  for 
the  payment  of  life,  sick,  accident  and  otlier 
benefits  to  the  members  of  such  societies,  or- 
ders, or  associations  and  dependents  of  such 
memliers.  and  which  are  not  created  for  the 
purpose  of  making  a  pecuniary  profit  for  its 
members  and  issuing  no  stock  to  its  mem- 
bers. 


ALABAMA. 


27 


Dissolution  —  Code,  §§   1291-1297. 


ARTICLE    XIV.     DISSOLT'TIOX    OF    BUSINESS 
COllI'OKATIOXS. 

Sec.  1291.  Petition  for  dissolution. 
11.'92.  Notice  by   register. 
1203.  "Wlien   dissolution   decreed. 
1294.  Receiver  appointed;   his  duties, 
llinn.  How  selected;   bond. 

1296.  Reeelver  pays  debts;  contested   claims. 

1297.  Appeal. 

li;98.  Powers  after  dissolution. 

1299.  Administration  of  affairs  on  dissolution. 

IWO.  Authority  of  oftioers. 

1301.  Time  for  settling  extended. 

§  1201.  Whenever  a  majority  of  the  stock- 
holders of  any  private  corporation,  owning 
three-fourths  of  the  stocli,  wisli  to  dissolve 
the  corporation,  they  may  do  so  in  the  fol- 
lowing manner:  They  shall  file  a  petition  in 
the  chancery  court  of  the  division  in  which 
the  corporation  is  located,  or  has  its  prin- 
cipal place  of  business,  setting  forth  the 
names  of  all  the  stockholders,  and  their  resi- 
dences, the  amount  of  stock  owned  by  each 
stockholder,  as  nearly  as  practicalile  all  the 
property,  real  and  personal,  of  the  corpora- 
tion, and  stating  that  it  is  the  wish  of  the 
petitioners  to  di.ssolve  the  corporation. 

Proceedings  to  vacate  charter.     §§  3417  et  seq. 

[Private  corporation  organized  under  the  general 
law  may  be  dissolved  by  not  of  stockholders, 
■without  obtaining  consent  of  the  State.  M.  &  P. 
Line  V.  AVaganer,  71  Ala.  581;  s.  c,  10  Am.  Corp. 
Cas.  12. 

Necessary  averments  of  bill  to  show  necessity 
for  appointment  of  receiver.  E.  L.  &  P.  Co.  v. 
Hanby.  lol  Ala.   15:  s.  c.   13  So.  Rep.  343. 

Above  section  does  not  impiiir  obligation  of  con- 
tract entered  into  while  statute  in  force.  Nelson 
V.  Hubbard,  90  Ala.  2.38:  s.  c,  11  So.  Rep.  42S. 

A  furnace  company  is  a  private  corporation 
within  moaning  of  above  section.  Wolfe  v.  Un- 
derwood. 91  .Ma.  523;  s.   c,  8  ^So.   Rep.   774. 

After  dissolution  creditors  can  enforce  their 
rights  only  in  the  mode  prescribed.  Nelson  v. 
Hubbard,    supra.] 

§  1202.  Upon  the  filing  of  such  petition,  the 
register  shall  give  notice  by  subpoena  to  all 
the  stockholders  not  joining  in  the  petition 
to  appear  within  thirty  days  after  service 
and  contest  the  same;  and  if  any  stockholder  i 
residing  out  of  the  State  does  not  join  in  the  j 
petition,  he  shall  be  made  a  party  by  adver-  i 
tisenient  in  the  manner  non-resident  defend-  | 
ants  in  chancery  are  made  parties,  and  he  | 
has  thirty  days  after  the  perfecting  of  siich 
notice  to  answer  and  contest  the  petition. 

§  1203.  If  at  a  regular  term  of  the 
chancery  court,  after  the  cause  is  at  issue, 
it  be  made  to  appear  to  the  chancellor  that 
a  majority  of  the  stockholders  still  wish  to 
dissolve  the  corporation,  proof  being  made 
as  in  chancery  cases,  the  chancellor  shall 
decree  the  corporation  dissolved. 

Judgment  of  forfeiture.     §  3433. 

[When  existence  Is  not  limited  by  charter,  and 
there  Is  no  voluntary  surrender  of  franchises,  cor- 
poration will  not  bo  deemed  dissolved  until  dis- 
solution Is  .iudicially  ascertained.  Neither  insolv- 
ency nor  sale  of  all  Its  property,  nor  cessation  of 
business  extinguishes  its  franchises.  Pavis  v.  R. 
R.  Co.,  87  Ala.  633;  s.  c,  6  So.  Rep.   140. 


Prosecution  and  final  decree  of  a  proceeding  to 
dl-ssolve  a  corporation  Is  sulflcient  proof  of  a  con- 
tinued desire  for  its  dissolution  by  a  petitioner. 
Wolfe  V.  Underwood,  97  Ala.  375;  s.  c,  12  So. 
Rep.   234.] 


§  1204.  T'pon  decree  of  dissolution,  the  clian- 
cellor  shall  appoint  a  i-eceiver  of  all  the 
property  and  assets  of  the  corporation.  The 
chancellor  shall  direct  the  receiver  to  collect, 
by  suit  or  otherwise,  all  the  debts  due  the 
corporation,  and  sell  property,  real  or  per- 
sonal, belonging  to  the  corporation,  and  how 
he  shall  make  title  thereto  to  the  purchaser; 
the  chancellor  may,  in  liis  discretion,  autlior- 
Ize  the  receiver  to  proceed,  without  suit,  to 
sell  any  or  all  of  the  debts  and  assets  of  the 
corporation  at  public  sale  for  cash,  or  on 
such  terms  as  in  his  judgment  the  interest 
of  the  parties  may  require. 

[Liability  of  stockholder  for  debts  of  n  corpora- 
tion becomes  primary  and  absolute  on  dissolution 
of  corporation:  and  a  bill  in  equltv  will  He  to 
enforce  such  liability,  without  averring  Insolvency 
of  corporation,  and  without  previous  suit  against 
It.  Spence  v.  Shapard,  57  Ala.  598;  s.  c,  6  Am. 
Corp.  Cas.  118. 

A  private  corporation  is  a  trustee  for  benefit  of 
its  creditors,  and  afterward  for  benefit  of  its  stock- 
holders. R.  R.  Co.  V.  Branch,  59  Ala.  139;  s.  c. 
6  Am.  Corp.  Cas.  136. 

An    insolvent   corjjoration   cannot   prefer  a   debt 
to  one  of  its  directors.     Gibson  v.   Furniture  Co 
9(;  Ala.  357:  s.   c,   11  So.   Rep.  365;   Rubbor  Co.  v! 
Scott  Co..  96  Ala.  439;  s.  c.  11  So.   Rep.  370. 

Powers  of  receiver  appointed  pending  proceed- 
ings for  dissolution.  E.  L.  &  P.  Co.  v.  Hanby 
101  Ala.  15;  s.  c.  13  So.  Rep.  .34.3.  Validitv  of  his 
appointment  cannot  be  questioned  collaterallv.  Id. 
Power  of  receiver  to  carry  out  existing  contracts. 
Id. 

Property  of  an  insolvent  corporation  Is  not  a 
trust  estate  in  hands  of  the  corporation  for  its 
creditors.  .Tewelry  Co.  v.  Volfer,  17  So.  Rep.  525: 
Barrett  v.  Pollak,   18  id.   615. 

When  rer-piver  should  not  be  appointed  at  in- 
stance of  stockholder  and  creditor  of  corporation. 
Coal  Co.  V.  Hooper,  105  Ala.  665;  s.  c,  17  So. 
Rep.   118. 


§  120.".  The  person  nominated  by  the  ma- 
jority of  the  stockholders  must  be  appointed 
receiver,  if  they  "can  agree;  but  if  they  fail 
to  agree  for  ten  days  after  the  decree  of 
dissolution,  the  chancellor,  in  term  time  or 
vacation,  or  the  register  in  his  absence,  must 
appoint  such  receiver,  requiring  proper  bond 
and  sureties  for  the  performance  of  his 
duties. 

§  120G.  In  the  performance  of  his  duties 
under  the  decree,  the  receiver  shall  pay  the 
debts  of  the  corporation  in  full  or  ratably,  as 
the  funds  realized  may  permit.  If  any  claim 
is  contested,  it  must  be  filed  by  the  claimant 
in  the  court,  and  the  genuineness  thereof 
ascertained  as  in  other  contested  claims  in 
chancery.  The  residue,  after  the  debts  and 
costs  are  paid,  shall  be  divided  among  the 
stockholders  according  to  the  amount  of 
stock  owned  by  each. 

§  1207.  Any  party  dissatisfied  with  the  de- 
cree of  dissolution  may  appeal,  giving  bond 
and    sureties,    as    prescribed    by   the    chan- 


28 


ALABAMA. 


Dissolution;  foreign  corporations  —  Code,  §§  1298-1301,  1316. 


cellor,   and   approved   by  the  chancellor  or 
register. 

[§§  1291-1207  construed.  Nelson  r.  Hubbard; 
Cotton  Mills  v.  Dlmmick,  96  Ala.  238;  s.  c,  11  So. 
Rep.  428.] 

§  1298.  All  conDorations  wbose  powers  ex- 
pire by  liuiitatiou.  or  wliicli  are  dissolved  by 
forfeiture  or  any  other  cause,  exist  as  bodies 
corporate  for  the  term  of  five  years  after 
such  dissolution,  for  the  purpose  of  prosecut- 
ing or  defending  suits,  settling  their  busi- 
ness, disposing  of  their  property,  and  divid- 
ing their  capital  stock,  but  not  for  the 
purpose  of  continuing  their  business. 

Or  longer,  upon  application.     §   1301. 

[A  right  of  action  to  enforce  personal  liability 
of  stockholders  accrues  to  creditors  on  dissolution 
of  the  corporation.  Such  dissolution  is  affected 
by  execution  of  the  general  assignment,  and  fol- 
lowed bv  complete  abandonment  of  its  business; 
and  statute  of  limitations  in  favor  of  stockholders, 
as  against  creditors,  begins  to  run  from  date  of 
such  assignment.  McDonald  v.  Ins.  Co.,  85  Ala. 
401;   s.   c,   5  So.   Rep.    120. 

Stockholders  of  a  dissolved  private  corporation, 
which  carried  on  its  business  for  eighteen  years 
without  interruption,  were  estopped  from  denying 
regularity  of  organization.     Id. 

A  suit  cannot  be  maintained  against  a  dissolved 
corporation,  unless  by  force  of  some  statute  it 
continues  in  existence  to  the  extent  of  remaining 
liable  to  suit.  Nelson  v.  Hubbard;  Cotton  Mills 
V.  Dimmick.  06  Ala.  238;  s.  c,  11  So.  liep.  428.] 


§  1201).  Upon  the  dissolution  of  any  coi-pora- 
tlon,  unless  other  persons  are  appointed  by 
the  general  assembly,  or  by  a  court  of  com- 
petent authority,  the  managers  of  the  busi- 
ness of  the  corporation  at  the  time  of  its  dis- 
solution, by  vchatever  name  liuown,  are  the 
trustees  of  the  stockholders  and  creditors, 
authorized  to  settle  the  affairs  of  the  cor- 
poration, dispose  of  such  property  as  is 
necessary  to  pay  its  debts,  and  divide  among 
the  stockholders  money  and  property  re- 
maining after  payment  of  such  debts  and 
the  necessary  expenses. 

[At  common  law,  upon  dissolution  of  a  corpora- 
tion, all  Its  real  estate  remaining  unsold  reverted 
to  original  grantor  or  his  heirs.  Debts  due  to  and 
from  the  corporation  were  extinguished.  Paschall 
T.    Whitsett,    11   Ala.   472. 

These  provisions  do  not  take  away  the  power  of 
a  private  con)oration,  which  has  become  insol- 
vent, but  whose  charter  has  neither  expired  or 
been  aniuille<l  or  forfeited,  to  make  a  voluntary 
assignmi'ut  for  benefit  of  creditors.  Cliamberliu 
V.   Bronilierg.   SS  Ala.  .^>7(!;  s.  c,  3  So.  Uep.  434. 

A  practical,  not  a  jiKlicialiy  ascertained,  disso- 
lution is  meant.  McDKundl  v.  Ala.  G.  L.  Ins.  Co., 
85  Ala.   4Ul;   s.   C,   5  So.    Hep.    120. 

Policyholders  are  creditors  of  a  dissolved  life 
Insurance  company.     Id. 

Above  section  held  not  to  affect  equity  jurisdic- 
tion in  regard  to  appointing  receivers  for  corpora- 
tions. Weatlierly  v.  Capital  City  Water  Co.,  22 
So.    Kep.    140.] 


§  ir>00.  Such  persons  have  authority  to  sue 
for  and  recover  the  debts  and  property  of 
the  dissolved  corporation,  in  its  corporate 
name,    and    are    jointly    and    severally    re- 


sponsible to  its  creditors  to  the  extent  of 
the  property  which  may  come  into  their 
hands. 

§  1301.  On  proper  application  to  the  chan- 
cellor, the  power  of  such  trustee,  or  person 
appointed  receiver  of  such  dissolved  corpora- 
tion, may  be  continued  for  such  length  of 
time  beyond  such  five  years  as  the  chancellor 
may  judge  necessary  for  the  purposes  con- 
templated in  the  three  preceding  sections. 

See  §  1298. 

[Corporations  whose  charters  expire  by  limita- 
tion, or  are  annulled,  exist  as  bodies  corporate 
for  five  years  after  dissolution,  for  the  purpose  of 
suit,  etc.     Curry  v.  Woodward,  53  Ala.  371.] 


ARTICLE  XVI.  CONDITIONS  UPON  WHICH 
FOREIGN  CORPORATIONS  ARE  PERMITTED 
TO    BUSINESS    IN    THE    STATE. 

Sec.  1316.  Foreign  corporation  must  file  instru- 
ment of  writing  designating  agents 
and  place  of  business  in  this  State. 

1317.  Where   filed. 

1318.  Unlawful     for    foreign    corporation     to 

transact  business  in  this  State  before 
declaration   filed;   penalty. 

1319.  Unlawful    to    act    as    agent    of    foreign 

corporation  before  such  declaration  is 
filed;  penalty. 

1320.  Solicitor   must   enforce  penalties;    com- 

missions. 

1321.  Admission  fees  exacted  of  foreign  cor- 

porations. 

1322.  Statement  to  be  filed. 

1323.  Fee  to  be  paid  but  once;  failure  to  pay 

vitiates  contracts. 

1324.  Exceptions. 

§  1316.  Every  corporation  not  oi'ganized 
under  the  laws  of  this  State  shall,  before 
engaging  in  or  transacting  any  business  in 
this  State,  file  an  instrument  of  writing,  un- 
der the  seal  of  the  corporation  and  signed 
ofhciall}''  by  tlie  president  and  secretary 
thereof,  designating  at  least  one  known 
place  of  business  in  this  State  and  an 
autliorized  agent  or  agents  residing  thereat; 
and  wlien  any  such  corporation  sliall 
abandon  or  change  its  place  of  business 
as  designated  in  such  instrument,  or 
sliall  substitute  another  agent  or  agents 
for  the  agent  or  agents  designated  in 
sucli  instrument  of  writing,  sucli  corpora- 
tion sliall  file  a  new  instrument  of  writing 
as  lu-rein  provided,  before  transacting  any 
further  business  in  this  State. 

See  Const.,  art.  XIV,  S  4,  and  note. 

[The  above  act  Is  a  penal  statute.  Ross  v.  Sec. 
Co.,  101  Ala.  ;^t>2;  s.  c,  13  So.  Rep.  5(54. 

Mortgage  to  foreign  corporations;  when  uot  con- 
trolled by  above  act.     Id. 

Action  to  recover  the  penalty  may  be  brought  in 
a  city  court,  bv  its  solicitors.  B.  <&  L.  Assn.  v. 
State,   09   Ala.    197. 

What  is  a  proper  compliance  with  laws  as  to 
I'oreign  corporation  filing  declaration  in  office  of 
secretary  of  Slate  and  distinguisliiiig  person  as 
agent.  Falls  v.  Bldg.  Co.,  97  Ala.  417;  s.  c,  13 
So.  Rep.  25.  This  is  entitled  to  great  weight 
as  a  legislative  Interpretation  of  the  constitutional 
provision  (art.  NIV,  S  4),  but  "  can  neither  add 
to    nor    take    from    the    legal    significance    of     its 


ALABAMA. 


29 


Foreign  corporations;  costs  — Code,  §§  1317-1324,  1347. 


meaning."  Farrior  v.  Security  Co.,  88  Ala.  275; 
s.   e.,  7  So.   Rep.  200. 

A  oertificate  need  not  designate  the  store  or  ofTice 
of  such  agent,  but  is  suflicient  if  it  designates  the 
oitv  where  he  resides.  McLeod  r.  L.  &  M.  Co., 
lOfi  Ala.  496;  s.   c.,   14  So.   Rep.  409. 

When  a  contract  with  a  foreign  corporation  has 
been  executed,  no  relief  can  be  granted  because 
such  corporation  had  not  complied  with  provisions 
of  above  statute.  Russell  v.  Jones,  101  Ala.  2G1; 
s.  c.  13  So.   Rep.  145. 

These  provisions  do  not  apply  to  every  act  done 
by  foreign  corporation  hero,  but  do  apply  to  a 
loan  of  money  here  by  foreign  corporation  en- 
gaging in  business  of  lending  money  on  mortgage, 
and  prevent  recovery  by  such  corporation  on  note 
given  for  money  borrowed,  when  failure  to  com- 
ply with  those  provisions  is  shown.  Mortg.  Co. 
v.  Nixon,  95  Ala.  318;  s.  c,  10  So.  Rep.  311. 

Agent  of  foreign  corporation  which  has  not 
complied  with  constitutional  and  statutory  pro- 
visions giving  the  right  to  do  business  in  this 
State,  cannot  maintain  an  action  to  recover  com- 
pensation for  services  rendered  in  procuring  a 
loan  from  it.     Collier  v.  Davis,  94  Ala.  45(5, 

Judgment  by  default  for  such  penalty  may  be 
recovered  on  proof  of  service  on  a  person  named 
as  agent;  and  the  penalty  being  necessarily  the 
amount  of  the  recovery,  no  writ  of  inquiry  is  nec- 
essarv  to  assess  the  damages.  B.  &  L.  Assn.  v. 
State"  99  Ala.  197;  s.  c.  13  So.  Rep.  fi87. 

Though  a  foreign  con^oration  failed  to  comply 
with  the  conditions  precedent  to  its  doing  busi- 
ness in  the  State,  held,  that  after  the  foreclosure 
of  a  mortgage  running  to  it  under  power,  the 
purchaser  obtained  the  legal  title.  Shahau  v.  Tet- 
ero,  21  So.  Rep.  951.] 


§  1317.  Such  instrument,  when  filed  by  a 
corporation  engaged  in  any  business  of  in- 
surance, must  be  filed  in  the  office  of  the 
State  auditor,  and  when  filed  by  a  corpora- 
tion engaged  in  any  other  business  than 
that  of  insurance,  must  be  filed  in  the  office 
of  the  secretary  of  State. 

§  1318.  It  is  unlawful  for  any  foreign  cor- 
poration to  engage  in  or  transact  any  busi- 
ness in  this  State  before  filing  the  written 
instrument  provided  for  in  the  two  preced- 
ing sections;  and  any  such  corporation  that 
engages  in  or  transacts  any  business  in 
this  State  without  complying  with  the  pro- 
visions of  the  two  preceding  sections  shall, 
for  each  offense,  forfeit  and  pay  to  the  State 
the  sum  of  one  thousand  dollars. 

§  1319.  It  is  unlawful  for  any  person  to 
act  as  agent  or  transact  any  business,  di- 
rectly or  indirectly,  in  this  State,  for  or  on 
belialf  of  any  foreign  corporation  which 
has  not  designated  a  known  place  of  busi- 
ness in  this  State  and  an  authorized  agent 
or  agents  residing  thereat,  as  required  in 
this  article;  and  any  person  so  doing  shall, 
for  each  offense,  forfeit  and  pay  to  tlie  State 
the  sum  of  five  hundred  dollars. 

§  1320.  Every  penalty  provided  for  in  this 
article  shall  be  sued  for  and  recovered  in 
the  name  of  the  State  of  Alabama,  by  the 
solicitor  of  the  circuit  or  county  in  which 
the  offense  is  committed:  and  when  col- 
lected, must  be  paid  by  the  solicitor  into 
the  State  treasury  for  the  use  of  the  State, 
less  twenty-five  per  cent,  to  be  retained  by 
such  solicitor  for  his  services.  The  attor- 
ney-general shall  represent  the  State  in  stich 
actions  carried  to  the  supreme  court,  and 
for  his  services  therein  is  entitled  to  one- 


half  the  commissions  herein  allowed  to  the 
solicitor. 

§  1321.  No  corporation  created  by  the  laws 
of  any  other  State  or  of  any  foreign  country 
shall  engage  in  or  transact  any  business  in 
this  State  without  first  having  paid  into  the 
treasury,  for  the  use  of  the  State,  the  fol- 
lowing fees:  Where  the  capital  stock  of 
such  corporation  does  not  exceed  fifty  tliou- 
sand  dollars,  a  fee  of  twenty-five  dollars: 
where  it  exceeds  fifty  thousand  dollars,  but 
does  not  exceed  one  hundred  thousand  dol- 
lars, a  fee  of  fifty  dollars:  where  it  exceeds 
one  hundred  thousand  dollars,  but  does  not 
exceed  two  hundred  and  fiftj-  thousand  dol- 
lars, a  fee  of  seventy-five  dollars;  where  it 
exceeds  two  hundred  and  fifty  thousand  dol- 
lars, but  does  not  exceed  five  hundred  thou- 
sand dollars,  a  fee  of  one  hundred  dollars; 
where  it  exceeds  five  hundred  thousand  dol- 
lars, but  does  not  exceed  one  million  dollars, 
a  fee  of  two  hundred  dollars;  where  it  ex- 
ceeds one  million  dollars,  a  fee  of  two  hun- 
dred and  fifty  dollars.  All  corporations  or 
mutual  companies  which  have  no  capital 
stock  shall  paj^  a  fee  of  twenty-five  dollars. 

§  1322.  Such  foreign  corporation  shall,  at 
the  time  of  paying  such  fee  into  the  treas- 
ury, file  in  the  office  of  the  State  auditor, 
an  instrument  of  writing  under  the  seal  of 
the  corporation  and  signed  officially  by  the 
president  and  secretary  thereof,  showing  the 
name  of  the  corporation  and  the  State  or 
country  under  whose  laws  it  was  incor- 
porated, its  principal  place  of  business  and 
the  amount  of  its  capital  stock. 

§  132.3.  The  fee  required  by  the  second 
preceding  section  shall  be  paid  once,  only; 
hut  such  payment  does  not  relieve  any  for- 
eign corporation  from  the  duty  of  comply- 
ing with  the  requirements  of  existing  laws. 
All  contracts  made  in  this  State  by  any 
foreign  corporation  which  has  not  first  com- 
plied with  the  provisions  of  the  two  pre- 
ceding sections,  shall,  at  the  option  of  the 
other  party  to  the  contract,  be  wholly  void. 

§  1324.  The  provisions  of  this  article  do 
not  apply  to  corporations  organized  under 
the  laws  of  the  United  States:  nor  to  cor- 
porations engaging  in  or  transacting  busi- 
ness of  interstate  commerce  only  within  tue 
State. 

CHAPTER  XXIX. 

Costs  and  Fees. 

ARTICLE  2.     SECURITY   FOR  COSTS. 

Sec.  1347.  Non-residents    must    give    security    for 
costs. 

§  1347.  xVU  suits  at  law  or  in  equity,  com- 
menced by  or  for  the  use  of  a  non-resident 
of  this  State,  must  be  dismissed  on  motion, 
if  security  for  the  costs,  approved  by  the 
clerk  or  register,  be  not  given  by  such  non- 
resident when  the  suit  is  commenced,  or 
within  such  time  thereafter  as  the  court 
may  direct. 

See  §  534. 


30 


ALABAMA. 


Evidence;  garnishments  —  Code,  §§  1S03,  2182. 


CHAPTER  XLVI. 


Evidence. 

ARTICLE   1.      GENERAL    RULES, 

Sec.  1803.  Whcu  proof  of  corporate  existence  not 
required. 

§  1803.  When  suit  is  brousht  by  a  coi-pora- 
tion,  or  by  partners,  the  plaintiff  must  not 
be  roiiuirt'tl  to  prove  the  existence  of  tlie 
coi"poration,  or  the  firm,  or  the  individuals 
couii)i)siug  it,  unless  the  same  is  denied  by 
plea  verined  by  affidavit  tiled  within  the 
time  allowed  for  tiling  pleas  in  abatement. 

[See  Moore  r.  Burns,  60  Ala.  269.  Above  sec- 
tion does  not  apply  to  pleas  filed  before  its  pas- 
sage as  amended,  "  though,  as  it  relates  only  to 
the  remedy,  it  would  operate  upon  proceedings 
taken  after  its  passage  in  the  case  then  pending." 
Bank  v.  Johnson,  'M  Ala.  549;  s.  c,  8  So.  Hep.  42. 
t.'nder  above  statute,  a  plea  denying  phiiutilt's  cor- 
porate existence  must  be  verified  bj-  affidavit. 
Rosenberg  v.  Claflin  Co.,  95  Ala.  249;  s.  c,  10  So. 
Rep.  521. 

I'lea  of  nul  tiel  corporation  must  be  verified. 
Smith  V.  Hiles-Carver  Co.,  107  Ala.  272;  s.  c,  18 
So.  Rep.  37.] 

CHAPTER  LIV. 

Garnishments. 

Art.  1.  Garnishment    defined;    ■when    and    how    is- 
sued and  dissolved. 
2.  Answer     of     garnishee     and     proceedings 
thereon. 


ARTICLE       1.        GARNISHMENTS      DEFINED; 
WHEN  AND  HOW  ISSUED  AND  DISSOLVED. 

Sec.  2182.  Subscription    for    stock    in    corporation 
may  be  garnished. 

§  2182.  Any  creditor  of  a  corporation  may, 
by  garnishment,  subject  the  unpaid  sub- 
scription of  any  stockholder  in  such  corpo- 
ration to  the  payment  of  its  debts,  without 
regard  to  whether  the  corporation  can  main- 
tain suit  against  the  stoclvholder  for  such 
subscription  or  not. 

Limit  of  personal  liability.  Const,  art.  XIV,  §  8. 
Suit  by  corporation  to  enforce  subscription  to 
stock.     §  1254.     See  note  to  §  1298. 

[A  Judgment  creditor  of  a  corporation  may  sum- 
mon, In  the  same  writ,  two  or  more  stockholders, 
who  are  severally  indebted  to  the  defendant  cor- 
poration, for  unpaid  stock  subscriptions.  And 
this  fact  does  not  convert  proceedings  Into  a 
suit  against  them  as  joint  debtors.  Curry  v. 
Woodward,  53  Ala.  371;  s.  c,  50  Id.  258;  a.  c.  44 
id.  305. 

To  subject  stockholders  to  garnishment,  it  Is 
not  necessary  that  the  corporation  should  at  the 
time  be  engaged  In  business,  or  have  persons  in 
office  as  president  and  directors.  Id.  Unless  an 
actual  dissolution  Is  shown,  the  corporation  Is  still 
an  "  existing  corporation  "  within  the  meaning  of 
above  section.  Id.  A  call  must  be  made,  or  the 
company  evidently  abandon  Its  business,  before 
statute  of  limitations  begins  to  run  in  favor  of 
stockholders.     Id. 

Personal  notice  need  not  be  given  or  proved  to 
fix  liability  of  a  defaulting  subscriber  to  capital 
stock   of   corporation,    when    such    personal   notice 


is  not  required  either  by  the  charter  or  the  terms 
of  the  subscription.  Grubbs  v.  R.  R.  Co.,  50  Ala.  398. 
Identity  of  corporation,  under  changed  name,  In 
suit  to  enforce  subscription  to  stock.  Semple  v. 
Glenn,  91  Ala.  245.  Decree  against  corporation; 
conclusiveness  against  stockholders.     Id. 

Any  arrangement  entered  into  between  a  cor- 
poration and  its  stockliolders,  with  the  view  of 
defeating  claims  of  creditors,  would  be  void  both 
at  law  and  in  equity.  Goodwin  v.  McGehee,  15 
Ala.  232. 

Capital  stock  of  a  corporation  is  a  trust  fund 
for  payment  of  its  debts,  and  a  stockholder  is 
not  entitled  to  any  dividend  until  all  debts  are 
paid.     Paschall  v.   Whitsett,  1  Ala.  472. 

When  stockholders,  after  calls  regularly  made, 
are  in  default,  a  judgment  creditor  has  complete 
remedy  at  law  against  them,  and  therefore  will 
not,  for  this  cause  only,  be  allowed  to  proceed  in 
equity.  Allen  v.  R.  R.  Co.,  11  Ala.  437.  But  as 
to  stockholders  who  are  not  in  default,  by  reason 
of  no  call  having  been  nuide,  but  whose  subscrip- 
tions have  not  been  paid,  court  of  equity  has  juris- 
diction to  compel  payment  at  instance  of  an  exe- 
cution creditor  of  the  corporation.     Id. 

Unpaid  subscrij^tions  in  hands  of  stockholders 
Is  part  of  the  capital  upon  which  creditors  have 
rights,  wherever  it  may  be.  A  stipulation  in  the 
contract  of  subscription,  that  it  shall  be  payable 
on  the  call  of  the  company,  is  valid  as  between 
stockholders,  and  will  not  defeat  rights  of  credi- 
tors.    Curry  v.   Woodward,  53  Ala.  372. 

Action  at  law  does  not  lie  against  stockholders 
of  a  corpoi'ation,  to  enforce  his  liability,  to  the 
extent  of  his  stock,  for  debts  due  by  a  corpora- 
tion at  the  time  of  its  dissolution.  The  remedy 
is  in  equity  only.  Smith  v.  Huckabee,  53  Ala. 
191.  This  case  distinguished  in  Curry  v.  Wood- 
ward, supra.  Liability  of  stockholders  for  debts 
of  corporation.  A.  Js:  M.  Assn.  v.  Ins.  Co.,  70  Ala. 
12U;  s.  c,  9  Am.  Corp.  Cas.  8.  Shares  of  stock 
in  insolvent  corporation;  validity  as  to  creditors. 
Id. 

Unpaid  subscription  of  stock  may  be  reached 
and  subjected  b3'  garnishment  at  suit  of  credi- 
tors of  a  corporation.  Woldridge  v.  Holmes,  78 
Ala.  568. 

Subscription  to  stock  in  private  corporation, 
payable  on  call  by  board  of  directors,  and  for 
which  no  call  has  been  made,  is  not  subject  to 
garnishment  at  law  at  the  suit  of  a  creditor  of 
the  corporation,  though  it  has  become  insolvent 
and  practically  dissolved.  Teague  v.  LcGrand,  85 
Ala.  493;  s.  c,  5  So.  Rep.  287.  Books  of  corpora- 
tion are  evidence  against  stockholders  in  an  action 
to  enforce  unpaid  subscription.  Lehman  v.  Glenn, 
87  Ala.  618;  s.  c,  6  So.  Rep.  44.  When  statute  of 
limitations  in  favor  of  stockholders,  as  against  the 
Corporation  or  its  creditors,  begins  to  run.  Id. 
Whether  a  judgment  by  default  against  garnishee 
should  recite  such  return  of  an  execution,  or  show 
that  proof  ^vas  made  of  the  fact,  is  not  decided. 
Carroll  v.  Milner,  93  Ala.  301;  s.  c,  9  So.  Rep.  221. 
Necessary  parties  to  bill  to  enforce  liability  of 
stockholders  of  dissolved  corporation.  Friend  v. 
Powers,  93  Ala.  114;  s.  c,  9  So.   Rep.  392. 

I'ledgee  of  stock  in  private  corporation,  hold- 
ing certificates  as  collateral  security,  and  having 
had  transfer  duly  entered  on  books,  is  liable  to 
creditors  as  owner  thereof,  on  subsequent  Insolv- 
ency and  dissolution  of  corporation.  Bank  v.  Mc- 
Donnell, 92  Ala.  387;  s.  c,  9  So.  Rep.  149.  Stock- 
holder of  private  corporation,  when  sued  by  its 
creditors,  is  estopped  from  denying  its  legal  exist- 
ence, or  from  insisting  that  its  charter  has  been 
lorfeited  by  non-compliance  with  statutory  pro- 
visions for  which  a  forfeiture  might  be  declaimed. 
Id. 

Husband  subscribing  for  stock  In  name  of  wife 
becomes  personally  liable  to  creditors  of  corpora- 
tion.    Id. 

Interest  as  against  stockholders  of  dissolved  cor- 
poration, in  favor  of  creditors,  begins  to  run  on 
confirmation  of  register's  report  ascertaining 
amount  of  creditors'  respective  claims  and  the  un- 
divided liability  of  each  stockholder.     Id. 

No  relation  of  principal  and  sureties  can  exist 
between  a  corporation  and  its  stockholders,  as 
such.  R.  R.  Co.  V.  Nicholas,  98  Ala.  92;  s.  c,  12 
So.  Rep.  723.  Capital  stock  Is  a  security  for  cor- 
porate  creditors.     Janney  v.   Bank,   98   Ala.    515; 


I 


ALABAMA. 


31 


Summons;  service  —  Code,  §§  2190,  32G8-3277. 


B  c,  13  So.  Rep.  761.  There  i.s  no  discrimination 
against  creditors  wlio  are  also  stocliliolders.  Id. 
Helation  of  stoclcbolder  to  corporation.  Id.  Capi- 
tal stiiclc  is  a  trust  fund  in  hands  of  directors. 
Corey  v.  Wadsworth.  99  Ala.  08;  s.  c.  11  So.  Rep. 
350.  OfHcers  or  directors  cannot  be  preferred  cred- 
itors of  an  ins<jlvent  corporation.  Id.  A  corpora- 
tion is  insolvent,  when.  Id.  AVlien  subscriber  to 
corporate  bonds  liable  as  garnishee.  Davis  v. 
(.iH-niical  €o.,  101  Ala.  127;  s.  c,  8  So.  Rep.  496. 
Lialiility  of  subscriber  to  stoclc  as  garnishee. 
>\  hite  V.   Kahn,   15  So.  Rep.  595.] 

ARTICLE   2.     ANSWER   OF    GARNISHEE    AND 
I'ROCEEDINGS  THEREON. 

Sec.  2190.  Answer  of  corporation;  by  whom  made. 

§  2190.  No  person  shall  answer,  on  behalf 
of  any  corpocation,  any  process  of  garnish- 
ment, unless  he  shall  make  affidavit  that  he 
is  the  duly  authorized  agent  of  the  corpora- 
tion to  make  such  ansv\-er. 


CHAPTER  XCI. 

Pleading  and  Practice. 

ARTICLE  1.     THE  SUMMONS. 

.-^cc.  .^208.  Civil  actions  commenced  by  summons. 

3274.  How  corporation  served. 

3275.  Service  on  person  or  corporation  operat- 

ing railroad  of  a  domestic  corporation. 

3276.  Publication    against    domestic    coi-pora- 

tion.  other  than  railroad  corporation, 
having  no  officer  or  agent  in  the  State. 
.3277.  Senice  on   designated  agent  of  foreign 
coiijoration;  proof  of  agency. 

§  320S.  All  civil  actions  in  courts  of  record, 
except  in  such  cases  as  are  otherwise  pro- 
vided by  this  Code,  must  be  commenced  by 
tlie  service  of  summons. 

S  .'>274.  Wlicn  the  suit  is  against  a  corpora- 
tion the  summons  may  be  executed  by  the 
delivery  of  a  copy  of  the  summons  and 
complaint  to  the  president  or  other  head 
thereof,  secretary,  cashier,  station  agent,  or 
any  other  agent  thereof. 

Service  of  summons  in  chancery.  See  p.  36.  See 
?  1256,  subd.  2,  note.  Service  of  process  on  indict- 
ment,   i  5317. 

[In  suit  against  a  corporation,  any  offij?r,  agent 
or  employe  thereof,  on  whom  summons  and  com- 
plaint may  l^e  executed,  is  competent  to  accept  the 
service,  ins.  Co.  v.  Woodward,  44  Ala.  287;  s.  c, 
3  Am.  Corp.  Cas.  116.  Accfptance  of  service  by 
one  as  secretary  of  the  corporation,  not  of  itself 
sufficient  evidence  that  be  bears  that  relation  to 
the  corporation.     Id. 

In  an  action  against  a  corporation,  a  return  by 
the  sheriff  on  summons  and  complaint  that  he  had 
executed  the  same  "  by  delivering  a  copy  to  G.  A., 
managing  agent  for  the  defendant,"  is  not  suffi- 
cient to  sustain  a  judgment  by  default.  Iron  Co. 
V.  Spradley,  42  Ala.  24.  What  is  necessary  to 
sustain  a  judgment  by  default  against  a  corpora- 
tion. Express  Co.  v.  Carroll,  42  Ala.  437;  Ins. 
Co.  V.  McCulIough,  42  id.  667:  Lvon  v.  Admrs.,  3 
id.  151;  R.  R.  Co.  v.  Cole,  6  id.  655;  R.  R.  Co.  v. 
Hartwell,  43  Id.  508. 

A  judgment  by  default  against  corporation  must 
show  that  proof  was  made  of  the  agency  of  per- 


son before  process  was  served.  R.  R.  Co.  v. 
Whorley,  74  Ala.  2CA. 

Necessary  proof  of  service  of  process  to  sustain 
judgment  bv  default  against  corporation.  Ins.  Co. 
v.  Fowler,  76  Ala.  372;  BIdg.  Assn.  v.  Agee,  99 
Id.  571;  s.  c,  13  So.  Rep.  279. 

Transcript  of  a  decree  rendered  by  a  chancery 
court  of  Virginia,  showing  that  process  was  served 
on  casliier  and  directors,  and  that  the  court  held 
this  service  sufficient  to  give  jurisdiction  over  the 
corporation,  is  conclusive  as  to  that  fact,  and  can- 
not be  here  collaterally  assailed.  Lehman  v. 
Glenn,  87  Ala.  618;  s.  c,  6  So.  Rep.  44.] 

§  327.">.  Whenever  any  railroad  corporation 
created  by  the  authority  of  this  State,  shall 
permit  its  railroad  to  be  used  or  operated 
by  any  other  person  or  corporation,  whether 
by  contract  or  otherwise,  process  issuing 
against  the  person  or  corporation  so  using 
or  operating  such  railroad,  may  be  served 
upon  any  station  agent  or  person  in  charge 
of  any  depot  along  the  line  of  such  railroad. 

§  3270.  Whenever  it  is  shown  by  affidavit 
that  the  president  or  other  head  of  a  do- 
mestic corporation,  the  secretary,  cashier 
and  managing  agent  thereof  are  absent  from 
the  State,  and  that  in  the  belief  of  affiant 
there  is  no  per.son  in  the  employ  of  such 
corporation  or  doing  business  for  it  in  this 
State,  such  corporation  may  be  served  with 
any  legal  process  issuing  from  any  court  of 
record  in  this  State,  by  publication  in  some 
newspaper  published  in  the  county  where 
suit  is  brought,  or,  if  there  is  no  newspaper 
published  in  the  county  where  suit  is 
brought,  in  the  newspaper  published  near- 
est the  place  of  trial;  and  a  copy  of  such 
newspaper  containing  such  notice  must  be 
sent  by  mail  to  tlie  president,  secretary, 
cashier,  or  other  agent  of  such  corporation, 
at  his  place  of  residence,  if  known;  and  if 
such  ])ublication  is  perfected  twenty  days 
before  the  next  term  of  the  court,  the  case 
shall  stand  for  trial  at  that  term;  otherwise 
at  the  succeeding  term,  or  any  other  term 
after  the  perfection  twenty  days  prior 
thereto.  This  section  does  not  apply  to  rail- 
road corporations. 

§  3277.  When  a  foreign  corporation  has 
filed  an  instrument  in  writing  designating 
one  or  more  agents  in  this  State  as  provided 
by  this  Code,  process  issuing  against  such 
foreign  corporation  may  be  served  upon  any 
agent  so  designated;  and  the  certificate  of 
the  secretary  of  State,  or  of  the  auditor,  as 
the  case  may  be,  showing  such  designation, 
is  evidence  of  the  fact  of  such  agency.  If 
the  agent  designated  by  such  foreign  coi^po- 
ration  shall  die,  resign,  remove  from  the 
State,  or  his  authority  shall  cease  from  any 
cause,  and  no  other  agent  shall  be  designated 
by  such  foreign  corporation,  the  service  of 
process  issuing  against  it  may  be  made  upon 
the  secretary  of  State,  or,  if  the  process  be 
against  an  insurance  company,  tipon  the  au- 
ditor; and  the  officer  serving  such  process 
upon  the  secretary  of  State,  or  the  auditor, 
as  the  case  may  be,  must  immediately  trans- 
mit a  copy  thereof  by  mail  to  such  corpora- 
tion, at  its  home  office,  and  state  such  fact  in 
his  return. 


32 


ALABAMA. 


Quo  warranto  —  Code,  §§  3417-3420. 


CHAPTER  XCIV. 

Quo  Warranto  —  Actions  in  the  Nature  of. 

Sec.  3417.  Actions  to  vacate  charters  of  corpora- 
tions, by  whom  instituted,  and 
grounds  for. 

3418.  Judge  of  circuit  court  may  direct  solic- 

itor to  commence  action;  auy  person 
may  sue  on  securing  costs. 

3419.  In  what  county  action  to  be  brought. 

3420.  Action  in  namo  of  State  for  usurpation 

of  office  or  franchise. 

3421.  Judge  of  circuit  court  may  direct  action 

to  be  brought;  auy  person  may  sue  on 
securing  costs. 

3422.  In  what  county  action  to  be  brought. 

3423.  When  alleged  corporation  may  be  joined 

as  party  defendant  without  prejudice. 

3424.  Court    always    open    on    trial    of    cause 

for    trial    after    five    days'    service    of 
summons,    postponement. 

3425.  Cause  to  be  tried  by  the  court  unless 

jury  demanded. 

3426.  Informant  joined  as  plaintiff  with  the 

State. 

3427.  In   whose  name  continued  on   death  of 

informant;  when  it  abates. 
3433.  On  judgment  of  forfeiture,  corporation 
dissolved;   costs. 

3437.  Appeal;  costs  thereof. 

3438.  When  appeal  does  not  supersede  execu- 

tion of  judgment  unless  bond  be  given. 

3439.  Appeal;   when  heard. 

§  3417.  An  action  may  be  brought  in  the 
name  of  the  State,  against  the  offending  cor- 
poration, on  the  information  of  any -person 
for  the  purpose  of  vacating  the  cliarter.  or 
annulling  the  existence  of  any  corporation, 
other  than  municipal,  whenever  such  coii^o- 
ration  — 

1.  Offends  against  any  of  the  acts  cre- 
ating, altering,  or  renewing  such  corpora- 
tion. 

2.  Violates  the  provisions  of  any  law,  by 
which  such  corporation  forfeits  its  charter, 
by  abuse  of  its  powers. 

3.  Has  forfeited  its  privileges  or  franchises 
by  failure  to  exercise  its  powers. 

4.  Has  done  or  omitted  any  act  which 
amounts  to  a  surrender  of  its  corporate 
rights,  privileges  and  franchises. 

5.  Exercises  a  franchise  or  privilege  not 
conferred  on  it  bj'  law. 

Ultra  vires.  Const.,  art.  XIV,  §  5.  Forfeiture 
by  nonuser.  §  1273.  Failure  to  elect  officers  does 
not  dissolve.  §  1276.  Voluntary  dissolution. 
§§  1291  et  seq. 

[A  cause  of  forfeiture  of  franchise  cannot  be 
taken  advantage  of,  or  enforced  against  a  cor- 
poration collaterally  or  incidentally,  or  In  any 
other  mode  than  by  a  direct  proceeding  for  that 
purpose.  Hudgins  v.  State,  46  Ala.  208;  Lehman 
v.  Warner,  61  id.  455;  s.  c,  6  Am.  Corp.  Cas.  155; 
A.  &  M.  Assn.  V.  Ins.  Co.,  70  Ala.  120;  s.  c,  9 
Am.  Corp.  Cas.  8.  On  the  creation  of  every  cor- 
poration It  Is  implied  In  law  that  misuser  or  non- 
user  shall  effect  a  forfeiture  of  charter.  State  v. 
Bank,  2  Stew.  30. 

A  corporation  may  consent  to  a  forfeiture  of  Its 
charter,  though  such  consent  can  only  be  given 
by  all  the  stockholders;  and  a  statute,  which  de- 
clares a  forfeiture  with  consent  of  the  company, 
does  not  Impair  the  obligation  of  contracts.  R.  R. 
Co.  V.  State,  29  Ala.  573. 

The  charter  of  a  corporation  cannot  be  declared 
void  in  a  collateral  proceeding,  and  evidence  of 
fraud  in  procurement  of  charter  is  therefore  inad- 


missible In  such  proceedings.  Duke  v.  Nav.  Co., 
16  Ala.  372. 

A  corporation  Is  not  to  be  deemed  dissolved, 
or  its  charter  forfeited,  by  reason  of  any  misuse 
or  uonuse  of  Its  franchises,  until  the  default  has 
been  judicially  ascertained  and  declared;  and  this 
can  only  be  done  by  the  courts  of  the  State  by 
which  its  charter  was  granted.  Im.  &  Ex.  Co.  v. 
Locke,  50  Ala.  332;  s.  c,  5  Am.  Corp.  Cas.  1.35. 
Courts  of  one  State  have  no  jurisdiction  to  decree 
forfeiture  of  franchises  of  a  corporation  organized 
under  laws  of  another  State.  Id.  An  illegal  In- 
tention upon  part  of  original  corporators,  as  to 
its  purposes,  does  not  invalidate  the  corporation 
from  its  inception  or  dissolve  it  after  its  forma- 
tion.    Id. 

Infraction  of  the  public  statute  is  ground  for 
forfeiture  of  chartered  rights  and  cause  of  in- 
validity of  contracts  affected  by  the  legal  tran- 
saction, but  the  misuser  of  franchises  will  not 
warrant  a  decree  of  dissolution  until  default  has 
been  judicially  ascertained.  Id.  Action  under 
above  section  to  forfeit  franchise  of  a  corporation 
cannot  be  brought  when  it  appears  that  the  cor- 
poration's office  is  out  of  the  State,  and  that  it 
is  doing  no  business  within  the  State.  State  v. 
R.  R.  Co.,  18  So.  Rep.  801.] 


§  3418.  The  judge  of  the  circuit  court  when- 
ever he  believes  that  any  of  these  acts  or 
omissions  can  be  proved,  and  it  is  necessary 
for  the  public  good,  must  direct  the  solicitor 
of  the  circuit  or  county  to  bring  such  action; 
or  such  action  may  be  brought  without  the 
direction  of  such  judge  on  the  information 
of  auy  person  giving  security  for  the  costs 
of  the  action,  to  be  approved  by  the  clerk 
of  the  court  in  which  the  action  is  brought. 

[Information  In  nature  of  quo  warranto,  to  va- 
cate charter  of  a  corporation  in  absence  of  statu- 
tory regulation,  can  only  be  filed  by  the  attorney- 
general,  ex-officio.  He  is  the  representative  of 
the  State  for  this  purpose.  State  v.  Council,  30 
Ala.  66. 

An  action  to  vacate  charter  of  private  corpora- 
tion may  lie  brought  by  any  person  giving  secu- 
ritv  for  costs  without  first  obtaining  order  from 
a  judge.  State  v.  Webb,  97  Ala.  Ill';  s.  c,  12  So. 
Rep.  377.] 


§  3419.  Such  actions  must  be  brought  in 
the  circuit  court  of  the  county  in  which  the 
corporation  has  its  principal  office,  or,  if  it 
has  no  principal  office,  of  any  county  in 
which  it  does  business,  or,  if  it  has  no  prin- 
ciple office  and  is  doing  no  business  in  the 
State,  such  action  may  be  brought  in  any 
county. 

§  3420.  An  action  may  be  brought  in  the 
name  of  the  State  against  the  party  offend- 
ing, in  the  following  cases: 

1.  "When  auy  person  usurps,  intrudes  into, 
or  unlaAvfully  holds  or  exercises  any  public 
office,  civil  or  military,  or  any  franchise 
within  this  State,  or  any  office  in  a  corpora- 
tion created  by  the  authority  of  this  State. 

2.  When  any  public  officer,  civil  or  mili- 
tary, has  done  or  suffered  an  act,  by  which, 
under  the  law,  he  forfeits  his  office. 

3.  "When  any  association,  or  number  of  per- 
sons, acts  within  this  State  as  a  corporation, 
without  being  duly  incorporated. 

[Action  against  Individuals  for  fraudulent  usurp- 
pat  ion  of  corporate  powers  is  properly  brought 
against    them,   but    corporation    Itself   Is    not   a 


alaba:\l\. 


33 


Quo  warranto  —  Code,  §§  3421-3439. 


proper  partv  dpfendant.  Statp  v.  "Webb.  97  Ala. 
Ill;  s.  c,  12  So.  liep.  377.  Corporate  functions 
acqiiirerl  by  evasive  compliance  is  a  fraud  upon 
law.     Id. 

See  State  v.  Mobile  &  Girard  R.  Co.,  108  Ala.  29; 
s.  C,  18  So.   Rep.  801.] 


§  3421.  The  judge  of  the  circuit  court  may 
direct  such  action  to  be  brought  when  he 
believes  that  any  of  the  acts  specified  in 
the  preceding  section  can  be  proved,  and  it 
is  necessary  for  the  public  good,  or  it  may 
be  brought  without  the  direction  of  such 
judge  on  the  information  of  any  person  giv- 
ing security  for  tlie  costs  of  the  action,  to 
be  approved  by  the  clerk  of  the  court  in 
which  the  action  is  l)ronght. 

§  3422.  Such  action  must  be  brought  in 
the  circuit  court  of  the  county  in  which  the 
acts  are  done  or  suffered,  or,  if  to  try  the 
right  to  a  corporate  office,  in  the  circuit  court 
of  the  county  in  which  the  corporation  has 
its  principal  office,  or.  if  it  has  no  principal 
office,  in  any  county  in  which  it  does  busi- 
ness. 

§  3423.  When  the  action  is  against  persons 
acting  as  a  corporation  withoiit  being  duly 
incorporated,  the  alleged  corporation  may  be 
joined  as  a  party  defendant,  and  such  joinder 
does  not  admit  its  corporate  existence,  or 
otherwise  prejudice  the  case  of  the  plaintiff; 
and  judgment  and  execution  may  go  against 
it  by  its  alleged  corporate  name,  as  in  other 
cases. 

§  3424.  The  court  is  at  all  times  open  for 
the  trial  of  such  cause  or  the  granting  of 
orders  therein.  The  summons  shall  be  re- 
turnable ten  days  from  the  date  of  issuance, 
and  if  five  days'  service  is  not  had  before 
such  return-day,  the  summons  is  returnable 
to  the  first  day  after  the  expiration  of  five 
days  after  such  service;  and  if  such  return- 
day  be  a  day  of  anj'  regular  or  special  term 
of  the  court,  the  cause  stands  for  trial  on 
the  next  day  after  the  return  day,  unless 
good  cause  be  shown  for  further  delay;  but 
if  such  return-day  does  not  fall  within  a 
regular  or  special  term,  the  judge  must  fix  a 
day  for  the  hearing,  of  which  the  clerk  must 
notify  the  parties  or  their  attorneys;  and  on 
such  day  the  case  may  be  tried,  or  for  good 
cause  shown,  or  by  consent  of  parties  and 
the  approval  of  the  court,  may  be  continued 
to  another  day. 

§  3425.  Such  cause  must  be  tried  by  the 
court  without  a  jury,  unless  a  jury  be  de- 
manded in  writing,  either  by  the  relator  at 
the  Time  of  filing  the  information,  or  by 
the  defendant  at  the  time  of  filing  his  an- 
swer; but  by  the  consent  of  both  parties  a 
trial  by  jury  may  be  had  where  previously 
waived,  or  may  be  waived  where  previously 
demanded  by  eilher  party.  If  need  be,  the 
court  or  judge  may  order  the  sheriff  to  sum- 
mon the  requisite  number  of  persons  to  serve 
as  jurors. 

§  3426.  Whenever  an  action  is  brought,  un- 
der the  provisions   of   tliis   chapter,    on  the 

a 


information  of  any  person,  his  name  must  be 
joined  as  plaintiff  with  the  State. 

§  3427.  On  the  death  of  such  person  pend- 
ing the  suit,  it  may  be  continued  in  the  name 
of  the  surviving  informant,  or  of  any  per- 
son who,  on  application,  having  first  given 
security  for  the  costs,  is  substituted  iu  his 
place;  but  on  the  death  of  all  the  informants, 
if  no  person  is  substituted  in  tlieir  place,  the 
action  abates. 

§  3433.  If  it  is  adjudged  that  a  corporation, 
against  which  an  action  has  been  lirought 
under  this  chapter,  has,  by  neglect  or  al)use, 
or  surrender,  forfeited  its  coi-porate  rights, 
privileges  and  franchises,  judgment  must  be 
rendered  that  the  corporation  be  excluded 
from  such  corporate  rights,  privileges  and 
franchises,  and  be  dissolved;  and  judgment 
for  costs  must  be  rendered  against  the  per- 
sons claiming  to  be  such  corporation,  and  the 
directors  or  managers  thereof,  as  established 
by  the  evidence;  and  execution  shall  be  is- 
sued on  such  judgment  at  the  expiration  of 
five  days  from  the  date  thereof,  unless  the 
defendant  or  the  persons  claiming  to  bo  such 
corporation  shall,  within  such  time,  take  an 
appeal  to  the  supreme  court. 

§  3437.  The  State,  informant,  or  defendant, 
may  appeal  to  the  supreme  court  within  ten 
days  after  judgment,  on  application  to 
the  clerk  and  giving  security  for  tlie  costs  of 
the  appeal;  tlie  names  of  the  sureties  to  be 
certified,  with  the  record,  to  the  supreme 
court;  and  if  the  appeal  is  not  sustained, 
judgment  for  costs  may  be  rendered  against 
such  sureties:  but  in  appeals  by  the  State 
no  security  shall  be  required. 

§  3438.  if  the  defendant  is  adjudged  guilty 
of  usurping,  or  intruding  into,  or  unlawfully 
holding  or  exercising  any  public  office,  civil 
or  military,  or  any  office  in  a  corporation  cre- 
ated by  the  authority  of  this  State,  such  ap- 
peal does  not  supersede  the  execution  of  the 
judgment,  unless  the  party  appealing  shall 
execute  bond,  in  a  sum  to  be  prescribed  and 
with  sureties  to  be  approved  by  the  presiding 
judge,  payable  to  the  State  of  Alabama,  with 
condition  that  if  he  fail  in  the  appeal  he  will 
pay  such  judgment  as  the  supreme  court 
may  render  in  the  premises,  and  all  such 
costs  and  damages  as  any  person  may  sus- 
tain by  reason  of  a  wrongful  appeal  and  sus- 
pension of  the  execution  of  the  judgment. 

§  3439.  Such  appeal  must  be  heard  by  the 
supreme  court  on  the  first  Thursday  after 
the  expiration  of  ten  days  from  the  date  of 
the  appeal,  if  the  court  be  then  in  session;  if 
not  in  session  at  the  expiration  of  such  ten 
days,  the  appeal  shall  be  heard  at  the  first 
opportunity  thereafter  during  any  term,  or 
{  may  be  heard  at  a  special  term  to  be  called 
by  the  court  for  such  hearing,  of  which 
twenty  days'  notice  must  be  given  to  the 
I  parties;  but  in  no  case  shall  such  appeal  be 
heard  unless  the  citation  of  appeal  has  been 
served  five  days  before  the  hearing. 


34 


ALABAMA. 


Taxation  —  Code,  §§  3906,  390S,  3909,  3911. 


CHAPTER  ex. 
Taxation. 


Art.   1 


Definition  of  terms. 

2.  Exemptions  from  taxation. 

3.  Subjeotc,  rates,  maturity  and  lien  of  taxes. 
5.  Assessments;  when  and  how  made. 


ARTICLE  1.    DEFINITION  OF  TERMS, 

Sec.  3906.  Meaning  of  words  and  phrases. 

§  3906.  Whenever  the  terms  mentioned  in 
this  section  nre  employed   in  this  chapter, 
they  are  employed  in  the  following  sense: 
******** 

r».  The  word  "  person,"  or  "  party,"  or 
other  word  or  words,  importing  the  singular 
number,  shall  be  held  to  include  firms, 
companies,    associations    and    corporations; 


"  Corporation  "  defined.     Const.,  art.  XIV,  §  13 
See  Civ.  Code,  §  1,  and  note. 


ARTICLE  2.     EXEMPTIONS  FROM  TAXATION. 

See.  3908.  Exemption     of    cotton     factories    from 
county  and  municipal  taxation. 
3909.  Application    for    such    exemption;    how 
made  and  granted. 

§  3908.  For  the  purpose  of  encouraging 
the  building  and  operating  of  factories  for 
the  spinning  of  thread,  yarns,  and  the  weav- 
ing of  cloth  and  other  fabrics  of  cotton  and 
wool  in  the  State,  the  court  of  county  com- 
missioners, or  board  of  revenue  of  any 
county,  or  the  constituted  authorities  of  any 
city  or  town,  in  which  it  is  proposed  to  lo- 
cate such  factories,  are  authorized  and  .em- 
powered to  remit  the  ta.\es  assessed  on  such 
buildings,  factories,  machinery  used  therein, 
or  land  upon  which  such  factories  or  build- 
ings are  located,  for  all  county  or  city  pur- 
poses, for  a  period  not  exceeding  five  years 
from  the  date  of  the  incorporation  or  organ- 
ization of  such  manufacturing  company. 

[A  legislative  bounty  subject  to  repeal.  Calhoun 
S"-  "«'•  ^f»odstock  I,  Co.,  82  Ala.  151;  s.  c„  2  So 
Kep.  132. J 


§  3909.  In  order  to  obtain  the  benefits  of 
such  exemption,  the  person,  firm  or  corpora- 
tion owning  or  controlling  such  factory  must 
make  application  in  writing  to  the*  court 
of  county  commissioners  or  board  of  revenue 
of  the  county,  or  the  constituted  authorities 
of  the  city  or  town  in  which  it  is  proposed 
to  locate  such  factory,  giving  the  location  of 
the  proposed  factory,  the  date  of  the  incor- 
poration or  organization  and  praying  for  an 
order  to  be  made  by  them,  granting  such 
person,  firm  or  corporation  the  exemption 
provided  in  the  preceding  section,  which  ap- 


plication, if  granted,  shall  be  entered  on  the 
records  of  their  courts,  and  an  order  made 
allowing  such  exemption  and  designating  the 
time  when  such  exemption  shall  expire;  but 
all  such  property  must  be  returned  for  State 
taxation.* 


ARTICLE    3.      SUBJECTS,    RATES,    MATURITY 
AND   LIEN   OF  TAXES. 

Sec.  3911.  Subjects  and  rate  of  taxation. 

§  3911.  For  the  use  of  this  State,  and  to 
raise  revenue  therefor,  there  is  levied  an  an- 
nual tax  of  fifty-five  cents  on  each  hundred 
dollars  in  value,  upon  the  following  prop- 
erly:    *     *     * 

4.  All  stocks  of  goods,  wares  and  merchan- 
dise, the  assessment  to  be  on  the  average 
amount  on  hand  during  the  preceding  year, 
but  the  amount  so  assessed  shall  in  no  case 
be  less  than  the  capital  actually  employed  in 
the  business  nor  less  than  sixty-six  and  two- 
thirds  per  cent,  of  the  oricinally  invoiced 
price  of  said  goods,  wares  and  merchandise 
to  be  taken  and  furnished  to  the  tax  assessor 
as  hereinafter  provided,  and  this  shall  in- 
clude all  goods,  wares  and  merchandise  kept 
on  plantations  or  elsewhere  or  by  railroad 
companies  or  manufacturing  companies,  or 
other  associations,  corporations  or  persons, 
for  sale  or  to  be  dealt  out  to  laborers  or  em- 
ployes for  profit,  or  on  account  of  their 
wages;  and  shall  include  all  goods,  wares 
and  merchandise  offered  for  sale  by  any  per- 
son commencing  business  subsequently  to 
the  first  day  of  October  of  the  current  year, 
but  in  such  case  the  tax  shall  be  apportioned 
according  to  the  date  at  which  the  business 


*An  act  approved  February  13,  1S97,  "  To  pro- 
mote and  secure  the  erection  of  cotton  mills  and 
factories  in  the  State  of  Alabama,''   is  as  follows: 

"Section  1.  Be  it  enacted  by  the  general  assembly 
of  Alabama,  That  any  person,  copartnership,  asso- 
ciation of  individuals,  or  corporations  incorporated 
under  the  laws  of  the  State  of  Alabama,  that 
shall,  within  five  years  from  the  approval  of  this 
act,  invest,  expend,  lay  out  aud  pay  at  least  fifty 
thousand  dollars  in  money  in  the  erection,  building 
and  construction  of  cotton  mills  or  factories  in 
this  State,  and  the  buikliugs,  plants,  works,  ma- 
chinery, appliances,  and  appurtenances,  proper  or 
necessary  for  the  practical  operation  of  such  cot- 
ton mills  or  factories,  shall  b-?  entitled  to  claim 
and  have  exempt  from  assessment  aud  collection 
for  State,  county  and  municipal  taxation  such 
cotton  mills  or  factories,  and  the  said  proper  or 
necessary  buildings,  plants,  (\-orks,  machinery,  ap- 
pliances and  appurtenances  for  the  period  of  ten 
years  only  from  the  approval  of  this  act,  and  the 
same  and  every  part  of  the  same  are  hereb.v  de- 
clared to  be  exempt  from  State,  county  and  mu- 
nicipal taxes;  Provided,  nevertheless.  That  nothing 
in  this  act  shall  be  construed  to  exempt  from  taxa- 
tion the  land  on  which  said  cotton  mills  or  fac- 
tories are  erected;  I'rovided,  This  act  shall  also 
apply  to  additions  costing  $50,000  or  more  made 
to  cotton  mills  now  existing  in   Alabama. 

"  §  2.  Be  it  further  enacted.  That  all  laws  and 
parts  of  laws,  general  or  special,  in  conflict  M-ith 
the  provisions  of  this  act,  be  and  the  same  are 
hereby  expressly  repealed."  (I'amph.  Acts  1896- 
1897,  p.  917.) 


( 


ALABAMA. 


35 


Taxation  —  Code,   §  3911. 


shall  lie  commenced,  so  that  if  commenced 
after  the  first  day  of  .January,  the  tax  shall 
be  three-fourths  of  the  tax  for  the  whole 
year:  if  commenced  after  the  first  day  of 
April,  the  tax  shall  be  one-half  of  the  tax  for 
the  whole  year,  provided  that  the  assessment 
herein  provided  for  shall  not  include  the  prod- 
ucts raised  on  the  farms  in  the  hands  of 
the  original  producer.  Every  person,  asso- 
ciation or  corporation  carrying  on  such  busi- 
ness, shall,  between  the  first  and  tenth  days 
of  October  in  each  year,  make  or  caiise  to  be 
made,  a  full  and  complete  invoice  of  the  va- 
rious articles  of  said  goods,  wares  and  mer- 
chandise, with  the  value  thereof,  and  in  list- 
ing the  taxes  thereon,  he  shall  present  the 
same  to  the  tax-assessor.  If  the  person,  as- 
sociation or  corporation  carrying  on  such 
business  shall  fail  to  make  such  invoice  and 
present  the  same  as  herein  required  or  shall 
fail  to  make  return  of  the  amount  of  stock 
as  herein  provided,  or  if  the  assessor 
is  not  satisfied  with  the  return  made,  the 
assessor,  in  order  to  make  a  proper  assess- 
ment, may  examine  the  insurance  effected  by 
such  person,  association  or  corporation  upon 
the  stock  so  to  be  assessed,  if  the  same  can 
be  ascertained,  and  may  also  by  inquii-y  of 
persons  believed  to  have  knowledge  of  the 
suViject  by  having  assisted  in  taking  invoice 
or  otherwise,  inform  himself  of  the  probable 
average  amount  of  such  stock;  and  from 
such  information  he  may  assess  the  same 
upon  the  best  judgment  he  can  form,  and 
where  assessments  have  been  so  made 
against  a  person,  association  or  corporation, 
which  has  not  complied  with  this  subdivis- 
ion, said  assessments  shall  not  be  subject  to 
revision  at  the  instance  of  the  taxpayer  and 
shall  in  no  case  be  reduced. 

7.  All  moneyed  capital,  that  is,  all  money 
lent,  solvent  credits,  or  credits  of  value;  and 
all  money  employed  in  the  business  of  ad- 
vancing, or  pending  on  any  kind  of  chattels, 
chosi  s  in  action,  or  personal  property,  or 
used  in  Iniying  or  discounting  notes,  bonds  or 
bills  of  exchnage. 

S.  Every  share  of  any  incorporated  bank 
or  banking  association  incorporated  under 
the  laws  of  this,  or  any  other  State,  or  of 
the  United  States,  to  be  assessed  and  collected 
in  the  rounty,  city,  town  or  village  where 
any  such  bank  is  located,  and  to  be  assessed 
at  its  actual  market  value  to  the  person  in 
whose  name  such  share  stands  on  the  books 
of  such  bank  and  not  to  the  bank  or  corpo- 
ration. It  is  the  duty  of  the  president  and 
cashier  of  every  such  bank  or  banking  asso- 
ciation to  make  out  and  return  under  oath 
to  the  assessor  of  the  coimty  in  which  the 
bank  is  located,  a  list  showing  the  total  num- 
ber of  shares  of  the  capital  stock  of  such 
bank,  the  full  name  and  residence  of  every 
shareholder  as  far  as  known,  the  actual  mar- 
ket value  of  such  shares  and  the  par  value 
thereof,  the  date  of  the  last  sale  of  stock 
in  such  bank,  with  the  names  of  the  seller 


and  purchaser  thereof,  and  the  price  paid  for 
same,  the  annual  dividend  declared  upon  the 
stock  of  such  bank  for  the  last  three  years, 
the  value  of  the  shares  as  shown  by  the 
books  of  the  corporation  and  by  the  last 
report  of  the  officers  to  the  shareholders,  the 
amount  of  the  surplus  and  the  amount  of  the 
undivided  profits  not  included  in  the  surplus; 
and  such  president  and  cashier  shall,  at  the 
same  time  return  to  the  assessor  of  the  county 
a  sworn  statement  of  all  real  estate  owned  by 
the  bank,  situated  in  this  State,  and  the 
value  thereof  as  assessed  for  taxation  the 
same  year,  and  thereupon  it  shall  be  the 
duty  of  the  assessor,  after  passing  upon  such 
assessment,  to  deduct  from  the  amount  or 
sum  at  which  the  whole  of  the  shares  are 
assessed,  the  amount  or  sura  at  which  the 
real  estate,  situated  in  this  State  and  belong- 
ing to  such  bank,  is  assessed  for  taxation; 
and  the  residue  of  values  remaining  after 
such  deduction  shall  be  the  assessed  value  of 
the  whole  of  such  shares,  and  such  residue, 
divided  by  the  whole  number  of  shares,  shall 
constitute  the  value  of  each  share  for  taxa- 
tion, and  the  bank  shall  pay  for  the  share- 
holder, the  tax  assessed  against  such  shares. 
It  is  the  intent  and  meaning  of  this  sub- 
division that  the  real  estate  of  every  such 
bank  shall  be  assessed  for  taxation  against 
the  bank  as  other  real  estate  in  this  State  is 
assessed  to  the  owner  thereof,  and  that  the 
bank  shall  pay  the  taxes  thereon;  and  the 
shares  shall  be  assessed  for  taxation  against 
the  shareholders  at  their  actual  market 
value  after  deducting  therefrom  the  assessed 
value  of  the  real  estate  of  the  bank,  and 
that  the  bank  shall  pay  for  the  shareholders, 
respectively,  the  tax  so  assessed  against  their 
shares.  In  arriving  at  the  market  value  of 
the  shares  there  must  be  considered  every- 
thing which  gives  them  value,  such  as  the 
franchise,  the  authorized  capital  and  assets 
of  the  bank,  the  real  and  personal  property, 
the  reserve  fund,  the  siuplus.  the  undivided 
profits,  and  all  other  interests  of  the  share- 
holder that  would  pass  to  a  purchaser  on  a 
transfer  of  his  stock;  and  except  as  herein 
and  expressly  providefl,  no  separate  tax  shall 
be  levied  upon  these  elements  of  value,  or  any 
of  them.  It  shall  be  no  ground  of  objection 
to  such  assessment  of  shares  that  it  is  en- 
tered upon  the  assessment-book  in  the  corpo- 
rate name  of  the  bank. 

9.  Every  share  of  any  corporation  organ- 
ized under  the  laws  of  this  State,  or  any 
other  State,  or  of  the  United  States  (other 
than  railroad,  telegraph,  express  and  sleep- 
ing-car companies,  building  and  loan  associa- 
tions, and  banks  or  banking  associations)  to 
be  assessed  and  collected  in  the  county 
wherein  such  corporation  has  its  chief  or 
home  oflice  in  this  State,  and  to  be  assessed 
at  its  actual  market  value,  to  the  person  in 
wliose  name  such  shares  stand  on  the  books 
of  the  corporation,  and  not  to  the  corpora- 
tion.    It  shall  be  the  duty  of  the  president  or 


36 


ALABAMA. 


Taxation;  venue  — Code,  §§  3911,  3936,  3942. 


chief  officer  of  every  such  corporation  to 
malce  out  and  return  under  oath,  to  the  as- 
sessor of  the  county  in  which  the  chief  or 
home  office  of  the  corporation  is  located,  a 
list  showing  the  total  number  of  shares  of 
the  capital  stock  of  such  corporation,  and  the 
par  value  thereof,  and  the  full  name  and 
residence  of  each  shareholder  as  far  as 
known,  the  actual  market  value  of  such 
shai'es  and  the  par  value  thereof,  the  date 
of  the  last  sale  of  stock  in  such  corporation, 
with  the  names  of  the  seller  and  the  pur- 
chaser and  the  price  paid  for  the  same,  the 
annual  dividend  declared  on  the  stock  of 
such  corporation  for  the  last  three  years,  the 
value  of  the  shares  as  shown  by  the  books 
of  the  corporation  and  by  the  last  report  of 
the  officers  to  the  shareholders,  the  amount  of 
the  surplus,  and  the  amount  of  undivided 
profits  not  included  in  the  surplus,  and  such 
president  or  chief  officer  shall,  at  the  same 
time,  return  to  the  assessor  a  sworn  state- 
ment of  all  the  taxable  property,  real  and 
personal,  owned  by  such  corporation,  situ- 
ated in  the  State,  and  the  value  thereof  as 
assessed  for  taxation  the  same  year;  and 
thereupon  it  shall  be  the  duty  of  the  assessor, 
after  passing  upon  such  assessments,  to  de- 
duct from  the  aggregate  amount  or  sum  at 
which  the  whole  of  the  shares  are  assessed 
the  aggregate  amount  or  sum  at  which  the 
real  and  personal  property  of  the  corpora- 
tion is  assessed  for  taxation;  and  the  residue 
of  values  remaining  after  such  deduction 
shall  be  the  assessed  value  of  the  whole  of 
such  shares,  and  such  residue,  divided  by 
the  whole  number  of  shares,  shall  constitute 
the  value  of  each  share  for  taxation,  and  the 
corporation  shall  pay,  for  the  shareholder, 
the  tax  assessed  against  his  shares,  and  the 
amount  so  paid  for  any  shareholder  shall 
be  a  lien  on  any  interest  which  shareholders 
may  have  in  any  property  owned  by  the  cor- 
poration. It  is  the  intent  and  meaning  of 
this  subdivision  that  all  the  property,  real 
and  personal,  of  the  coi-poration,  except  such 
property  as  is  exempt  from  taxation  by  the 
laws  of  the  State  or  of  the  United  States, 
shall  be  assessed  for  taxation  against  the 
corporation  as  other  property  in  this  State  is 
assessed  to  the  owner  thereof,  and  that  the 
corporation  shall  pay  the  tax  thereon 
whether  such  assessment  exceeds  the  aggre- 
gate assessed  value  of  the  shares  or  not;  that 
the  shares  shall  be  assessed  for  taxation 
against  the  shareholders,  at  their  actual 
marlvot  value  after  deducting  therefrom 
the  assessed  value  of  the  real  and  per- 
sonal property  of  the  corporation,  and 
that  the  corporation  shall  pay  for  the 
shareholders,  respectively,  the  tax  so  as- 
sessed against  their  shares.  If  the  aggregate 
value  of  the  shares  does  not  exceed  the  aggre- 
gate value  of  the  real  and  personal  property 
of  the  corporation  as  assessed  for  taxation, 
then  on  tax  shall  be  demanded  or  collected 


on  the  shares.    It  shall  be  no  ground  of  ob- 
jection  to   such   assessment   of   shares   tliat 
the  same  is  entered  on  the  assessment-book 
in  the  name  of  the  corporation. 
******* 

13.  All  dividends  declared  or  earned,  and 
nor  divided,  by  corporations  doing  business 
in  this  State. 

14.  All  other  property,  real  and  personal, 
not  otherwise  specified  herein,  including  cot- 
ton, pig-iron,  manufactured  goods  and  other 
things  of  value. 


ARTICLE    5.      ASSESSMENTS;    WHEN    AND 
HOW    MADE. 

Sec.  3936.  Full  statoment  of  subjects  of  taxation 
required  of  taxpayers. 
3942.  By  whom  property  should  be  listed. 

§  393G.  Every  person  of  full  age  and  of 
sound  mind,  and  every  firm  and  body  corpo- 
rate or  politic  shall,  when  legally  called  on 
by  the  assessor,  foi'thwith  make  to  him  a 
full,  true  and  distinct  statement  of  all  the 
real  and  personal  property,  with  a  correct  de- 
scription thereof,  of  which  he  is  the  owner 
or  holder,  individually,  or  as  guardian,  par- 
ent, husband,  trustee,  administrator,  execu- 
tor, receiver,  accounting  officer,  partner, 
agent,  or  factor,  and  including  all  moneys 
and  credits  so  held  or  owned,  or  on  deposit 
anywhere  in  the  State,  on  the  first  day  of  Oc- 
tober preceding,  except  as  herein  otherwise 
prescribed. 

§  3942.  The  property  *  *  *  of  those 
whose  property  is  in  the  hands  of  receivers, 
(shall  be  listed),  by  such  receivers;  of  every 
firm,  or  body  corporate  or  politic,  by  the 
partner,  president,  principal  officer  or  agent 
thereof;  *  *  *  and  all  persons  herein  re- 
quired to  list  property  for  others  shall  list  it 
separately  from  their  own,  and  in  the  name 
of  the  owner  thereof. 


CHAPTER  CXIV. 

Venue. 

ARTICLE  1.  VENUE  OF  ACTIONS. 

Sec.  4207.  Corporation  sued  where. 

§  4207.  A  foreign  or  domestic  corporation 
may  be  sued  in  any  county  in  which  it  does 
business  by  agent. 

See  §  1256,  subd.  2,  note;  Const.,  art.  XIV,  §  4; 
§§  1316  et  seq. 

RULES   OF    PRACTICE    IN   CHANCERY 
COURTS. 

21.  Domestic  corporations  may  be  served 
with  process  by  executing  it  upon  the  presi- 
dent, or  other  head  thereof,  secretary,  cash- 


ALABAMA. 


37 


Crimiual  proceedings  —  Code,  §§  4721,  4776,  5316-5319. 


ier,  or  managing  agent  thereof.  If  affidavit 
is  made  that  the  oflBcers  named  in  the 
preceding  part  of  this  rule  are  unlvnown, 
absent  from,  or  reside  out  of  the  State,  the 
process  may  be  served  upon  any  white  per- 
son in  the  employ  of  such  corporation,  or 
doing  business  for  it.  Process  may  be 
served  on  foreign  corporations  by  executing 
It  upon  any  agent  of  such  corporation,  or 
white  person  in  its  employ  in  this  State,  or 
by  publication,  a  copy  of  which  may  be  sent 
to  any  of  the  ofhcers  named  in  the  first  part 
of  this  rule.  If  a  summons  to  answer  a  bill 
•  is  personally  served  on  the  agent  or  person 
In  the  employ  of  such  foreign  corporation, 


such  agent  or  employe  may  be  required  to 
answer  on  oath,  as  in  case  of  other  defend- 
ants to  bills,  and  under  like  penalties. 


Summons,   how  served  on   a 
■S2~-i.      See    §    li!56,     subd. 


rnrporation.     Code, 
2,    cross-references. 


[In  suit  against  a  corporation,  any  officer,  agent 
or  employe  thereof,  on  whom  summons  and  com- 
plaint may  be  executed,  is  competent  to  accept 
service.  Ins.  Co.  v.  Woodward,  44  Ala.  287;  s.  c, 
3  Am.  Corp.  Cas.  116.  Acceptance  of  service  by 
one  as  secretary,  not  of  itself  sufficient  evidence 
that  he  bears  that  relation  to  the  corporation.     Id. 

What  officers  are  necessary  parties  to  bills  of 
discoverv  against  a  corporation.  V.  &  A.  M.  &  M. 
Co.  V.  Hale,  93  Ala.  542;  s.  c,  9  So.  Rep.  256; 
Le  Grand  v.  J'cKenzie,  IIU  Ala.  493;  s.  c,  20  So. 
Rep.   131.] 


THE  CRIMINAL  CODE, 


CHAPTER  CLUI. 

Forgery  and  Counterfeiting. 

Sec.  4721.  Counterfeiting  or  forging  corporate  seal. 

§  4721.  Any  person,  who.  with  intent  to 
defraud,  counterfeits  or  forges  the  seal  of 
*  *  *  any  corporation  incorporated  tinder 
the  authority  of  this  State,  or  falsely  makes, 
forges,  or  counterfeits  any  impression  pur- 
I-orting  to  be  the  impression  of  any  such 
seal,  is  guilty  of  forgery  in  the  second  degree. 

Corporate  smI.     §§  1144,  1256. 

CHAPTER  CLIV. 

Frauds. 

ARTICLE  6.  DEPRECIATING  STOCK  OR 
BONDS  OF  CORPORATION  WITH  INTENT  TO 
BUY. 

Sec.  4776.  Depreciating  stock  or  bonds  of  corpora- 
tion with  intent  to  buy. 

§  4770.  Any  president,  director,  or  man- 
aging officer  of  any  corporation,  by  whatso- 
ever name  or  title  he  may  be  known  or  called, 
"Who  shall  do  or  omit  to  do  any  act,  or  who 
shall  make  any  declaration  or  statement  in 
writing,  or  otherwise,  with  the  intent  to  de- 
preciate the  market  value  of  the  stock  or 
bonds  of  such  corporation,  and  with  the 
further  intent  to  enable  such  president,  di- 
rector, or  other  managing  officer,  to  bu3-  any 
such  stock  or  bonds  at  less  than  the  real 
value  thereof,  must,  on  conviction,  be  fined 
not  more  than  five  hundred  dollars,  and  shall 
be  sentenced  to  hard  labor  for  the  county  for 
not  less  than  six  nor  more  than  twelve 
months. 


CHAPTER   CliXXX. 

Proceedings   After  Indictment;   Trial   and 
its  Incidents. 

ARTICLE  17.  PROCESS  ON  INDICTMENT 
AGAINST  CORPORATION;  TRIAL,  AND  JUDG- 
MENT. 

Sec.  5316.  Indictment    against    corporation    to.  be 
docketed  and  notice  issued. 

5317.  How  notice  and  copy  served;  when  case 

stands   for  trial. 

5318.  Defendant  falling  to  plead,  plea  of  not 

gnilty  entered. 

5319.  Upon  conviction  judgment  rendered  for 

fine  and  costs  and  execution  issued. 

§  5316.  When  an  indictment  is  returned 
against  a  corporation  doing  business  in  this 
State,  such  indictment  shall  be  forthwith 
docketed,  and  the  clerk  of  the  court  shall 
issue  a  notice  thereof  to  the  defendant  corpo- 
ration, accompanied  by  a  certified  copy  of 
the  indictment. 

§  5317.  Such  notice  and  copy  may  be  served 
upon  any  officer  or  agent  of  the  defendant 
corporation  authorized  by  law  to  receive  ser- 
vice of  summons  or  other  civil  process  issu- 
ing against  such  corporation,  and  upon  the 
return  of  the  sheriff  showing  proper  service, 
the  indictment  stands  for  trial. 

§  531S.  If  the  defendant  corporation  fails 
to  appear  and  plead  to  the  indictment,  the 
court  must  cause  the  plea  of  not  guilty  to  be 
entered  for  it;  and  the  trial  shall  pro- 
ceed as  if  the  corporation  had  appeared  and 
pleaded  not  guilty;  but  in  such  case  proof 
must  be  made  to  the  court  that  the  person 
upon  whom  the  notice  and  copy  of  the  indict- 
ment were  served  was  an  officer  or  agent  of 
the  corporation  authorized  by  law  to  receive 
such  service. 

§  5319.  Upon  the  conviction  of  such  corpo- 
ration, judgment  shall  be  rendered  against  it 
for  the  fine  imposed,  together  With  the  costs 
of  the  prosecution,  and  execution  thereon 
shall  forthwith  issue  against  the  property  of 
the  corporation;  and  other  executions  may 
issue  thereon  until  such  judgment  is  satis- 
fied. Btit  in  case  of  appeal  from  such  judg- 
ment, the  execution  thereof  may  be  super- 
seded as  in  civil  cases. 


mDEX  TO  ALABAMA. 


ACTIONS:  Page. 

corporations  may  maintain  and  defend ir> 

right  to  bring,  and  decisions  affecting      Hj,  17 

commenced  by  summons   31 

summons,  how  served   31 

on  railroad  corporation   31 

by  publication    31 

on  agent  of  foreign  corporation   31 

to  vacate  charters.     (See  Quo  "Warranto.) 32 

venue  of    3f 

ADMINISTRATOR: 

may  transfer  stock   22 

AGENT: 

of  foreign  corporation,  service  of  process 7 

instrument  designating,  to  be  filed   2S 

service  of  summons  on 31 

power  to  appoint   IS 

decisions  respecting  powers  of   IS 

directors  to  appoint 19 

AMENDMENT: 

Oil  declaration  of  incorporation 25 

ARTICLES  OF  INCORPORATION.     (See  Declaration.) 
ATTACHMENT: 

corporations  entitled  to   11 

security  for  costs  by  foreign  corporation   11 

may  issue  against  foreign  corporation 11 

levy  on  shares  of  stock.    (See  Execution.) 22 

BANKS: 

sharo^i,  liable  to  taxation  35 

BONDED  INDEBTEDNESS: 

increase  of,  meetings  for  23 

BONDS: 

county,  city  or  town  not  to  issue  to  aid  corporation (5 

issue  of,  except  for  money,  property,  etc 9 

purchase  of.  by  directors  -^ 

false  representation  as  to  value  of,  by  directors 24 

depreciating  value  by  officers  or  directors i>T 

BOOKS: 

stock,  registry  of  transfers   21 

registry  of  hypothecation,  mortgage  or  lien  21,  22 

stockholders  to  have  access  to 24 

BORROW: 

manufaoturin;;,  etc.,  companies  may 12 

not  exceeding  capital  stock  13 

corporations  generally,  power  of   19 

BUSINESS: 

expressly  authorized  by  charters   ^ 

nature,  declaration  to  state ^^ 


40  INDEX  TO  ALABAMA. 

BY-LAWS:  Tage. 

niamil'acturin}:,  etc..  compauies  may  adopt   12 

wliat  to  prescribe   1- 

corporations  generally  may  adopt   IS 

CANALS: 

mannfacturinj:,  etc.,  companies  may  construct 13 

CAPITAL  STOCK: 

increase,  general  laws  to  provide  5) 

consent  of  stockholders   ^ 

amount,  declaration  to  state 12 

subscription:!  to.    (See   Subscriptions.)    V2 

upon  payment,  certificate  to  be  issued  12 

debts  of  manufacturing,  etc.,  companies  not  to  exceed 13 

of  manufacturing,  etc.,  companies,  increase 14 

of  certain  corporations,  increase  of 20 

increase  of,  meetings  for  23 

tax  to  be  paid  upon 23,  24 

fees   upon    2(5 

CERTIFICATE  OF  INCORPORATION  (See  Declaration): 

of  manufacturing,  etc.,  companies,  issued  upon  payment  of  portion  of  subscriptions...  12 

issue  of,  by  judge  of  probate 1(5 

statement  to  cure  defects   25 

not  to  issue  to  corporation  having  same  name Utj 

CHARTERS    (See  Declaration): 

existing,  when  not  valid 7 

forfeiture,  assembly  not  to  remit 7 

business  to  be  expressed  in  S 

subject  to  repeal  or  amendment   10 

amendment  of,  how  made  25 

actions  to  vacate.     (See  Quo  Warranto.) 32 

COMMISSION: 

Oil  manufacturing,  etc.,  companies,  to  receive  subscriptions   V2 

to  call  meeting  of  subscribers 12 

to  deliver  subscriptions  to  officer 12 

oi  corporations  generally   to  receive  subscriptions 15 

to  deliver  subscriptions  to  officer l(j 

feen  to  be  paid  before  issuing li(j 

CONSOLIDATION: 

of  mining,  quarrying  and  manufacturing  companies 13 

meeting  of  stockholders 13 

agreement  in  writing 13 

agreement  to  be  filed   13 

corporations  entitled  to  what  rights 14 

CONTRACTS: 

lawfi  impairing  obligation  of  5 

CORPORATIONS: 

organized  by  general  laws  7 

duea,  how  secured  10 

term  includes  what  10 

COSTS: 

security  for,  foreign  corporation  to  give 29 

COTTON  FACTORIES: 

exempted  from  taxation    34 

application  for  exemption    34 

CREDIT: 

of  state  not  to  be  loaned (5 

of  county,  city  or  town,  not  to  be  loaned (i 


IXDEX  TO  ALABAMA.  41 
# 

CUEDITOKS:  '  Pag<^- 

liability  of  stockholders  to,  for  unpaid  subscriptions c50 

DEBTS,  CORPORATE: 

secured  by  means  provided  by  law  10 

stockholders  liable  for !•> 

of  manufacturing,  etc.,  companies,  not  to  exceed  capital  stock Vj 

of  other  corporations  not  to  exceed  capital  stock 10 

DECLARATION  OF  INCORPORATION      (See  Charter;  Certificate  of  Incorporation): 

manufacturing,  etc.,  corporations,  to  be  filed    1- 

contents  of   1- 

commission  to  receive  subscriptions  upon  filing l- 

of  corporations  generally,  contents   14 

amendment,  how  made  .  .^ -5 

book  to  be  kept  for  entry  of 20 

DIRECTORS: 

of  manufacturing,  etc.,  companies,  first  election 12 

term  of  office  12 

to  be  elected  annually  14 

vacancies    14 

powera  and  duties 14 

of  corporations  generally,  first  election I'i 

elected   annually    I'J 

term  of  office   !'■' 

officers  elected  by 1  '•' 

majority  a  quorum   24 

failure  to  elect  not  to  dissolve 24 

increase  or  decrease  of  number 24 

purchase  of  stock  or  bonds  by 24 

false  representations  as  to  value  of  stock  or  bonds 24,  37 

call  of  special  meetings  by 2."> 

trustees  upon  dissolution 2.S 

depreciating  value  of  stock  or  bonds 3" 

DISSOLUTION: 

petition  by  stockholders   27 

subpoena  of  stockholders   27 

decree  of  chancellor 27 

appointment  of  receivers 27 

receivers,  powers  and  duties  , 27 

stockholders  may  nominate 27 

continuance  in  office 28 

appeal  from  decree 27,  28 

continuance   after    28 

directors,  when  trustees  upon  28 

powers  and  liabilities 28 

EMINENT  DOMAIN: 

right  not  to  be  abridged 6 

franchises  may  be  taken  ^ 

compensation  to  be  paid *j 

payable  before  taking  property   0 

how  determined  0 

manufacturing,  etc.,  companies,  when  may  exercise l'> 

EXECUTION: 

levy  on  shares  of  stock 22 

sale  of  stock  under  levy 22 

statement  to  sheriff,  or  officer  having -- 

transfers,  hypothecation,  liens  or  mortgages  void  as  against,  unless  registered 22 


42  INDEX  TO  ALABAMA. 

EXECUTOR:  I'fige. 

may  transfer  stock ^2 

EXISTENCE,  CORPORATE: 

continuance  after  dissolution   -^ 

EX  POST  FACTO  LAW: 

not  to  bo  passed •  •  •  •  ^ 

FEES: 

for  filing  papers  relating  to  corporations ^ 

to  be  paid  upon  incorporation -^ 

upon  increase  of  capital  stock 2(3 

upon  organization  by  general  assembly  26 

not  charged  to  certain  corporations 26 

paid  by  foreign  corporations 29 

FOREIGN  CORPORATION: 

to  have  place  of  business  and  agent  in  state 7 

service  of  process  on  agent ^ 

rights  of,  decisions  respecting "*•  ^ 

security  for  costs  in  attachment 11 

process  of  attachment  against  11 

instrument  designating  agent  and  place  of  business 28 

vrhen  filed  29 

business  not  to  be  transacted  until  filed 29 

penalty  for  failure  to  file 29 

fees  to  be  paid  by 29 

security  for  costs  to  be  given  by 21> 

service  of  summons  on  agent 31 

FORFEITURE: 

of  franchise  for  non-user 24 

failure  to  hold  annual  meeting  not  to  act  as 25 

continuance  of  existence  after 28 

FRANCHISES: 

may  be  taken  by  condemnation 6 

non-user,  forfeiture  for 24 

forfeiture,  action  to  vacate  charter  for.    (See  Quo  Waranto.) 32 

usurper  of,  action  against  32 

FRANCHISE  TAX: 

upon  increase  of  capital  stock  23.  24 

GARNISHMENT: 

creditors  to  subject  unpaid  subscriptions  to 30 

answer  of  garnishee  31 

HYPOTHECATION: 

of  stock,  registry  to  be  made 22 

void  against  levy  unless  registered 22 

INCORPORATION    (See  Declaration): 

of  manufacturing,  mining  and  quarry  companies 12 

of  corporations    generally   14 

euro  of  defects  in 25 

INCREASE: 

of  capital  stock,  meetings  for 14,  20.  23 

bonded  indebtedness 23 

franchise  tax  to  be  paid  23,  24 


INDEX  TO  ALABAMA.  43 

INDICTMENT:  Page. 

ol  corporations,  process  on   37 

notice  issued   37 

service  of  notice  37 

plea  of  corporation   37 

judgment  for  fine  imposed 37 

LAND  COMPANIES: 

investments  by   19 

LIABILITY: 

ot  stockholders  to  creditors,  enforced  by  garnishment 30 

LIEN: 

on  stock,  registry  to  be  made 22 

void  against  levy  unless  registered   22 

on  stock,  for  debts  due  from  stockholders 23 

sale  to  satisfy   23 

MANUFACTURING  CORPORATIONS: 

organization  of  11 

declaration  to  be  filed 12 

contents  of   12 

commissioners  to  receive  subscriptions 12 

subscriptions,  how  paid.    (See  Subscriptions.) 12 

first  meeting  for  organization 12 

directors.    (See   Directors.)    12 

oflScers.    (See    Ofiicers.)    12 

certificate  issued  to   12 

corporate  powers  of 12,  13 

railways,  tunnels,  etc.,  may  be  constructed 13 

consolidation,  how  effected   13 

increase  of  capital  stock 14 

taxation  of  34,  35 

list  of  goods,  etc.,  to  be  delivered  to  assessors 35 

MEETINGS  OF  STOCKHOLDERS: 

oi  manufacturing,  etc.,  companies,  annually  14 

of  other  corporations,  held  annually 20,  25 

for  increase  of  capital  stock 20,  23 

for  issue  of  preferred  stock 23 

for  change  of  number  of  directors 24 

special,  may  be  called  by  directors 25 

vote  by  proxy,  at 25 

MINING    (See  Manufacturing  Corporations): 

corporations  organized  for 11 

MORTGAGE: 

manufacturing,  etc.,  companies  may  12 

corporations  generally,  may 19 

consent  of  stockholders   19 

on  stock,  registry  to  be  made 22 

void  against  levy  unless  registered 22 

NAME,  CORPORATE: 

declaration  to  state  12 

not  to  be  same  as  other  corporation  26 

OFFICERS: 

manufacturing,  etc.,  companies  may  appoint  12 

corporations  generally    may  appoint   18 

rights  as  determined  by  decisions   IS 

appoinment  by  directors   11> 

failure  to  elect,  not  to  dissolve -•* 


44  IXDEX  TO  ALABAMA. 

PAPERS: 

stockholders  to  have  right  of  access 24 

PERSON: 

term  includes  corporation 11 

PERSONAL  PROPERTY: 

manufacturinj,',  etc.,  companies  may  hold  and  convey 12 

corporations  generally,  may  acquire  and  convey IS 

PLACE  OF  BUSINESS: 

declaration  to  state  12,  14 

of  foreign  corporation    designation  to  be  filed  2S 

POWERS,  CORPORATE: 

decisions  respecting,  under  Constitution   8,  9 

oi  manufacturing,  etc.,  companies  12 

of  corporations  generally  IG,  17 

PREFERRED  STOCK: 

issued,  consent  of  stockholders 10 

meetings  of  stockholders  for  issue '2'.i 

proceedings  to  be  filed 2;; 

stockholders  entitled  to 23 

PROBATE,  JUDGE  OF: 

duties  as  to  declarations  of  incorporation   12,   14.  25 

to  keep  book  for  entry  of  papers  relating  to  corporations 20 

fees  for  filing  papers 2'5 

PROPERTY: 

private,  not  to  be  taken  without  compensation 0 

compensation  paid  before  taking i) 

compensation,  how  determined  9 

PROXY: 

vote  by,  stockholders  may  25 

QUARRYING  CORPORATIONS: 

organization  of.     (See  Manufacturing  Corporations.) 11 

QUO  WARRANTO: 

action  to  vacate  charters 32 

brought  for  what  reasons  32 

by  whom  brought   32 

against  persona  usurping  franchises  or  offices 32 

when  to  be  brought  32,  33 

by  whom  brought   33 

summons,  service  and  return 33 

trial  and  proceedings 33 

judgment  against  corporation  33 

appeals  from  judgment 33 

judgment  against  usurpers   33 

appeals  from  judgment 33 

RAILWAYS: 

manufacturing,  etc.,  companies  may  construct  13 

REAL  PROPERTY: 

manufacturing,  etc.,  companies  may  hold  and  convey 12 

corporations  generally  may  acquire  and  convey IS 

corporations  organized  to  buy  and  sell,  powers 19 

RECEIVERS: 

appointment  on  dissolution   27 

nomination  of,  by  stockholders 27 

distribution  and  payment  of  claims 27 

RECORDS: 

stockholders  to  have  right  of  access  24 


IXDEX  TO  ALABAMA.  45 

SEAL,  CORPORATE:  Page. 

manufacturinj,',  etc.,  companies  may  have   V^ 

corporations  generally  may  have 16 

forgery  of.  how  punished 37 

SPECIAL  LAWS: 

when  not  to  be  passed 6 

notion  of,  to  apply  for  passage 6 

STOCK: 

assembly  not  to  authorize  investment  in 0 

not  to  bo  issued  except  for  money,  property,  etc U 

preferred,  consent  of  stockholders  to  issue 10 

meetings  of  stockholders  to  issue   -'3 

proceedings  filed    23 

stockholder   entitled   to    23 

shares  deemed  personal  property  21 

transferable  on  books  of  corporation   21 

transfer  must  be  registered 21 

hypothecation,  mortgage  or  lien  to  be  registered 21 

transfer  by  personal  representative 22 

shares  subject  to  execution   22 

levy  made  by  indorsement    22 

sale  under  execution   22 

books  of  corporation  to  be  submitted  to  sheriff 22 

lien  on,  for  debts  due  from  stockholders 2.'i 

sale  to  satisfy   2^ 

purchase  of,  by  president  or  directors 24 

false  representation  as  to  value,  by  directors 24 

capital,  increase,  general  laws  to  regulate 9 

stockholders  to  consent  to  increase S> 

amount,  declaration  to  state   12,  14 

subscriptions  to.     (See  Subscriptions.)   12 

upon  payment,  certificate  to  be  issued   12 

debts  of  manufacturing,  etc..  companies  not  to  exceed 13 

of  manufacturing,  etc.,  companies,  increase 14 

of  certain  corporations,  increase  of 20 

increase  of,  meetings  for 2/^ 

tax  to  be  paid  upon  23,  24 

fees  upon    26 

STOCKHOLDERS: 

counties,  cities,  towns,  not  to  become (i 

liability  for  corporate  debts 10 

of  manufacturing,  etc.,  companies,  to  meet  annually  14 

of  corporations,  consent  to  mortgage 19 

increase  of  capital  stock   20 

lien  on  stock  for  debts  due  from '2'A 

sale  of  stock  to  satisfy 2.*'. 

to  have  access  to  books  and  papers 24 

right  to  vote  at  meetings 2r> 

may  vote  by  proxy   2.5 

petition  for  dissolution.     (See  Dissolution.)   27 

garnishment,  to  secure  subscription,  by  creditors 30 

shares  liable  to  taxation 35,  36 

deduction  of  corporate  property 36 

SUBSCRIBERS: 

naniefl.  declaration  to  state   12.  14 

meeting  for  organization    12 


46  I:N'DEX  to  ALABAMA. 

SUBSCRIPTIONS:  I'as?e- 

of  manufacturing,  etc.,  companies,  commission  to  receive 12 

how  payable    12 

delivered  to  officers   ^  2 

certificate  issued  upon  payment 1- 

of  corporations  generally,  commission  to  receive 15 

decisions  respecting    15 

how  paid 15.  16 

unpaid,  creditor's  action  to  recover   ^0 

SUCCESSION: 

manufacturing,  etc.,  companies  to  have 12 

corporations  generally  to  have   16 

SUB  AND  BB  SUED: 

manufacturing,  etc.,  companies  may 12 

corporations  getierally  may   16 

SUMMONS: 

service  on  corporation   31 

on  railroad  company   31 

by  publication    31 

on  agent  of  foreign  corporation 31 

TAXATION: 

power  not  to  be  delegated 6 

property  subject  to  uniform  rate 6,  7 

"  person,"  term  includes  what   34 

cotton  factories  exempted  from  34 

application  for  exemption  34 

subjects  and  rates  of 34,  35 

list  of  property  to  be  furnished  assessors 35 

bank  shares  liable  to   35 

to  be  paid  by  bank 35 

shares  of  certain  corporations  subject  to 35 

statements  made  by  corporate  officers   35.,  36 

value  of  real  and  personal  property  deducted 36 

statements  made  by  taxpayers 36 

TELEGRAPH  COMPANIES: 

construction  of  lines  by   10 

consolidation,  not  to  be  made 10 

TRAMWAYS: 

manufacturing,  etc.,  companies  may  construct 13 

TRANSFER: 

of  stock,  must  be  registered   21 

void  against  levy  unless  registered    22 

TUNNELS: 

manufacturing,  etc.,  companies  may  construct 13 

USURPER    (See  Quo  Warranto): 

of  franchises  and  offices,  action  against 32,  33 

VOTE: 

of  stockholders  at  meetings 25 

by  'proxy   25 


ARKANSAS. 


TABLE  OF  CONTENTS. 


CONSTITUTIONAL  PROVISIONS.  Tase. 

Art.        II.  DGClaratioii  of  lijilits 5 

V.  Legislative    5 

XII.  Private  corporatious 5 

XVI.  Taxation    6 

STATUTES. 

Ch.     1.  Adniinistratinn     7 

9.  Attachments    7 

29.  Corporations    7 

II.  For  manufacturing  and  other  lawful 7 

VII.  Dissolution   12 

30.  Costs    12 

45.  Criminal  law 12 

60.  Execution    13 

63.  Fees    14 

81.  Injunction    14 

119.  Pleadings  and  practice   14 

125.  Railroads     15 

129.  Revenue    16 

139.  Statutes    17 

151.  Usurp;itiou  of  office,  etc 17 

LEGISLATIVE    ACTS    SUBSEQUENT    TO    1884. 
4. 


ARKANSAS. 


COjS"STrrUTION  of  AEKAXSAS-18T4. 


PROVISIONS  RELATING  TO  CORPORATIONS. 


ARTICLE  II. 

Declaration  of  Rights. 

See.  17.  Laws    irupairiiicr    the    obligation    of    con- 
tracts prohil)itcd. 
22.  Private    property   not   to    be   taken    witli- 
,  out  just  compensation. 

ARTICLE  V. 

Legislative. 

Sec.  33.  No  liahilit.v  or  oblijration  of  any  corpora- 
tion shall  be  released  by  the  State. 

ARTICLE  XII. 

Private  Corporations. 

Sec.  1.  Existing    charters    under    which    organiza- 
tion shall  not  have  taken  place  to  have 
no  validity. 
2.  No  special  act  conferring  corporate  powers 
to  be  passed. 

5.  No  county,  town  or  municipality  shall  be- 

come a  stockholder. 

6.  Corporations  may  be  formed  under  general 

laws,  which  may  be  altered  or  repealed. 

7.  State  not  to  become  a  stockholder. 

8.  No  stock  or  bonds  to  be  issued  except  for 

money,  property  or  labor  done.  Fic- 
titious increase  of  stock  or  indebtedness 
is  void. 

9.  Right   of  way   not   to  be   appropriated  un- 

til compensation  is  made, 
in.  Bills  and  notes  not  to  circulate  as  money. 

11.  Foreign    corporations   may   do   business   In 

this  State.     Proviso. 

12.  State  shall  never  assume  liability  of  a  cor- 

poration, nor  shall  indebtedness  to  State 
be  released. 


ARTICLE  XVI. 

Taxation. 

Sec.     7.  Power  to  tax  corporations  not  to  be  sur- 
rendered or  suspended. 

ARTICLE  II. 

Declaration  of  Rights. 
§  17.  No    *    *     *    law  impairing  the  obli- 
.craiion  of  contracts  shall  ever    be    passed; 

*        «        Itc 

See  Const.,  art.  XII,  §  6;  art.  XVI,  §  7;  Stat- 
utes.  §§  991,  1035. 

§  22.  *  *  *  Private  property  shall  not 
he  taken,  appropriated  or  damaged  for  pub- 
lic use,  without  just  compensation  therefor. 

See  Const.,  art.  XII,  §  9. 

[Above  provision  Is  necessarily  Implied  in  tlie 
preamble  to  the  Constitution,  and  in  several  other 


articles.  Ex  parte  Martin,  13  Ark.  19R.  Until 
just  indemnity  is  afforded  to  a  party,  his  prop- 
erty cannot  be  taken.  Id.;  see  Roberts  v.  Wil- 
ikims,  l.j  Ark.  43.  Riirht  of  way  acquired  under 
charter  of  a  corporation  cannot  be  affected  by 
snb.sequent  constitutional  provision.  R.  R.  Co.  v. 
Turner,   31  Ark.   495.] 

ARTICLE  V. 

Legislative. 

§  33.  No  obligation  or  liability  of  any  rail- 
road or  other  corporation  held  or  owned  by 
this  State  shall  ever  be  exchanged,  trans- 
ferred, remitted,  postponed  or  in  any  way 
diminished  by  the  general  assembly;  nor 
shall  such  liability  or  obligation  be  released 
except  by  payment  thereof  into  the  State 
treasury. 

See  Const.,  art.  XII,  §  12. 

ARTICLE  XII. 

Private  Corporations. 

§  1.  All  existing  charters  or  grants  of 
special  or  exclusive  privileges  under  which 
a  bona  fide  organization  shall  not  have  taken 
place  and  business  been  commenced  in  good 
faith  at  the  time  of  the  adoption  of  this  Con- 
stitution shall  thereafter  have  no  validity. 

§  2.  The  general  a.ssembly  shall  pass  no 
special  act  conferring  corporate  powers,  ex- 
cept for  charitable,  educational,  penal  or  re- 
formatory purposes,  where  the  corporations 
created  are  to  be  and  remain  under  the 
patronage  and  control  of  the  State. 

General  Laws,   §§  900-901. 

[Applied  in  Little  Rock  v.  Parish,  36  Ark.  175. 
The  legislature  is  the  judge  of  the  neces.Mty  of 
special  legislation.     I'owell  v.  Durdcn,  01  Ark.  21.] 

§  5.  No  county,  city,  town  or  other  muni- 
cipal corporation  shall  become  a  stockholder 
in  any  company,  association  or  corporation; 
or  obtain  or  ai>propriate  money  for,  or  loan 
its  credit  to,  any  corporation,  association,  in- 
stitution or  individual. 
See  §  7,  post. 

§  G.  Corporations  may  be  formed  under 
general  laws,  Avhich  laws  may,  from  time  to 
time,  be  altered  or  repealed.  The  general 
assembly  shall  have  the  power  to  alter,  re- 


arka:n^sas. 


Taxation  —  Const.,  Art.  xii,  §§  7-12;  Art.  xvi,  §  7. 


voke  or  nnnul  any  charter  of  incorporation 
now  existin-  and  revocable  at  tlie  adoption 
of  this  Constitution,  or  any  tliat  may  here- 
after be  created,  whenever,  in  their  opinion. 
It  may  be  injurious  to  llie  citizens  of  tliis 
State,  in  such  manner,  however,  that  no  in- 
justice shall  be  done  to  the  corporators. 

General   Law,   {§  9C0-991. 

§  7.  Except  as  herein  provided,  the  State 
shall  never  become  a  stoclcholder  in,  or  sub- 
scribe to,  or  be  interested  in,  the  stock  of  any 
corporation  or  association. 

See  S  5,  ante. 

§  8.  No  private  corporation  shall  issue 
stocks  or  bonds,  except  for  money  or  prop- 
erty actually  received  or  labor  done,  and  all 
tictitious  increase  of  stock  or  indebtedness 
shall  be  void;  nor  shall  the  stock  or  bonded 
indebtedness  of  any  private  corporation  be 
increased,  except  in  pursuance  of  genei'al 
l.'iws,  nor  until  the  consent  of  the  persons 
holding  the  larger  amount  in  value  of  stock 
sliall  be  obtained  at  a  meeting  held  after  no- 
tice given  for  a  period  not  less  than  sixty 
days,  in  purstiance  of  law. 

§  0.  No  jtroiterty,  nor  right  of  way,  shall 
be  appropriated  to  the  use  of  any  corporation 
until  full  compensation  therefor  shall  be  first 
made  to  the  owner,  in  money,  or  first  secured 
to  him  by  a  deposit  of  money,  which  com- 
pensation, irrespective  of  any  benefit  from 
any  improvement  proposed  by  such  corpora- 
tion, shall  l)e  ascertained  l>y  a  jury  of  twelve 
men,  in  a  court  of  competent  jurisdiction. 
as  shall  be  prescribed  bj'  law. 

See  Const.,  art.  II,  §  22,  and  note. 

[Property  cannot  be  taken  under  this  section  for 
private  purposes.  Uoberts  v.  Wllliiiins,  1.5  Ark. 
4:?.  I'rovlsifin  has  no  apj)lication  to  a  charter 
previously  jrraiited.  In  so  far  as  it  undertakes  to 
chanue  the  mode  (tf  ac<inlsition  of  propertv  con- 
tained in  such  rharter.  C.  &  F.  U.  Co.  v.  Trout, 
32  .\rk.  IS:  Same  v.  Turner.  TU  id.  494.  For  full 
discussion  of  power  to  take  i>rivate  propertv  for 
piihllf  use.  see  Ex  parte  Martin.  1.3  Ark."  108. 
Kitrlit  of  way  acquired  under  charter  of  a  corjio- 
ration  cannot  he  affected  liy  subserpient  consti- 
tutional amendment.  K.  K.  Co.  v.  Turner.  .31  Ark. 
49."..  Tlie  owner's  damaK''S  for  the  right  of  wav 
to  a  railroad  ovi-r  his  land  cannot  be  diniinisheil 
by  estimated  benefit  likelv  to  accrue  to  ids  re- 
maining property.  R.  K.  v.  Ande-son,  39  Ark. 
107.] 

§  10.  No  ;i(t  of  tlie  general  assembly  shall 
be  passed  auiliori/.ing  tlie  issue  of  bills,  notes 
or  other  paper  wliich  may  circulate  as 
money. 

§  11.  Foreign  corporations  may  be  autlior- 
Ized  to  do  business  in  this  State  under  such 
limitations  and  restiictions  as  may  be  pre- 
scribed by  law.  I'rovided,  That  no  such 
coriioration    sii.ill    do   any    business    in    this 


State  except  while  it  maintains  therein  one 
or  more  known  places  of  business  and  an 
autliorized  agent  or  agents  in  the  same  upon 
whom  process  may  be  served;  and,  as  to 
contracts  made  or  business  done  in  this 
State,  they  shall  be  subject  to  the  same 
regulations,  limitations  and  liabilities  as  like 
corporations  of  this  State,  and  sliall  exercise 
no  oilier  or  greater  powers,  privileges  or 
franchises  tlian  may  be  exercised  by  like 
corporations  of  this  State,  nor  shall  they 
have  power  to  condemn  or  appropriate  pri- 
vate property. 

See  Statutes,  §  4982,  and  Act  of  1887,  at  p.  15. 
"  Foreign  corporation  "  defined.    §  6354. 

[A  corporation  of  another  State  is  not  a  "  per- 
son beyond  the  limits  of  this  State  "  within  mean- 
iu>r  of  §  13,  ch.  91,  II.  S.,  concerning  limitations, 
but  is  a  "  person  residing  beyond  the  limits  of 
this  State,"  within  the  meaning  of  §  14,  ch.  99. 
Clarke  v.  Bank.  10  Ark.  516. 

Statute  of  limitations  as  ai^pliod  to  foreign  cor- 
porations.    Bank  v.  Armstron'.:.  12  Ark.  602. 

Existence  of  foreign  corporations  is  a  question 
of  fact  for  jury.    Lindaucr  v.  Ins.  Co.,  13  Ark.  461. 

I'roof  of  organization  of  foreign  corporation. 
Lindauer  v.  Ins.  Co.,  13  Ark.  461;  Finley  v.  Coun- 
cil, etc.,  10  id.  425. 

AVhen  foreign  corporation  may  collect  rent  of 
land  In  State.  Lumber  Co.  v.  S.  W.  Imp.  Co., 
55  Ark.  625:  s.  c,  18  S.  W.   Rep.   1055. 

Right  of  foreign  corporation  to  do  business  in 
State.  Gunn  v.  Sewing  Machine  Co.,  57  Ark.  24; 
s.   c,   20  S.   W.   Rep.   591. 

In  a  suit  b.v  a  foreign  corporation,  tlie  plea  puts 
in  issue  its  existence.  Plankroad  Co.  v.  Banese 
&  Brown.  21  Ark.  306:  and  Same  v.  Rieves  et 
al..  Id.  302.  See,  also.  12  id.  772,  and  10  id.  423. 
Foreign  corporation  mav  litigate  in  this  State. 
Railway  v.  Fire  Assn..  r,5  Ark.  163:  s.  C,  18  S. 
W.  Rep.  43.  Presumption  that  foreign  corpora- 
tion  has  complied  with  the  law.     Id. 

Foreign  loan  corporation  not  doing  business  in 
State,  when.  Scruggs  \.  Mortgage  Co.,  54  Ark. 
566:  s.  c,   16  S.  W.   Rep.  .563. 

Above  section  is  not  self-executing.  Sherwood 
V.   Wllkins,  45  S.   W.   Rep.   988.] 

§  12.  Except  as  herein  otherwise  provided, 
the  State  shall  never  assume  or  pay  the  debt 
or  liability  of  any  county,  town,  city  or 
other  corporation  whatever,  or  any  part 
thereof,  unless  such  debt  or  liability  shall 
li:ive  been  created  to  reiiel  invasion,  sujipress 
insurrection  or  to  provide  for  the  public  wel- 
fare and  defense.  Nor  shall  tlie  indebtedness 
of  any  corporation  to  the  State  ever  be  re- 
leased or  in  any  manner  discharged  save  by 
payment  into  the  public  treasury. 

See  Const.,   art.   V,   §   33. 

ARTICLE  XVI. 
Taxation. 

§  7.  The  power  to  tax  corporations  and 
corporate  property  shall  not  be  surrendcied 
or  susi)en(led  by  :iny  contract  or  grant  to 
which  the  State  may  be  a  party. 

Sue  §§  5U13,  5045,  5046. 


ARKANSAS. 


Administration;  atraclmKMits:  business  corporations  —  Stat.,  §§  104,  105,  300-321,  960. 


STATUTES  or  AEIvAKSAS  -  1884. 


CHAPTER  I. 

Administration. 

Sec.  104.  Verifioation    by    corporation    of   demands 
aijaiiist  estates. 
105.  Sutficieney  of  alfidavit  by  officer  of  a  cor- 
])oration. 

§  104.  In  case  of  a  debt  due  a  corporation, 
the  cashier  or  treasurer  shall  make  the  affi- 
davit required  in  the  preceding  section.* 

Verification  of  pleadings  by  corporation.    §  50.56. 

§  105.  When  an  affidavit  shall  be  required 
to  be  made  by  an  othcer  of  a  corporation, 
*  *  *  it  shall  be  sufficient  to  state  in  such 
affidavit  "  that  he  has  made  dilii;ent  inquiry 
and  examination,  and  that  he  does  verily 
believe  that  nothing  has  been  paid,  except 
the  amount  credited,  and  that  the  sum  de- 
manded is  justly  due." 

[An  affidavit  by  an  officer  of  a  corporation  in  a 
form  prescribed  by  statute,  omitting  the  words 
"  tliat  the  sum  demanded  is  justly  due,"  is  suffi- 
cient.    State  V.   Collins,  16  Ark.   32.] 

CHAPTER  IX. 

Attachments. 

Sec.  309.  When  and  for  what  causes  obtained. 

320.  By  whom  and  how  executed. 

321.  Number    of    shares    of    defendant    in    in- 

corporated companies  furnished  sheriff 
on  pain  of  contempt. 

§  309.  The  plaintiff  in  a  civil  action  may. 
at  or  after  the  commencement  thereof,  have 
an  attachment  against  the  property  of  the 
defendant,  in  the  cases  and  upon  the  grounds 
hereinafter  stated,  as  a  security  for  the 
satisfaction  of  such  judgment  as  may  be 
recovered : 

First.  In  an  action  for  the  recovery  of 
money,  where  the  action  is  against  — 

1.  A  defendant  or  several  defendants  who, 
or  some  one  of  whom,  is  a  foreign  corpora- 
tion or  a  nonresident  of  the  State. 

8.  *  *  *  An  attachment  shall  not  be 
granted  on  the  ground  that  the  defendant  or 
defendants,  or  any  of  them,  is  a  foreign  cor- 
poration or  nonresident  of  this  State  for  any 
claim  other  than  a  debt  or  demand  arising 
upon  contract. 

See  §  5005. 

[In  proceedings  by  attachment  against  property 
of  nonresident,  the  statute  must  be'  strictly  fol- 
lowed.    Bush  V.  Visant,  40  Ark.  124.] 

§  320.  The  order  of  attachment  shall  be 
executed  by  the  sheriff  or  other  officer  with- 
out delaj^  in  the  following  manner: 

Third.  Upon  other  personal  propertyt  by 
delivering  a  copy  of  the  order,  with  a  notice 
specifying  the  property  attached,  to  the  per- 
son holding  the  same;  *  *  *  as  to  stoclc  in 
a  corporation,  or  property  held,  or  a  debt  or 

•Affidavit  to  claim  against  an  estate. 


demand  owing  by  it,  to  the  chief  officer,  or 
to  the  secretary,  cashier,  treasurer  or  man- 
aging agent  thereof,  and  by  summoning  the 
person  or  corporation  to  answer  as  a  gar- 
nishee in  the  action.  The  sheriff  shall  de- 
liver copies  to  and  summon  such  persons  as 
garnishees  as  the  plaintiff  may  direct. 
See   Act   of   1801,    at    p.    10. 

§  321.  It  shall  be  the  duty  of  every  person 
mentioned  in  the  third  subdivision  of  the 
last  section,  to  whom  the  slieriff  shall  apply 
therefor,  to  furnisli  him  with  a  certificate  of 
the  number  of  shares  of  the  defendant  in 
the  stocli  of  the  corporation,  a  description  of 
the  property  held  by  such  corporation  or 
person  belonging  to  or  for  the  benefit  of  the 
defendant,  or  the  amount  of  the  debt  owing 
to  the  defendant  by  such  corporation  or  per- 
son, whether  due  or  not;  and  a  failure  to 
perform  this  duty  may  be  punished  by  the 
court  as  a  contempt. 

CHAPTER  XXIX. 

Corporations. 

II.  Corporations    for   manufacturing 
lawful  business. 
VII.  Dissolution  of  corporations. 


and    other 


II.      CORPORATIONS    FOR    MANUFACTURING 
AND    OTHER    LAWFUL    BUSINES.S. 


Sec.  960. 

961. 
962. 
963. 
964. 
965. 

966. 

967. 
968. 


969. 
970. 


971. 


974. 
975. 
976. 
977, 
979. 
980. 

981. 
982. 
983. 
984, 
986, 
989. 
990. 
991. 


Corporation  to  carry  on  any  lawful  busi- 
ness, who  may  form. 

Capital  stock,  amount  of  shares. 

I'urposes  of  corporation  to  be  stated. 

First  meeting  of  stockholders. 

Board  of  directors,   when   elected:   term. 

Failure  to  elect  not  to  dissolve  corpora- 
tion. 

Officers,  how  elected;  to  reside  and  keep 
offices,  where. 

Vacancy,  how  filled. 

To  tile  copy  of  articles  of  association, 
where;  what  to  state;  copy  evidence, 
when. 

Quorum,   what. 

Calls  on  stock,  by  whom  made;  how  col- 
lected. 

Annual  report,  what  to  contain;  where 
filed. 

973.  General  corporate  powers. 

Books  open  to  inspection,   where  kept. 

Stock,  how  transferred:  lien  on. 

Articles   of  association   amended,   how. 

978.  To  be   recorded. 

Certificates  required  to  be  under  oath. 

President  and  secretary  liable,  when  and 
for  what. 

Stockholders  liable,  when. 

Directors  liable,   when. 

Officers  generally  liable,  when. 

985.  Insolvent;   directors  liable,   when. 

987,  988.   Lien   on   stock,    foreclosed  how. 

Other  liens  not  to  be  affected  by. 

May  remove  place  of  business,  how. 

Power  of  legislature  over. 


§   9G0.    Any   number  of  persons,    not   less 
than  three,  who,  by  articles  of  agreement  in 

t  other  than  that  capable  of  manual  delivery. 


8 


AEKAXSAS. 


Manufacturing,  etc.,  corporations  —  Stat.,  §§  9G1-9G7. 


writiun,  have  associated,  or  shall  associate, 
accordinj;  to  the  pruvisious  of  this  act,  un- 
der any  nauio  assumed  by  them,  for  the  pur- 
pose of  enfiairi'if?  i"  t'l'  carryinj;  on  any  lund 
of  mauufacturinj^,  meclianical,  mining  or 
other  lawful  business,  and  who  shall  comply 
with  all  the  provisions  of  this  act,  shall,  with 
their  successors  and  assigns,  constitute  a 
body  politic  and  corporate,  under  the  name 
assumed  by  them  in  their  articles  of  asso- 
ciation. 

See  Const.,  nit.  XII,   §§  2,  6. 

[Clnsslflcntion  of  corporations  Into  nubile  and 
privaii'.     State  et  al.   v.   Ctirran.  12  Ark.  321. 

yuasi  corijoration  distinguished  from  corporation. 
Carson  v.  St.  Frances  Levee  District,  SU  Arli.  513; 
b.  c,  27  S.   W.   Uep.   r)!)0. 

Acts  done  by  or  to  a  corporation,  by  a  name  sulj- 
staniiallv  Its  "true  name,  though  differing  from  it 
in  words  and  syllables,  are  valid.  Bower  et  al.  v. 
Bank,  5  Ark.  234. 

I'riiof  of  organization  as  required  by  the  charter, 
and  exercise  of  corporate  powers,  is  prima  facie 
evidence  that  the  conditions  precedent  to  corpo- 
rate existence  had  been  complied  with.  I'laiik- 
road  Co.  V.  Uieves,  23  Ark.  302:  Hammett  t.  li.  K. 
Co.,  20  Id.  204.  Corporate  existence  proved  by 
general  reputation.  Fleener  v.  State,  58  Ark.  !)S; 
s.  c,  23  S.  W.  Kep.  1.  Maker  of  note  held  by 
bona  flde  Indorsee  cannot  question  corporate  ex- 
istence of  payee.    Reynolds  v.   Both,  01  Ark.  317.] 

§  901.  The  amount  of  capital  stock  in  every 
joint-stoci<  corporation  sliall  be  lixed  and 
limited  by  tlie  stockliolders  in  their  articles 
of  association,  and  shall  be  divided  into 
shares  of  twenty-five  dollars  each;  but  every 
such  corporation  may  increase  its  capital 
stock,  and  the  number  and  amount  of  shares 
therein,  at  any  meeting  of  the  stockholders 
specially  warned  for  that  purpose. 

Shares,  how  levied  on.  §§  3003,  3004.  How  sold 
on  execution.  §  .3074.  Execution  against,  how 
executed.  §li  3089-3096.  Shares  listed  for  taxation. 
{§  5645,  564G.  Transfer  of  stock,  how  made.  §  975. 
Lien  on  stock.  §§  986-088.  Act  authorizing  cor- 
poration to  reduce  Its  capital  stock.    See  p.  17. 

§  962.  The  purpose  for  which  every  such 
corporation  shall  be  established  shall  be  dis- 
tinctly and  dflinitcly  specified  by  tlie  stock- 
holders in  tlieir  articles  of  association,  and  it 
shall  not  be  lawful  for  said  corporation  to 
direct  its  operations  or  appropiiate  its  funds 
for  any  other  purpose. 

Powers  of  corporations.  $§  972,  973,  and  notes. 
Fees  for  filing  articles.    §  3228. 

§  9G,3.  When  any  number  of  persons  shall 
have  associated  according  to  the  provisions 
of  this  act,  any  two  of  them  may  call  tlie 
first  meeting  of  the  cori)oration,  at  such  time 
and  place  as  they  may  appoint,  bj-  giving 
notice  thereof  in  any  one  or  more  news- 
papers pulilislied  in  tlic  county  in  which  such 
corj)oration  is  to  I>e  estal)lislied,  or  in  any 
adjoining  county,  at  least  lifleen  days  before 
the  time  aitpointed  for  sueli  meeting.  Rut 
said  notice  may  lie  waived  liy  a  writing, 
signed  by  all  tlie  sultscribers  to  tlie  capital 
stock  of  such  company,  specifying  the  time 


and  place  for  said  first  meeting,  which  writ- 
ing sliall  be  entered  at  full  length  upon  tlie 
records  of  the  corporation;  and  the  lirst 
meeting  of  such  corporation,  which  has  been 
held  pursuant  to  such  written  waiver  of 
notice,  shall  be  valid. 

§  9(>4.  The  stock,  property,  affairs  and  busi- 
ness of  every  such  corporation  shall  be  un- 
der the  care  of,  and  shall  be  managed  by, 
not  less  than  three  directors,  who  shall  be 
chosen  annually  by  the  stockholders,  at  such 
time  and  place  as  shall  l)e  provided  by  the 
by-laws  of  said  corporation,  and  who  shall 
be  stockholders,  and  shall  hold  their  ottices 
for  one  year,  and  until  others  shall  be 
chosen  in  their  stead. 

Directors  individually  liable,  when.  §§  982,  983, 
984. 

[Purchase  of  assets  of  corporation  by  a  director 
not  void  but  voidable.  Jones  et  al.  v.  Ark.  M.  & 
A.   Co..  .38  Ark.   17. 

Majority  of  directors  cannot  act  where  others 
had  no  notice;  hence  cannot  make  assignment  of 
projterty.  Simon  v.  Levier  Assn.,  .">4  Ark.  58;  s.  c, 
14  S.  W.  Uep.  1101.  Xor  mortgage  property. 
Bank  v.  McCarthy.  55  Ark.  473;  s.  c,  18  S.  W. 
Rep.   759.    How   notice  should   be  given.    Id.] 

§  9G.5.  If  an  election  of  directors  in  any 
such  corporation  shall  not  take  place  at  the 
annual  meeting  thereof  in  any  year,  such 
corporation  shall  not  thereby  be  dissolved, 
but  an  election  may  be  had  at  any  time 
within  one  3'ear,  to  be  fixed  upon,  and 
notice  thereof  to  be  given  by  the  directors. 

§  9r)f>.  The  directors  of  every  such  coipora- 
tion  shall  choose  one  of  their  number  to  be 
president,  and  shall  also  choose  a  secretary 
and  treasurer,  which  tAvo  last-mentioned 
officers  shall  reside  and  have  their  place  of 
business  and  Iceep  the  boolvs  of  said  corpora- 
tion within  this  State,  and  shall  choose  such 
other  ofticers  as  the  by-laws  of  the  corpoi'a- 
tion  shall  prescribe;  all  of  which  said  offi- 
cers shall  hold  their  offices  until  others  shall 
be  chosen  in  their  stead. 

President  and  secretary  personall.v  liable,  when. 
§  980.    Officers  generally,  when.    §  983. 

§  907.  The  directors  of  such  corporation, 
for  the  time  being,  shall  have  power  to  fill 
any  vacancy  which  may  happen  in  their 
board  by  death,  resignation  or  otherwise  for 
the  current  .vear. 

§  908.  Before  any  corporation,  formed  and 
established  by  virtue  of  the  provisions  of  this 
act,  shall  commence  business,  the  president 
and  directors  thereof  shall  file  a  true  copy 
of  their  articles  of  association,  at  full  length, 
and  also  a  certificate  setting  forth  the  pur- 
pose for  which  such  corporation  is  formed, 
the  amount  of  its  capital  stock,  the  amount 
actually  paid  in.  and  the  names  of  its  stock- 
holders, and  the  numbi'r  of  shares  by  each 
respectively    oAvned,    witli    the   secretary    of        ^ 
State,  and  a  duplicate  tliereof  witli  the  clerk       ; 
of  the  county  in  wliich  such  corporation  is  to        ! 
transact  business.    Said  articles  of  associa- 
tion and  certificate  shall  be  signed  by  the       i 


ARKAXSAS. 


Mauufacturing,  etc.,  corporations  —  Stat.,  §§  9C9-972. 


presiilont  aud  a  majority  of  the  directors; 
and  said  secretary  and  county  clerk  shall  re- 
spectively record  the  same  in  boolvs  to  be 
kept  by  them  for  that  purpose,  and,  within 
thirty  days  after  the  payment  of  any  in- 
stallment called  for  by  the  directors  of  such 
corporation,  a  certificate  thereof  shall  be 
made,  sifrned,  filed  and  recorded  as  aforesaid. 
A  copy  of  the  certificate  first  specified  in  this 
section,  certified  by  the  secretary  of  this 
State,  under  the  seal  thereof,  shall  be  re- 
ceived in  all  courts  as  prima  facie  evidence 
of  the  due  formation,  existence  and  capacity 
of  such  corporation  in  any  suit  brought  by 
or  against  the  same. 

Requirements  of  foreign  cori'orations.  See  Act 
of  1887,  at  p.  15.  Articles  may  be  amended.  §§  97(5- 
979. 

[Court  bound  to  take  judicial  notice  of  act  creat- 
ing corporation,  and  of  powers  therein  defined. 
Finlev  V.  Council,  10  Ark.  423. 

Individuals  cannot  do  business  as  a  corporation 
until  their  articles  of  a.ssociation  are  filed.  For 
purchases  made  by  them  before  that  time  they 
are  personally  liable  as  partners.  Garnctt  et  al. 
v.  Richardson  et  al.,  35  Ark.  144;  see  Connor  v. 
Abbott,  id.  365. 

■\Vhen  an  act  of  incorporation  requires  nothing 
to  be  done  by  the  trustees  named  in  it,  as  a  con- 
dition precedent  to  their  becoming  a  corporation, 
they  become  such  immediately  upon  its  passage. 
Blackwell  v.  State,  36  Ark.  178;  vide    2u  Ark.  204] 

§  969.  A  majority  of  the  directors  of  every 
such  corporation,  convened  according  to  the 
by-laws,  shall  constitute  a  quorum  for  the 
transaction  of  business,  aud  a  majority  of 
the  stockholders  present  at  any  legal  meet- 
ing shall  be  capai^le  of  transacting  tlie  busi- 
ness of  that  meeting;  and  at  all  meetings  of 
such  stockholders  each  share  shall  entitle  the 
holder  thereof  to  one  vote. 

[By  the  common  law  a  majority  of  the  trustees 
of  a  corporation  is  necessary  to  constitute  a 
quorum.     Blackwell  v.   State,  36  Ark.   17S.] 

§  970.  The  directors  may  call  in  the  sub- 
scription to  tlie  capital  stock  of  such  corpora- 
tion by  installments,  in  such  proportion  and 
at  such  times  and  places  as  they  shall  think 
proper,  by  giving  such  notice  thereof  as  the 
by-laws  shall  prescribe;  aud  in  case  any 
stockholder  shall  neglect  or  refuse  payment 
of  any  such  installment  for  tlie  space  of 
sixty  days  after  the  same  shall  liave  be- 
come due  and  payable,  and  after  he  shall 
have  been  notitied  thereof,  said  corporation 
may  recover  the  amouut  of  said  installment 
from  such  negligent  stockholder,  in  any 
proper  action  for  that  purpose,  or  may  sell 
said  stock  at  pul)lic  auction,  giving  at  least 
thirty  days'  notice  of  the  time  and  place 
of  sale  by  advertising  in  some  newspaper 
published  in  the  county  where  the  business 
of  sucli  coritoration  is  transacted,  or  in  an 
adjoining  county.  And,  in  case  of  a  sale,  the 
proceeds  thereof  shall  be  first  applied  in  pay- 
ment of  the  installment  called  for,  and  the 
expenses  of  the  sale  and  the  residue  shall  l)e 
refunded  to  the  owner  thereof.  In  case  the 
proceeds  of  such  sale  shall  be  iusufticient  to 


pay  said  installments,  said  corporation  may 
recover  the  balance  from  such  negligent 
stockholder.  Such  sale  shall  entitle  the 
purchaser  to  all  tlie  rights  of  a  stockholder 
to  the  extent  of  the  shares  so  purchased. 

[Suits  by  corporations  for  calls  upon  subscrip- 
tions and  for  assessments.  R.  R.  Co.  v.  Gaster, 
20  Ark.  455;  Same  v.  Chestnut,  id.  461. 

Stock  subscriptions.  What  sufficient  to  bind 
subscriber.  AVoodrufiC  v.  McDonald  et  al.,  33  Ark. 
97. 

^Vhen  subscription  due  before  all  of  capital 
stock  subscribed.  Arkadelphia,  etc.,  v.  Trimble, 
.■54  Ark.   316;   s.   c,   15  S.    W.    Kcp.   776. 

Voluntary  release  of  stock  subscription  by  in- 
solvent company  is  fraud,  when.  Carter  v.  Print- 
ing Co.,  54  Ark.  576;  s.  c,  16  S.  W.  Reip.  579J 


§  971.  The  president  and  secretai'j'  of  every 
corporation  organized  under  the  provisions 
of  this  act  shall  annually  make  a  certificate 
showing  the  condition  of  the  affairs  of  such 
corporation,  as  nearly  as  the  same  can  be 
ascertained,  on  the  first  day  of  .January  or 
of  July  next  preceding  the  time  of  making 
such  certificate,  in  the  following  particulars, 
viz.:  The  amount  of  capital  actually  piii<l 
in;  the  cash  value  of  its  real  estate;  the  cash 
value  of  its  personal  estate;  the  cash  value 
of  its  credits;  the  amount  of  its  debts;  the 
name  and  number  of  shares  of  each  stoclc- 
holder;  which  certificate  shall  be  deposited 
on  or  before  the  fifteenth  day  of  February 
or  of  August  with  the  county  clerk  of  the 
county  in  which  said  corporation  transacts 
its  business,  who  shall  record  the  same  at 
length  in  a  l)ook  to  l)e  kept  by  him  for  tliat 
purpose;  and  Avhenever  any  stockliolder  shall 
transfer  his  stock  in  any  such  corporation, 
a  certificate  of  such  transfer  shall  forthwith 
be  deposited  with  the  county  clerk  as  afore- 
said, who  shall  note  the  time  of  said  deposit 
and  record  it  at  full  length  in  a  Ixxjk  to  ha 
by  him  kept  for  tliat  purpose;  and  no  trans- 
fer of  stock  shall  l>e  valid  as  against  any 
creditor  of  such  stockholder  until  such  cer- 
tificate shall  have  been  so  deposited. 

Sale  of  shares  under  execution  or  attachment. 
Sec  .\ct  of  1891,   at  p.    16. 

§  972.  All  corporations  organized  and  es- 
tablished under  the  provisions  of  this  act 
shall  be  capable  to  sue  and  be  sued,  plead 
aud  he  impleaded,  answer  and  be  answered 
unto,  appear  and  prosecute  to  final  judgment 
in  any  court  or  elsewhere;  to  have  a  common 
seal  and  to  alter  the  same  at  pleasure;  to 
elect,  in  such  manner  as  they  shall  de- 
termine, all  necessary  officers;  to  fix  their 
compensations  and  define  their  duties;  to  or- 
dain and  estaldisli  by-laws  for  the  govern- 
ment and  regulation  of  their  affairs,  and  to 
alter  and  reiieal  the  same;  and  to  employ  all 
such  agents,  mechanics  and  other  laborers 
as  they  shall  think  proper. 

Attachments.  §  309.  Corporation  must  give  se- 
curity for  costs.  §  10.36.  Executions  against  cor- 
poration. §§  300.3-.3096.  Injunction  against  corpo- 
ration. §  37.38.  Pleadings  and  practice.  §§  4'.i79- 
5209.    Requirements  of  foreign  orporation  before 


10 


ARKAXSAS. 


Gi'ueral  powers;  books;  amendments  —  Stat.,  §§  973-977. 


It  cau  sue  lu  tbls  State.  Act  of  1S87.  at  p.  15. 
Officers,  how  elocted.  etc.  §  9l56.  Tersonal  liabil- 
ity of  officers.  §§  9S0,  9S2,  l)S3.  Tower  to  hold 
land.    $  973. 

[Powers  of  corporation  defined.  Conway  et  al., 
ex  parte,  4  Ark.  oOi.'.  Corporation  distinct  from 
directors  or  corporators  who  compose  it.  Id. 
riea  of  liudtation  to  action  by  corporation  ad- 
mits its  existence  and  capacity  to  sue.  Clark  v. 
Bank,  10  Ark.  OHJ.  These  also  admitted  by  plea  of 
the  general  issue  In  suit  broupht  by  a  coriioration. 
rinl.'y  V.  Council,  10  .A.rk.  4:^0.  Actions  against 
corporation  to  recover  for  services  rendered  to 
promoters.  R.  U.  Co.  v.  I'erry,  37  Ark.  lt>4.  Oral 
promise  bv  new  corporation  to  pay  debts  con- 
tracted by"  promoters,  void  by  statute  of  frauds. 
Id.  Corporation  is  bound  only  by  its  owu  con- 
tracts, and  not  bv  tliose  of  individual  members  in 
their  private  capacity.  Id.  A  plea  of  nul  tiel 
corporation  bad  on  demurrer  or  on  motion  to 
strike  out.  In  suit  brou;:ht  by  a  domestic  cor- 
poration, created  by  public  law,  of  which  the 
courts  take  judicial  notice;  but  if  the  statute 
creating  the  corporation  require  something  to  be 
performed  as  a  condition  precedent  to  its  exist- 
ence, the  plea  would  be  good,  and  the  plaintiff 
must  replv  a  performauce.  llammett  v.  R.  K. 
Co.,  20  Ark.  204. 

In  a  suit  bv  a  corporation.  It  can  be  shown  in  1 
defense,    that"  the    plaintiffs    have    forfeited    their 
corporate  rights  by  misuser  or  uonuser.     Id.     I'ri-  i 
vate  corporation  may  be  sued  by  one  of  its  own  | 
members,  eitht-r  at  law  or  in  equity.     Booker,  ex 
parte,  IS  Ark.  338. 

In  a  suit  by  a  corporation  unnecessary  to  aver  i 
in    declaration    that    plaintiff'    is    an    incorporation 
duly  constituted  and  authorized  to  sue  in  its  cor- 
por"ate  name.     If  legal  existence  is  questioned   it  ! 
must  be  done  by  plea.     R.    R.    Co.   v.   Gaster,  20 
Ark.  455. 

An  answer  to  an  action  by  a  corporation,  that 
It  had  forfeited  its  charter  by  nonuser,  without 
averring  that  a  forfeiture  had  been  declared  by 
judicial  proceedings  for  that  purpose,  is  demur- 
rable.    West  et  al.  v.  Ins.  Co.,  31  Ark.  476. 

In  suits  against  corporations,  it  is  not  neces- 
sary to  allege  in  the  complaint  the  incorporation 
further  than  by  a  statement  of  the  corporate 
name.     Building  Assn.  v.  Ilogan,  2S  Ark.  2iil. 

Corporation  may  be  sued  for  libel.  Am.  Cas. 
Co.  V.  Lea.  .".G  Ark.  530;  s.  c.  20  S.  AV.  Rep.  410. 

Foreign  insurance  company  doing  business  in 
State  Is  suable  on  any  cause  of  action  arising 
here.     Id. 

Foreign  corporation  may  litigate  in  this  State. 
Railway  v.  Fire  Assn.,  55  Ark.  163;  s.  c,  18  S. 
W.    Rep.  43. 

Authority  of  certain  officers  of  a  corporation  to 
execute  its  notes  cannot  be  presumed  from  fact 
that  they  have  exercised  it.  Ry.  Co.  v.  Bank. 
34  S.   W.   R.-p.  89. 

Everything  done  by  and  to  the  persons  in- 
trusted with  the  management  of  the  business  at 
the  branches  of  the  bank  of  tlie  State,  in  respect 
to  that  business,  m\ist  be  considered  as  done  by 
or  to  the  corporation.  Bower  v.  State  Bank,  5 
Ark.  2.34. 

Corporations  must  be  limited  by  their  charters 
OS  to  questions  which  relate  to  the  i>ower  of  deal- 
ing with  tidrd  persons;  but  in  questions  relating 
to  their  own  organization  a  liberal  construction 
is  to  be  adopted.  I'lankroad  Co.  v.  Rieves,  23 
Ark.  302. 

To  bind  a  corporation  by  specialty,  corporate 
seal  must  be  allixed  to  tin-  instrument.  Piivate 
seal  of  agent  not  sutlicient.  State  v.  Allis,  IS 
Ark.  269.] 


§  073.  Every  siU'li  cnrporatiou  shall,  by  its 
corporate  naino.  have  power  to  aoqiiiro  and 
hold  such  lands,  teiu'ments  and  horedita- 
nionts  and  such  proiu-rly  of  every  kind  as 
shall  be  necessary  for  the  pnri)ose  of  said 
coriioration;  and  such  dther  lands,  temqnents 
and  hereditaments  ;is  sli:il]  be  taken  in  pay- 
ment of  «>r  as  security  for  debts  due  to  such 


corporation,  and  to  manage  and  dispose  of 
the  same  at  pleasure. 

[The  assets  of  an  incorporated  company  are  a 
trust  fund  for  the  payment  of  its  debts  and  may 
be  followed  into  the  hands  of  any  person  acquir- 
ing them  with  notice  of  the  trust.  Jones  et  al. 
V.  Ark.  M.  A:  A.  Co.,  38  Ark.  17. 

Couvevances  of  corporate  property  by  president 
and  secretarv  cannot  be  attacked  by  corporate 
creditors  for'  failure  of  directors  to  agree  to  its 
sale  at  a  corporate  meeting.  Estes  v.  Bank,  34 
S.  W.  Rep.  85.] 


§  974.  The  books  of  every  such  corporation 
containing  their  accounts  shall  be  kept  and 
shall  at  all  reasonable  times  be  open  in  the 
coimty  where  such  corporation  is  located,  or 
at  the  office  of  the  treasurer  within  this 
State,  for  the  inspection  of  any  of  the  stock- 
holders of  said  corporation;  and  said  stock- 
holders shall  have  access  to  the  books  and 
statements  of  said  corporation;  and  shall 
have  the  right  to  examine  the  same  in  said 
countj'  or  at  said  office,  and,  as  often  as 
once  in  each  j-ear,  a  true  statement  of  the 
accoimts  of  said  corporation  shall  be  made 
and  exhibited  to  the  stockholders,  by  order 
of  the  directors. 

§  97.5.  The  stock  of  every  such  corporation 
shall  be  deemed  personal  property,  and  be 
transferred  only  on  the  books  of  such  cor- 
poration in  such  form  as  the  directors  shall 
Ijrescribe;  and  such  corporation  shall  at  all 
times  have  a  lien  upon  all  the  stock  or 
proiierty  of  its  members  invested  therein  for 
all  debts  due  from  them  to  such  corporation. 

See  §  901. 

[Transfer  of  stock  and  franchise  will  not  carry 
assets  previously  distributed  among  stockliolders. 
Jefferson  v.  Edriugton,  53  Ark.  566;  s.  c,  14  S.  W. 
Rep.  99,  903.] 

§  970.  Every  such  corporation  may  amend 
its  articles  of  association  by  the  specification 
of  any  other  lawful  business  in  which  the 
stockholders  may  desire  to  engage;  btit  be- 
fore it  shall  commence  any  business  under 
its  amended  articles  other  than  such  as 
was  distinctly  and  definitely  specified  in 
its  original  articles,  the  president  and 
directors  shall  cause  such  of  the  amended 
articles  as  specify  the  purpose  for  which 
such  corporation  is  formed,  subscribed 
by  all  the  stockholders,  to  be  published 
in  a  new.spaper  printed  in  the  county  in 
which  such  corporation  is  located,  or  in 
an  adjoining  county;  and  shall  also  make  a 
certificate  of  the  purpose  for  which  such 
corporation  is  formed,  as  changed  by  the 
amended  articles,  which  certificate  shall  be 
signed,  deposited  and  recorded  in  the  same 
manner  as  the  certificate  required  in  section 
9GS. 

See  §  908. 

§  977.  When  any  such  corporation  shall  in- 
crease its  capital  stock,  as  provided  in  sec- 


ARKANSAS. 


11 


Certificate,  filing  of,  etc.—  Stat.,  §§  978-98G. 


tion  961,  the  president  and  directors  shall, 
■within  thirty  days  thereafter,  uialie  a  cer- 
tificate thereof,  which  shall  be  sifjued,  de- 
posited and  i-ecorded  as  provided  in  section 
90S. 

§  978.  The  county  clerk,  after  recording  the 
certificates  specified  in  section  971,  shall  re-  | 
turn  the  same,  Avith  his  indorsement  of  ' 
record  thereon,  to  said  corporation  on  de-  ' 
niand;  and  for  recording  the  certificates  re-  i 
quired  in  this  act  he  shall  be  entitled  to  j 
receive  at  the  rate  of  ten  cents  for  each  one 
hundred  words.  ; 

§  979.  The  certificates  required  by  sections  ' 
908,  971,  970  and  977,  except  certificates  of 
transfers  of  stoclv,  shall  be  made  under  oath 
or  attirmation  by  the  person  subscril)iug  the 
same;  and  if  any  person  sliall  Icnowingly 
sv.-ear  or  affirm  falsely  as  to  any  material 
facts,  he  shall  be  deemed  guilty  of  perjury, 
and  be  punished  accordingly. 

§  980.  (As  amended  February  14,  1891.)  If 
the  president  or  secretary  of  any  such  cor- 
poration shall  neglect  or  refuse  to  comply 
with  the  provisions  of  section  971  and  to  per- 
form the  duties  required  by  them  respec- 
tively, the  persons  so  neglecting  or  refusing 
shall  jointly  and  severally  be  liable  to  an 
action  founded  on  this  statute,  for  all  debts 
of  such  corporation  contracted  during  the 
period  of  any  such  neglect  or  refusal. 

Liability  of  directors.  §  982.  Of  other  officers. 
§  983.    Criminal  liability  of  officers.    §§  1780,  1788. 

§  981.  If  the  capital  stock  of  any  such  cor- 
poration shall  be  withdrawn  and  refunded  to 
the  stockholders  before  the  payment  of  all 
the  debts  of  the  corporation  for  which  such 
stock  would  have  been  liable,  the  stock- 
holders of  such  corporation  shall  be  liable 
to  any  creditor  of  such  corporation,  in 
an  action  founded  on  this  statute,  to 
the  amount  of  the  sum  refunded  to 
them  respectively,  as  aforesaid;  but  if 
any  stockholder  shall  be  compelled,  by 
any  such  action,  to  pay  the  debts  of  any 
creditor,  or  any  part  thereof,  he  shall  have 
the  right,  by  bill  in  equity,  to  call  upon  all 
the  stockholders  to  Avhom  any  part  of  said 
stock  has  been  refunded  to  contriljute  their 
proportional  part  of  the  sum  paid  by  him 
as  aforesaid. 


[Liability  of  stockholders  under  the  common 
law.  Jones  et  al.  v.  Jarman.  34  Ark.  323.  Lia- 
bility under  Constitution  of  1868.     Id.] 


§  982.  If  the  directors  of  any  such  corpora- 
tion shall  declare  and  pay  a  dividend  when 
the  corporation  is  insolvent,  or  any  dividend 
the  payment  of  which  would  render  it  in- 
solvent, knowing  such  corporation  to  be  in- 
solvent, or  that  such  dividend  woiild  render 
it  so,  the  directors  assenting  thereunto  shall 
be  jointly  and  severally  liable,  in  an  action 


founded  on  this  statute,  for  all  debts  due 
from  such  corporation  at  the  time  of  such 
dividend. 

[Corporation  estopped  to  deny  that  dividend 
has  been  declared,  when.  Rv.  Co.  v.  Martin,  57 
Ark.  355;  s.   c,  21  S.   W.   Rep.   4C5. 

When  assets  of  business  corporation  a  trust 
fund  for  creditors.  Worthen  v.  Griffith,  59  Ark. 
502;   s.   c,  28  S.   W.    Rep.   286. 

RiKht  of  corporation  to  make  preferences.    Id. 

Corporation  may  prefer  its  directors.    Id.] 

§  983.  If  the  president,  directors  or  secre- 
tary of  au3^  such  corporation  shall  intention- 
ally neglect  or  refuse  to  comply  with  the  pro- 
visions of  this  act,  and  to  perform  the  duties 
therein  required  of  them,  respectively,  such 
of  them  as  so  neglect  or  refuse  shall  be 
jointly  and  severally"  liable,  in  an  action 
founded  on  this  statute,  for  all  the  debts  of 
such  corporation  contracted  during  the 
period  of  any  such  neglect  or  refusal. 

See  §  980. 

[That  defendant  signed  a  note  for  money  loaned 
the  corporation  of  which  he  was  a  director  in  the 
belief  that  he  would  not  be  individually  liable  is 
no  defense.  Maledou  v.  Leflore,  35  S.  W.  Ren. 
1102.] 


§  984.  If  any  corporation,  organized  and 
established  under  the  authority  of  this  act, 
shall  violate  any  of  its  provisions,  and  shall 
thereby  become  insolvent,  the  directors  or- 
dering or  assenting  to  such  violation  shall 
be  jointly  and  severally  liable,  in  an  action 
founded  on  this  statute,  for  all  debts  con- 
tracted after  such  violation  as  aforesaid. 

§  985.  Any  corporation,  organized  under 
this  act,  which  has  a  lieu  upon  the  stock  of 
any  stockholder  therein,  as  provided  by  sec- 
tion 97.J.  may  give  notice  to  such  stockholder 
tnat,  unless  he  shall  pay  his  indebtedness 
to  said  corporation  within  three  mouths  from 
the  time  of  giving  such  notice,  then  such 
corporation  will  proceed  to  sell  and  transfer 
the  stock  of  such  stockholder  in  said  cor- 
poration; and,  upon  default  of  payment,  said 
corporation  may  sell  the  stoclc  of  such  in- 
debted stockholder  as  hereinafter  provided, 
and  any  such  corporation  may  prescribe,  by 
its  by-laws,  the  manner  of  giving  the  notice 
required  by  this  section. 

§  980.  Such  corporation  may,  at  any  time 
within  six  months  after  it  shall  have  given 
the  notice  required  by  the  preceding  section 
to  such  indebted  stockholder  of  its  intention 
to  sell  such  stock,  and  the  three  months' 
notice  shall  have  expired,  advertise  in  one 
or  more  newspapers  published  in  the  county 
where  such  corporation  is  located,  and  if 
there  be  no  newspaper  published  in  said 
county,  then  in  a  newspaper  published  in  an 
adjoining  county,  giving  at  least  three 
weeks'  notice  of  the  time  and  place  of  sale, 
and  at  the  time  and  place  shall  state  the 
amount  due  from  such  stockholder  to  such 
corporation;  and  may  then  pi'oceed  to  sell, 
for  cash,  at  public  auction,    to   the   highest 


12 


ARKANSAS. 

Dissolution  -  Stat.,  §§  987-991,  1035. 


corporation  on  said  stock,  siicli  corporation 
sliall  credit  tlic  amount  received  for  such 
stoclv.  less  the  costs  of  sale,  to  said  indebted 
stockholder,  and  may  proceed  to  collect  the 
remainder  of  tln'ir  debt  by  any  proper  action 
for  that  iturpose. 

§  t»ST.  Whenever  the  purchasers  of  said 
stock  shall  have  complied  with  the  conditions 
of  said  sale,  the  corporation  sliall  issue  now 
certificates  of  stock  to  such  purchasers,  or 
to  their  order,  and  shall  cancel  upon  the 
books  of  the  corporation  the  certificates  of 
suc-li  indebted  stockholder,  and  the  new  cer- 
tificates so  issued  shall  entitle  the  holders 
thereof  to  all  the  privilejies,  rights  and  in- 
terests of  a  stockholder  in  sucli  corporation. 
§  9S8.  Whenever  any  stockholder  in  any 
such  corporation  sliall  have  made  a  transfer 
or  assiiriimeiit  of  his  stock,  as  security  for 
his  indt'btedness,  to  a  tliird  party,  and  after- 
ward shall  become  a  debtor  to  such  corpora- 
tion, such  corporation  may  sell  the  ecjuity  of 
redemption  of  such  stock  in  the  same  man- 
ner as  is  provided  for  the  sale  of  stock  on 
which  it  has  a  lien,  and  shall  credit  the 
amount  received  from  such  sale  to  such  in- 
debted stockhohler.  Such  corporation  may 
require  the  party  holdiiig  a  transfer  or  as- 
sipnment  of  such  stock  to  give  a  statement 
to  the  treasurer  of  such  corporation,  iinder 
oath,  of  the  amount  for  which  said  stock  was 
pledged:  and  if  said  ])arty  shall  not  give 
such  a  statement  at  or  before  the  time  such 
sale  Is  to  take  place,  he  shall  forfeit  all 
claim  and  lien  on  such  stock,  or  any  part 
thereof,  and  such  corporation  may  sell  the 
same  as  herein  provided. 

8  nsf>.  Nothing  contained  in  the  four  pre- 
ceding sections  shall  affect  any  lien  or  right 
acquired  by  any  otlier  party  by  virtue  of 
any  attachment  or  levy  of  execution  upon 
the  stock  of  any  stockholder  in  any  such 
corporation. 

§  !»rM).  .\ny  joint-stock  corporation,  organ- 
ized under  the  provisions  of  this  act,  may 
remove  its  place  of  business  from  any 
county  in  this  State  where  It  is  or  may  be 
located  to  any  other  county  in  this  State. 
But  the  president  and  secretary  of  such  cor- 
poration shall  procure  from  the  count.v  clerk 
of  the  county  from  whi<-h  it  shall  remove  a 
certified  copy  of  the  records  of  its  articles 
of  association  and  all  other  records  showinir 
the  state  of  its  affaii's.  to  wlii<'h  certified 
copy  shall  be  attached  the  certificate  of  said 
president  and  secretary  that  such  corpora- 
tion has  thus  removed,  wlTwh  certified  cony 
and  certifieafe  attached  shall  be  left  for 
record,  immediately  on  such  removal,  in  the 
office  of  the  county  clerk  of  the  county  to 
which  such  corporation  shall  remove,  and 
shall  be  recorded  by  such  clerk  at  full  length 


certificate  to  be  published  in  a  newsi)iiier 
in  the  county  in  which  such  corporation 
shall  be  located,  or  in  an  adjoining  county; 
and  in  case  of  removal  from  one  county  to 
another,  said  duplicate  shall  be  publishcl  in 
two  newspapers,  one  in  the  county  frnm 
which,  and  the  other  in  the  county  to  which, 
such  corporation  shall  remove. 

§  901.  The  general  assembly  may  at  any 
time,  for  just  cause,  rescind  the  powei-s  of 
any  joint-stock  corporation  created  pursuant 
to  "the  provisions  of  this  act,  and  prescribe 
such  mode  as  may  lie  necessary  or  expedient 
for  the  settlement  of  its  affairs. 

See  Const.,  art.   II,   §  17.    Dissclution.    §  10:?5. 

[Whore  legislature  posses.ses  power  to  roi)eaI 
charter,  and  exercises  it,  courts  will  not  presinne 
that  such  power  was  improperly  oi-  uncouseonsly 
exercised.  State  v.  Cuiran,  12  Ark.  3J1.  I'ower 
of  legislature  to  "  alter,  revoke  or  amend  "  char- 
ters considered,  beep  v.  Uy.  Co.,  58  Ark.  4o7; 
s.  c,  25  S.  W.  Hep.  "o.  It  may  restrict  corpora- 
tion's right  to  contract.    Id.] 


VII.     DISSOLUTION. 

§  1035.  If  any  corporation  shall  expire  or 
cease  to  exist,  either  by  its  OAvn  limitation, 
judicial  judgment  of  forfeiture  of  charter, 
or  liy  legislative  act,  the  common  law  in  re- 
lation to  corporations  shall  not  be  in  force 
in  relation  thereto,  but  the  goods  and 
chattels,  lands, tenements  and  hereditaments, 
and  every  right  or  profit  issuing  out  of  or 
appertaining  thereto,  moneys,  credits  and 
effects  of  such  corporation,  shall  immedi- 
ately vest  in  the  State  in  trust  for  the  uses 
and  purposes  by  said  charter  contemplated; 
and  each,  every  and  all  right,  upon  the 
expiration  or  dissolution  of  said  corporation, 
shall  be  and  is  in  al)eyance  until  the  action 
of  the  legislature  shall  be  had  thereon,  un- 
less provision  shall  be  made  by  law  for  the 
management  of  said  corporation  fund  in 
contemplation  of  such  dissolution. 

See  §  ii'.n   and   Act  of  1S9.3,   at  p.    IG. 

[Power  of  legislature  to  create  and  control  cor- 
porations. State  et  al.  v.  Curran,  12  Ark.  321; 
s.  c.  reversed,  15  How.  (U.  S.)  304. 

Hissolution  of  a  corporation  for  misuser  and 
noiniscr  can  only  he  effected  hy  judicial  trial  a!id 
judgment.  If  a'  l)i\nk  makes  n  valid  assignment 
of  its  assets  and  property  to  trustees,  for  bciie- 
tit  of  its  creditors,  it  is  a  good  cause  of  a  for- 
feiture of  charter.     State  v.   Rank.  5  .\rk.   ni\r,. 

The  charter  of  a  corporation  can  he  avoided  for 
nonnser  or  misuser  only  hy  direct  proceeiUngs 
against  it.  on  behalf  of  "the  State,  for  that  i)ur- 
l)ose.  ludividuiils  cannot  allege  it  in  collateral 
suits  until  it  he  iudiciallv  declared.  Blackwell 
V.  State.  :\r,  Ark.  ITS. 

Hy  the  death  of  all  its  members  a  corporation 
is  dissolved,  and  wlien  from  death  or  disfran- 
chisement too  few  remain  under  the  constitution 
'  of  the  corporation   to  continue  the  succession,   to 


ARIvAXSAS. 


13 


Costs;  criminal  law;  execution  —  Stat.,  §§  1036,  1725,  1735,  17S6-1788;  3003. 


all  purposfs  of  action  at  loast,  the  corporation 
Itself  is  (lissolvetl;  but  as  Ion}?  as  the  survivors 
are  sufficient  in  number  to  continue  the  succes- 
sion, the  bo<lv  remains.     Id. 

When   so  dissolved  the  fact  may  be  shown   col- 
laterally.    Id.] 


CHAPTER  XXX. 

Costs. 

Sec.  1036.  Security  for  costs,  who  to  give. 

§  1030.  A  plaintiff  who  is  a  uouresident  of 
this  State,  or  a  corporation  other  than  a 
bank  created  by  the  laws  of  this  State,  be- 
fore comnieucinp:  an  action  shall  file  in  the 
clerk's  office  a  bond,  with  sntficieut  surety, 
to  be  approved  by  the  clerk,  for  the  payment 
of  all  costs  which  may  accrue  in  the  action 
in  the  court  in  which  it  is  brousht,  or  in  any 
other  to  which  it  may  be  carried,  either  to 
the  defendant  or  to  the  officers  of  the  courts. 


CHAPTER  XLV. 

Criminal  Law. 

XXVIII.  Forfrery.  counterfeiting,  etc. 
XXXII.  Offenses  against  the  revenue. 

XXVIII.       FORGERY.     COUNTERFEITING, 
ETC. 

Sec.  1725.  •Counterfeiting  corporate  seal. 

1735.  Forgery  by  officer  of  corporation, 

§  1725.  If  any  person  shall  fraudulently 
make  or  counterfeit  any  instrument,  stamp- 
ing or  impression  in  the  figure  or  likeness  of 
the  seal  *  *  *  of  any  corporation  or  offi- 
cer thereof,  or  if  he  have  in  his  possession 
any  such  instrument,  and  conceal  the  same, 
knoAving  it  to  be  falsely  made  and  counter- 
feited, he  shall,  on  conviction,  be  confined 
in  the  penitentiary  not  less  than  five  nor 
more  than  fifteen  years. 

§  1735.  Every  president,  cashier,  treasurer, 
secretary  or  other  officer,  and  every  agent  of 
any  bank,  railroad,  manufactiu'ing  or  other 
corporation,  who  shall  wilfully  and  design- 
edly sign,  with  intent  to  issue,  sell  or  pledge, 
any  false,  fraudulent  or  simulated  certificate 
or  other  evidence  of  the  ownership  or  trans- 
fer of  any  share  of  the  capital  stock  of  such 
corporation,  or  any  certificate  or  other  evi- 
dence of  the  ownership  or  transfer  of  any 
share  in  such  corporation,  or  any  instrument 
purporting  to  be  a  certificate  or  other  evi- 
dence of  such  OAvnership  or  transfer,  promis- 
sory note,  bond,  bill  of  exchange  or  other 
evidence  of  indebtedness,  the  signing,  issu- 
ing, selling  or  pledging  of  which  by  such 
president,  cashier,  treasurer,  secretary,  or 
other  officer  or  agent,  shall  not  l)e  authorized 
by  the  charter  and  by-laAvs  of  sucli  corpora- 
tion, upon  conviction  thereof,  shall  be  pun- 
ished bj'  a  fine  not  exceeding  one  thousand 
dollars  and  imprisoned  in  the  penitentiary 
not  less  than  one  nor  more  than  ten  vears. 


XXXII.      OFFENSES     AGAINST     THE     REVE- 
NUE. 

Sec.  1786.  President   or   agent   of   bank   failing   to 
list  .stock. 
1788.  False  listing  of  property  for  taxation, 
perjury. 

§  1786.  If  the  president  or  principal  ac- 
counting officer  or  agent  of  any  bank  or  in- 
corporated company  shall  fail  to  complj' 
with  the  provisions  of  the  law  in  regard  to 
listing  or  the  payment  of  taxes  on  the  shares 
or  capital  stock  of  such  bank  or  incorporated 
company,  at  the  time  fixed  by  law  for  list- 
ing property  or  paying  taxes,  he  shall,  upon 
conviction  thereof,  be  deemed  guilty  of  a 
felony,  and  shall  be  fined  not  less  than  one 
thousand  and  not  more  than  five  thousand 
dollars,  and  imprisoned  in  the  penitentiary 
not  less  than  one  nor  more  than  five  years; 
and  tlie  fine  hereby  imposed  shall  be  a  lien 
against  the  assets  of  such  bank  or  incor- 
porated company,  and  execution  may  i.ssue 
as  in  other  cases. 

Civil  liability  of  officers.    §§  980,  982-085. 

§  1788.  Any  president,  secretary,  receiver, 
accounting  officer,  serA'ant,  agent  or  person 
Avho  shall  knowinglj'  make  any  false  an- 
swer to  any  question  or  statement  required 
by  law  touching  the  business,  property, 
moneys  and  credits  of  stich  person  or  cor- 
poration liable  to  taxation  shall  be  deemed 
guilty  of  perjury. 

CHAPTER  LX. 

Execution. 

Sec.  3003.  Stocli  in  corporations,  how  levied  on. 
3004.  Same. 
3u74.  Of  shares  in  corporations. 

Executions  against  Corporations. 

3089.  First    process   against,    on   judgment   to 
be  fi.  fa.,  and  how  levied. 

3090.  In   what  case  attachment  thereafter  to 

issue. 

3091.  Attachment,   how  issued. 

3092.  Effect  of  such  service  to  bind  debts,  etc. 

3093.  Proceedings  and  judgment  against  gar- 

nishee. 

3094.  Garnishee  paying  money,  to  have  credit 

against  corporation. 

3095.  Other    writs    of   attachments    to    Issue, 

when  judgment  not  satisfied. 

3096.  Surplus  to  be  paid  to  corporations. 

§  3003.  When  an  execution  shall  be  issued 
against  any  shares  or  stock  in  any  bank,  in- 
surance company  or  other  corporation,  it 
shall  be  the  duty  of  the  cashier,  secretary  or 
chief  clerk  thereof,  upon  the  request  of  the 
officer  haA-ing  such  execution,  to  furnish  him 
AA'ith  a  certificate,  under  his  hand,  stating 
the  number  of  rights  or  shares  the  defend- 
ant holds  in  such  bank,  company  or  incor- 
poration, with  the  incumbrances  thereon. 

See  Act  of  1891,   at  p.   16. 


14 


AEKAXSAS. 


Executions;  fees;  injimction  —  Stat.,  §§  3004,  3074,  308&-3096,   3228,   3738. 


§  30Oi.  The  officer  obtaining  such  informa- 
tion may  nialve  a  levy  of  sucli  execution  on 
siieli  rlglits  or  shares  by  leaving  a  true  copy 
<»f  such  writ  with  the  cashier,  secretary  or 
chief  clerk;  and,  if  there  be  none,  then  with 
some  other  otlicer  of  such  bank,  company 
or  corporation,  with  the  certificate  of  the 
officer  making  such  levy  that  he  levies  upon 
and  takes  such  riglits  or  shares  to  satisfy 
such  execution. 

See  Act  of  1891,  at  p.  16. 

§  3074.  When  any  rights  or  shares  in  any 
b:ink,  company  or  corporation  shall  be  sold, 
tlie  officer  making  such  sale  shall  execute 
an  instrument  in  writing,  to  be  drawn  at  the 
expense  of  the  purchaser,  reciting  the  sale 
and  paj-ment  of  the  consideration,  and  con- 
veying to  the  purchaser  all  the  right,  title 
and  interest  which  the  defendant  had  in  and 
to  such  rights  and  shares,  and  sliall  also  leave 
with  the  cashier,  secretary,  chief  clerk,  or,  if 
there  be  none,  then  with  any  other  officer 
of  such  bank,  company  or  corporation,  a 
copy  of  the  execution  and  his  retiu'n  thereto; 
and  the  purchaser  shall  thereupon  be  entitled 
to  all  dividends  and  stock,  and  to  the  same 
I^rivileges  as  a  member  of  such  companj",  as 
such  debtor  was  entitled  to. 

Executions  against  Corporations. 

§  3080.  The  first  process  upon  the  judgment 
n gainst  auj*  private  corporation  shall  be  a 
fieri  facias,  which  the  sheriff  or  other  officer 
sliall  levy  on  the  moneys,  goods  and  chattels, 
lands  and  tenements,  of  such  corporation, 
and  proceed  thereon  as  in  other  cases. 

§  3090.  If  the  sheriff  or  other  officer  shall 
return  upon  any  such  writ  of  fieri  facias 
that  no  goods  and  chattels,  lands  and  tene- 
ments, can  be  found  whereon  to  levy,  or  if 
the  property  taken  shall  not  be  sufficient  to 
satisfy  the  judgment,  interest  and  costs,  the 
circuit  court  shall,  on  the  application  of  the 
plaintiff,  or  his  attorney,  issue  a  writ  of 
attachment  against  tlie  rights  and  credits  of 
sufh  corporation,  reciting  tlie  judgment,  exe- 
cution and  return,  and  directed  to  the  sheriff 
of  the  proper  county. 

[licmoval  by  a  corporation  of  a  material  part  of 
Its  iiropf-rty  out  of  the  State,  ground  of  attacb- 
iiiciit.  Slmiin  V.  iScvicr  Assn.,  ,",4  Ark.  58;  s.  c, 
14   S.    AV.    nop.   llUl.] 

§  3091.  Such  attachment  shall  be  executed 
by  summoning,  as  garnishee,  any  person 
having  any  moneys  or  effects  belonging  to 
sucli  corporation,  and  any  debtor  to  such 
corporation,  Avho  may  be  found  within  the 
county,  to  appear  before  the  circuit  court  at 
the  return  of  sucli  writ,  and  then  and  there 
answer  touching  any  moneys  or  effects  of 
such  corporation  In  his  hands,  or  any  debt 
he  may  owe  to  the  same. 

§  30f>2.  From  the  time  of  making  such  ser- 
vice, all  mon<»vR  and  effects  due  and  owing. 


payable  or  belonging  to  such  corporation, 
shall  be  bound  until  the  judgment  is  satis- 
tied;  and  no  payment  made  thereafter  to 
such  corporation,  or  other  disposition  of 
other  debts,  moneys  or  effects  so  attached, 
shall  be  credited  to  the  garnishee  making  the 
same,  nor  shall  the  stock  owned  by  such  per- 
son in  such  corporation  be  allowed  as  a 
set-off. 

§  3093.  Proceedings  against  garnishees,  un- 
der the  provisions  of  this  act  shall  be  the 
same  as  against  the  garnishees  summoned 
in  the  case  of  absent  and  absconding  debtors; 
but  no  judgment  shall  be  rendered  against 
him  for  any  debt  to  become  due  at  a  future 
day,  until  after  the  same  shall  become  due. 

§  3094.  For  all  moneys  paid  by  any 
garnishee,  under  the  provisions  of  this  act, 
he  shall  have  credit  against  the  corporation 
to  whom  it  is  due. 

§  3095.  If  a  sufficient  sum  be  not  made  to 
satisfy  such  judgment  and  costs,  other  writs 
of  attachment  may  be  issued  as  aforesaid, 
from  time  to  time,  until  the  whole  is  satis- 
fied. 

§  3090.  If  any  money  remain  in  the  hands 
of  the  officer,  after  satisfying  the  judgment 
and  all  costs,  he  shall  pay  the  same  to  the 
corporation,  or  its  order. 

CHAPTER  LXIII. 
Fees. 

Sec.  322S.  Of  secretary  of  State. 

§  .3228.  The  following  fees  shall  be  allowed 
for  services  performed  by  the  secretary  of 
State,  and  paid  into  the  treasury  in  the  same 
manner  that  all  other  fees  are  or  shall  be 
directed  to  be  paid,  viz.: 

For  receiving  each  draft  of  articles  or 
charter  of  a  private  incorporation,  created 
for  religious,  literary,  benevolent  or  scientific 
ptu'poses,  and  not  for  purposes  of  pecuniary 
profit,  directly  or  indirectly,  $2.."0. 

For  filing  each  charter  or  draft  of  articles 
of  a  private  corporation,  created  for  any 
other  purpose  than  that  denoted  in  the  pre- 
ceding paragraph,  excepting  also  railway 
and  telegraph  companies,  .$25. 

For  each  amendment  or  supplement  thereto 
(and  the  expense  of  recording  the  same),  $10. 

All  the  above  specified  fees  shall  be  paid 
at  the  time  the  commission,  certificate,  in- 
strument, or  copy,  is  delivered,  or  the 
charter  or  draft  of  articles  of  incorporation 
is  filed  or  recorded. 


CHAPTER  LXXXI. 

Injunction. 

Sec.  3738.  Injunction  to  stop  business  of  a  corpo- 
ration, notice  required. 

§  3738.  An  injunction  to  stop  the  general 
and  ordinary  business  of  a  corporation,  or 
the    operation   of   a   turnpike,    railroad     or 


ARKANSAS. 


15 


Receivers  —  Stat.,  §§  497^-5056. 


canal  cumpauy,  or  of  a  municipal  corpora- 
tion, or  of  tlie  trustees  of  a  town,  or  any 
building,  erection  or  other  worlv,  or  to  re- 
strain a  nuisance,  or  the  unlawful  issue  or 
circulation  of  small  notes  or  bills,  can  only 
be  gx'anted  upon  reasonable  notice  of  the 
time  and  place  of  the  application  therefor 
to  the  party   enjoined. 

CHAPTER  CXIX. 
Pleadings  and  Practice. 


Sec.  4970.   Sorvice  of  suninions  on  corporations. 
4n.S2.  On  foreiiru  corporations. 
4080.  Warning  order,  when  to  be  made. 
5002.  Actions     against     corporations,     where 

brought. 
5005.  Against   foreign   corporations. 
5012.  Action   in   name   of   State   to   vacate   or 

repeal  charters. 
.501.S.   Service  of  process  in  such  case. 
505f>.  Pleadings,  how  verified  by  corporation. 
5209.  Service  of  notice  on  corporations. 


Receivers. 

5283.  Powers  and  duties  in  cases  of  corpora- 

tions,  etc. 

5284.  In  cases  now  pending  receiver  may  be 

substituted  as  a  party. 
5290.  Who  not  to  be  receiver. 

§  4979.  Where  the  defendant  is  a  corpora- 
tion, created  by  the  laws  of  this  State,  the 
service  of  the  summons  may  be  upon  the 
president,  mayor  or  chairman  of  the  board 
of  trustees,  and,  in  case  of  the  absence  of 
the  above  officers,  then  it  may  be  served 
upon  the  cashier,  treasurer,  secretary,  clerk 
or  agent  of  such  corporation,  and,  in  case 
of  railroad  corporations,  upon  any  station 
agent,  or  upon  any  person  v\-ho  has  control 
of  any  of  the  business  of  said  corporation, 
either  as  clerk,  agent  or  otherwise,  who,  as 
such  agent  or  clerk,  has  to  report  to  the  cor- 
poration who  employed  them;  and,  in  cases 
of  railroad  corporations,  a  service  of  a  copy 
of  the  summons  upon  the  clerk  or  agent  of 
any  station  in  the  county  Avhere  the  same 
shall  be  issued  shall  be  deemed  and  con- 
sidered as  a  good  and  A-alid  service. 

Service  of  summons  on  foreign  corporation. 
§  4982.  Service  of  notice  on  corporation.  §  5209. 
Foreign  corporation  must  have  an  agent  for  pro- 
cess.   See  Act  of  1887,  at  p.   13.    See  §  972,   note. 

[Provisions  of  a  charter,  regulating  ninnner  of 
serving  process  on  tlie  corporation,  relates  alone 
to  the  remedy,  and  Is  repealed  by  a  subseriuent 
general  enactment  prescribing  manner  of  scrv'ce 
In  such  cases.  U.  R.  ("o.  v.  Hecht.  :.9  Ark.  (T.l. 
Service  of  process  iipon  a  corporation,  return  must 
show  what.     U.    R.   Co.   v.   Trout,   32  Ark.   17.] 

§  40S2.  "Where  the  defendant  is  a  foreign 
corporatifin,  having  an  agent  in  this  State, 
the  service  maj-  be  upon  such  agent. 

Suits  by  and  against  foreign  corporation.  Const., 
art.  XII,  §  11;  Statutes,  §  972;  Act  of  1887,  at 
p.   15. 


28  S.   W.    Rep.   420;   T'nion,   etc..    To.   v.   Craddock^ 
o9  Ark.  -j'S.'j;  s.  c,  28  S.   W.  Rep.  424.] 


Constructive  Service. 

§  4989.  Where  it  appears  by  the  affidavit 
of  the  plaintiff,  filed  in  the  clerk's  office  at 
or  after  the  commencement  of  the  action, 
that  the  defendant  is: 

First.  A  foreign  corporation,  having  no 
agent  in  this  State;  or.    *    *    * 

§  5002.  An  action,  other  than  those  men- 
tioned in  sections  4994,  4995,  5000,*  against  a 
corporation  created  by  the  laws  of  this  State 
may  be  brought  in  the  county  in  which  it  is 
situated  or  has  its  principal  office  or  place 
of  business,  or  in  which  its  chief  officer  re- 
sides but,  if  such  corporation  is  a  bank,  or 
insurance  company,  the  action  may  be 
brought  in  the  county  in  which  there  is  a 
branch  of  the  bank  or  agency  of  the  com- 
pany, where  it  arises  out  of  a  transaction  of 
such  branch  or  agency. 

§  .5005.  An  action,  other  than  one  of  those 
mentioned  in  sections  4994,  4995,  5000,* 
against  a  nonresident  of  this  State,  or  a 
foreign  corporation,  may  be  brought  in  any 
county  in  which  there  may  be  property  of 
or  debts  owing  to  the  defendant. 

See  §  309.  Actions  In  which  attachments  may 
be  sued  out  may  be  prosecuted  In  any  county  In 
which  property  may  be  attached.    Statutes,  §  316. 

§  5012.  Any  action  required  by  law  to  be 
brought  in  the  name  of  the  State  against 
any  corporation,  or  to  vacate  or  repeal  any 
charter,  may  be  brought  in  any  county  in 
the  State  before  any  court  having  juris- 
diction of  such  action. 

Quo  warranto,  proceedings  in.    §§  6464  et  seq. 

[Proceedings  in  quo  warranto  is  the  proper  rem- 
edy to  compel  forfeiture  of  franehise.  State  v. 
Bank.  5  Ark.  595.  Writ  of  quo  warranto  asa'n-t 
a  mere  officer  or  servant  not  sufficient.  Smith  v. 
State,   21   Ark.   294.] 

§  5013.  Service  of  process  in  any  such  ac- 
tion may  be  made  in  any  county  in  the  State 
upon  any  defendant  to  such  action  in  like 
manner  as  is  now  or  may  hereafter  be  pro- 
vided by  law  in  other  cases,  and  any  such 
defendant  shall  be  required  to  appear  and 
defend  such  action  in  the  county  where  the 
same  may  be  commenced. 

S  5050.  The  verification  of  any  pleading  of 
a  corporation  may  l)e  by  any  officer  or 
agent  on  whom  the  summons  in  an  action 
against  the  corporation  may  be  served,  or  by 
its  attorney  in  the  action. 

Verification  b.v  corporation  of  demands  againsi 
estates.     §§  104,  105. 


[As  to  service  of  process  on  foreign  corporation.        *ActioPS    regarding    real    property    and    to    re- 
see  B.   &  L.  Assn.  V.   Hallum,  59  Ark.   583;  s.   c,     cover  penalties  and   forfeitures. 


16 


AllKAXSAS. 


liiTiivois;  railroads;  taxation  —  Stat.,  §§  5209,  528^-5284.  521)0,  55S5-55SG. 

I 


§  52<t!>.  A  notice  to  a  ("orporatiou  may  be 
served  in  tlie  saiuo  inaiuK'r  as  a  suimuous 
in  an  action  atxainst  it. 

See  §  4".I7'J. 

Receivers. 

§  52,s;'..  Wlionovor,  in  any  case,  a  roceivor 
,vhall  bo  appoiuted  for  a  corporation  or  the 
trustees  tlicrcof,  or  any  copartnership  or 
joint-stoclc  company,  and  the  order  or  decree 
111"  tlie  conrt,  jndjie  or  chanceUor  shall  be  tliat 
till'  lands,  tenements,  goods,  chattels,  funds, 
assets.  nn)neys,  credits,  choses  in  action. 
ri.L'lits  and  interests  of  every  kind,  name  and 
nature,  eitlier  in  law  or  equity,  or  any  part 
tliereof,  belonjrinjx  to  the  same,  shall  be 
placed  in  the  hands  of  sucli  receiver,  he 
sliall  from  thenceforward,  until  further  order 
or  decree  of  the  court,  judjre  or  cliancellor, 
have  full  possession,  custody  and  control 
thereof,  and  shall  be  vested  with  the  title, 
so  far  as  it  shall  be  necessary  to  collect 
debts,  prese^-ve  the  assets  and  property  for 
the  beneht  of  creditors  and  all  persons  in- 
terested, and  may  and  shall  bring  and 
prosecute  and  defend  all  suits  in  his  own 
name  that  may  be  necessary  for  that  pur- 
l>ose. 

§  5284.  Tn  all  suits  that  may  be  pending  in 
any  court,  prosecuted  by  or  brought  against 
such  corporation,  or  trustees,  or  copartner- 
ship, or  joint-stock  company,  or  in  which 
either  may  be  interested,  such  receiver  may 
be  substituted  as  a  party,  on  his  own  ap- 
plication, without  process  or  revivor,  and 
pnsecute  or  ih'fend  tlie  same  with  like  effect 
as  tlie  original  parties  might  or  could  do, 
and  suits  may  progress  against  him  by  sub- 
stitution in  tlie  same  manner. 

§  5200.  No  partj'  or  attorney,  or  person  in- 
terested in  an  action,  shall  be  appoiuted 
n  ceiver  therein. 


CHAPTER  CXXV. 

Railroads. 


Sof.  0510.  Corporations     may     fix     par     value 
shares,  how. 


of 


§  .">10.  It  shall  be  lawful  for  any  railroad 
or  other  inc(jrporated  company,  organized 
under  the  laws  of  this  State,  to  fix  the  par 
value  of  the  shares  of  its  capital  stock  at  one 
hundred  dolhirs  per  share.  I'rovided,  That 
stuck  now  in  existence  of  less  amount  than 
one  hundred  dollars  shall  continue  to  have 
pro  rata  reiiresentation.  And.  pi-ovided,  fur- 
ther, That  the  number  of  shares  of  stock 
required  to  be  owned  by  directors,  as  one  of 
the  (lualilications  for  tliat  othce,  sliall  be  re- 
duced in  the  same  iiroportion  as  the  par 
value  of  the  shares  is  increased.  And,  pro- 
vided, further,  Tliat  this  act  shall  not  be  so 
c<iiistrued  as  to  authorize  the  increase  of  the 
aiiiuuut  of  capital  stock  of  any  company. 


CHAPTER  CXXIX. 

Revenue. 

Sec.  i)."8o.  \Vords  and  phrases  defined. 
u'lSii.  All  property  taxable. 
r)(il3.   Property   li.sted   by   whom. 
r)t;4.5.   Corporatiiiiis;   wlien  and   what  to  list. 
5G4tJ.  Notice    by    assessor    to    corporation    to 

file  statement;   penalty   for  failure  or 

refusal. 

§  5585.  *  *  *  The  term  "  investment  in 
bonds,"  wherever  used  in  this  act,  shall  be 
held  to  mean  and  include  all  *  *  *  cer- 
tihcates  of  indebtedness  commonly  called 
scrip,  whether  issued  by  incorporated  or  un- 
incorporated conii)aiiies,  *  *  «  or  other 
corporations,  held  by  persons  residing  in  this 
State,  either  by  themselves  or  by  others  for 
them,  whether  for  themselves  or  as  guard- 
ians, trustees  or  agents. 

The  term  "  investment  in  stocks,"  wher- 
ever used  in  this  act,  shall  be  held  to  mean 
and  include  all  moneys  invested  *  *  *  lu 
any  association,  corporation,  joint-stock  com- 
pany or  otherwise,  the  stock  or  capital  of 
which  is  or  may  be  divided  into  shares, 
which  are  transferable  by  each  owner  with- 
out the  consent  of  the  other  partners  or 
stockholders,  for  the  taxation  of  which  no 
special  provision  is  made  by  this  act,  held 
by  persons  residing  in  this  State,  either  for 
themselves  or  as  guardians,  trustees  or 
agents,  or  by  others  for  them. 

The  term  "  personal  property,"  wherever 
used  in  this  act,  shall  be  held  to  mean  and 
include: 

Second.  The  capital  stock,  undivided  prof- 
its, and  all  other  means  not  forming  part  of 
the  capital  stock  of  every  company,  whether 
incorporated  or  unincorporated,  and  every 
share,  portion  or  interest  in  such  stock, 
profits  or  means,  by  whatsoever  name  the 
same  may  be  designated,  inclusive  of  every 
share  or  portion,  right  or  interest,  either 
legal  or  equitable,  in  and  to  every  ship, 
vessel  or  boat  of  whatsoever  name  and  de- 
scription, tised,  or  designed  to  be  ttsed,  ex- 
clusively or  partially,  in  navigating  any  of 
the  Avaters  Avithin  or  bordering  <m  this  State, 
whether  sucli  shii),  vessel  or  boat  shall  be 
within  the  jurisdiction  of  this  State  or  else- 
where, and  whether  the  same  shall  have 
been  enrolled,  registered  or  licensed  at  any 
collectors  office,  or  within  any  collector's 
district  of  this  State  or  not. 


Property  and   Privileges   Subject   to   Tax- 
ation. 

§  ."580.  All  proi)erty,  whether  real  or  per- 
sonal, in  this  State;  all  moneys,  credits,  in- 
vestments in  bonds,  stocks,  joint-stock  com- 
l>anies,  or  otherwise,  of  persons  residing 
therein;  the  projierty  of  corporations  now 
existing  or  hereafter  created,  and  proj^erty 
of  .'ill  banks  or  bnuking  cmnpanies  uoav  ex- 
isting or  hereafter  created,  and  of  all 
bankers   and   brokers,    shall   be   subject   to 


ARKANSAS. 


17 


Quo  warranto  —  Stat.,  §§  5G13-G4(:;4. 


taxation;  and  such  property,  monoys,  ci'edlts, 
iiivi'stiiu'iits  in  boud.s,  stocks,  joint-stoclc 
companies  or  otherwise,  or  the  value  thereof, 
shall  be  entered  on  the  list  of  taxa))le  prop- 
erty for  that  purpose. 

§'ri(>18.  The  property  of  *  *  *  corpora- 
tions whose  assets  are  in  the  hands  of  re- 
ceivers, (shall  be  listed)  by  the  receiver;  of 
every  company,  firm,  body  politic  or  cor- 
porate, by  the  president  or  principal  ac- 
counting officer,  partner  or  agent  thereof. 

S  5(54.").  (las,  telephone,  bridge,  street  rail- 
road, savings  banks,  mutual  loan,  building, 
transportation,  constriiction,  and  all  other 
companies,  corporations  or  associations,  in- 
corimrated  under  the  laws  of  tins  State,  or 
under  the  laws  of  any  other  State,  and  doing 
business  in  this  State,  other  than  insurance 
companies  (see  §  3832),  and  the  companies 
and  cori)orations  whose  taxation  is  in  this 
act  specifically  provided  for,  in  addition  to 
the  other  property  required  by  tliis  act  to  be 
listed,  sh.'ill,  through  tlieir  president,  secre- 
tary, ])rincii)al  accounting  ottic(>r  or  agent, 
annually,  during  the  month  of  Marcli.  make 
out  and  deliver  to  the  assessor  of  the  county 
Avh.ere  said  company  or  corporation  is  lo- 
cated or  doing  business  a  sworn  statement 
of  the  capital  stock,  setting  forth  particu- 
larly: 

First.  The  name  and  the  location  of  the 
comi)any  or  association. 

Second.  The  amount  of  capital  stock  au- 
thorized, and  the  number  of  shares  into 
wliicli  such  cai>ital  stock  is  divided. 

Third.  The  amount  of  capital  stock  paid 
up.  its  market  value,  and,  if  no  market 
value,  then  the  actual  value  of  the  shares 
of  stock. 

Foiu'th.  The  total  amount  of  all  indebted- 
ness, except  indebtedness  for  current  ex- 
]ienses.  excluding  from  such  indebtedness 
the  aniouTit  paid  for  the  purchase  or  im- 
provement of  the  property. 

Fifth.  True  valuation  of  all  the  tangible 
property  belonging  to  such  company  or  cor- 
poration; such  schedule  shall  ho  made  in 
conformity  to  such  instructions  and  forms 
as  may  be  prescribed  by  the  auditor  of  pul»- 
lic  accounts. 

«('(<  Const.,  nrt.  XVI,  §  7. 

r>fo(1p  of  nsspssliit;  ooriior.itions  .for  taxos  other 
tlmn  rnihvnv.  Rv.  v.  "Williams,  53  Ark.  6.S;  s.  c, 
i:'.  S.   W.    Rep.   T'JG.] 

§  fiiUG.  The  assessor  shall,  annually,  at 
least  ten  days  before  the  twenty-oitihth  day 
of  February,  deliver  to  the  president,  sec- 
retary, accounting  officer  or  agent  of  any 
such  comi)any,  corporation  or  association 
located  in  or  doing  business  in  such  county  a 
notice  in  writing  to  return  such  schedule  by 
the  thirty-first  day  of  March  next  ensuing. 
Any  president,  secretary,  principal  account- 
ing officer  or  agent  of  any  such  companies 
or  corporations,  u]ion  whom  such  notice  shall 
have  been  served,  willfully  neulecting  or  re- 
fusing to  make  such  return  by  the  thirty- 


first  day  of  March  next  ensuing,  after  de- 
livery of  said  notice,  shall  be  guilty  of  a 
misdemeanor,  and,  upon  conviction,  shall  be 
fined  in  any  sum  not  exceeding  one  hundred 
dollars,  or  inprisoned  not  exceeding  three 
months,  or  both,  and  the  asses.sor  shall,  from 
the  best  information  he  can  obtain,  make  out 
and  enter  upon  tlie  proper  assessment-roll  a 
list,  Avith  the  valuation,  of  all  tangible  and 
intangible  property  belonging  to  such  de- 
faulting company  or  corporation  subject  to 
taxation  by  the  provisions  of  this  act,  with 
fifty  per  cent,  penalty. 

CHAPTER  CXXXIX. 

Statutes. 

Sec.  G339.  Cornoraliou,  company  or  person  Includes 
what. 
6344.   Certain  words  defined. 
03.")4.  Defintion  of  foreiyu  corporation. 
6364.  Rule  iu  amending  Co'Je. 

§  0331).  The  words  "  corporation,  company 
or  i)erson,"  when  they  occur  together  in  any 
statute  defining  ;ind  punishing  crimes,  sliail 
be  construed  to  include  *  *  *  public  and 
i)rivate  bodies,  politic  and  corporate,    *    *    * 


Rules  of  Construction  of  the  Code. 

§  G344.  *  *  *  The  word  person  includes 
a  cori)oration   as  Avell  as  a  natural  person 

:;:         *        * 

§  0354.  A  "  foreign  corporation "  is  one 
created  by  the  laws  of  some  other  State  or 
country. 

See  Const.,  art.  XII,  §  11. 

§  G3G4.  No  act  shall  have  the  effect  to 
amend  or  repeal,  or  be  construed  as  amend- 
ing or  repealing,  any  title,  chapter,  article, 
section,  clause  or  provision  of  the  Code  un- 
less such  intention  be  expressly  stated,  and 
the  title,  chapter,  article  or  section  shall  be 
particularly  referred  to  and  recited  in  the 
•,\vt  amending  or  repealing  the  same. 

CHAPTER  CLI. 

Usurpation  of  Office,  etc. 

Sec.  0404.  In  wliat  case  action  at  law  may  be 
broui;lit  in  lien  of  quo  warranto. 

040.5.   Pow  Ijroniiht  to  vaeate  charter. 

0406.  In  rase  of  usurpation  of  ofQce,  how 
l)roiijrlit. 

64G7.  rrospcntnis  attorney  to  institute  ac- 
tion, wli(>n. 

0408.  Attorney-general,  when. 

("470.   .Tudgment. 

0472.  IMeading.s,  when  to  be  verified. 

§  G4(>4.  In  lieu  of  the  writs  of  scire  facias 
and  quo  warranto,  or  of  an  information  in 
the  nature  of  a  quo  Avarranto,  actions  by 
]n"oceedings  at  hiAv  may  be  brought  to  vacate 
or  rejieal  charters,  and  prcA-ent  the  usurpa- 
tion of  an  office  or  franchise. 

See  §  .'012. 


18 


ARKANSAS. 

Foi-fign  corporations  —  Acts  of  1887. 


§  6465.  The  action  to  repeal  or  vacate  a 
charter  sliall  be  in  the  name  of  the  State, 
and  brou.ulit  and  prusecuied  by  tlie  attorney- 
general,  or,  nnder  his  sanction  and  direction, 
by  an  attorney  of  the  State. 

§  (j-im.  AMienever  a  person  usurps  an  office 
or  franchise  to  wliich  he  is  not  entitled  by 
law,  an  action  by  proccedinv^s  at  law  may 
be  instituted  a.u'ainst  him,  citlier  by  the  State 
or  the  party  entitled  to  the  othce  or  franchise, 
to  prevent  the  usurper  from  exercising  the 
office  or  francliise. 

§  6467.  It  shall  be  the  duty  of  the  several 
prosecuting  attorneys  to  institute  the  actions 
mentioned  in  this  chapter  against  all  persons 
who  have  or  shall  usurp  county  offices  or 
franchises,  where  there  is  no  other  person 
entitled  thereto,  or  the  person  entitled  fails 
to  institute  tlie  same  for  three  mouths  after 
the  usurpation. 

§  6468.  For  the  usurpation  of  other  than 
couuty  offices  or   franchises,  the   action   by 


the  State  shall  be  instituted  and  prosecuted 
by  the  attorney-general. 

'§  647(».  Where  a  person  is  adjudged  to 
have  usurped  an  office  or  franchise,  he  shall 
be  deprived  thereof  by  the  judgment  of  tlie 
court,  and  the  person  adjudged  entitled 
thereto  reinstated  therein;  but  no  one  sliall 
bo  adjudged  entitled  thereto  unless  tlie 
action  is  instituted  by  him.  And  the 
court  shall  have  power  to  enforce  its 
judgment  by  causing  the  books  and  pa- 
pers, and  all  otlier  things  pertaining  to 
I  lie  office  or  franchise,  to  be  surrendered 
by  the  usurper,  and  by  preventing  him  from 
fiirther  exercising  or  using  the  same,  and 
naay  enforce  its  orders  by  fine  and  imprison- 
ment until  obeyed. 

§  6472.  The  pleadings  in  the  actions  named 
in  this  chapter  are  not  required  to  be  veri- 
lied  by  affidavit,  unless  prosecuted  by  a 
private  individual. 


LEGISLATIVE  ACTS  RELATING  TO  CORPORATIONS,  ENACTED 
SUBSEQUENTLY  TO  1884. 


1.  To  prescribe  condition  upon  which  foreign  cor- 

porations may  do  business  in  this  State. 

2.  To   rejrulate   tlie   levy   and   seizure   of   sale   of 

shares  of  stock  in  corporat'ons  under  writs 
of  execution  or  attachment. 

3.  To  provide  for  dissolution  of  corporations. 

4.  To  prevent  preference  among  creditors  of  in- 

solvent corporations. 

5.  To    authorize    corporations    to     reduce     their 

capital  stock. 
6.  To  prevent  combinations  of  trusts  and  corpo- 
rations. 

Act  1. 

AN  ACT  to  prescribe  the  condition  tipon 
which  foreign  corporations  may  do  busi- 
ness in  this  State. 

Sec.  1.  Foreign  corporation  to  file  certificate  with 
secretary  of  State,  naming  agent  upon 
whom   sumiiHins  ma.v  be  served. 

2.  Contracts   void   upon   failure   to  comply. 

3.  Corporations    hen-tofore    engaged    in    busi- 

ness to  have  ninety   days   to  file  certifi- 
cate. 

4.  Acts  In  foice  from  passage. 

Be  it  enacted  by  tlie  general  a'-sembly  of 
the  State  of  Arkansas: 

Section  1.  Before  any  foreign  corporation 
sliall  Itegin  to  carry  on  Inisiness  in  this 
State  it  shall,  by  its  certiticate  under  the 
hand  of  tlie  i>resideiit  and  seal  of  such  eom- 
liany.  filed  in  the  othee  of  tlie  secretary  of 
State,  d(sigii;ile  :iii  agent,  wlio  shall  be  a 
citizen  of  this  State,  upon  whom  service, 
snimiioiis  and  otlier  iircc«'ss  ma.v  be  ma<le. 
Such  eertitiejite  shall  also  state  tlie  principal 
place  of  business  of  such  cori»orations  in  this 
State.  Service  upon  such  agent  shall  be 
sufficient  to  give  iiirisdi<tion  over  snch  cor- 
poration to  any  of  the  courts  of  this  State. 

§  2.  If  any  siidi  f.'iei;ni  curpm-atioii  slrill 
fail  ti>  ceiiiply  with  the  provisions  of  the 
foregoing  sectiuii,  all  its  contracts  witli  citi- 


zens of  this  State  shall  be  void  as  to  the 
corporation,  and  no  court  of  this  State  shall 
enforce  the  same  in  favor  of  the  corporation, 

§  8.  Any  foreign  corporation  that  has  here- 
tofore enga.ged  in  business,  or  made  con- 
tracts in  this  State,  may  Avithin  ninety  days 
from  the  passage  of  this  act,  file  such  cer- 
tificate with  the  secretary  of  State,  and 
thereon  all  their  contracts  made  before  tliis 
act  goes  into  effect,  are  hereby  declared  valid 
as  if  said  certiticate  had  been  tiled  before 
they  began  Ijusiness  in  this  State. 

§  7.  This  act  shall  take  elTect  and  be  in 
force  from  and  after  its  passage. 

(Approved  April  4,  1887.) 

See  Const.,  art.  XII,  §  11,  and  note;  Statutes, 
§§  4982,  9G8,  6354. 

[Above  act  does  not  affect  prior  contracts  of 
foreign  corporations.  Kaihva}'  v.  Fire  Assn..  Ti'i 
Ark.  1G3;  s.  c.  IS  S.  AV.  Rep.  4:5.  Does  it  api>ly 
to   foreign    insurance  conipaniesV    Id. 

A  trust  deed  made  in  Louisiana,  providing  tli:it 
it  should  be  constnuMl  b.v  tlie  laws  of  Arkansas, 
was  not  a  doing  of  busin(>ss  in  Arkansas  willi'n 
the  statute  iniiiosing  conditions  on  foreign  cor- 
porations, H.  &  A.  Mortg.  Co.  V,  Winchell,  34 
S.    W.    Hep.   S'll. 

That  a  foreign  corporation  has  not  complied 
witli  the  statutory  requirements  does  not  rendei- 
a  contract  of  the  corporation  with  a  nonresident 
void.     Hoylngton  v.  Van  Etten,  35  S.  W.  Uep.  622  ] 

Act  2. 

AX  ACT  to  regulate  the  levy  and  seizure 
and  sjile  of  sliares  or  stock  in  corporations 
under  writs  of  execution  or  attachment. 

Sec,  1.  Provides  how  levy  or  attachment  shall   be 
served. 
2.   Shares   to  be  sold  as  other  personal   pron- 
erty  and   officer  to  execute  certificate  of 
purchase. 


AEKAXSAS. 


19 


Levy  and  sale  of  stock;  dissolution  —  Acts  of  1891,  1893. 


Sec.  3.  OflBcers    of   corporation    to    transfer   stock 
purchased. 
4.  Conflicting  laws  repealed. 

Be  it  enacted  l)y  tlae  general  assembly  of 
the  State  of  Arkansas: 

Section  1.  Whenever  an  officer,  having  an 
execution  or  writ  of  attachment  in  his  hands, 
shall  levy  on  shares  or  stock  in  corporations, 
he  shall  make  such  levy  or  seizure  by  leaving 
a  true  copy  of  such  writ  with  the  president, 
secretary  or  cashier,  or  other  officer,  with 
the  certificate  of  the  officer  making  such 
levy,  that  he  levies  upon  and  takes  such 
rights  or  shares  to  satisfy  such  execution. 

§  2.  That  shares  or  stock  thus  levied  upon 
or  seized,  shall  be  sold  by  the  officer  in  the 
same  manner,  as  other  personal  property  is 
sold  under  the  writ  by  virtue  of  which  the 
levy  is  made,  and  the  officer,  making  the 
sale,  shall  execute  and  deliver  to  the  pur- 
chaser thereof  a  certificate,  which  said  cer- 
tificate may  be  in  the  following  form:  I 
(name  of  the  officer  and  his  office)  hereby 
certify,  that  I  have  this  day  of 

sold  to  (name  of  purchaser)  shares  of 

the  capital  stock  of  the  (name  of  the  coiiDora- 
tion)  in  conformity  with  the  laws  of  the 
State,  which  said  shares  were  by  me  seized 
on  the  day  of  ,  under  and  by  virtue 

of  a  certain  writ  of  (describe  the  writ)  is- 
sued and  delivered  to  me  out  of  the 
court,  on  the  day  of  in  favor  of 

(name  of  plaintiff)  against  (name  of  defend- 
ant), for  the  sum  and  price  of  $  ,  which 
was  the  highest  and  best  bid  therefor. 

Witness  my  hand  this  day  of 

§  3.  That  upon  presentation  of  such  cer- 
tificate to  the  president,  secretary  or  cashier 
or  other  principal  officer  of  said  coi'poration, 
who  has  charge  of  the  stock-books  of  the 
corporation,  it  shall  be  the  duty  of  fuch 
officer,  to  issue  to  the  holder  of  said  cer- 
tificate, a  certificate  of  stock  for  the  number 
of  shares  thus  levied  on  and  sold,  and  trans- 
fer it  on  the  stock-books  of  the  corporation, 
in  the  same  manner  as  if  transferred  by  the 
owner  in  person,  and  he  shall  also  issue  to 
such  holder  of  the  certificate  of  purchase, 
a  certificate,  of  transfer,  under  the  seal  of 
the  corporation,  Avhich  may  be  recorded  in 
the  office  of  the  county  clerk  of  the  county, 
as  now  provided  for  by  section  971  of 
]\Iansfield's  Digest,  and  when  so  trans- 
ferred, the  stock  of  the  i)erson  whose  in- 
terest has  been  sold  by  the  officer  under  the 
writ  of  execution  or  attachment,  shall  be 
deemed  cancelled  and  wholly  void. 

§  4.  That  all  laws  in  conflict  herewith,  be 
and  the   same  are  hereby  repealed. 

(Approved  February  28,  1S91.) 

See  §§  3003  et  seq. 

Act  3. 

AN  ACT  to  provide  for  the  dissolution  of 
corporations. 

Sec.  1.  Manner  of  dissolution  of  corporntions. 
2.  Publication   to  be  made. 


Sec.    3.  Stockholders  may  intervene. 

4.  Corporations  may  surrender  charter. 

5.  Chancery  courts  to  wind  up  same. 

6.  Repeal   all   laws   in   conflict   and   this   act 

takes  effect  from  passage. 

Be  it  enacted  by  the  general  assembly  of 
Arkansas: 

Section  1.  That  hereafter  courts  having 
equitable  jurisdiction  may  make  decrees 
upon  the  ai)plicatiou  of  the  stockholders  or 
creditors  of  any  corporation,  to  dissolve  and 
wind  up  such  corporation  and  to  pay  its 
debts  and  distribute  its  assets  among  the 
holders  of  the  shares  of  stock  thereof,  in  all 
cases  where  it  shall  be  made  to  appear  that 
such  corporation  is  insolvent  and  therefore 
unable  to  continue  its  business,  and  in  all 
cases  where  it  shall  be  made  to  appear  that 
the  corporation  has  ceased  to  transact  busi- 
ness. 

§  2.  In  addition  to  the  service  of  summons 
in  such  cases,  as  required  in  other  suits,  the 
l^laintilf  therein  shall  cause  notice  to  be 
given  by  at  least  two  insertions  in  some 
newspaper  published  in  the  county  in  which 
such  corporation  had  its  chief  place  of  busi- 
ness, at  least  thirty  days  before  any  decree 
is  taken  therein. 

§  3.  All  stockholders  shall  have  the  right 
to  intervene  in  such  suits  and  in  favor  or  in 
opposition  to  the  proposed  dissolution. 

§  4.  Any  corporation  may  surrender  its 
charter  by  resolution  adopted  by  the  ma- 
jority in  value  of  the  holders  of  the  stock 
thereof  and  a  certified  copy  of  such  resolu- 
tion filed  in  the  office  of  the  secretary  of 
State,  and  a  copy  thereof  filed  in  the  office 
of  the  county  clerk  of  the  county  in  which 
such  corporation  is  organized,  shall  have 
effe'ct  to  extinguish  such  corporation. 

§  5.  When  any  corporation  has  surrendered 
its  charter  the  chancery  court  shall  have 
jurisdiction  to  pay  its  debts  and  to  distribute 
its  assets  among  the  stockholders  according 
to  their  several  interests. 

§  6.  All  laws  in  conflict  with  this  act  are 
hereby  repealed,  and  this  act  shall  take 
effect  and  be  in  force  from  and  after  its 
passage. 

(Approved  April  12,  1803.) 

See  Statutes,  §  1035. 


Act  4. 

AN  ACT  to  prevent  preference  among  the 
creditors  of  insolvent  corporations. 

Sec.  1.  Xo  preference  to  be  allowed  creditors  of  in- 
solvent corporations,  except  for  wages 
and  salaries. 

2.  Creditors     or    stockholders     may    institute 

proceedings  to  wiml  up  conioratioiis. 

3.  Treferences  to  be  sot  aside  by   the  chan- 

cery court. 

4.  Chancery  court  to  give  notice. 

Be  it  enacted  by  the  general  assembly  of 
the  State  of  Arkansas: 

Section   1.   That   no   preferences   shall   be 
alloAved   among   the   creditors    of   insolvent 


20 


AEJvAjSSAS. 


Capital  stock;  trusts  —  Acts  of  1893,  1895. 


corporations  except  for  wapes  aud  salaries 
of  laborers  aud  employes. 

§  2.  Any  creditor  or  stockholder  of  any 
insolvent  corporation  may  institute  proceed- 
ings in  the  cliancery  court  for  the  Aviudinj? 
up  of  the  affairs  of  such  corporations  and 
upon  such  application  the  court  sliall  take 
charge  of  all  the  assets  of  such  corporation 
and  distribute  them  equally  among  the 
creditors  after  paying  the  wages  and  salaries 
due  laborers  and  employes. 

§  3.  Every  preference  obtained  or  sought 
to  be  (il)taiiie(l  by  any  creditor  of  such  cor- 
poration wliotlier  by  attachments,  confession 
of  judgment  or  otherwise,  and  every  pref- 
erence .sought  to  be  given  by  such  coii^ora- 
tion  to  any  of  its  creditors,  in  contemplation 
of  insolvency  shall  be  set  aside  by  the  chan- 
cery court,  and  such  creditor  shall  be  re- 
quired to  relinquisli  his  preference  and 
accept  his  pro  rata  shai'e  in  the  distribution 
of  the  assets  of  such  corporation;  Provided, 
That  no  such  preference  shall  be  set  aside 
unless  complaint  thereof  be  made  within 
ninety  (90)  days  after  the  same  is  given  or 
souglit  to  be  obtained. 

§  4.  When  any  chancery  court  shall  obtain 
jurisdiction  of  any  such  insolvent  corpora- 
tion under  the  provisions  of  this  act,  it  shall 
direct  notice  to  be  given  to  all  the  creditors  of 
such  corporations  to  present  their  claims 
within  ninety  (90)  days  thereafter  for  the 
purpose  of  sharing  in  the  assets  of  such  cor- 
poration. 

(Approved  April  14,  1893.) 

[This  act  does  not  apply  to  an  attachment  levied 
before  it  tooli  effect.  Daris  v.  Clatiiu  Co.,  38  S. 
W.   Rep.   6()2,   1117.] 


Act  5. 

AN  ACT  to  authorize  corporations  to  reduce 
tlieir  capital  stock. 

Sec.  1.  Authorizes  reduction  of  capital  stock.    How 
made.     Proviso. 
2.  Act  takes  effect  and  in  force  from  Its  pas- 
sage. 

Be  it  enacted  by  the  general  assembly  of 
the  State  of  Arkansas: 

Section  1.  That  any  corporation  organized 
under  the  laws  of  tliis  State  may  reduce  its 
capital  stock,  either  by  releasing  unpaid 
subscrii)tions  for  stock,  or  by  refunding  to 
shareholders  a  portion  of  the  amount  paid 
in  by  them.  Such  reduction  shall  be  made 
by  a  resolution  adopted  at  the  regular  meet- 
ing of  the  stockholders,  or  by  a  special  meet- 
ing called  for  that  purpose,  aud  a  copy  of 
said  resolution  shall  be  tiled  as  an  amend- 
ment to  the  charter,  in  the  otfices  of  the 
secretary  of  State  and  of  tlie  county  clerk 
in  the  county  in  which  such  corporation 
transacts  business,  and  such  copy  shall  also 
be  published  in  some  newspaper  having  a 


circulation  in  the  county.  Provided,  That 
no  such  reduction  shall  affect  or  in  any  way 
impair  the  rights  of  any  person  Avho  is  a 
creditor  of  such  corporation  at  the  time  the 
reduction  is  made. 

§  2.  This  act  shall  take  effect  and  be  In 
force  from  and  after  its  passage. 

(Approved  February  12,  1895.) 


See  §  901,  supra. 


Act  6. 


AX  ACT  to  prevent  combinations  of  trusts 
and  coi^porations  in  the  State  of  Arkansas 

Sec.  1.  rrohil)its    the    formation   of   combinations, 

trusts,    etc. 
2.  Corporations    violating    provisions    of    this 

act   forfeit   charters. 
.3.  Punishment  fixed  for  violation  of  this  act. 

4.  Live   stock   and    agricultural   products   not 

subject    to   this   act. 

5.  Persons  damaged  by  trusts  to   sue  same. 

6.  Circuit  judges  to  instruct  juries  as  to  the 

provisions   of   this   act. 

7.  Repeals  all   laws  In  conflict  herewith. 

Be  it  enacted  by  the  general  assembly  of 
the  State  of  Arkansas: 

Section  1.  That  from  and  after  the  passage 
of  this  act,  all  arrangements,  contracts, 
agreements,  trusts,  or  combinations,  between 
persons  or  coiporations,  made  with  a  view 
to  lessen  or  which  tend  to  lessen  full  and 
free  competition  in  the  importation  or  the 
sale  of  articles  imported  into  this  State,  or  in 
the  manufacture  or  sale  of  articles  of  domes- 
tic groAvth.  or  of  domestic  raw  material,  and 
all  arrangements,  contracts,  agreements, 
trusts  or  combinations,  between  persons  or 
corporations  designed,  or  which  tend  to  ad- 
vance, reduce  or  control  the  price,  or  the  cost 
to  the  producer,  or  to  the  consumer  of  any 
such  product  or  article,  are  hereby  declared 
to  be  against  public  policy,  unlawful  aud 
void. 

§  2.  Be  it  further  enacted,  That  any  cor- 
poration chartered  under  the  laws  of 
this  State,  which  shall  violate  the  provis- 
ions of  tliis  act,  shall  thereby  forfeit  its  char- 
ter and  franchise,  and  its  corporate  existence 
shall  thereupon  cease  and  determine.  Every 
foreign  corporation  which  shall  violate  the 
provisions  of  this  act,  is  hereby  denied  the 
right  to  do  so,  and  is  prohibited  from  doing 
busness  in  this  State.  It  is  hereby  made 
the  duty  of  the  attorney-general  of  this  State 
to  enforce  this  provision  by  due  process  of 
law. 

§  3.  Be  it  further  enacted,  Tliat  any  vio- 
lation of  this  act  shall  be  deemed,  and  is 
hereby  declared,  destructive  of  full  aud  free 
competition,  and  a  conspiracy  against  trade, 
and  any  person  or  persons  who  may  engage 
in  any  such  conspiracy,  or  who  shall  as  prin- 
cipal, manager,  director,  or  agent,  or  in  any 
other  capacity,  knowingly  carry  out  any  of 
the  stipulations,  purposes,   prices,   rates,   or 


AEKAJN'SAS. 


21 


Trusts  —  Acts  of  1897. 


orders,  made  in  furtherance  of  any  such  con- 
spiracy, shall  on  conviction,  be  punished  by 
any  fine  of  not  less  than  five  hundred  dol- 
lars, nor  more  than  two  thousand  dollars, 
and  by  imprisonment  in  the  penitentiary 
not  less  than  one,  nor  more  than  ten  years, 
or  in  the  judgrment  of  the  court,  by  either 
such  fine  or  imprisonment. 

§  4.  Be  it  further  enacted.  That  the  pro- 
visions of  this  act  shall  not  apply  to  agricul- 
tural products,  or  live  stock,  while  in  the 
possession  of  the  producer  or  raiser. 

§  5.  Be  it  further  enacted.  That  any  person 
or  persons,  or  coriX)ration,  that  may  be  in- 
jured or  damaged  by  any  such  arrangements, 
contracts,  agreements,  trusts,  or  combina- 
tions, described  in  section  one  of  this  act  may 


sue  for  and  recover  in  any  court  of  compe- 
tent jurisdiction  in  this  State,  of  any  person 
or  persons,  or  corix>rations,  operating  such 
trusts,  or  combinations,  the  full  considei'a- 
tion  or  sum  paid  him  or  them  for  any  goods, 
wares,  merchandise  or  articles  of  sale  of 
which  is  controlled  by  such  combination  or 
trust. 

§  6.  Be  it  further  enacted,  That  it  shall 
be  the  duty  of  the  judges  of  the  circuit  courts 
of  this  State  to  specially  instruct  the  juries 
as  to  the  provisions  of  this  act 

§  7.  Be  it  further  enacted.  That  all  laws 
and  parts  of  laws  in  conflict  with  the  provis- 
ions of  this  act  be,  and  the  same  are  hereby, 
repealed. 

(Approved  March  16,  1897.) 


INDEX  TO  ARKANSAS. 


ACCOUNTS:  Page. 

books,  open  to  stockholders 10 

statement  of,  to  be  exhibited  annually 10 

ACTIONS: 

to  enforce  payment  of  subscriptions  9 

corporation  may  maintain  and  defend 9 

costs,  security  by  foreign  corporation  .  .  .■ 13 

service  of  summons  on  corporation 15 

against  corporations,  when  brought 15 

to  repeal  or  vacate  charter,  when  brought 15 

service  of  process  15 

pleadings,  verification  by  corporation   35 

receivers,  appointment  of 16 

to  repeal  or  vacate  charters,  how  brought 17,  18 

to  prevent  usurpation  of  franchises  17,  18 

judgment  of  ouster 18 

AMENDMENT: 

of  articles  of  association 10 

part  to  be  published  10 

fees  for  filing 14 

ARTICLES  OF  ASSOCIATION: 

corporation  formed  by 7,  8 

name  to  be  assumed  by 8 

capital  stock  fixed  by  8 

purposes  to  be  stated  8 

to  be  filed  ^ 

what  to  state 8 

amendment,  how  made 10 

part   to    be    published    10 

fees  for  filing 14 

return  of  original  by  county  clerk 11 

fees  for  filing   1-4 

ATTACHMENT: 

against  foreign  corporation   7 

order  of,  against  stock < ''' 

certificate  of  number  of  shares  owned  by  debtor 7 

writ  of,  upon  return  of  fieri  facias  against  corporation 14 

how  executed  1'^ 

garnishee  may  be  summoned  14 

sale  of  stock  under 18,  19 

BILLS  AND  NOTES: 

not  to  circulate  as  money 6 

BONDS: 

increased,  not  to  be,  without  consent  of  stockholders 6 

investment  of,  term  defined 16 

BOOKS: 

of  accounts,  to  be  kept -^'-^ 

open  to  stockholders  • 


24  IXDEX  TO  AKKAXSAS. 

BUSINESS:  ^age- 

for  whith  corporations  may  be  formed  7,  8 

BY-LAWS: 

to  provide  for  election  of  directors ^ 

to  prescribe  officers ° 

corporation  may  adopt  ^ 

CAPITAL  STOCK: 

increase,  not  without  consent  of  stockholders 6 

fixed  by  articles  of  association ^ 

divided  into  shares   ^ 

increase  by  stockholders    8 

certificate  to  be  filed 10.  H 

subscriptions  to,  directors  may  call  in 9 

withdrawal,  liability  of  stockholders 11 

deemed  personal  property  for  taxation  17 

statement  of,  delivered  to  assessors 17 

reduction  of,  how  made  20 

CERTIFICATE: 

of  corporate  purposes,  to  be  filed.    (See  Articles  of  Association.) 8 

copy  of,  as  evidence 8 

of  financial  conditions,  to  be  filed  annually 9 

liability  for  failure  to  file  11 

to  be  made  under  oath 11 

upon  removal  of  place  of  business 12 

CHARTERS    (See  Articles  of  Association): 

under  which  organization  has  not  taken  place,  invalid 5 

revocable  at  pleasure  of  legislature 6 

actions  to  repeal  or  vacate 17 

surrender  of,  by  stockholders  19 

forfeiture  for  forming  trusts 20,  21 

CLAIM: 

against  estate,  by  corporation 7 

COMBINATIONS: 

to  prevent  competition  are  illegal 20 

charter  forfeited  for  joining  20 

proceedings  against    20.  21 

COMPETITION: 

trusts  to  prevent,  are  illegal   20.  21 

CONTRACTS: 

obligation  not  to  be  impaired 5 

CORPORATIONS: 

created  by  general  laws ,  5 

COSTS: 

security  for,  by  foreign  corporation 13 

DEBTS,  CORPORATE    (See  Liability;  Stockholders,  etc.): 

to  state,  not  to  be  released 5 

state  not  to  assume g 

liability  of  officers  for,  for  failure  to  file  annual  certificate 11 

of  stockholders,   for  withdrawal  of  capital 11 

of  directors  for  illegal  dividends 11 

of  officers  for  failure  to  comply  with  law 11 

DIRECTORS    (See  Officers): 

business  to  be  managed  by  S 

to  bo  chosen  annually   y 

qualifications « 

failure  to  elect  not  to  dissolve y 

officers  chosen  by y 


IXDEX  TO  ARKAXSAS.  25 

DIRECTORS  —  (Continued):  Page. 

vacancies,  how  filled  8 

articles  of  association  to  be  filed 8 

majority  a  quorum   9 

subscriptions  to  capital  stock,  calls  for   9 

dividends    when  corporation  is  insolvent 11 

liability  of,  for  violations  of  law   11 

DISSOLUTION: 

disposition  of  property  upon   ^ 12 

of  insolvent  corporation,  application  for 19 

notice  to  be  published   19 

on  surrender  of  charter   19 

DIVIDENDS: 

not  to  be  declared  when  corporation  is  insolvent 11 

EXECUTION: 

on  stock,  certificate  of  shares  owned  by  defendant 13 

sale  of  stock,  rights  of  purchaser  14 

fieri  facias  first  process  against  corporation   14 

if  returned  unsatisfied,  writ  of  attachment  may  issue   14 

sale  of  stock,  under  writ  of 18,  19 

FEES: 

for  filing  articles  of  association  and  amendments 14 

FIERI  FACIAS: 

upon  judgment  against  corporation   14 

FOREIGN  CORPORATIONS: 

may  bo  authorized  to  do  business 6 

to  have  place  of  business  within  state 6 

subject  to  same  liabilities  as  domestic 6 

designation  of  agent  for  service  of  process 6 

security   for   costs    13 

service  of  summons  on  agent   15 

what  is 17 

designation  of  agent  for  service  of  process   18 

effect  of  failure  to  make 18 

FORGERY: 

of  corporate  seal    13 

FRANCHISE: 

usurpation  of,  action  to  prevent 17,  18 

instituted  by  whom    18 

judgment   of   ouster    IS 

forfeiture  for  forming  trusts,  etc 20,  21 

FRAUDULENT: 

issue  of  shares  of  stock  13 

GARNISHEES: 

person  having  corporate  property,  when  summoned 14 

proceedings  against  14 

INCREASE: 

of  capital  stock,  by  stockholders 10 

certificate  to  be  filed l'^-  H 

INJUNCTION: 

to  restrain  business  of  corporation,  notice 1-^.  1*5 

INSOLVENT  CORPORATIONS: 

dissolution   of    1^ 

preferences  prohibited  except  to  laborers    I'J.  20 

proceedings  to  wind  up   *-*^ 

Of) 

preferences  to  be  set  aside  *" 


26  IXDEX  TO  ATlKA:N^SxiS. 

INSTALLMENTS:  ^""Se. 

subscriptions  payalilo  in   ^ 

action  to  enforce  payment ^"^ 

sale  of  stock  for  unpaid •• ^ 

INVESTMENT  OF  BONDS: 

term  (lofinetl  for  taxation   16 

INVESTMENT  OF  STOCKS: 

term  defined  for  taxation IG 

LIABILITY: 

of  otiieers,  for  failure  to  file  certificate  of  affairs 11 

of  stockholders,  for  withdrawal  of  capital 11 

of  directors,  for  illegal  dividends 11 

LIEN: 

of  stock,  corporation 11 

sale  of  stock  to  satisfy  11 

notice  of  time  and  place  of  sale 11 

new  certificates  to  purchasers    12 

MEETING  OF  STOCKHOLDERS: 

first,  how  called   8 

majority,   a  quorum    9 

stockholders  to  have  vote  for  each  share   9 

MONEY: 

paper  not  to  be  issued  as 6 

OFFICERS: 

chosen  by  directors   8 

by-laws  to  prescribe   8 

corporation  may  elect 9 

fraudulent  statements,  for  taxation  13 

PAR  VALUE: 

of  shares,  corporation  may  fix 16 

PERSON: 

term  includes  corporation   17 

PLACE  OF  BUSINESS: 

change,  how  effected 12 

certificate  of  removal  to  be  filed 12 

publication  of  certificate 12 

PLEADINGS: 

verification  by  corporation    15 

POWERS.  CORPORATE: 

not  conferred  by  special  act 5 

specified  generally y 

decisions  respecting q 

PREFERENCES: 

by  insolvent  corporations,  prohibited 20 

to  be  set  aside 9q 

PRESIDENT:                                                 *" 

directors  to  choose u 

liability  for  failure  to  file  certificate  of  affairs 11 

for  failure  to  comply  with  law  .                                                           n 

PRICE: ^^ 

trusts  to  regulate,  are  illegal "0  ''1 

PROPERTY  (See  Real  Property;  Personal  Property)! "  '  " 

not  to  bo  taken  without  compensation   5  g 

compensation,   how   ascertained    '  q 

corporation  may  hold  and  convey [  10 


I^^DEX  TO  ARKANSAS.  27 

prRrOSEH,  CORPORATE:  Page. 

articlos  of  association  to  state   y 

coitifuato  of,  to  be  filed 8 

REAL  PROPERTY: 

corporation  may  acqnire  and  convey   10 

RECEIVERS: 

possession  of  property  by   16 

substitnted  as  a  party   16 

persons  interested  not  to  be  appointed 16 

property  listed  by   17 

REDUCTION: 

of  capital  stock,  bow  made  20 

REMOVAL: 

of  place  of  business,  proceedings  12 

RIGHT  OF  WAY: 

not  to  be  taken  without  compensation 6 

compensation,   how  ascertained    6 

SALE  OF  STOCK: 

to  satisfy  debts  due  to  corporation  11 

notice  of  time  and  place 11 

new  certificates  to  purchasers ; 12 

under  writs  of  execution  in  attachment   18,  19 

certificaco  of  purchase  19 

transfer  of  stock  sold 19 

SEAL,  COMMON: 

corporation  may  have 9 

forgery  of,  what  constitutes  13 

SECRETARY: 

directors  to  choose    8 

to  reside  and  have  place  of  business  in  state 8 

liability  for  failure  to  file  certificate  of  affairs 11 

for  failure  to  comply  with  law  11 

SERVICE: 

of  summons  on   corporation    15 

on  agent  of  foreign  corporation   15 

of  notice  on  corporation  Kj 

SERVICE  OF  PROCESS: 

designation  of  agent  by  foreign  corporation   6 

STOCK: 

not  to  be  issued  except  for  money,  etc 6 

shares,    how    attached    7 

par   value   of 8 

sale  of,  for  unpaid  installments   9 

transfer,  certificate  to  be  filed   9 

on   books  of  corporation    10 

deemed  personal  property   10 

lien  on,  for  debts  due  corporation  10 

sale  of,  to  satisfy  11 

notice  of  time  and  place  of  sale 11 

rights  of  purchaser 12 

sale  of  right  of  redemption  if  pledged  12 

fraudulent    issue   of    13 

failure  to  list,  for  taxation,  penalty   13 

execution  on,  how  levied    13,  14 

sale  under,  rights  of  purchaser 14 

par  value,  corporation  may  fix  10 

investment  of.  term  defined    16 

subject   to   taxation,    when    16 


28  INDEX  TO  APvKAXSAS. 

ST(.)CK  —  (Continued):  Page. 

sale  of,  under  execution  on  attachment   18,  19 

certificate  of  purchase  to  be  executed 19 

transfer  of  stock  to  be  made 19 

capital,  increase  not  without  consent  of  stockholders 6 

fixed  by  articles  of  association   8 

divided  into  shares  ^ 

increase  by  stockholders   ^ 

certificate  to  be  filed    10'  H 

subscriptions  to,  directors  may  call  in  ^ 

withdrawal,  liability  of  stockholders   H 

personal  property  includea   1^ 

reduction  of,  how  made 20 

STOCKHOLDERS: 

county,  city  or  town  not  to  become 5 

state  not  to  become   6 

vote  for  each  share 9 

unpaid  subscriptions,  collection  of 9 

books  of  accounts  open,  etc 10 

statement  of  accounts  to  be  exhibited  annually 10 

liability  of,  for  withdrawal  of  capital 11 

lien  of  corporation  on  stock  of 11 

sale  of  stock  to  satisfy 11 

SUBSCRIPTIONS: 

installment*^,  how  paid    9 

action  to  recover  amount  of 9 

sale  of  stock  for  unpaid 9 

SUE  AND  BE  SUED: 

corporation  may 9 

SUMMONS: 

service  of,  on  corporations   15 

on  agent  of  foreign  corporation 15 

TAXATION: 

power,  not  to  be  surrendered   6 

failing  to  list  stock,  penalty 13 

false  statements  by  officers,  etc 13 

"  investment  of  bonds,"  term  defined   16 

"  investment  of  stocks,"  term  defined   16 

personal  property  includes  capital,  etc   18 

property  subject  to    3,  17 

property  listed  by  receiver 17 

statement  of  capital,  etc.,  to  be  rendered  to  assessors 17 

notice  to  return  schedule .  .  17 

TRANSFER: 

of  stock,  certificate  to  be  filed 9 

to   1)0   entered   on   books    10 

TREASURER: 

directors  to  choose   S 

to  reside  and  have  place  of  business  in  state 8 

TRUSTS: 

to  prevent  competition  are  illegal 20 

charter  forfeited   for  joining   20 

proceedings    against    20,  21 

USURPATION: 

of  office  or  franchise,  action  to  prevent  17,  18 

instituted    by    whom    18 

judgment  of  ouster 18 

VERIFICATION: 

of  pleadings  by  corporation   15 


CALIFORNIA. 


TABLE  OF  CONTENTS. 


CONSTITUTIONAL  PROVISIONS.  Page. 

Art.          I.  Declaration  of  rights 5 

IV.  Legislative  department  6 

XII.  Corporations    " 

XIII.  Taxation   11 

XVII.  Land  exemption 11 

XIX.  Chinese  11 

CODES   OF   CALIFORNIA. 

I.  Political 12 

II.  CiTil   13 

III.  Civil  Procedure    36 

IV.  Penal    39 

Political   Code.    Part  III.    Government  of  the  State, 

TITLE    I.     PL'BLIC    OFFICERS. 

Ch.  3.  Governor    12 

5.  Secretary  of  State  12 

TITLE   IX.    REVENUE. 

Ch.  1.  Property  liable  to  taxation  12 

2.  Definitions   .• 12 

8.  Assessment  of  property  13 

Civil  Code.     Division  First.     Part  IV.      Corporations. 

TITLE   I.     GENERAL  PROVISIONS. 

Ch.  1.  Formation  of  corporations  13 

2.  Corporate  stock  22 

3.  Corporate  powers   28 

4.  Extension  and  dissolution   7 34 

AX  ACT  RELATING  TO   FOREIGN   CORPORATIONS. 

Division    Second.      Part   IV.      Acquisition    of  Property. 

TITLE  IV.     TRANSFER. 

Ch.  4.  Acknowledgment  of  instruments 35 

TITLE  VI.    AVILLS. 

Ch.  1.  Execution  of 36 

Code  of  Civil  Procedure.     Preliminary  Provisions.     Part  II.     Civil  Actions. 

TITLE   V.     MANNER    OF   COM3IENCING. 

TITLE   VI.      PLEADINGS. 

Ch.  6.  Verification    37 

TITLE  VII.     PROVISIONAL  RE3IEDIES. 

Ch.  4.  Attachment 37 

5.  Receivers    37 

TITLE  X.     ACTIONS  IN  PARTICLLAR   CASES. 

Ch.  5.  Actions  for  usurpation  of  franchises 3S 

Part  III.     Special  Proceedings. 

TITLE   VI.     VOLUNTARY   DISSOLUTION    OF  CORPORATIONS. 

Penal   Code.     Preliminary  Provisions.    Part  I.     Crimes  and  Punishment. 

TITLE   XIII.     CRIMES  AGAINST   PROPERTY. 

Ch.  13.  Frauds  in  management  of  corporations 39 

SPECIAL  SECTION  RELATING  TO  EMPLOYMENT  OP  MINORS. 

Part  II.     Criminal  Procedure. 

TITLE  XX.     MISCELLANEOUS    PROCEEDINGS. 

Ch.  9.  Proceedings  against  corporations 41 

LEGISLATIVE    ACTS  RELATING    TO    PAYMENT  OF  WAGES. 


CALIFORNIA. 


CONSTITUTION  OF  CALIFORNIA. 


PROVISIONS  RELATING  TO  CORPORATIONS. 


ARTICLE  I. 

Declaration  of  Rights. 

Sec.  14.  Private  proporty  not  to  be  taken  with- 
out just  compensation. 
IG.  ObliRation  of  contracts  not  to  be  im- 
paired. 
21.  Special  privileges  not  to  be  granted 
which  may  not  be  altered,  revoked  or 
repealed. 

ARTICLE  IV. 

Legislative  Department. 

Sec.  25.  Local  or  special  laws  prohibited  In  cer- 
tain cases. 

26.  Legislature  shall  pass  laws  regulating 
purchase  and  sale  of  shares  of  stock. 

31.  Credit  of  the  State,  or  any  political  sub- 
division thereof,  not  to  be  given  in  aid 
of  any  corporation. 

33.  Regulation  of  compensation  for  services 
performed  and  commodities  furnished 
by  certain  corporations. 


ARTICLE  XII. 

Corporations. 

Sec.      1.  How  corporations  are  formed, 

2.  Dues  from  corporations. 

3.  Liability  of  stockholders. 

4.  Corporations,    what    is     included    in     the 

term. 

5.  No  flinrters  for   banking  purposes.     Law- 

ful money. 

6.  Charters   and   grants  existing  bef>i'e  this 

Constitution  if  not  in  bona  flde  organi- 
zation have  no  validity. 

7.  Extension    of   franchise   or   charter. 

8.  Right  of  eminent  domain. 

9.  Not  to  engage  in  other  business. 

10.  Leasing  or  alienation   of  franchise. 

11.  Increase  of  stock  or  bonds. 

12.  Vote  of   stockholders   and   election   of  di- 

rectors. 

13.  Loan  of  State  credit. 

14.  Books  of  corporation  open  for  inspection, 
l.i.   Corporations  organized  out  of  this  State. 

16.  I'lace  where  corporation  may  be  sued. 

17.  Common  carriers.     Rights  of  railroads  to 

cross  each  other. 

18.  Restrictions     in     regard    to     ofHcers    and 

employes'    interest    in    any    railroad    or 
canal "  of     those    who     are     not     stock- 
holders. 
10.  Free    passes    and     penalty    for    accepting 
the  same. 

20.  Contracts   of   common    carriers   with   ves- 

sels,   etc.     In    regard    to   lowering   rates 
for  passengers  and  freight. 

21.  No  discrimination  in  charges. 

22.  Enumeration  of  railroad  districts. 

23.  Same. 

24.  Legislature  to  pass  laws  for  enforcement 

of  provisions  of  this  article. 


ARTICLE   XIII. 

Taxation. 

Sec.     1.   "  Property  "  defined. 

6.  Powers   of    taxation    not    to     be 
dered. 
11.  Income  taxes. 


ARTICLE  XVII. 

Land  Exemption. 

Sec.  2.  The    holding   of     large    tracts    of     unculti- 
vated lands  should  be  discouraged. 


ARTICLE  XIX. 

Chinese. 
Sec.  2.  Employment  of  Chinese. 

ARTICLE  I. 

Declaration  of  Rights. 

§  14.  Private  property  shall  not  be  taken 
or  damaged  for  public  use  without  just  com- 
pensation having  been  first  made  to,  or  paid 
into  court  for,  the  owuer,  and  no  right  of 
way  shall  be  appropriated  to  the  use  of  any 
corporation  other  than  municipal  until  full 
compensation  therefor  be  first  made  in 
money  or  ascertained  and  paid  into  court  for 
the  owner,  irrespective  of  any  benefit  from 
any  improvement  proposed  by  such  corpora- 
tion, which  compensation  shall  be  ascer- 
tained by  a  jury,  unless  a  jury  be  waived, 
as  in  other  civil  cases  in  a  court  of  record, 
;is  shall  be  prescribed  by  law. 

Right  of  eminent  domain  not  to  be  abridged. 
Art.  XII,  §  8.  "  Property  "  defined.  Art.  XIII,' 
§  1.  Holdings  of  uncultivated  lands  to  be  dis- 
couraged.   Art  XVII,  §  2. 


[Private  property  cannot  be  taken  for  public 
use  until  paid  for.  Water-Works  v.  Sharpstein, 
TiO  Cal.  284.  Which  rule  is  thoroughlv  imbedded  in 
the  Constitution.  Laml)  v.  Schottlof,  .54  Cal.  324. 
Special  road  law  of  1S74  repealed  by  this  sec- 
tion. Weber  V.  Supervisors.  59  Cal.  205.  Owner 
of  the  property  is  entitled  to  .jury  trial  to  ascer- 
tain damages.  Id.  Tliis  section  somewhat  differ- 
ent from  corresponding  section  of  Constitution  of 
1849.  Reardon  v.  San  Francisco,  GG  Cal.  501;  s.  c, 
fi  Pac.  Rep.  317.  No  right  of  way  over  a  street 
is  allowed  for  the  use  of  other  than  municipal 
corporation,    save   upon    compensation   ascertained 


califok:n^ia. 


Legislative  department,  Const,  Art.  i,  §§  16,  21;  Art.  iv,  §§  25,  2G,  31. 


by  the  jury.  Cheney  v.  O'Brien,  69  Cal.  196; 
8.  c,  10  I'ac.  Rep.  479.  One  private  person  can- 
not talie  property  from  another,  either  for  the 
use  of  the  taker  or  for  an  alleged  public  use, 
without  anv  compensation  paid  or  tendered.  Lux 
v.  Ilaggiu,"  69  Cal.  '2Go;  s.  c.,  10  Pac.  liep.  674. 
In  every  case,  provisions  of  statute  as  to  mode 
of  conducting  condemnation  proceedings  must  be 
strictly  pursued.  Lux  v.  Haggin,  69  Cal.  301; 
s.  c,  10  Pac.  Rep.  674.  Remote  consequential 
damages  occasioned  to  private  property  as  an  In- 
direct result  of  public  works  do  not  constitute  a 
taking  of  such  property,  within  meaning  of  the 
Constitution.  Green  v.  State,  73  Cal.  29;  s.  c, 
11  Pac.  Rep.  602;  14  id.  610.  Compensation  to  be 
awarded  to  one  must  be  ascertained  irrespective 
of  anv  benefit  that  would  accrue  to  remainder  of 
his  land.  Ry.  Co.  v.  I'orter,  74  Cal.  261;  s.  c,  15 
Pac.  Rep.  774.  Rules  for  determining  value  of 
condemned  property.  L.  &  T.  Co.  v.  Neale,  78 
Cal.  63;  s.  c,  20  Pac.  Rep.  372.  Right  of  eminent 
domain  Is  inherent  in  State  and  not  conferred  hy 
the  Constitution,  and  may  be  delegated  by  legis- 
lature to  any  corporation  or  individual  who  shall 
comply  with  terms  upon  which  the  right  is  given. 
Moran  v.  Ross,  79  Cal.  159;  s.  c,  21  Pac.  Rep. 
547.  So  far  as  the  section  requires  payment  of 
compensation  for  "  usurpation  of  any  benoflt  from 
any  improvement  proposed  by  such  corporation," 
it  is  carefully  limited  to  "  corporations  other 
than  municipal."  Moran  t.  Ros.s,  79  Cal.  551; 
s.  c,  21  Pac.  Rep.  9."i8;  R.  R.  Co.  v.  Mayne,  83 
Cal.  569;  s.  c,  23  Pac.  Rep.  522.  In  an  action  to 
condemn  right  of  way  for  a  railroad  corporation, 
incompetent  to  show  that  oranges  would  bring 
better  prices  by  reason  of  railroad  being  there, 
and  that  value  of  corporation  is  dependent  upon 
the  market,  and  its  accessibilitv  thereto.  Ry.  Co. 
V.  Haven.  94  Cal.  489;  s.  c.  29  "Pac.  Rep.  87.5. 
Section  cited.  Moulton  v.  Parks,  64  Cal.  178;  s.  c, 
30  Pac.  Rep.  613.  And  held  not  to  apply.  Rv. 
Co.  v.  Wade,  91  Cal.  4.56;  s.  c,  27  Pac.  Rep.  768. 
Manufacturing  corporation  having  incidental 
power  to  maintain  railroads  and  tramwavs  for  its 
business,  cannot  exercise  right  of  eminent  do- 
main. Peo.  V.  Mauf.  Co.,  107  Cal.  250;  s.  c,  40 
Pac.    Rep.   391.] 

§  16.  No  *  *  *  law  impairing  the  obli- 
gation of  contracts,  sliall  ever  be  passed. 

See  next  section.  Charters  may  be  repealed 
C.  C,  §  384;  Const.,  art.  XII,  §  1. 

§  21.  No  special  privileges  or  immunities 
shall  ever  be  granted  which  may  not  be 
altered,  revoked,  or  repealed  by  the  legisla- 
ture; nor  shall  any  citizen,  or  class  of  citi- 
zens, be  granted  privileges  or  immunities 
which,  upon  the  same  terms,  shall  not  be 
granted  to  all  citizens. 

See  preceding  section.  Power  of  taxation  not  to 
be  surrendered.    Art.  XIII,  §  6. 


ARTICLE  IV. 

Legislative  Department. 

§  2o.  The  legislature  shall  not  pass  local 
or  special  laws  in  any  of  the  foUoAving 
enumerated  cases: 

Sixteenth.  Releasing  or  extinguishing,  in 
whole  or  in  part,  the  indebtedness,  liability, 
or  obligation  of  any  corporation  or  person 
to  this  State,  or  to  any  municipal  corporation 
therein. 

Nineteenth.  Granting  to  any  corporation, 
association,  or  individual  any  special  or  ex- 
clusive right,  privilege  or  immunitv. 


Twenty-fifth.  Chartering  or  licensing  fer- 
ries, bridges,  or  roads. 

Credit  of  State  or  of  municipalities  not  to  be 
given.  Art.  IV,  §  31.  How  corporations  are 
formed.  Art.  XII,  §  1.  Loan  of  State  credit. 
Art.  XII,  §  13. 

§  2G.  *  *  *  The  legislature  shall  pass 
laws  to  regulate  and  prohibit  the  buying  and 
selling  of  the  shares  of  the  capital  stock  of 
corporations  in  any  stock  board,  stock  ex- 
change, or  stock  market  under  the  control 
of  any  association.  AH" contracts  for  the  sale 
of  shares  of  the  capital  stoclc  of  any  cor- 
poration or  association,  on  margin,  or  to  be 
delivered  at  a  future  day,  shall  be  void,  and 
any  money  paid  on  such  contracts  may  be 
recovered  by  the  party  paying  it  by  suit  in 
any  court  of  competent  jurisdiction. 

[A  contract  between  brokers,  whereby  one 
agrees  to  purchase  and  sell  stock  for  account  of 
the  other,  to  advance  money  for  the  purpose,  and 
pay  assessment  on  stock  purchased,  is  not  ob- 
noxious to  above  section.  Kutz  v.  Fleisher,  67 
Cal.  93;  s.  c,  7  Pac.  Rep.  195.  Agreement  between 
a  stock  broker  and  his  customer,  by  whicli  broker 
agreed  to  purchase  stocks,  charging  customer  with 
commissions  and  interest  on  money  advanced, 
and  holding  stocks  as  security  until  their  sale, 
<-ustomer  merely  receiving  or  paying  dilVereuce 
between  buying  and  selling  of  value  of  stocks,  is 
a  contract  for  sale  of  stock  on  margin,  within  the 
inhibition  of  above  section,  and  is  void.  Cashman 
v.   Root.  89  Cal.  373;   s.   c,  26  Pac.   Rep.   883. 

Whether  a  transaction  between  a  broker  and 
bis  customer  for  purchase  of  stocks  of  which  an 
immediate  delivery  is  not  contemplated,  is  in  con- 
travention of  this  section  is  a  question  of  fact  to 
be  determined  in  each  particular  case.  Kullman 
V.   Simmens,   104  Cal.  595;  s.  c,  38  I'ac.   Rep.  362. 

One  who  sues  to  recover  money  voluntarily  paid 
for  purchase  of  stocks  on  margin  to  be  delivered 
at  a  future  date,  in  contravention  of  above  sec- 
tion, is  not  entitled  to  recover  interest  thereon. 
Baldwin  v.  Zadig,  104  Cal.  594;  s.  c,  38  Pac.  Rep. 
363,  722.] 

§  31.  The  legislature  shall  have  no  power 
to  give  or  to  lend,  or  to  authorize  the  giving 
or  lending,  of  the  credit  of  the  State,  or  of 
any  county,  city  and  county,  city,  township, 
or  other  political  corporation  or  subdivision 
of  the  State  now  existing,  or  that  may  be 
hereafter  established,  in  aid  of  or  to  any 
person,  association,  or  corporation,  whether 
municipal  or  otherwise,  or  to  pledge  the 
credit  thereof,  in  any  manner  whatever,  for 
the  payment  of  the  liabilities  of  any  indi- 
vidual, association,  municipal,  or  other  cor- 
poration'whatever;  nor  shall  it  have  power 
to  make  any  gift,  or  authorize  the  making 
of  any  gift,  of  any  public  money  or  thing  of 
value  to  any  individual,  municipal,  or  other 
corporation  whatever;  *  *  *  it  shall  not 
have  power  to  authorize  the  State,  or  any 
political  subdivision  thereof,  to  subscribe  for 
stock,  or  to  become  a  stockholder  in  any 
corporation  whatever. 

See  art.  IV,  §  25;  art.  XII,  §  13. 

[This  provision  nppli(>s  to  formation  or  creation 
of  corporations,  and  (o  powers  directly  conferred 
upon  them  by  legislative  enactment,  and  i^annot 
1)0  construed  as  jirohibiling  assignment  of  a  fran- 


i 


CALIFORXIA. 


Corporations,  Const.,  Art.  xii,  §§  1-6. 


chise  to  a  lofially  or.cauized  corporation  by  per- 
sons having  legal  right  to  exercise  and  transfer 
the  same.  Peo.  v.  Stanford,  77  Cal.  371;  s.  c,  IS 
rac.  Kep.  So;  19  id.  (i'Xi.  To  constitute  a  gift  by 
legislature  within  the  inhibition  of  this  section, 
there  must  be  a  gratuitous  transfer  of  State  prop- 
erty, made  voluntarily  and  without  consideration. 
Yoseniite,  etc.,  Co.  v.  Dunn,  83  Cal.  201;  s.  c,  23 
I'ac.   Rep.   3G9. 

Section  construed.  San  Luis  Water  Co.  v.  Es- 
trads,  117  Cal.  lUS;  s.  c,  48  Pac.  Rep.  1075.] 

§  33.  The  leffislatufo  shall  pass  laws  for  the 
regulation  and  limitation  of  the  chavscs  for 
services  performed  and  commodities  fur- 
nished by  teloRTapli  and  gas  corporations, 
and  the  charges  by  corporations  or  indi- 
viduals for  storage  and  wharfage,  in  which 
there  is  a  public  use;  and  where  laws  shall 
provide  for  tlie  selection  of  any  person  or 
officer  to  regulate  and  limit  such  rates,  no 
such  person  or  officer  shall  be  selected  by 
any  corporation  or  individual  interested  in 
the  business  to  be  regulated,  and  no  person 
shall  be  selected  Avho  is  an  officer  or  stock- 
holder in  any  such  corporation. 


ARTICLE  XII. 

Corporations. 

Section  1.  Corporations  may  be  formed  un- 
der general  laws,  but  shall  not  be  created 
by  special  act.  All  laws  now  in  force  in  this 
State  concerning  corporations,  and  all  laws 
that  may  be  hereafter  passed  pursuant  to 
this  section,  maj'  be  altered  from  time  to 
time  or  repealed. 

See  art.  IV,  §  2.5;  art.  I,  §  21.  Charters  may  be 
repealed.  C.  C,  §  384.  General  laws  for  forma- 
tion of  corporations.    C.  C,  §§  285,  289-296. 

[A  charter  cannot  be  amended  by  a  special  law. 
but  legislature  has  power  to  control  charters  of 
all  corporations  bv  eencral  laws.  Thomason  v. 
Ashwoith.  7.'?  (';il.'  77;  s.  c.  14  Pac.  Rep.  (51.">. 
Ihis  section  forbids  any  .nttenipt  by  legislature 
to  confer  a  benefit  or  impose  a  duty  upon  one 
or  more  corporations  formed  under  generiil  law. 
not  conferred  or  imposed  upon  all  corporations 
formeil  under  the  same  law.  I*eo.  v.  R.  R.  Co.,  83 
Ciil.  .SOI;  s.  c,  23  Pne.  Rep.  .30.-?.  It  has  never 
been  construed  ns  requiring  that  all  private  cor- 
pcjratious  must  lie  formed  under  same  gener;\l 
law,  or  limited  to  the  exercise  of  the  same  pow- 
ers. In  re  Madeira  Irrigation  District,  92  C^il. 
31(i;  .«!.  c.  28  Pac.  Rep.  272,  07.").  Section  construed. 
Water- Works  v.   San   Francisco,  01  Cal.   38.] 

§  2.  Dues  from  corporations  shall  be  se- 
cured by  such  individual  liability  of  the  cor- 
porators and  other  means  as  may  be  pre- 
scribed by  law. 

[Section  held  not  to  aoply  to  case  at  bar.  Ilar- 
mon  y.  Page,  62  Cal.  448.] 

§  3.  Each  stockholder  of  a  corporation  or 
jolnt-stoclv  association  sliall  be  individually 
and  personally  liable  for  such  pro])ortion  of 
all  its  debts  and  liabilities  contracted  or  in- 
curred, during  the  time  he  Avas  a  stockholder, 
as  the  amount  of  stock  or  shares  owned  by 
him  l>ears  to  the  whole  of  the  subscribed 
capital  stock  or  shares  of  the  corporation  or 


association.  The  directors  or  trustees  of  cor- 
porations and  joint-stock  associations  sliall 
be  jointly  and  severally  liable  to  the  creditors 
and  stockholders  for  all  moneys  embezzled 
or  misappropriated  bj'  the  officers  of  such 
corporation  or  joint-stock  association  during 
the  term  of  office  of  such  director  or  trustee. 

Sec  C.   C,  §§  322,  327. 

[The  obligations  of  stockholders  to  pay  their  re- 
spective proportions  of  debts  of  corporation  is  di- 
rect and  prinniry.  Faymonville  v.  McCollough.  59 
Cal.  285.  Remedy  given  by  this  section  is  addi- 
tional to  and  does  not  supersede  other  remeclies 
existing  when  Constitution  was  adopted.  Ililler 
V.  Collins,  03  Cal.  23G.  The  complaint  to  enfojce 
liability  must  state  proportion  of  stock  owned  by 
def(>udant,  at  time  debt  sued  for  was  incurre<l, 
bears  to  whole  subscribed  stock  at  that  time,  or 
facts  from  which  such  proportion  may  be  deducted. 
I'.idwell  V.  Babcock,  87  Cal.  29;  s.  c,  25  Pac.  Rep. 
752. 

The  legal  effect  of  the  condition  prescribed  by 
this  section  is  that  a  corporation  when  created 
becomes  the  agent  of  its  stockholders  to  make  such 
contracts  and  incur  such  liabilities  as  are  author- 
ized by  law  and  its  articles  of  incorporation,  and 
the  contract  it  thus  makes  binds  the  stockholders 
to  the  extent  named.  Kennedy  v.  Bank,  97  Cal. 
93:    s.    c,   31    Pac.    Rep.   840. 

This  section  held  not  to  apply  where  president 
of  a  mining  company,  without  knowledge  of  di- 
rectors, agrees  to  pay  excessive  price  for  reduc- 
ing ores.     Fox  v.  Miuing  Co.,  41  Pac.  Rep.  308.] 


§  4.  The  term  "  corporations,"  as  used  in 
this  article,  shall  be  construed  to  include  all 
associations  and  joint-stock  companies  hav- 
ing any  of  the  powers  or  privileges  of  cor- 
liorations  not  possessed  by  individuals  or 
partnerships;  and  all  corporations  shall  have 
the  right  to  sue  and  shall  be  subject  to  be 
sued,  in  all  courts,  in  like  cases  as  natural 
persons. 

Corporation  defined.  C.  C,  §§  283,  284.  Included 
in  term  "  person."  C.  C.  P.,  §  17;  Pen.  C,  §  7.  A 
corporation  is  known  in  law  only  by  Its  name. 
C.  C,  §  .3,54  (1)  n.  Power  to  sue  and  be  sued.  C. 
C,  §  354  (2).    To  be  sued  where.    Art.  IV,   §  10. 

[With  this  right  of  the  corporation  to  maintain 
nml  defend  actions  concerning  its  riirhts  or  lia- 
bilities the  stockholder  c.nnnot  interfere,  except 
when  directors  refuse  to  act,  or  are  guilty  of 
frauil  in  the  maintenance  or  defense  of  the  ac- 
tions. Raines  v.  Rabcock.  95  Cal.  592;  s.  c,  27 
Pac.    Rep.   074;   30  id.   770.] 

§  5.  The  legislature  shall  have  no  power  to 
pass  any  act  granting  any  charter  for  bank- 
ing purposes,  but  corporations  or  associa- 
tions may  be  formed  for  such  purjioses  under 
general  laws.  No  corporation,  association, 
or  individual  shall  issue  or  put  in  circulation, 
as  money,  anything  but  the  lawful  money  of 
the  Fnited  States. 

Corporations  not  to  is.sue  money.  C.  C,  §  S'>C>. 
Banking  corporation  must  keep  certain  records. 
C.  C,  §  321. 

§  0.  All  existing  charters,  grants,  fran- 
chises, special  or  exclusive  privileges,  under 
which  an  actual  and  bona  fide  organization 


CALIFORNIA. 


Corporations,  Const.,  Art.  xii,  §§  7-14. 


shall  not  have  taken  place,  and  business 
been  conuneneea  in  jrood  faith,  at  the  time 
of  tlie  adoption  of  tliis  Constitution,  shall 
thereafter  have  no  validity. 

See  C.  C,  S  287. 

§  7.  The  lo;rislature  shall  not  extend  any 
franchise  or  charter,  nor  remit  the  forfeiture 
of  any  franchise  of  charter,  of  any  corpora- 
tion now  existing:,  or  which  shall  hereafter 
exist  under  the  laws  of  this  State. 


See  C.  C,  §  401. 

[Section  applied.     I'oo. 
.  c,  -7  I'ac.   lU'p.  673.] 


V.   Uy.  Co.,  91  Cal.  338; 


§  8.  The  exercise  of  the  right  of  eminent 
domain  shall  never  be  so  abridged  or  cou- 
ftrued  as  to  prevent  the  legislature  from 
talcing  the  property  and  franchises  of  incor- 
\»nrated  companies,  and  subjecting  them  lo 
public  use,  the  same  as  the  property  of  in- 
dividuals; and  the  exercise  of  the  police 
l>()wer  of  the  State  shall  never  be  so 
al)ridged  or  construed  as  to  permit  corpora- 
tions to  conduct  their  business  in  such  man- 
ner as  to  infringe  the  rights  of  individuals 
or  the  general  well-being  of  the  State. 

Emiiieut  domain.     Art.  I,  §  14. 

§  9.  No  corporation  shall  engage  in  any 
business  other  than  that  expressly  author- 
ized in  its  charter,  or  the  law  under  which 
it  may  have  been  or  may  hereafter  be  organ- 
ized; nor  shall  it  hold  for  a  longer  period 
than  five  years  any  real  estate  except  such 
as  may  be  necessary  for  carrying  on  its 
business. 

Powers  of  corporations.  C.  C,  §  3.54.  How  much 
Teal  estate  may  be  acquired.     C.  C,  §  360. 

§  10.  The  legislature  shall  not  pass  any 
laws  permitting  the  leasing  or  alienation  of 
any  franchise,  so  as  to  relieve  the  francliise 
or  property  held  thereunder  from  the  liabili- 
ties of  the  lessor  or  grantor,  lessee  or 
prantee,  contracted  or  incurred  in  the  opera- 
tion, use,  or  enjoyment  of  such  franchise,  or 
any  of  its  privileges. 


Franchise  may  bo  sold   under  execution.    C. 
I  388. 


C, 


[Section  construed.     Lee  v.  So.   Pac.   R.  Co.,   IIG 
Cal.   97;   s.   c,   47   I'ac.    Ucp.   931i.] 


§  11.  No  corporation  shall  issue  stock  or 
bonds,  excei»t  for  money  jiaid,  labor  done, 
or  property  actually  received,  and  all  fic- 
titious increase  of  stock  or  indebtedness 
pliall  be  void.  The  stock  and  bonded  in- 
delitedness  of  corporations  shall  not  be  in- 
creased except  in  i»ursuance  of  general  law, 
/lor  without  the  consent  of  the  per.sons  hold- 
ing the  larger  amount  in  value  of  the  stock. 


at  a  meeting  called  for  that  purpose,  giving 
sixty  days"  public  notice,  as  may  be  provided 
by  law. 

See  C.  C,  §  359. 

[First  clause  of  this  section  is  prohibitory.  The 
last  clause  is  not  self-executing.  Ewing  v.  Min- 
ing Co.,  56  Cal.  649.  Section  359  of  the  Civil 
Code  conllicts  with  section  and  is  annulled.  Id. 
The  increase  of  capital  stock,  and  the  issuing  the 
additional  shares,  to  be  sold  at  a  price  less  than 
par  value  of  stock,  to  supply  a  fund  actually  re- 
iiuircd  for  use  of  corporation,  is  not  "  fictitious 
increase  of  capital,"  within  meaning  of  this  sec- 
tion. Stein  V.  Howard,  65  Cal.  616;  s.  c,  4  Pac. 
Itep.  062.  Non-negotiable  notes  secured  by  mort- 
gages executed  by  a  corporation  do  not  constitute 
•'  bonded  indebtedness  "  within  meaning  of  this 
section.  Underhill  v.  Santa  Barbara,  etc.,  Co.,  93 
Cal.  300;  s.  c,  28  I'ac.  Rep.  1049.  Section  con- 
strued. Thomason  v.  Ash  worth,  73  Cal.  77;  s.  c, 
14   I'uc.    Rep.    615.] 


§  12.  In  all  elections  for  directors  or  man- 
agers of  corporations  every  stockholder  shall 
have  the  right  to  vote,  in  person  or  by  proxy, 
the  number  of  shares  of  stock  owned  by 
him  for  as  many  persons  as  there  are  di- 
rectors or  managers  to  be  elected,  or  to 
cuunilate  said  shares  and  give  one  candidate 
as  many  votes  as  the  number  of  directors 
multiplied  by  the'  number  of  his  shares  of 
stock  shall  equal,  or  to  distribute  them,  on 
the  same  principle,  among  as  many  can- 
didates as  he  shall  think  fit;  and  such  di- 
rectors or  managers  shall  not  be  elected  in 
any  other  manner,  except  that  members  of 
co-operative  societies  formed  for  agricultural, 
mercantile,  and  manufacturing  purposes, 
may  vote  on  all  questions  affecting  such 
societies  in  manner  prescribed  by  law. 

See  C.  C,  §  307. 

[A  corporation  has  no  power  to  adopt  any  other 
mode  of  election.  Wright  v.  Water  Co.,  67  Cal. 
5;{2;  s.  c,  8  I'ac.  Rep.  70.  A  stockholder  may 
maintain  an  action  to  set  aside  election  of  di- 
rectors, although  at  time  of  election  no  stock 
had  stood  in  his  name  on  books  sufficiently  long 
to  entitle  him  to  vote.    Id.] 

§  13.  The  State  shall  not  in  any  manner 
loan  its  credit,  nor  shall  it  subscribe  to  or 
be  interested  in  the  stock  of  any  company, 
association,  or  corporation. 

See  art.  IV,  §  31. 

§  14.  Every  corporation  other  than  reli- 
gious, educational,  or  benevolent,  organized 
or  doing  business  in  this  Slate,  shall  have 
and  maintain  an  office  or  place  in  this  State 
for  tlie  transaction  of  its  business,  where 
transfers  of  stock  shall  be  made,  and  in 
wliicli  sliall  be  kejit,  for  inspection  by  every 
person  having  an  interest  therein,  and  legis- 
lative committees,  books  in  which  sliall  be 
recorded  the  amount  of  capital  stock  sub- 
scribed, and  by  whom;  the  names  of  the 
owners  of  its  stock,  and  the  amounts  owned 
by  them  respectively;  the  amount  of  stock 
paid  in,  and  by    Avhom;    the    transfers    of 


CALIFOKXIA. 


Corporations,  Const.,  Art.  xii,    §§  15-20. 


stock;  the  amouut  of  its  assets  and  liabilities, 
and  tlie  names  and  place  of  residence  of 
its  officers. 

Corporation  may  be  sued  at  Its  principal  place 
of  business.  Art.  IV,  §  16.  Such  place  must  be 
stated  in  articles.  C.  C,  §  290.  But  may  be 
changed.  C.  C,  §  321  (a).  Records  must  be  kept. 
C.  C,  §§  377,  378;  Pen.  C,  §§  585,  5G9.  Legisla- 
ture may  examine.  C.  C,  §  383.  Transfer  of 
shares.  C.  C,  §§  324,  325.  Banking  corporation 
to  keep  certain  records.    C.  C,   §  321. 

§  15.  No  corporation  organized  outside  the 
limits  of  this  Slate  shall  be  allowed  to 
transact  business  within  this  State  on  more 
favorable  conditions  than  are  prescribed  by 
law  to  similar  corporations  organized  under 
the  laws  of  this  State. 

Service  of  summons  on  foreign  corporation.  C. 
C.  P.,  §§  411,  412.  Action  for  usurpation.  Id., 
5§  803  et  seq. 

§  16.  A  corporation  or  association  may  be 
sued  in  the  county  where  the  contract  is 
made  or  is  to  be  performed,  or  where  the 
obligation  or  liability  arises  or  the  breach 
occurs;  or  in  the  count j"  where  the  principal 
place  of  business  of  such  corporation  is  situ- 
ated, subject  to  the  power  of  the  court  to 
change  the  place  of  trial  as  in  other  cases. 

Principal  place  of  business,  what  is.  Art.  XII, 
J  14,  and  note.  Power  to  sue  and  be  sued.  C.  C, 
§  354  (2),  and  note.  Judgment  against  and  sale  of 
corporate  property.  C.  C,  §§  388-393.  Serrice  of 
summons  upon  corporation.  C.  C.  P.,  §§  411,  412. 
Appointment  of  receiver.  Id.,  §§  5G4,  565,  568. 
Actions  for  usurpations.  Id.,  §§  803  et  seq.  Crim- 
inal procedure  against  corporation.  Pen.  C,  §§ 
1390-1397. 

[This  section  not  in  conflict  with  fourteenth 
amendment  of  United  States  Constitution.  Lewis 
V.  H.  11.  Co.,  66  Cal.  209;  s.  c,  5  i'ac.  Itep.  79. 
In  an  action  against  a  corporation  to  recover 
damages  for  breach  of  contract,  defendant  is  en- 
titled to  a  change  of  venue  to  county  in  which 
Its  principal  place  of  business  is  situated,  when 
county  in  which  action  was  brought  is  not  the  one 
In  which  contract  was  made  or  to  be  jjerformed, 
or  In  which  the  obligation  or  liability  arose  or 
the  breach  occurred,  or  in  which  principal  place 
of  business  of  the  corpor.ition  is  situated.  Cohn 
v.  R.  R.  Co.,  71  Cal.  488;  s.  c,  12  Pac.  Rep. 
498.  Action  against  domestic  insurance  cor^iora- 
tlou  may  bo  brought  and  tried  in  county  where 
contract  of  insurance  was  completed,  and  the 
corporation  defendant  is  not  entitled  to  a  change 
of  venue  to  county  where  it  has  its'  principal 
place  of  business,  If  contract  was  not  completed 
therein,  although  policy  was  there  issued.  Yore 
V.  Bankers,  etc.,  Assn.,  88  Cal.  6(i0;  s.  c,  26  Pac. 
Rep.  514.  Liability  of  corporatiim  to  grant  re- 
demption of  mortgage;  place  where  arose.  Baker 
V.  Ins.  Co.,  73  Cal.  182;  s.  c,  14  Pac.  Rep.  686. 
Action  against  railroad  corporation  for  refusal  to 
carry  lumber.  Action  is  presumptively  brought 
in  proper  county,  and  to  secure  change  of  venue 
must  be  shown  that  breach  did  not  occur  in  that 
county.  Chase  v.  R.  R.  Co.,  83  Cal.  -168;  s.  c.  23 
Pac.  Rep.  532.  This  section  is  merelv  permissive, 
and  not  mandatory.  Bank  v.  Superior  Ct.,  83  Cal. 
492;  s.  c,  24  Pac.  Rep.  157.  Under  this  section, 
association  of  persons  organized  for  a  particular 


purpose,  although  not  formally  a  corporation,  may 
be  sued  for  negligence  in  county  where  its  lia- 
bility arose.  Kendrick  v.  Mining  Co.,  94  Cal.  137; 
s.   c,   29  Pac.    Rep.   324. 

Place  of  residence  of  a  corporation  is  In  county 
where  principal  place  of  business  is  situated,  and 
that  Is  proper  county  for  bringing  actions,  sub- 
ject to  above  constitutional  provision.  McSherry 
V.  Mining  Co.,  97  Cal.  637;  s.  c,  32  Pac.   Rep.  711. 

In  an  action  against  corporation  brought  out  of 
the  county  where  It  has  principal  place  of  busi- 
ness, where  no  motion  was  made  to  change  venue, 
a  decision  upon  an  application  of  defendant  for 
a  writ  of  prohibition  to  restrain  further  proceed- 
ings is  res  adjudlcata.  White  v.  Bank,  98  Cal. 
166;   s.   c,   32   Pac.    Rep.   979. 

Place  of  residence  of  a  corporation  is  In  county 
where  It  has  its  principal  place  of  business,  but 
a  corporation  defendant  cannot  insist  upon  change 
of  venue,  where  it  has  been  sued  in  county  where 
its  liability  arose.  Trezevant  v.  Strong  Co.,  102 
Cal.  47;  s.  c,  36  Pac.  Rep.  395.  Action  against 
newspaper  for  libel;  place  of  trial.  Brady  v. 
"  The  Tiuu's-Mirror  Co.,"  106  Cal.  56;  s.  c,  39 
Pac.    Rep.  2U9.] 

§  17.  All  railroad,  canal,  and  other  trans- 
portation companies  are  declared  to  be  com- 
mon carriers,  and  subject  to  legislative  con- 
trol. Any  association  or  corporation,  organ- 
ized for  the  purpose,  under  the  laws  of  this 
State,  shall  have  the  right  to  connect  at  the 
State  line  with  railroads  of  other  States. 
Every  railroad  company  shall  have  the  right 
Avith  its  road  to  intersect,  connect  with,  or 
cross  any  other  railroad,  and  shall  receive 
and  transport  each  the  other's  passengers, 
tonnage,  and  cars,  without  delay  or  dis- 
crimination. 

See  §§  18-23,  post. 

§  18.  No  president,  director,  officer,  agent, 
or  employe  of  any  railroad  or  canal  com- 
pany shall  be  interested,  directly  or  indi- 
rectly, in  the  furnishing  of  material  or  sup- 
plies to  such  company,  nor  in  the  business 
of  transportation  as  a  common  carrier  of 
freight  or  passen,gers  over  the  worlcs  owned, 
leased,  controlled,  or  worljed  by  such  com- 
pany, except  such  interest  in  the  business 
of  transportation  as  lawfully  flows  from  the 
ownersliip  of  stoclc  therein. 

§  19.  No  railroad  or  other  transportation 
company  sliall  grant  free  passes,  or  passes 
or  tickets  at  a  discount,  to  any  person  hold- 
ing any  office  of  honor,  trust,  or  profit  in 
this  State;  and  the  acceptance  of  any  such 
pass  or  ticket  by  a  member  of  the  legislatiu'e 
or  any  public  officer,  other  than  railroad  com- 
missioner, shall  worlc  a  forfeiture  of  his 
office. 

§  20.  No  railroad  company  or  other  com- 
mon carrier  sliall  combine  or  make  any  con- 
tract with  the  OAvners  of  any  vessel  that 
leaves  port  or  makes  port  in  this  State,  or 
with  any  common  cail'ier,  by  which  com- 
bination or  contract  the  earnings  of  one 
doing  the  carrying  are  to  be  shared  by  tlie 
other  not  doing  the  carrying.  And  when- 
ever a  railroad  corporation  shall,  for  the  pur- 
pose of  competing  with  anj'  other  common 
carrier,  lower  its  rates  for  transportation  of 
passengers  or  freight  from  one  point  to  an- 
other, such  reduced  rates  shall  not  be  again 


10 


CALIFORNIA. 


Corporatious,  Const.,  Art.  xii,  §§  21-23. 


raised  or  IncrensiHl  from  such  standanl  with- 
out the  eonsout  of  the  governmental  author- 
ity iu  whieh  !>hall  be  vested  the  power  to 
regulate  fares  and  freights. 

§  21.  No  discrimination  in  charges  or 
facilities  for  transportation  shall  be  made  by 
any  railroad  or  other  transportation  com- 
pany between  places  or  persons,  or  iu  the 
facilities  for  the  transportation  of  the  same 
classes  of  freight  or  passengers  within  this 
State,  or  comiug  from  or  goiug  to  any  other 
State.  rersous  and  property  transported 
over  any  railroad,  or  by  any  other  trans- 
portation company  or  individual,  shall  be 
delivered  at  any  station,  landing,  or  port,  at 
charges  not  exceeding  the  charges  for  the 
transportation  of  persons  and  property  of 
the  same  class,  in  the  same  direction,  to 
any  more  distant  station,  port,  or  lauding. 
ICxcursion  and  commutation  ticlcets  may  be 
issued  at  special  rates. 

[Section  cited.  Ex  parte  Moynler,  65  Cal.  35; 
s.  c,  2  I'nc.  Kep.  728.  Held  to  have  no  applica- 
tion to  ease  at  bar.  Ex  parte  Casiuello,  62  Cal. 
r>o'.».  This  section  prevents  any  lejiislative  ilis- 
criniination  in  favnr  of  railroads  situated  witliin 
one  county  only.  I'eo.  v.  R.  R.,  83  Cal.  394;  s.  c, 
23  I'ac.  Rep.  303.  Tests  of  special  legislation. 
Id.] 

§  22.  The  State  shall  be  divided  into  three 
districts  as  nearly  equal  in  population  as 
practicable,  in  each  of  whicli  one  railroad 
commissioner  shall  be  elected  by  the  qualified 
electors  thereof  at  the  regular  gubernatorial 
elections,  whose  salary  shall  be  fixed  by  law, 
and  whose  term  of  ofiice  shall  be  four  years, 
commencing  on  the  tirst  Monday  after  the 
first  day  of  January  next  succeeding  their 
election.  Said  commissioners  shall  be  quali- 
fied electors  of  tliis  State  and  of  the  district 
from  Avhich  they  are  elected,  and  shall  not 
be  interested  in  any  railroad  corporation,  or 
other  transportation  company,  as  stock- 
holder, creditor,  agent,  attorney,  or  employe; 
and  the  act  of  a  majority  of  said  commis- 
sioners shall  be  deemed  the  act  of  said  com- 
mission. Said  commissioners  shall  have  the 
power,  and  it  shall  be  their  duty,  to  estab- 
lish rates  of  charges  for  the  transi)ortation 
of  passengers  and  freight  by  railroad  or 
other  transportation  companies,  and  pul)lisli 
the  same  from  time  to  time,  with  such 
changes  as  they  may  make;  to  examine  the 
books,  I'ecords,  and  papers  of  all  railroad  and 
other  transportation  companies,  and  for  this 
purpose  they  shall  have  power  to  issue  sub- 
p(pnas  and  all  otlier  necessary  process;  to 
liear  and  determine  comjilaints  against  rail- 
road and  other  transportation  coini)anies,  to 
send  for  jiersons  and  papers,  to  administer 
oaths,  take  testimony,  and  imnish  for  con- 
tempt of  their  orders  and  processes,  in  the 
same  manner  and  to  the  same  extent  as 
courts  of  record,  and  enforce  tlieir  decisions 
and  correct  aliuses  throuirli  the  medium  of 
llip  courts.  Said  commissioners  slmll  pre- 
scribe a  uniform  system  of  accounts  to  be 
kept  by  all  such  corjtorations  and  companies. 
Any   railroad   corporation  or  transportation 


company  which  shall  fail  or  refuse  to  con- 
form to  such  rates  as  shall  be  established 
by  such  commissioners,  or  shall  charge  rates 
in  excess  thereof,  or  shall  fail  to  keep  their 
accounts  iu  accordance  witli  the  system  pre- 
scribed by  the  commission,  sliall  be  fined  not 
exceeding  twenty  tliousaiul  dollars  for  each 
offense,  and  every  olticer,  agent,  or  employe 
of  any  such  corporation  or  company,  who 
shall  demand  or  receive  rates  iu  excess 
thereof,  or  who  shall  in  any  manner  violate 
the  provisions  of  this  section,  shall  be  fined 
not  exceeding  five  thousand  dollars,  or  be 
imprisoned  iu  the  county  jail  not  exceeding 
one  j-ear.  In  all  controversies,  civil  or  crim- 
inal, the  rates  of  fares  and  freights  estab- 
lished by  said  commission  shall  be  deemed 
conclusively  just  and  reasonable,  and  in  any 
action  against  such  corporation  or  company 
for  damages  stistained  bj'  charging  excessive 
rates,  the  plaintiff,  in  addition  to  the  actual 
damage,  may,  in  the  discretion  of  the  judge 
or  jury,  recover  exemplary  damages.  Said 
commission  shall  report  to  the  governor,  an- 
nually, tlieir  proceedings,  and  such  other 
facts  as  may  be  deemed  important.  Noth- 
ing in  this  section  shall  prevent  individuals 
from  maintaining  actions  against  any  of 
such  companies.  The  legislature  may,  in 
addition  to  any  penalties  herein  prescribed, 
enforce  this  article  by  forfeiture  of  charter 
or  otlierwise,  and  maj'  confer  such  further 
powers  on  the  commissioners  as  shall  be 
necessary  to  enable  them  to  perform  the 
duties  enjoined  on  them  in  this  and  the  fore- 
going section.  The  legislature  shall  have 
power,  by  a  two-thirds  vote  of  all  the  mem- 
bers elected  to  each  house,  to  remove  any 
one  or  more  of  said  commissioners  from 
office,  for  dereliction  of  duty,  or  corruption, 
or  incompetency;  and  whenever,  from  any 
cause,  a  vacancy  iu  office  shall  occur  in  said 
commission,  the  governor  shall  fill  the  same 
by  the  appointment  of  a  qualified  person 
tliereto,  who  shall  hold  office  for  the  residue 
of  the  unexpired  term,  and  until  his  suc- 
cessor shall  have  been  elected  and  qualified. 
§  23.  Until  the  legislature  shall  district  the 
State,  the  following  shall  be  the  railroad 
districts:  The  first  district  shall  be  com- 
posed of  the  counties  of  Alpine,  Amador, 
Butte,  Calaveras,  Colusa,  Del  Norte,  El 
Dorado,  Humboldt,  Lake  Lassen,  Mendocino, 
Modoc,  Napa,  Nevada,  Placer,  Plumas,  Sac- 
ramento, Shasta,  Sierra,  Siskiyou,  Solano, 
Sonoma,  Sutter,  Tehama,  Trinity,  Yolo,  and 
Yuba,  from  which  one  railroad  commis- 
sioner shall  be  elected.  The  second  district 
sliall  be  composed  of  the  counties  of  Marin, 
San  Francisco,  and  San  Mateo,  from  which 
one  railroad  commissioner  shall  be  elected. 
The  third  district  shall  be  composed  of  the 
counties  of  Alameda,  Contra  Costa,  Fresno, 
In.vo,  Kern,  Los  Angeles,  Mariposa,  Merced, 
Mono,  Monterey,  San  Benito,  San  Bernar- 
dino, San  Diego,  San  Joaquin,  San  Luis 
Obispo,  Santa  Barl)ara,  Santa  Clara,  Santa 
Cruz,    Stanislaus,    Tulare,    Tuolumne,    and 


CALIFOKi^riA. 


11 


Taxation;  Chinese,  Const.,  Ait.  xii,  §  24;  Art.  xiii,  §§  1,  6,  ll;Art.     xvii,  §  3;  Art.  xix,  §  2. 


Ventura,  from  which  one  railroad  commis- 
sioner shall  be  elected. 

§  24.  The  legislature  shall  pass  all  laws 
necessary  for  the  enforcement  of  the  pro- 
vi.'slons  of  this  article. 

ARTICLE   XIII. 

Taxation. 

§  1.  All  property  in  the  State,  not  exempt 
under  the  laws  of  the  United  States,  shall 
be  taxed  in  proportion  to  its  value,  to  be 
ascertained  as  provided  by  law.  The  word 
"  property,"  as  used  in  this  article  and  sec- 
tion, Is  hereby  declared  to  include  *  *  * 
bonds,  stocks,  dues,  franchises,  and  all  other 
matters  and  things,  real,  personal,  and  mixed, 
capable  of  private  ownership.    *     *    * 

"  Property "  defined.  Pol.  C,  §  3617.  Double 
taxation  prohibited.  Id.,  §  3607.  Shares  of  stock 
not  taxable.  Id.,  §  3G08.  Assessments,  how  and 
by  whom  made.    Id.,  §§  3628,  3641. 

§  6.  The  power  of  taxation  shall  never  be 
surrendered  or  suspended  by  any  grant  or 
contract  to  which  the  State  shall  be  a  party. 

Special  privileges  not  to  be  granted.    Art.  I,  §  21. 

§  11.  Income  taxes  may  be  assessed  to  and 
collected   from  persons,   corporations,  joint- 


stock  associations,  or  companies  resident  or 
doing  business  in  this  State;  or  any  one  or 
more  of  them,  in  such  cases  and  amounts, 
and  in  such  manner,  as  shall  be  prescribed 
by  law. 

Stock  in  corporations  not  taxable.    Pol.  C,  §  360& 


ARTICLE  XVII. 

Land   Exemption. 

§  3.  The  holding  of  large  tracts  of  land, 
uncultivated  and  unimproved,  by  individuals 
or  corporations,  is  against  the  public  interest, 
and  should  be  discouraged  by  all  means  not 
inconsistent  with  the  rights  of  private 
property. 

ARTICLE  XIX. 

Chinese. 

§  2.  No  corporation  now  existing  or  here- 
after formed  under  the  laws  of  this  State 
shall,  after  the  adoption  of  this  Constitution, 
employ,  directly  or  indirectly,  in  any  capac- 
ity, any  Chinese  or  Mongolian.  The  legis- 
lature shall  pass  such  laws  as  may  be 
necessary  to  enforce  this  provision. 


12 


CALIFORXIA. 


Foes:  taxation,  Pol.  Code,  §§  380,  410;  3007,  3008,  3017. 


CODES  A:N"D  statutes  of  CALIF0E]^IA-188G. 


POLITICAL  CODE. 


Part  III.    Government  of   the  State. 

TITLE  VI.     rrilLIC     OFFICERS. 

CHAPTER  III. 
Governor. 
Sec.  880.  Powers  and  duties  of  the  governor. 

I  880.  In  addition  to  those  prescribed  bj' 
the  Constitution,  the  governor  has  the  power 
and  must  perform  tlie  duties  prescribed  in 
thlB  and  the  following  sections: 

6.  He  may  require  the  attorney-general  or 
district  attorney  of  any  county  to  inquire 
into  the  affairs  or  management  of  any  cor- 
poration existing  under  tlie  laws  of  this 
State. 


CHAPTER  V. 

Secretary  of  State. 
Sec.  416.  Fees  of. 

§  416.  (As  amended  March  16,  1805.)  The 
secretarj'  of  State,  for  services  performed  in 
his  ofl3ce,  must  charge  and  collect  the  fol- 
lowing fees: 

3.  For  filing  articles  of  incorporation,  five 
dollars. 

4.  For  recording  articles  of  Incorporation, 
twenty  cents  per  folio. 

5.  For  issuing  each  certificate  of  incorpora- 
tion, three  dollars. 

13.  For  filing  certificate  of  Increase  or  de- 
crease of  capital  stock,  five  dollars. 

14.  For  Issuing  certificate  of  increase  or 
decrease  of  capital  stock,  three  dollars. 

15.  For  filing  certificate  of  continuance  of 
existence,  five  dollars. 

16.  For  Issuing  certificate  of  continuance 
of  existence,  three  dollars. 

18.  For  recording  miscellaneous  documents 
or  papers,  per  folio,  twentj--five  cents. 
********         * 

TITLE     IX.     REVENUE. 

CHAPTER  I. 

Property  Liable  to  Taxation. 

Sec.  8607.  Double  taxation   prohibited. 

3608.  Shnros    of    stock    in    corporations    not 
taxable. 

§  3007.  (As    amended    March    28,    1805.) 
*     »    *    Nothing  in  this  Code  sliall  be  con- 
strued to  require  or  permit  double  taxation. 
See  S  3608,  note. 


§  3008.  Shares  of  stock  in  corporations  pos- 
sess no  intrinsic  value  over  and  above  the 
actual  value  of  the  property  of  the  corpora- 
tion which  they  stand  for  and  represent,  and 
the  assessment  and  taxation  of  such  shares 
and  also  of  the  corporate  property  would  be 
double  taxation.  Therefore  all  property  be- 
longing to  corporations  shall  be  assessed  and 
taxed,  but  no  assessment  shall  be  made  of 
shares  of  stock,  nor  shall  any  holder  thereof 
be  taxed  therefor. 

Income  taxes.  Const.,  art.  XIII,  §  11.  Double 
taxation.    §  3007. 

[The  rule  as  laid  down  in  this  section  Is  also 
laid  down  in  San  Francisco  v.  Mackcy,  3  West 
Coast  Rep.  697.  It  would  be  assessing  same  prop- 
erty twice  to  assess  to  a  corporation  all  of  Its  cor- 
porate property,  and  also  to  assess  to  each  of  the 
stockholders  stock  or  shares  held  by  him.  Peo.  v. 
Badlnm,  57  Cal.  504.  The  legislature  has  power  to 
declare  that  corporate  property  shall  be  assessed 
to  the  corporation,  and  that  the  same  property 
shall  not  be  again  assessed  against  the  stock- 
holders. Id.  An  assessment  upon  "  the  capital  " 
of  a  corporation,  eo  nomine,  held  to  be  valid. 
San  Francisco  v.  Water-AVorks,  54  Cal.  571.  The 
revenue  act  does  not  make  a  corporation  liable 
for  taxes  assessed  on  its  capital  stock,  when  such 
capital  is  represented  by  shares  of  stock  which 
are  not  the  property  of  the  corporation.  Peo.  v. 
Bank.  51  Cal.  508.  Above  section  applied.  Water- 
Works  V.  Schottler,  62  Cal.  115.] 


CHAPTER  II.      - 
Definitions. 

Sec.  3G17.  "  Property  "  defined. 

§  3617.  (As  amended  March  28,  1895.) 
Whenever  the  terms  mentioned  in  this  sec- 
tion are  employed  in  this  act,  they  are  em- 
ployed m  the  sense  hereafter  affixed  to  them: 

First.  The  term  "  property  "  includes  *  *  * 
bonds  (except  of  railroad  or  quasi  public  cor- 
porations), stocks,  dues,  franchises,  and  all 
other  matters  and  things,  real,  personal,  and 
mixed,  capable  of  private  ownership. 
***         ****** 

All  property  to  be  taxed.  Const.,  art.  XII,  §  1. 
Stock.    §  3608. 

[Franchises  are  property,  and  are  to  be  t.ixed 
In  proportion  to  their  value.  Gas  Co.  v.  Januarv, 
57  Cal.  614;  Burke  v.  Badlani,  Id.  594;  Water- 
works V.  Schottler,  62  id.  72;  Gas  Co.  v.  Schott- 
ler, id.  119;  The  Freight  ca.se.  15  Wall.  282;  Rv. 
Gross  Receipts  case,  id.  296;  State  v.  R.  R.  Tax 
cases,  92  F.  S.  603.  Section  referred  to.  Water- 
Works  V.  Schottler,  62  Cal.  115.] 


CALIFORXIA. 


13 


Business  corporation;  formation,  Pol.  C,  §§  3628,  3G41;  Civ.  C;  §§  2S3-2So. 


CHAPTER  III. 

Assessment  of  Property. 

Sec.  3628.  Assossnionts,  how  nnd  bj-  whom  niade. 
3641.  I'roporiy      of      corporations      assessed 
where  situated. 

§  3G2S.  (As  amended  March  2S.  1595.)  The 
franchise,  roadway,  roadbed,  rails  and  roll- 
ing stock  of  all  railroads  operated  in  more 
than  one  countj-  in  this  State  shall  be  as- 
sessed by  the  State  board  of  eqiializatiou,  as 
hereinafter  provided  for.  Other  franchises,  if 
granted  by  the  authorities  of  a  county,  city, 
or  city  and  county,  must  be  assessed  in  the 
count}-,  city,  or  city  and  county  within  which 
they  were  granted;  if  granted  by  any  other 


authority,  they  must  be  assessed  in  the 
county  in  which  the  corporations,  firms,  or 
persons  owning  or  holding  them  have  their 
principal  place  of  business.  All  other  tax- 
able property  shall  be  assessed  in  the  county, 
city,  or  city  and  county,  town,  township,  or 
district  in  which  it  is  situated.    *     *    * 

§  3041.  The  property  of  every  firm  or  cor- 
poration mu.st  be  assessed  in  the  county 
where  the  property  is  situate,  and  must  be 
assessed  in  the  name  of  the  firm  or  corpora- 
tion. 

[This  section  docs  not  apply  to  shares  in  a  niin- 
intr  corporation  constituted  under  the  laws  of  tliia 
State  and  whose  tangible  property  is  situated 
elsewhere.  San  Francisco  v.  Flood,  64  Cal.  5i>l; 
s.   c,  2  Pac.   Rep.  264.] 


CIVIL  CODE. 


Division  First.     Part  IV.     Corporations. 

TITLK    I.      GENERAL.    PROVISIOXS    APPLI- 
CABLE   TO    ALL    CORPORATIONS. 

Ch.  1.  Formation  of  corporations. 

2.  Corporate  stocl<. 

3.  Corporate  powers. 

4.  Extension  and  dissolution  of  corporations. 

CHAPTER  I. 

Formation  of  Corporations. 

Art.     I.  Corporations  defined   and   how   orjranized. 
II.  By-laws,    directors,    elections,    and    meet- 
ings. 

ARTICLE   I.      CORrORATIOXS  DEFINED   AND 
HOW   ORGANIZED. 

Sec.  28.3.  Corporation  defined. 

284.  Wliat    are    public    and    private    corpora- 
tions. 
2S5.  Corporations,  how  formed. 

286.  For    what    purpose    private   corporations 

are  formed. 

287.  How    corporations    may    continue    their 

existence  imder  this  Code. 

288.  Existing   corporations    not   affected. 

289.  Name    of    instrument    creating    corpora- 

tion. 

290.  Articles   of   incorporation,    what   to   con- 

tain. 

291.  Certain     corporations    to    state     further 

facts  in  articles. 

292.  F'ive  rorporators.  three  to  be  citizens  of 

the  State,  to  sign  articles  and  acknowl- 
edge the  same. 

293.  Prerequisite  to  filing  articles.     Amounts 

to  be  subscribed  to  be  fixed. 

294.  I'rereriuisite    to    filing   articles   of   corpo- 

rations for  profit. 

295.  Oath   of  officer  to  subscription  of  stock 

and  payment  of  ten  per  cent. 

296.  To    file    articles    with    count.v    clerk    riid 

secretary  of  State,   and   receive  certifi- 
cate.    Term  of  existence. 

297.  Certified  eopy  of  certificate  to  be  prima 

facie  evidence  of  its  contents. 

298.  Who  are  members  and  who  stockholders 

of  a   corporation. 

299.  Coi>y   of  articles   to   be   filed   where   cor- 

lioration   owns   property. 

300.  P.aiikiiig  cori>orations  may  elect  to  have 

capital  stock. 

§  2S3.  A  corporation  is  a  creature  of  the 
law,  having  certain  powers  and  duties  of  a 
natural  person.    Being  created  by  the  law. 


it  may  continue  for  any  length  of  time  which 
the  law  prescribes. 

What  is  included  in  term  "  corporation."  Const., 
art.  XII,  §  4.  "  I'erson  "  includes  corporations. 
C.  C.  P.,  §  17;  Fen.  C,  §  7. 

[A  corporation  for  commercial  purposes,  for;u''<l 
under  our  statute,  is  little  more  than  a  joint- 
stock  company  utuler  English  laws,  more  nearly 
resembling  a  limited  jiartnership  undei*  spe<"ial 
articles  than  a  corporation  at  common  law.  Chater 
V.  Refining  Co.,  19  Cal.  219. 

Above  section  referred  to  and  applied.  Dean  v. 
Davis,  51  Cal.  406.] 

§  2S4.  Corporations  are  either  public  or 
private.  Tublic  corporations  are  formed  or 
organized  for  the  government  of  a  portion 
of  the  State;  all  other  corporations  are 
private. 

[Quasi  pul)lic  corporations  have  in  view  some 
public  enterprise  in  which  the  interests  of  the 
local  or  general  pul)lic  are  involved.  Under  above 
section  they  are  classed  as  i)ublic.  Ditch  Co.  v. 
Zellerbach,  37  Cal.  543.  A  levee  district  is  such. 
Dean  v.   Davis,  51  Cal.  409.] 

§  285.  Private  corporations  may  be  formed 
by  the  voluntary  association  of  any  five  or 
more  persons,  in  the  manner  prescribed  ia 
this  article.  A  majority  of  such  persons 
must  be  residents  of  this  State. 

See  Const,  art.  XII,  §  1.  IIow  formed.  C.  C, 
§§  289-290. 

[In  incorporating  under  the  general  law  a  strict 
compliance  with  all  reiiuirements  of  the  statutes 
is  not  essential,  and  the  proeeedings  will  not  be 
held  invalid  for  sliglit  defects  or  omissions.  Ir- 
regularities can  only  be  investigated  in  a  dire<'t 
proceeding  instituted  by  the  State  for  that  pur- 
pose, and  not  in  a  collateral  action.  Water- Works 
V.  San  Francisco.  22  Cal.  4^4:  Kx  parte  S.  V.  W. 
W..  17  id.  132:  Feo.  v.  R.  R.  Co.,  45  id.  306:  Asy- 
lum V.  Abranis.  49  id.  -l.V).  Rut  the  omission  of 
such  acts  as  are  declared  necessary  steps  in  thf» 
process  of  incorporation  will  be  fatal,  even  col- 
laterally, when  the  fact  of  incorporation  ean  lie 
questioned.  Mining  Co.  v.  Woodbury.  14  Cal.  424; 
Harris  v.  McGregor,  29  id.  125;  Feo.  v.  Sel fridge, 
52  id.  331.] 


14 


CALTFORXIA. 


Articles  of  iucorporation,  Civ.  C,  §§  280-290. 


§  2S0.  Private  corporations  may  be  forinetl 
for  any  purpose  for  wliich  individuals  may 
lawfully  associate  themselves. 

rin  view  of  above  section,  the  extent  of  the 
failure  of  the  exercise  of  all  such  enlarged  pow- 
ers bv  corporations  Is  beyond  the  reach  of  the 
courts.  Low  V.  It.  R.  Co.,  52  Cal.  00.  Above  sec- 
tion repeals  all  provisions  of  law  Inconsistent 
with  It.     Tulley  v.  Tranor,  53  Cal.  279.] 

§  2S7.  Any  corporation  existing  on  the  first 
day  of  January,  one  thousand  ei{.'ht  hundred 
and  seventy-three,  formed  under  the  laws 
of  this  State,  and  still  existing:,  which  has 
not  already  elected  to  continue  its  existence, 
under  the  provisions  of  this  Code  applicable 
thereto,  may,  at  any  time  thereafter,  make 
such  election  by  the  unanimous  vote  of  all 
its  directors,  or  such  election  may  be  made 
at  any  annual  meeting  of  the  stockholders 
or  members,  or  at  any  meeting  called  by  the 
directors  expressly  for  considering  the  sub- 
ject, if  voted  by  stockholders  representing 
a  majority  of  the  capital  stock,  or  by  a 
majority  of  the  members,  or  may  be  made 
by  the  directors  upon  the  written  consent  of 
that  number  of  such  stockholders  or  mem- 
bers. A  certificate  of  the  action  of  the  di- 
rectors, signed  by  them  and  their  secretary, 
when  the  election  is  made  by  their  unani- 
mous vote,  or  upon  the  written,  consent  of 
the  stockholders  or  members,  or  a  certificate 
of  the  proceedings  of  the  meeting  of  the 
stockholders  or  members,  when  stich  election 
Is  made  at  any  such  meeting,  signed  by  the 
chairman  and  secretary  of  the  meeting,  and 
a  majority  of  the  directors,  must  be  filed  in 
the  office  of  the  clerk  of  the  county  where 
the  original  articles  of  corporation  are  filed, 
and  a  certified  copj'  thereof  must  be  filed  in 
the  office'  of  the  secretary  of  State;  and 
thereafter  the  corporation  shall  continue  its 
existence  under  the  provisions  of  this  Code 
which  are  applicable  thereto,  and  shall  pos- 
sess all  the  rights  and  powers,  and  be  sub- 
ject to  all  the  obligations,  restrictions,  and 
limitations  prescribed  thereb3'. 

See  Const.,  art.   XII,  §§  6,  7. 

[A  corporation  organized  prior  to  adoption  of 
the  Codes,  haviiiK  continued  Its  existence  under 
the  Codes,  becomes  n  Code  corporation,  and  may 
extend  the  terms  of  its  existence,  In  conformity 
with  Code,  bevond  period  of  its  existence.  Peo. 
V.   rflster.  ,^)7  Cal.  5Z2. 

A  bankinK  corporation,  whose  original  incor- 
poration was  attacked,  was  allowed  to  continue 
under  the  Code.     Peo.  v.  I'crrin,  50  Cal.  345.] 

§  288.  No  corporation  formed  or  existing 
before  twelve  o'clock,  noon,  of  tlie  day  upon 
which  this  Code  takes  effect,  is  affected  by 
the  provisions  of  part  four  of  division  first 
of  this  Code,  unless  sucli  corporation  elects 
to  continue  its  exlsfenr-e  under  it  as  provided 
in  section  two  hundred  and  eisihty-seven;  but 
the  laws  under  Mliich  such  corporations 
were  formed  and  exist  are  api>lifal>lo  to  all 
such  corporations,  and  are  repealed,  subject 
to  the  provisions  of  this  section. 

See  Const.,  art.  XII,  §  G. 


[See  Ilevnenian  v.  Rlake.  10  Cal.  5T0:  Water- 
Works  V.  "nryant,  52  id.  141;  Estate  of  Eastman, 
GO  id.  308.] 

§  2S'J.  The  instrument  by  which  a  private 
corporation  is  formed  is  called  "  articles  of 
incorporation." 

§  2U0.  (As  amended  March  31,  1891.) 
Articles  of  iucorporation  must  be  prepared, 
setting  forth: 

1.  The  name  of  the  Incorporation. 

2.  The  purpose  for  which  it  is  formed. 

3.  The  place  where  its  principal  business 
is  to  be  transacted. 

4.  The  term  for  which  it  is  to  exist,  not  ex- 
ceeding fifty  years. 

o.  The  number  of  its  directors  or  trustees, 
which  shall  not  be  less  than  five  nor  more 
than  eleven,  and  the  names  and  residence 
of  those  who  are  appointed  for  the  first 
year;  Provided,  That  the  corporate  pow- 
ers, business,  and  property  of  corpora- 
tions formed  or  to  be  formed  for  the 
purpose  of  erecting  and  managing  halls 
and  buildings  for  the  meetings  and  ac- 
commodation of  several  lodges  or  societies 
of  any  benevolent  or  charitable  order  or  or- 
ganization, and  in  connection  therewith  the 
leasing  of  stores  and  offices  in  such  building 
or  buildings  for  other  purposes,  may  be  con- 
ducted, exercised,  and  controlled  by  a  board 
of  not  less  than  five  nor  more  than  fifty 
directors,  to  be  chosen  from  among  the 
stockholders  of  such  corporation,  or  fi'om 
among  tlie  members  of  such  order  or  organ- 
ization; And  provided,  also.  That  at  any  time 
during  the  existence  of  corporations  for 
profit,  other  than  those  of  the  character  last 
hereinabove  provided  for,  the  number  of  the 
directors  may  be  increased  or  diminished,  by 
a  majority  of  the  stockholders  of  the  cor- 
poration, to  any  number  not  exceeding 
eleven  nor  less  than  five,  who  must  be  mem- 
bers of  the  corporation;  whereupon,  a  cer- 
tificate, stating  the  number  of  directors, 
must  be  filed,  as  provided  for  in  section  two 
hundred  and  ninety-six  for  the  filing  of  the 
original  articles  of  iucorporation;  And  pro- 
vided, also,  That  the  corporate  powers,  busi- 
ness, and  property  of  corporations  formed, 
or  to  be  formed,  for  social  purposes,  and  not 
directly  for  profit,  may  be  exercised,  con- 
ducted, and  controlled  by  a  board,  consisting 
of  such  number  of  directors  as  may  be  in 
the  Constitution  or  by-laws  provided;  and 
corporations  so  formed  may,  in  their  con- 
stitution or  by-laws,  provide  for  the  length 
of  time  that  the  directors,  or  any  number 
thereof,  sliall  act,  and  may,  in  like  manner, 
provide  that  certain  directors,  or  a  certain 
number  of  the  board  of  directors,  to  be 
selected  by  the  corporation  or  the  board  of 
directors,  in  tlie  mode  and  manner  provided 
in  the  Constitution  or  by-laws,  shall  act  for 
any  specified  length  of  time,  or  otherwise, 
ns  shall  be  in  the  Constitution  or  by-laws 
set  forth. 

0.  The  amount  of  its  capital  stock,  and  tho 
number  of  shares  into  which  it  is  divided. 


CALIFORNIA. 


15 


Artlclos  of  incorporation;  filing,  Civ.  C,  §§     291-29G. 


7.  If  there  is  a  capital  stock,  the  amount 
actually  subscribed,  and  by  whom. 

Articles,  bow  anionded.     C.  C,  §  3G2. 

[Omission  to  state  place  where  Its  principal 
business  Is  to  be  transacted  is  fatal.  Harris  v. 
MciJrecor,  29  Cal.  124. 

A  failure  to  describe  It  as  the  "  principal  place 
of  business  "  Is  a  more  technical  error.  Ex  parte 
S.   V.  W.  AV.,  17  Cal.  132. 

Omission  In  allidavlt.  In  regard  to  payment  of 
ten  per  cent,  of  the  subscribed  stock,  and  of  the 
words  "  in  trood  faith,"  was  deemed  immaterial. 
I'eo.   V.   It.   R.   Co.,  45  Cal.  30G. 

Omission  of  the  original  certificate  to  state 
nniount  of  caidtal  stock  held  cured  bv  subsequent 
legislation.     I'eo.  v.  J'enlii,  50  Cal.  345. 

Statement  In  certificate  or  a  term  of  existence 
greater  than  that  allowed  bv  law  js  not  fatal. 
I'eo.  V.   Cheeseman,  2  W.   G.  R.  270. 

.Section  cited.  It.  It.  Co.  v.  Hlldreth,  53  Cal. 
12S;  Thomas  v.  Mining  Co.,  65  id.  601;  s.  c,  4 
I'ac.  Itep.  641;  Chapman  v.  Doraj',  89  Cal.  54: 
s.   c,   26   Tac.    Itep.   605. 

In  formation  of  a  corporation,  substantial  rather 
than  literal  compliance  with  eacli  provision  of 
the  statutes  Is  necessarv.  I'eo.  v.  Water  Co.,  97 
Cal.  276;  s.   c,  32  Tac.   Rep.  236.] 


§  201.  The  articles  of  incorporation  of  any 
railroad,  Avagon  road,  or  telegraph  organiza- 
tion must  also  state: 

1.  The  kind  of  I'oad  or  telegraph  intended 
to  be  constructed. 

2.  The  place  from  and  to  which  it  is  in- 
tended to  be  run,  and  all  the  intermediate 
branches. 

3.  The  estimated  length  of  the  road  or  tele- 
graph line. 

4.  That  at  least  ten  per  cent,  of  the  capital 
stock  subscribed  has  been  paid  in  to  the 
treasurer  of  the  intended  corporation. 

[Articles  of  Incorporation  of  a  railroad  must 
fullv  set  forth  amounts  subscribed,  and  by  whom. 
R.  R.  Co.  v.  Ilildreth,  53  Cal.  123.] 

§  292.  The  articles  of  incorporation  must 
be  subscribed  by  five  or  more  persons,  a 
ma.iority  of  whom  must  be  residents  of  this 
State,  and  acknowledged  by  each  before 
some  officer  authorized  to  talie  and  certify 
acknowledgments  of  conveyances  of  real 
property.    (In  effect  July  1,  1874.) 

[Requirement  of  this  section  is  a  condition 
preeedent  to  n  valid  -ncorporatlon :  an  acknowl- 
edgment of  articles  bv  onlv  four  Incornorators  Is 
fatally  defeetive.  I'eo.  v.  Water  Co.,  97  Cal.  276; 
S.   c.  32   Par.    Rep.   236. 

Not  necessary  to  validity  of  corporation,  or  to 
the  subserihcrs  who  agree  to  its  formation  Iieoom- 
Ing  stockholders,  that  they  should  all  sign  the 
articles  o"  incorjioration.  San  .Toaoiun,  ete.,  Co. 
V.  Heeeher,  101  Cal.  70;  s.  c,  .35  I'ac.  Rep.  :^49. 
Nor  is  it  necessary  tliat  eertiflcates  of  stock 
should    have    been   issued.     Id.] 

§  20.'?.  Each  intended  corporation  nameA 
In  section  Iavo  hundred  and  ninety-one,  be- 
fore filing  articles  of  incoriioration,  must 
have  actually  sul)scril)od  to  its  <'a])ital  stock, 
for  each  mile  of  tlie  contemplalod  work,  tlie 
following  amoiuits,  to  wit: 

1.  One  thousand  dollars  per  mile  of  rail- 
road. 


2.  One  hundred  dollars  per  mile  of  tele- 
graph lines. 

3.  Three  hundred  dollars  per  mile  of  wagon 
roads. 

See   §   291,  note. 

[Section  referred  to.  R.  R.  Co.  v.  Hlldreth.  53 
Cal.  128.] 

§  294.  Before  the  articles  of  incorporation 
of  any  corporation  referred  to  in  the  pre- 
ceding section  are  filed,  there  must  be  paid, 
for  the  1)enelit  of  the  corporation,  to  a 
treasurer  elected  by  tlie  subscribers,  ten  per 
cent,  of  the  amount  subscribed. 

[Under  this  statute,  payment  bv  check  drawn 
on  the  bank  where  drawer  had  no  funds  is  In- 
sufficient. I'eo.  V.  Chambers,  42  Cal.  201.  But 
payment  of  the  ten  per  cent,  in  good  faith  by 
checks  drawn  upon  a  sufhcient  deposit  and  pay- 
able in  presenti,  would  be  a  sufficient  compliance. 
Peo.  V.  R.  R.  Co.,  45  Cal.  306.] 

§  295.  Before  the  secretary  of  State  issues 
to  any  such  corporation  a  certificate  of  the 
filing  of  articles  of  incorporation,  there  must 
be  filed  in  his  office  an  affidavit  of  the  presi- 
dent, secretary,  or  treasurer  named  in  the 
articles,  that  the  required  amount  of  the 
capital  stock  thereof  has  been  actually  sub- 
scribed, and  ten  per  cent,  thereof  actually 
paid  to  a  treasurer  for  the  benefit  of  the 
corporation. 

Signing  fictitious  name  or  fraud  In  the  subscrip- 
tion.   Pen.  C,  §  557. 

[In  making  this  affidavit,  substantial,  not  a 
literal,  compliance  with  statiite  is  all  that  Is  re- 
quired.    Peo.  V.  R.  It.  Co.,  45  Cal.  306.] 

§  20G.  Upon  filing  the  articles  of  incorpora- 
tion in  the  office  of  the  county  clerk  of  the 
countj-  in  which  the  principal  business  of 
the  company  is  to  be  transacted,  and  a  copy 
thereof,  certified  by  the  county  clerk,  with 
the  secretary  of  State,  and  the  affidavit  men- 
tioned in  the  last  section,  where  such  affi- 
davit is  reqtiired,  the  secretary  of  State  must 
issue  to  the  corporation,  over  the  great  seal 
of  the  State,  a  certificate  that  a  copy  of  the 
articles,  containing  the  required  statement 
of  facts,  has  been  filed  in  his  office;  and 
thereupon  the  per.«;ons  signing  the  articles, 
and  their  associates  and  successors,  shall  be 
a  body  politic  and  corporate,  by  the  name 
stated  in  the  certificate,  and  for  the  term  of 
fifty  years,  unless  it  is  in  tlie  articles  of  in- 
corporation otlierwise  stated  or  in  tliis  Code 
otherwise  special]}'  provided.  (In  effect  July 
1,  1874.) 

Correction  of  erroneous  filing.  C.  C,  §  363. 
Articles  must  be  filed  in  every  county  where  cor- 
poration owns  property.    C.   C,   §  290. 

[Filing  articles  In  wrong  county  fatal  to  crea- 
tion of  corporation  de  facto.  Martin  v.  Deetz, 
102  Cal.  55:  s.   c.  36  Pac.   Rep.  36S. 

Prior  to  adoption  of  Code,  a  corporation  had 
legal  existence  from  time  of  filing  certificate  with 


16 


CALIFOKXIA. 


I'roperty  rcstric-tious;  banking  corporations,  Civ.  C,  §§  297-300. 


county  clerk.    M.  H.  M.  Co.  v.  Woodbury,  14  Cal. 
424 

Section  clterl.  WIckorslinm  v.  Brlttnn,  93  Cal. 
3D;  s.  c,  28  Par.  Kop.  792;  29  Id.  51:  Canal,  etc., 
Co.  V.  Waruer,  72  Cal.  382;  s.  c,  14  Pac.  lU-p.  37.] 

§  297.  (As  aniontk^d  March  8,  1895.)  A  copy 
of  any  articles  of  incorporation  liled  in  pur- 
suance of  this  chapter,  and  ccrtilieil  by  the 
secretary  of  State,  or  by  tlie  county  clerk  of 
the  county  where  the  oriixinal  articles  shall 
have  beeil  filed,  must  be  received  in  all  the 
courts  of  this  State,  and  other  places,  as 
prima  facie  evidence  of  the  facts  therein 
stated. 

[Certified  copy  of  articles  of  Incorporation  Is 
prima  facie  evidence  of  the  facts  therein  stated. 
S.  V.  W.  W.  V.  Ran  Francisco,  22  Cal.  434;  Min- 
ing Co.  V.  Ailment.  20  Id.  28(>. 

Section  referred  to  and  applied.  Canal,  etc., 
Co.  V.  Warner.  72  Cal.  :^b2;  s.  c.  14  Pac.  Rep.  37. 

A  certified  copy  of  the  certificate  is  not  ;n  any 
sense  secondary  evidence,  but  is  by  law  made 
equal  in  all  respects  with  the  original,  as  evidence. 
Tnnnell  (^o.  v.  McKenzie,  67  Cal.  487;  s.  c,  8  Pac. 
Hep.  22.] 

§  298.  The  owners  of  shares  in  a  corpoi-a- 
tion  M-hich  has  a  capital  stoclc  are  called 
stockliolders.  If  a  corporation  has  no  capital 
stock,  the  corporators  and  their  successors 
are  called  members. 

Liability  of  stockholders.  Const.,  art.  XII,  §  3; 
C.  C,  §  322. 

§  299.  No  corporation  hereafter  formed 
shall  purchase,  locate,  or  hold  property  in 
any  county  in  this  State,  without  filing  a 
copy  of  the  copy  of  its  articles  of  incorpora- 
tion filed  in  the  office  of  the  secretary  of 
State,  didy  certified  by  such  secretary  of 
State,  In  the  office  of  the  county  cleric  of  the 
county  in  which  such  property  is  situated, 
within  sixty  days  after  such  purchase  or  lo- 
cation is  made.  Every  corporation  now  in 
existence,  whether  formed  under  the  pro- 
visions of  this  Code  or  not,  must,  witliin 
ninety  days  after  tlie  passage  of  this  section, 
file  such  certified  coi)y  of  the  copy  of  its  arti- 
cles of  incorporation  in  the  office  of  the  county 
clerk  of  every  county  in  this  State  in  which 
It  holds  any  property  (except  the  county 
where  the  original  articles  of  incorporation 
are  filed);  and  if  any  corpDratloi'  hereafter  ac- 
quire any  projiorty  in  any  county  other  than 
tliat  in  which  it  now  holds  property,  it  must, 
witliin  ninety  days  thereafter,  file  with  tlie 
clerk  of  such  county  such  certified  copy  of 
the  copy  of  its  articles  of  incorporation.  The 
copied!  so  filed  Avith  the  several  county  clerks, 
and  certified  cojiies  tliereof.  shall  have  the 
same  force  and  effect  in  evidence  as  would 
the  originals.  Any  corporation  failing  to 
comjily  with  the  provisions  of  tliis  section 
shall  not  maintain  or  defend  any  action  or 
proceeding  in  relation  to  such  property,  its 
rents,  issues,  or  profits,  until  such  articles 
of  inconioration,  and  such  certified  copy  of 
Its  articles  of  incori)oration.  and  such  cer- 
tified copy  of  tlie  co])y  of  its  articles  of 
Incorporation,  shall  be  filed  at  the  places  di 


rected  by  the  general  law  and  this  section; 
Provided,  That  all  corporations  shall  be 
liable  in  damages  for  any  and  all  loss  that 
may  arise  by  the  failure  of  such  corporation 
to  perform  any  of  the  foregoing  duties 
within  the  time  mentioned  in  this  section; 
And  provided  further,  Tliat  the  said  damages 
may  be  recovered  in  an  action  brought  in 
any  court  of  this  State  of  competent  juris- 
dic'tion,  by  any  party  or  parties  suffering 
the  same.    (In  effect  April  23,  ISSO.) 

Corporation  not  to  bold  land  more  than  five 
jears.  Const.,  art.  XII,  §  0.  Amonnt  it  may  hold. 
C.  C,  §  360.  Right  to  hold  real  estate.  C.  C, 
§  354  (6). 

[An  objection  that  a  corporation  defendant  in 
an  notion  to  (iniet  title  to  land  had  not  proved 
con))ilinnee  ^\■\th  provisions  of  .above  section  can- 
not be  taken  for  first  time  upon  appeal.  Labory 
V.    Asvhim.   07   Cal.    270;    s.    c.    r!2    Pae.    Rep.   231. 

Failure  to  comply  with  above  section  does  rot 
prevent  a  coriioration  from  defendiiifi  an  ac^i.in 
Itrouirht  against  it  to  recover  for  work  and  labor 
alleged  to  have  been  performed  on  its  property. 
Weeks  v.  Mining  Co.,  73  Cal.  .590:  s.  c.  15  Pac. 
Rep.  .302.  Noncompliance  with  above  section  is 
a  matter  to  be  set  up  by  defendant  in  an  action 
of  e.lectment  brought  by  the  corporation.  Denial 
of  existence  of  the  eorporntion  doos  not  raise  the 
anestion.  R.  R.  Co.  v.  Purcell,  77  Cal.  GO:  s.  c, 
18  Pac.  Rep.  SS6.  In  an  action  by  a  corporation 
in  relation  to  its  jiroperty,  it  is  not  essenti.'il  that 
the  complaint  should  show  compliance  with  above 
section.  Bank  v.  Tibbits.  80  Cal.  68:  s.  c.  22  I'ac. 
Rep.  66.  Failnre  to  comply  is  a  mere  matter  in 
abatement  of  an  action  brought  by  it  in  relation 
to  such  property;  and  in  order  to  be  available  as 
a  defense  must  be  specially  pleaded  in  the  an- 
swer: otherwise  it  is  waived.  Id.  But  averment 
denying  the  coi'porate  existence  and  alleging  tb:it 
It  lias  not  legal  capacity  to  sue.  does  not  set  np 
such  defense.  Id.  It  is  clear  that  above  section 
applies  only  to  corporations  wliose  articles  are 
required  bv"  statute  to  be  filed  with  the  secretary 
of  State.  "Mora  v.  Murphy,  83  Cal.  17;  s.  c,  23 
Pac.   Rep.   63.] 

§  300.  Every  corporation  that  has  been  or 
may  be  created  under  the  general  laws  of 
this  State,  doing  a  banking  business  therein, 
and  Avhich  has  no  ca]>ital  stock,  may  elect 
to  have  a.  capital  stoclv,  and  may  issue  cer- 
tificates of  stock  therefor,  in  the  same  man- 
ner as  corporations  formed  under  the  pro- 
visions of  cliapter  I,  article  I,  of  the  Civil 
Code,  relating  to  the  formation  of  corpora- 
tions; Provided,  That  no  such  corporation 
shall  use  or  convert  any  moneys  or  funds 
theretofore  belonging  to  it  or  under  its  con- 
trol, into  capital  stoclv ;  lint  such  funds  or 
moneys  must  ho  held  and  managed  only  for 
the  purposes  and  in  the  manner  for  which 
tliey  were  created.  Before  such  change  is 
made,  a  majority  of  the  members  of  such 
corporation  present  at  a  meeting  called  for 
tlie  purpose  of  considering  the  proposition 
wliether  it  is  best  to  have  a  capital  stock, 
its  amount,  and  tlio  number  of  shares  into 
wliicli  it  sliall  bo  divided,  must  vote  in  favor 
of  liaving  a  cai^ital  stock,  fix  the  amount 
thereof,  and  the  number  of  shares  into  which 
it  shall  be  divided.  Notice  of  the  time  and 
jdaceof  holding  such  meetincr,  and  its  object, 
must  be  given  liy  the  president  of  such  cor- 
poration, l)y  publication  in  some  newspaper 


CALIFORXIA. 


17 


By-laws;  diircctors,  Civ.  C,  §§  301-303. 


printed  and  piiljlishod  in  tlie  county,  or  city 
and  county,  in  which  the  principal  phice  of 
business  of  the  corporation  is  situated,  at 
least  once  a  week  for  three  successive  weelvs 
prior  to  the  holding  of  the  meeting.  A  copy 
of  the  proceedings  of  this  meeting,  giving 
the  numljer  of  persons  present,  the  votes 
taken,  the  notice  calling  the  meeting,  the 
proof  of  its  publication,  the  amount  of 
capital  actually  subscribed,  and  by  whom, 
all  duly  certified  by  the  presi<lent  and  secre- 
tary of  the  corporation,  must  be  filed  in  the 
offices  of  the  secretary  of  State  and  clerk  of 
the  county  where  the  articles  of  incorpora- 
tion are  filed.  Thereafter  such  corporation 
is  possessed  of  all  the  rights  and  powers,  and 
Is  subject  to  all  the  obligations,  restrictions, 
and  limitations,  as  if  it  had  been  originally 
created  with  a  capital  stock:  and  provided 
further,  That  no  bank  in  this  State  shall 
ever  pay  any  dividend  upon  so  called 
guaranty  notes,  nor  upon  any  stoclv,  except 
upon  the  amount  actually  paid  in  money 
into  said  capital  upon  such  stock,  and  any 
payment  made  in  violation  of  this  provision 
shall  render  all  officers  and  directors  con- 
senting to  the  same  jointly  and  severally 
liable  to  the  depositors  to  the  extent  thereof. 
(In  effect  May  28,  1878.) 

Certain  records  to  be  kept  by  banking  corpora- 
tion.    C.  C,  §  321. 

[Banking  company  held  to  have  complied  with 
above  provisions.  "Peo.  v.  Perrin.  5C>  Cal.  349: 
see,  also,  Dallemand  v.  Bank,  74  id.  600;  s.  c,  16 
Pac.   Rep.  497.] 

ARTICLE    ir.      BY-LAWS.    DIRECTORS,    ELEC- 
TIONS AND    MEETINGS. 

Sec.  301.  Adoption    of     by-laws,    when,    how,    and 
by   whom. 

302.  Directors,  election  of,  etc. 

303.  By-laws   may   provide   for   what. 

304.  By-laws  to  lie  copied  and  open  for  pub- 

lic inspection. 
30.5.  How   many  and   who  to  be  directors. 

307.  Elections,   how   conducted. 

308.  Organization   of  board  of  directors,   etc. 

309.  Dividends     to     be     made     from     surplus 

profits. 

310.  Removal  from  office  of  directors,  etc. 

311.  Justice  of  the  peace  may  order  meeting 

when. 

312.  Majority  of  stock  must  be  represented. 

313.  All  stock  may  be  represented  in  votes. 

314.  Election   may  be  postponed. 

313.  Complii lilts  and  quo  warranto  regarding 
elections. 

316.  False     certificate,    report,    or     notice    to 

make  officers  liable. 

317.  Meeting  by  consent  to  be  valid. 

318.  I'roceedings  at  meeting  to  be  binding. 

319.  Meetings,  where  held. 

320.  AVhcn  no  provision  in  by-laws  for  regu- 

lar    meetings,     special     meetings     how 
called. 

321.  Banking    corporations    required    to    keep 

certain  books. 
321(a).  Domestic     corporations     may     change 
place  of  business. 

§  301.  Every  corporation  formed  imder  this 
title  must,  within  one  mouth  after  filing 
articles  of  incorporation,  adopt  a  code  of  bj'- 
laws  for  its  government  not  inconsistent 
with  the  Constitution  and  laws  of  this 
State.       The  assent  of   stockholders   repre- 


senting a  majority  of  all  the  subscribed 
capital  stock,  or  of  a  majority  of  the  mem- 
bers, if  there  be  no  capital  stock,  is  neces- 
sary to  adopt  by-laws,  if  they  are  adopted 
at  a  meeting  called  for  that  pui^ose;  and  ia 
the  event  of  such  meeting  being  called,  two 
weeks'  notice  of  the  same,  by  advertisement 
in  some  newspaper  published  in  the  county 
in  which  the  principal  place  of  business  of 
the  corporation  is  located,  or  if  none  is  pub- 
lished therein,  then  in  a  paper  published  in 
an  adjoining  county,  must  be  given  by  order 
of  the  acting  president.  The  wiitten  assent 
of  the  holders  of  two-thirds  of  the  stock,  or 
of  two-thirds  of  the  members  if  there  be  no 
capital  stock,  shall  be  effectual  to  adopt  a 
code  of  by-laws  without  a  meeting  for  that 
purpose. 

Power  to  make  by-laws.  C.  0.,  §  354  (6).  May 
provide  for  what.  C.  C,  §  303.  May  be  repealed 
or  amended.    C.  C,  §  304. 

[By-laws  are  void  if  contrary  to  Constitution  or 
statutes,  either  of  State  creating  the  corporation 
or  of  the  United  States,  or  to  the  common  law. 
Peo.  V.  Crockett.  9  Cal.  112;  United  States  v. 
Hart,  1  Pet.  C.  C.  390;  Bank  v.  Lanier,  11  Wall. 
369.  A  corporation  cannot  pass  by-laws  Imposing 
liens  on  stock  so  as  to  charge  bona  fide  pur- 
chasers thereof.  Bank  v.  Bank.  63  Cal.  359.  By- 
laws cannot  be  adopted  impairing  vested  rights. 
Peo.  V.  Crockett,  supra.  A  stockholder  is  bound 
by  charter  and  regularly  adopted  by-laws,  whether 
he  has  signed  them  or  not.  McFadden  v.  Super- 
visors. 74  Cal.  571;  s.  c,  16  Pac.  Rep.  397.  The 
substantial  rights  of  a  stockholder  cannot  be 
taken  from  him,  or  abridged,  bv  bv-laws.  Bank 
V.  Superior  Ct.,  104  Cal.  649;  s.  c,  38  Pac.  Rep. 
452. 

By-laws  adopted  before  organization  held  In- 
valid under  above  section.  Vercoutere  v.  Land 
Co.,   48  Pac.    Rep.   375.] 

§  302.  The  directors  of  a  corporation  must 
be  elected  annually  by  the  stockholders  or 
members,  and  if  no  provision  is  made  in  the 
by-laws  for  the  time  of  election,  the  election 
must  be  held  on  the  first  Tuesday  in  June. 
Notice  of  such  election  must  be  given,  and 
the  right  to  vote  determined  as  prescribed 
In  section  three  hundred  and  one. 

See  Const.,  art.  XII.  §  12.  Election  may  be  post- 
poned. C.  C,  §  314.  Must  be  elected  at  first  meet- 
lug.     §   306.    Manner  of.    §  307.     See    §   312,    note. 

[The  notice  of  meeting  must  be  given  in  man- 
ner prescribed  by  statute  in  order  to  be  effectual. 
Manf.  Co.  v.  Vassault,  50  Cal.  5.34.  A  notice  must 
designate  the  hour  as  well  as  the  dav  of  meeting. 
Id.  Notice  of  special  meeting  should  be  personal 
unless  otherwise  provided  in  charter  or  by-laws. 
Harding  v.  Vandewater,  40  Cal.  77.  Section  re- 
ferred to.  Wickersham  v.  Brlttan,  93  Cal.  36; 
s.   c,   28  Pac.    Rep.   792;  29  id.   51.] 

§  303.  A  corporation  may,  by  its  by-laws, 
where  no  other  provision  is  specially  made, 
provide  for: 

1.  The  time,  place,  and  manner  of  calling 
and  conducting  its  meetings,  and  may  dis- 
pense witli  notice  of  all  regular  meetings  of 
stockliolders  or  directors. 

2.  The  number  of  stockholders  or  members 
constituting  a  quorum. 

3.  The  mode  of  voting  by  proxy. 


18 


CALIFOKXIA. 


By-laws;  directors,   Civ.  C,  §§  304,  305. 


4.  Tlie  qualifications  nud  duties  of  direct- 
ors, aud  also  the  time  of  their  auuual  elec- 
tion, and  the  mode  aud  mauuer  of  giviug 
notice  thereof. 

;").  The  compensation  and  duties  of  officers. 

G.  The  manner  of  election  and  tenure  of 
office  of  all  officers  other  than  the  directors; 
aud, 

7.  Suitable  penalties  for  violations  of  by- 
laws, not  exceeding  in  any  case  one  hundred 
dollars  for  any  one  offense. 

5.  The  newspaper  in  which  all  notices  of 
the  meetings  of  stockholders  or  board  of  di- 
rectors, notice  of  which  is  required,  shall  be 
I)ublisluHl,  which  must  be  some  newspain-r 
published  in  the  county  Avhere  the  principal 
place  of  business  of  the  corporation  is  lo- 
cated, or  if  none  is  published  therein,  then 
in  a  newspaper  published  in  au  adjoining 
county;  Provided,  Tliat  when  the  by-laws 
prescribe  the  newspajier  in  which  said  pub- 
lication shall  be  made,  if  from  any  cause  at 
the  time  auy  publication  is  desired  to  be 
made,  the  publication  of  such  newspaper 
shall  have  ceased,  the  board  of  directors 
may,  by  an  order  entered  on  the  records  of 
the*  corporation,  direct  the  publication  to  be 
made  in  some  other  newspaper  published  in 
the  county,  or  if  none  is  published  therein, 
then  in  an  adjoining  county. 

§  2.  Section  three  hundred  and  six  of  said 
Code  is  hereby  repealed.  (In  effect  March 
19,  1SS9.) 

Power  to  make  by-laws.  C.  C,  §§  301,  354  (6). 
By-laws  may  provide  for  amount  of  stock  to  be 
owned  by  directors.  C.  C,  §  303.  For  duties  of 
directors.  §  308.  For  issuing  certificates  of  stock. 
§  323.  For  disposal  of  stock  owned  by  the  cor- 
poration.   §  344. 

[Special  meeting  of  directors  called  contrary  to 
by-laws  hold  illegal.  Smith  v.  Dorn.  96  ("al.  73; 
«.  c.  30  Pac.  Hop.  1024.  Section  construed  as  to 
election  of  directors.  "Wiekersham  v.  Brittan,  93 
Oal.  :!8;  s.  c.  28  Pac.  Kep.  792:  29  id.  51.  No 
flecree  or  act  of  board  of  directors,  made  or  done 
while  not  assembled  as  a  board,  is  a  valid  corpo- 
rate act.  Id.  Acts  of  a  corporation  which  con- 
stitute a  ratification  of  acts  of  its  president,  and 
estoppel  in  pais,  precluding  corporation  from 
questionins:  his  authoritv.  Gribble  v.  Brewing 
Co.,  100  Cal.  67;  s.  c,  .'54  Pac.  Uep.  527.  President 
must  be  a  director.  Dulin  v.  Coal  Co.,  103  Cal. 
357:  s.  c,  :',5  Pac.  K<>p.  1(145;  37  id.  207.  Agree- 
ment among  stockholders  as  to  election  of  presi- 
dent at  a  certain  salary  is  void  and  cannot  be 
enforced.  Id.  Trustees  cannot  vote  a  salary,  or 
increase  of  salary,  to  one  of  their  number  as 
president,  when  his  vote  is  essential  to  adoption 
of  the  resolution.  Wiekersham  v.  Crittenden,  106 
Cal.   .327;   s.   c,   .39  Pac.    Uep.   6(r2. 

Above  section  refers  to  the  primary  requirements 
to  be  followed  in  order  that  proxies  may  be  enti- 
tled to  vote,  and  does  not  authorize  curtailing  of 
right  of  voting  by  proxy,  but  only  to  regulate 
exercise  of  right  by  re(iuiring  that  authorization 
must  be  in  writing,  properly  witnessed,  acknowl- 
edged, filed  with  the  records,  etc.  Bank  v.  Su- 
perior Ct.,  104  Cal.  t>49;  «.  c,  38  Pac.  Uep.  432.] 

§  304.  All  by-laws  adopted  must  be  certi- 
fied by  a  majority  of  the  directors  and  secre- 
tary of  the  corporation,  and  copied  in  a 
legible  hand  in  some  book  kejit  in  the  office 
of    the   corporation,    to    be    known    as    the 


"  Book  of  By-laws,"  and  no  by-law  shall 
take  effect  until  so  copied,  and  the  book 
shall  then  be  opened  to  the  inspection  of  the 
public  during  office  hours  of  each  day  ex- 
cept holi(l:iys.  The  by-laws  may  be  repealed 
or  amended,  or  new  by-laws  may  be  adopted, 
at  the  annual  meeting,  or  at  any  other  meet- 
ing of  the  stockholders  or  members,  called 
for  that  purpose  by  the  directors,  by  a  vote 
representing  two-thirds  of  the  subscribed 
stock,  or  by  two-thirds  of  the  members.  The 
written  assent  of  the  holders  of  two-thirds 
of  the  stock,  or  two-thirds  of  the  memliers 
if  there  be  no  capital  stock,  shall  be  effectual 
to  repeal  or  amend  any  by-law,  or  to  adopt 
additional  by-laws.  The  power  to  repeal 
and  amend  the  bj^-laws,  and  adopt  new  by- 
laws, may,  by  a  similar  vote  at  any  such 
meeting,  or  similar  written  assent,  be  dele- 
gated to  the  board  of  directors.  The  power, 
when  delegated,  may  be  revoked  by  a  similar 
vote,  at  any  regular  meeting  of  the  stock- 
holders or  members.  "Whenever  any  amend- 
ment or  new  by-law  is  adopted,  it  shall  be 
copied  in  the  book  of  by-laws  with  the  oi*ig- 
inal  by-laws,  and  immediately  after  them, 
and  shall  not  take  efTect  until  so  copied.  If 
any  by-law  be  repealed,  the  fact  of  repeal, 
with  the  date  of  the  meeting  at  which  the 
repeal  was  enacted,  or  written  assent  was 
filed,  shall  be  stated  in  said  book,  and  until 
so  stated  the  repeal  shall  not  take  effect. 
(Approved  March  14,  1SS5.) 

[Effect  of  noncompliance  with  a  statute  as  to 
the  recording  of  by-laws.  Hall  v.  Crandall,  29 
Cal.  567.  Section  referred  to.  Chapman  v.  Doray, 
89  Cal.  54;  s.   c,  26  Pac.   Rep.   605.] 

§  30.5.  The  cori^orate  powers,  business,  and 
property  of  all  corporations  formed  under 
this  title  must  be  exercised,  conducted,  and 
controlled  by  a  board  of  not  less  than  five 
nor  more  than  eleven  directors,  to  be  elected 
from  among  the  holders  of  stock;  or,  where 
there  is  no  capital  stock,  then  from  the  mem- 
bers of  such  corporations;  except  that  cor- 
porations formed,  or  to  be  formed,  for  the 
pm-pose  of  erecting  and  managing  halls  and 
buildings  for  the  meetings  and  accommoda- 
tion of  several  lodges  or  societies  of  any 
benevolent  or  charitable  order  or  organiza- 
tion, and  in  connection  therewith  the  leasing 
of  stores  and  offices  in  such  building  or 
btiildings  for  other  purposes,  the  corporate 
powers,  business,  aud  property  thereof  may 
be  conducted,  exercised,  and  controlled  by 
a  board  of  not  less  than  five  nor  more 
than  fifty  directors,  to  be  chosen  from 
among  the  stockholders  of  such  corpora- 
tion or  from  among  the  members  of 
such  order  or  organization.  A  majority 
of  the  directors  must  be  in  all  cases 
citizens  of  this  State.  Directors  of  cor- 
porations for  profit  must  be  holders  of 
stock  therein  in  an  amount  to  be  fixed  by 
the  by-laws  of  the  corporation.  Directors  of 
all  other  corporations  nnist  be  members 
thereof.  T'nless  a  quorum  is  present  and 
acting    no  business  performed    or  act  done 


CALIFORNIA. 


19 


Elections;  dividends,  Civ.  C,  §§  306-309. 


is  valid  as  against  the  corporation.  "When- 
ever a  Taeaucy  occurs  in  the  office  of  di- 
rector, unless  the  by-laws  of  the  corporation 
otherwise  provide,  such  vacancy  must  be 
filled  hy  an  appointee  of  the  board. 

"  Director  "  deflued.  Ten.  C,  §  572.  On  dis- 
solution, directors  to  be  trustees  of  creditors.  C. 
C,  §  400.  Liability  of  directors.  Const.,  art.  XII, 
§  3;  C.  C,  §  327.    Acts  of  directors.    C.  C,  §  308. 

[Corporate  powers  must  be  exercised  by  trustees 
selected  from  the  stockholders.  Gashwller  v. 
"Willis,  33  Cal.  11;  Blood  v.  Marcuse,  38  id.  593. 
Directors  constitute  the  corporation  for  all  pur- 
poses of  dealhifr  with  others,  and  what  they  do  as 
Its  representatives,  the  corporation  itself  is 
deemed  to  do.  Maynard  v.  Ins.  Co.,  .34  Cal.  4S4. 
The  fact  that  director  is  not  a  stockholder  does 
not  vitiate  his  case,  he  is  de  facto  the  representa- 
tive of  the  corporation.  Bank  v.  S.  &  L.  Co.,  63 
Cal.  179.  The  powers  of  a  corporation  must  be 
exercised,  and  its  property  controlled,  by  its  board 
of  directors.  Xo  officer  has  authority  to  execute 
a  mortgage  of  corporate  property  in  absence  of  a 
resolution  of  such  board.  Mining  Co.  v.  Mining 
Co.,  78  Cal.  632;  s.  c,  21  Pac.  Rep.  373.  Directors 
must  be  presumed  to  know  at  all  times  the  con- 
dition of  the  business  and  property  under  their 
control.  Schenck  v.  Bandmann,  81  Cal.  234;  s.  c, 
22  Pac.  Kep.  654.  Distinction  between  "  elec- 
tion "  of  directors  and  "  appointment."  Wick- 
ersham  v.  Brittan,  93  Cal.  34;  s.  c,  28  Pac.  Rep. 
792;  29  Id.  51.  A  corporation  can  confer  author- 
ity upon  an  agent  to  sell  its  lands  only  through 
Its  board  of  directors,  when  duly  assembled,  by 
resolution  duly  passed  and  recorded,  and  a  ratifi- 
cation of  sueli  authority  can  onl.v  be  made  in  the 
same  manner.  Salflehl  v.  Sutter,  etc.,  Co.,  94 
Cal.  546;  s.  c,  29  Pac.  Rep.  llOo.  Action  by  stock- 
holder to  set  aside  sale  of  corporate  property  by 
directors  upon  ground  of  fraud;  general  subject 
discussed.  Smith  v.  Dorn,  96  Cal.  73;  s.  c,  30 
Pac.   Rep.   1024.] 

§  306.  (Repealed.    See  §  303.) 

§  307.  All  elections  must  be  by  ballot,  and 
every  stockholder  shall  have  the  right  to 
vote  In  person  or  by  proxj-  the  number  of 
shares  standing  in  his  name,  as  provided  in 
section  three  hundred  and  tvrelve  of  this 
Code,  for  as  many  persons  as  there  are  di- 
rectors to  be  elected,  or  to  cumulate  said 
shares  and  give  one  candidate  as  many 
votes  as  the  number  of  directors  multiplied 
by  the  number  of  his  shares  of  stock  shall 
equal,  or  to  distribute  them  on  the  same 
principle  among  as  many  candidates  as  he 
shall  think  fit.  In  corporations  having  no 
capital  stock,  each  member  of  the  corpora- 
tion may  cast  as  many  votes  for  one  di- 
rector as  there  are  directors  to  be  elected, 
or  may  distribute  the  same  among  any  or  all 
of  the  candidates.  In  either  case  the  di- 
rectors receiving  the  highest  number  of 
votes  shall  be  declared  elected.  The  pro- 
visions of  this  section,  so  far  as  it  relates 
to  cumulative  voting,  shall  not  apply  to 
literai-y.  religious,  scientific,  social,  or  benev- 
olent societies,  imless  it  shall  be  so  provided 
in  their  by-laws  or  rules. 

§  2.  This  act  shall  take  effect  immediately. 
(Approved  March  10,  1SS7.) 

See  Const,  art.  XII,  §  12.  Elections,  how  con- 
ducted.   C.  C,  §  312. 

rSentinn  applied.  Wickersham  v.  Brittan,  93 
Cal.  36.] 


§  308.  Immediately  after  their  election,  the 
directors  must  organize  by  the  election  of  a 
president,  who  must  be  one  of  their  number, 
a  secretary,  and  treasurer.  They  must  per- 
form the  duties  enjoined  on  them  by  law 
and  the  by-laws  of  the  corporation.  A  ma- 
jority of  the  directors  is  a  sufficient  number 
to  form  a  board  for  the  transaction  of  busi- 
ness, and  everj'  decision  of  a  majority  of  the 
directors  forming  such  board,  made  when 
duly  assembled,  is  valid  as  a  corporate  act. 

See  note  to  §  354  (5),  C.  C.  Frauds  and  mis- 
management by  officers;  penalty.  Pen.  C,  §|  557- 
572. 

[Directors  are  agents  of  corporation  only  when 
acting  as  a  board;  as  a  general  rule,  they  do  not 
Individually  represent  the  corporation.  Gash- 
wiler  V.  Willis,  33  Cal.  11;  Blood  v.  Marcuse.  .38 
Id.  503.  A  note  executed  by  the  president  to  him- 
self as  payee,  purporting  to  be  note  of  the  cori)0- 
ration,  is  invalid,  unless  authorized  or  ratified  by 
directors,  though  the  consideration  be  a  debt 
honestly  due.  Smith  v.  Assn.,  78  Cal.  289;  s.  c, 
20  Pac.  Rep.  677.  r)lrectors  who  are  directly  in- 
terested in  the  passage  of  the  resolution  are  not 
competent  to  vote  thereon.  Section  referred  to. 
Wickersham  v.  Brittan.  93  Cal.  3S;  s.  c.  28  Pac. 
Rep.  792;  29  id.  51:  Salfleld  v.  Sutter,  etc.,  Co.,  94 
Cal.  549;  s.  c,  29  Pac.  Rep.  1105.] 

§  309.  (As  amended  March  31,  1891.)  The 
directors  of  corporations  must  not  make 
dividends,  except  from  the  surplus  profits 
arising  from  the  business  thereof;  nor  must 
they  divide,  withdraw,  or  pay  to  the  stock- 
holders, or  any  of  them,  any  part  of  the 
capital  stock;  nor  must  they  create  debts  1  e- 
yond  their  subscribed  capital  stock;  nor 
must  they  divide,  withdraw,  or  pay  to  the 
stockholders,  or  any  of  them,  any  part  of 
the  capital  stock,  except  as  hereinafter  pro- 
vided, nor  reduce  or  increase  the  capital 
stock,  except  as  herein  specially  provided. 
For  a  violation  of  the  provisions  of  this  sec- 
tion, the  directors  under  whose  administra- 
tion the  same  may  have  happened  (except 
those  who  may  have  caused  their  dissent 
therefrom  to  be  entered  at  large  on  the  min- 
utes of  the  directors  at  the  time,  or  wliere 
not  present  when  the  same  did  happen)  are, 
in  their  individual  and  private  capacity, 
jointly  and  severally  liable  to  the  corpora- 
tion, and  to  the  creditors  thereof,  in  tlie 
event  of  its  dissolution,  to  the  full  amount 
of  the  capital  stock  so  divided,  withdrawn, 
paid  out.  or  reduced,  or  debt  contracted; 
and  no  statute  of  limitations  is  a  bar  to  any 
suit  against  such  directors  for  any  sums  for 
which  they  are  linlile  by  this  section;  Pro- 
vided, however,  That  where  a  corporation 
lias  been  heretofore  or  may  hereafter  be 
formed  for  the  purpose,  among  other  things, 
of  acquiring,  holding,  and  selling  real  estate, 
water,  and  water  rights,  the  directors  of 
such  corporation  may,  with  the  consent  of 
stockholders  representing  two-thirds  of  the 
capital  stock  thereof,  given  at  a  meeting 
called  for  that  purpose,  divide  among  the 
stockholders  the  land,  water,  or  water  rights 
so  liy  such  corporations  held,  in  the  pro- 
portions   to    which    their   holdings    of   such 


20 


CALIFORNIA. 


Removal  of  directors;  elections,  Civ.  C,  §§  310-312. 


stock  at  tbe  time  of  such  division  would  en- 
title them.  All  conveyances  made  by  the 
oorpuraiiou,  in  pursuance  of  this  section, 
shall  be  made  and  received  subject  to  the 
debts  of  such  corporation  existing  at  the 
date  of  the  conveyance  thereof.  Nothing 
lierein  shall  prohibit  a  division  and  distribu- 
tion of  the  capital  stock  of  any  corporation 
which  remains  after  the  payment  of  all  its 
debts,  upon  its  dissolution  or  the  expiration 
of  its  term  of  existence. 

Misconduct  of  directors  ns  to  dividends  and  dis- 
counts. Pen.  C,  §  560.  Frand  in  accounts.  §  503. 
False  reports.  §  564.  By  absent  director.  §§  569, 
570.  Director's  liability  for  euibezzlemeut  of  offi- 
cers.   Const.,  art.  XII,  §  3. 

[The  prohibition  of  above  section  Is  directed 
against  the  trustees,  and  Is  designed  to  protect 
creditors  of  such,  and,  also,  to  protect  stockhold- 
ers against  their  mismanagement  in  distributing 
capital  slocli  in  the  form  of  dividends.  Martin  v. 
Zcllerbach,  38  Cai.  300. 

Any  arrangement  which  will  have  the  effect  to 
withdraw  the  capital  of  any  incorporated  com- 
pany, and  turn  it  over  to  stockholders,  excei)t  In 
manner  provided  by  law,  is  In  violation  of  above 
section,  and  void  as  to  the  creditors  of  the  cor- 
poration, either  prior  or  subsequent,  wlio  had  no 
notice  of  the  arrangement  at  time  of  giving  the 
credit.  Id.  By  capital  stock,  the  statute  intends 
the  capital  of  the  corporation  on  which  it  tran- 
sacts business,  whether  such  capital  consists  of 
money,  property  or  other  valuable  commodities. 
Id.  Dividends  may  be  paid  in  scrip  or  in  shares 
of  stock.  Harris  v.  Refining  Co..  41  Cal.  3'.t;i. 
One  who  receives  stock  acquires  therebv  an  in- 
terest In  the  undivided  profits.  Id.  In  "order  to 
recover  dividends,  plaintiff  must  have  been  the 
absolute  owner  of  the  stock  when  the  dividends 
accrued.  Mere  possession  of,  or  a  special  property 
therein,  is  not  sutficient.  Dow  v.  Mining  Co.,  31 
Cal.  G30.  Stockholders  have  no  legal  title  to  cor- 
porate property.  Shares  simply  represent  the 
right  of  shareliolders  to  share  in  distribution  of 
profits  of  the  corporation,  and  in  the  final  dis- 
tribution of  Its  assets  when  It  ceases  to  exist.  In 
advance  of  such  final  distribution,  stockholders 
cannot  even  unanimously  agree  to  a  division  of 
any  part  of  the  capital  stock  which  the  directors 
are  forbidden  to  make.  The  method  prescribed 
by  the  Code  for  dissolution  Is  exclusive,  and 
there  can  be  no  distribution  of  capital  stock  un- 
der any  other  circumstances.  Kohl  v.  Lilienthal, 
SI  Cal.  .HTS;  s.  c,  L'O  I'nc.  Kep.  -lui;  22  id.  GS<». 
The  "  capital  stock  "  which  directors  are  forbid- 
den, by  above  section,  to  divide,  is  the  actual  prop- 
erty of  the  corporation  contrilmtod  by  tlie  share- 
holders and  of  a  nominal  or  share  capital.  Mining 
f'o.  v.  Pierce,  !)0  Cal.  1.S2;  s.  c,  27  Pac.  Bep.  44. 
Inhibition  of  the  section  does  not  prohibit  pay- 
ments of  dividends  by  a  mining  corporation  froin 
net  proceeds  of  Its  mining  operations,  to  be  as- 
certained by  deducting  the  gross  outlay  of  cur- 
rent expenses  from  the  gross  receipts,  and  the 
balance,  less  a  reasonable  contingent  reserve 
would  be  legitimate  subject  of  dividend.  Id  A 
mining  corporation  may  distribute  its  net  earn- 
ings although  the  value  of  its  mine  is  therebv 
diminished:  and  it  is  not  deemed  to  have  divided 
Its  capital,  within  meaning  of  above  section 
nierely  txrause  it  has  distributed  the  net  proceed.s 
of  its  mining  oj)erations.  Id.  I'lie  fact  that 
money  was  borrowed  by  directors  to  pav  some  of 
the  dividends  Is  not  a  violation  of  spction  30!l 
where  it  appears  that  the  corporation  had  used 
surplus  profits,  equal  in  amount  to  dividends  paid 
for  purpose  of  makinir  needed  improvements  id' 
Declaring  of  dividonds  is  intrusted  to  discretion 
of  directors,  which,  wlien  honestlv  and  intelli- 
gently exercised,  will  not  be  slinlitlv  overruled 
Id.  The  fact  that  notes  and  mortgages  were  exe- 
cuted by  a  corporation  for  Indebtedness  bevond 
subscribed  caplt:il  stock,  fontrary  to  provision  of 
section  ."iOO,  does  nf)t  render  such  notes  and  mort- 
gages void,  riiderliill  v.  Imp.  Co.,  93  Cal.  ."iOO- 
s.  c,  US  Pac.  Kep.  1049.     Above  section  construed.' 


Id.  Misappropriation  of  corporate  property  by 
trustees  seeking  to  vote  themselves  the  property 
of  the  cori>oratlou.  Shattuck  v.  S.  &  R.  Co.,  58 
Cal.  550. 

Legislature  has  power  to  declare  that  corporate 
property  shall  be  assessed  to  the  corporation,  and 
that  same  property  shall  not  be  again  assessed 
against  tlie  stockholders.  Peo.  v.  Badlam,  57  Cal. 
5U4. 

Declaration  of  dividends  largely  a  question  of 
policy  intrusted  to  discretion  of  directors,  which 
will  not  be  lightly  overruled.  Zellerbach  v.  Alleu- 
berg,   99  Cal.   57;  s.    c,   33  Pac.    Rep.    786. 

Statute  of  limitations  for  recovery  of  dividends 
from  a  corporation  cannot  be  avoided  on  ground 
of  fraud,  when.  Bills  v.  Mining  Co.,  106  Cal.  9; 
s.   c,    39   Pac.    Rep.   43. 

A  by-law  providing  for  surrender  of  stock  and 
payment  of  value,  held  Illegal,  under  above  sec- 
tion.    Vercoutere  v.  Laud  Co.,  48  I'ac.   Rep.  375.] 

§  310.  No  director  shall  be  removed  from 
otiice,  unless  by  a  vote  of  two-thirds  of  the 
members,  or  of  stockholders  holding  two- 
thirds  of  the  capital  stock,  at  a  general  meet- 
ing held  after  previous  notice  of  the  time 
and  place,  and  of  the  intention  to  propose 
such  removal.  Meetings  of  stockholders  for 
this  piu-pose  may  be  called  by  the  president, 
or  by  a  majority  of  the  directors,  or  by 
members  or  stockholders  holding  at  least  one- 
half  of  the  votes.  Such  calls  must  be  in 
writing,  and  addressed  to  the  secretary,  who 
must  thereupon  give  notice  of  the  time, 
place,  and  object  of  the  meeting,  and  by 
whose  order  it  is  called.  If  the  secretary 
refuse  to  give  the  notice,  or  if  there  is  none, 
the  call  may  be  addressed  directly  to  the 
members  or  stockholders,  and  be  served  as 
a  notice,  in  which  case  it  must  specify  the 
time  and  place  of  meeting.  Tlie  notice  must 
be  given  in  the  manner  provided  in  section 
three  hundred  and  one  of  this  title,  unless 
other  express  provision  has  been  made  there- 
for in  the  by-laws.  In  case  of  removal,  the 
vacancy  may  be  filled  by  election  at  the 
same  meeting. 

§  311.  Whenever,  from  any  cause,  there  is 
no  person  authorized  to  call  or  to  preside  at 
a  meeting  of  a  corporation,  any  justice  of 
the  peace  of  the  county  where  such  corpora- 
tion is  established  may,  on  written  applica- 
tion of  three  or  more  of  the  stockholders  or 
of  the  members  thereof,  issue  a  warrant  to 
one  of  the  stoclvholders  or  members,  direct- 
ing him  to  call  a  meeting  of  the  corporation, 
by  giving  the  notice  required,  and  the  justice 
may  in  the  same  Avarrant  direct  such  per- 
son to  preside  at  such  meeting  until  a  clerk 
is  chosen  and  qualified,  if  there  is  no  other 
officer  present  legally  authorized  to  preside 
thereat. 

§  312.  At  all  elections,  or  votes  had  for  any 
purpose,  there  must  be  a  majority  of  tlie  sub- 
scribed capital  stock,  or  of  the  members, 
represented  either  in  person  or  by  proxy  in 
writing.  Every  person  acting  therein  fin  per- 
son, or  by  proxy,  or  representative]  must  be 
a  member  thereof,  or  a  bona  fide  stockholder, 
having  stock  in  his  own  name  on  the  stocic 
books  of  the  corporation  at  least  ten  days 
prior  to  the  election.  Any  vote  or  election 
had  other  than  in  accordance  with  the  pro- 
visions of  this  article  is  voidable  at  the  in- 
stance of  absent    [or  any]   stockholders   or 


CALIFORNIA. 


21 


Electious;  misconduct  of  officers,  Civ.  C,  §§  313-320. 


members,  aud  may  be  set  aside  by  petition 
to  tlie  district  court  of  tlie  countj^  where  the 
same  was  held.  Any  regular  or  called  meet- 
ing of  the  stoclcholders  or  members  may 
iidjourn  from  day  to  day,  or  from  time  to 
time,  If,  for  any  reason,  tlicre  is  not  present 
a  majority  of  tlie  subscribed  st(jck  or  mem- 
bers, or  no  election  had,  such  adjournment 
aud  the  reasons  therefor  being  recorded  in 
the  journal  of  proceedings  of  the  board  of 
directors.    (In  elfect  April  1.  1878.) 

See  §  307,  ante.     Notice  of  meeting.     §  302. 

[A  survivnig  partner  has  tbe  right  to  vote  stock 
In  his  h.Tnds  as  partnership  assets  at  an  election 
for  otfioers  of  a  corporation.  And  the  fact  that  a 
portion  of  the  stock  stood  npon  the  books  of  cor- 
poration In  name  of  deceased  partner  alone,  does 
not  affect  such  right,  if  in  fact  the  stock  belongs 
to  the  partnership.  Allen  v.  Hill,  10  Cnl.  114. 
Senible  upon  prlncijile  that  real  owner  of  stock 
Is  entitled  to  represent  it  at  meetings  of  the  cor- 
poration, notwithstanding  he  does  not  appear  as 
owner  upon  books  of  comjjany.  Id.  I'erson  to 
whom  stock  has  been  issued  as  trustee,  without 
knowledge  or  consent  of  owners,  is  not  bona  fide 
stockholder  within  meaning  of  above  section;  and 
where,  without  stock  thus  issued,  a  majority  of 
stock  Is  not  represented  at  a  meeting  for  election 
of  trustees,  the  election  is  void.  Stewart  v.  Min- 
ing Co.,  54  Cal.  149.  I'erson  appearing  from  books 
of  company  to  be  owner  of  stock  is  entitled  to 
vote  It,  although  he  has  transferred  it,  trans- 
feree not  appearing  with  the  stock  and  objecting. 
Peo.  V.  Robinson,  64  Cal.  373;  s.  c,  1  I'ac.  Uep. 
150.  Stockholder  ma.v  maintain  action  to  set 
aside  election  of  directors,  although  at  time  of 
election  no  stock  had  stood  in  his  name  on  books 
of  corporation  sufHcientlv  long  to  entitle  him  to 
vote.  Wright  v.  Water  Co.,  67  Cal.  532;  s.  c,  8 
I'ac.  Rep.  70.  The  superior  court  has  jurisdiction 
as  a  court  of  equit.v  to- inquire  into  validity,  and 
to  set  aside  such  an  election.  Id.  Every"  quali- 
fied stockholder  present  at  an  election  has  right 
to  vote  at  one  time  the  property  or  shares  owned 
by  him  for  the  whole  number  of  directors  to  be 
elected,  or  to  cumulate  his  shares  upon  one  can- 
didate, or  to  distribute  them  among  as  many 
candidates  as  he  may  see  fit;  a  corjioration  has  no 
power  to   adopt   any   other  mode   of  election.      Id. 

"  Election  "  distinguished  from  "  api)oihtment." 
AVickersham  v.  Kriltan,  93  Cal.  34;  s.  c,  28  I'ac. 
Rep.   792;   29   Id.   51. 

I'ledgor  of  stock  has  right  to  vote  it,  where 
pledgee  does  not  claim  the  right  under  agreement 
with  pledgor.  Dulin  v.  Coal  Co.,  103  Cal.  357; 
S.   c.   35   I'ac.    Rep.    1045;   37  id.   207. 

A  by-law  of  a  banking  corporation  providing  that 
no  proxy  sliould  be  voted  by  anyone  not  a  stock- 
holder of  the  corporation  "is  void,  as  being  an 
infringement  upon  above  statute.  Rank  v.  Su- 
perior Ct.,  104  Cal.  649;  s.  c,  38  I'ac.   Rep.  452.] 

§  313.  The  shares  of  stock  of  an  estate  of 
a  minor,  or  insane  person,  may  be  repre- 
sented by.  his  guardian,  aud  of  a  deceased 
person  by  his  executor  or  administrator. 

§  314.  If  from  any  cause  an  ehn/tion  does 
not  take  place  on  the  day  appointed  in  the 
by-laws,  it  may  be  hold  on  any  day  there- 
after as  is  provided  for  in  such  by-laws,  or  to 
which  such  election  may  be  adjourned  or 
ordered  by  the  directors.  If  an  election  has 
not  been  held  at  the  appointed  time,  and  no 
adjourned  or  other  meeting  for  the  purpose 
has  been  ordered  by  the  directors,  a  meet- 
ing may  be  called  by  the  stockholders,  as 
provided  in  section  three  hundred  and  ten 
of  this  article. 

Adjournment  of  meeting.     §  312,   note. 


§  315.  Upon  the  application  of  any  person, 
or  body  corporate,  aggrieved  by  any  election 
held  by  any  corporate  body,  the  district 
court  of  the  district  in  which  such  election 
is  held  must  proceed  forthwith  to  hear  the 
allegations  and  proofs  of  the  parties,  or 
otherwise  inquire  into  the  matters  of  com- 
plaint, and  thereupon  eonlirm  the  election. 
Older  a  new  one,  or  direct  such  other  relief 
in  the  premises  as  accords  with  right  and 
justice.  Upon  filing  the  petition,  and  before 
any  further  proceedings  are  had  under  this 
section,  five  days'  notice  of  the  hearing  must 
be  given,  under  the  direction  of  the  court 
or  the  judge  thereof,  to  the  adverse  party, 
or  those  to  be  alfected  thereby.  (In  eft'e'ct 
April  1,  1878.) 

[Above  section  has  application  only  to  elections 
which  are  by  statute  authorized  to"  be  made  by 
the  stockholders,  and  does  not  include  an  ap- 
pointment made  by  directors  to  fill  vacancies. 
"  Election  "  distinguished  from  "  appointment." 
Wickersham  v.  Brittan,  93  Cal.  34;  s.  c,  28  Pac. 
Rep.  792;  29  id.  51.  A  "  corporate  body  "  re- 
ferred to  Is  the  corporation  Itself,  and  not  the 
board  of  directors.  Id.  The  superior  court  has 
jurisdiction  to  entertain  proceedings  under  sec- 
tion 312  and   section   315  of  tlie   Civil   Code.     Id. 

Suit  to  set  aside  election  of  directors;  staving 
action  of  director  pending  appeal.  Dulin  v.  W.  & 
C.  Co.,  98  Cal.  3U4;  s.  C,  33  I'ac.   Rep.   123.] 

§  310.  Any  officer  of  a  corporation  who 
willfully  gives  a  certificate,  or  willfully 
makes  an  official  report,  public  notice,  or 
entry  in  any  of  the  records  or  books  of  the 
corporation,  concerning  the  corporation  or 
its  business,  which  is  false  in  any  material 
representation,  shall  be  liable  for  all  the 
damages  resulting  therefrom  to  any  person 
injured  thereby;  and  if  two  or  more  officers 
unite  or  participate  in  the  commission  of 
any  of  the  acts  herein  designated,  they  shall 
be  jointly  and  severally  liable.  (In"  effect 
July  1,  1874.) 

See  Pen.  C,  §§  558,  564. 

§  317.  When  all  the  stockholders  or  mem- 
bers of  a  corporation  are  present  at  any 
meeting,  however  called  or  notified,  and  sign 
a  written  consent  thereto  on  the  record  of 
such  meeting,  the  doings  of  such  meeting 
are  as  valid  as  if  had  at  a  meeting  legally 
called  and  noticed. 

§  318.  The  stockholders  or  members  of 
such  corporation,  when  so  assembled,  may 
elect  officers  to  fill  all  vacancies  then  exist- 
ing, and  may  act  upon  such  other  business 
as  might  lawfiUly  be  transacted  at  regular 
meetings  of  the  corporation. 

§  31f>.  The  meetings  of  the  stockholders 
and  board  of  directors  of  a  corporation  must 
be  held  at  its  office  or  principal  place  of 
business. 

Place  of  business  may  be  changed.     §  321(a^. 

§  320.  When  no  jirovision  is  made  in  the 
by-laws  for  regular  meetings  of  the  directors 
and  the  mode  of  calling  sjiecial  meetings,  all 
meetings  must  be  called  by  special  notice  in 


22 


CALIFORNIA. 


Liability  of  stockholders,  Civ.  C,  §§  o:il-322. 


■oTitiugr.  to  be  piveu  to  each  director  by  the 
secretary,  on  the  order  of  the  president,  or 
if  tliere  be  uoue,  ou  the  order  of  two 
directors. 

[Under  this  section.  It  is  not  required  that  no- 
tice of  special  meeting  of  directors  should  specify 
purpose  of  meeting.  A  notice  tliat  tlic  meeting 
will  l)e  held,  place  where,  and  time  when  it  will 
be  held,  will  be  sutllcieiit.  Granger  v.  Mining 
Co.,  &;)  Cal.  G70.  In  absence  of  contrary  proof, 
notice  to  directors  of  a  meeting  will  l)e  presumed, 
though  not  recited  in  the  record  of  the  meeting. 
Id.;  Harding  v.  Vandewatcr,  40  Cal.  78.  distin- 
guished. Each  director  must  have  special  notice 
of  regular  meetings  of  board  of  directors,  unless 
provision  Is  made  in  by-laws  for  such  meetings. 
Thompson  v.  Williams,  76  Cal.  154;  s.  c,  18  Pac. 
Kep.   153.] 

§  321.  Every  corporation  doing  a  banking 
business  in  tliis  State  must  keep  in  its  othce, 
in  a  place  accessible  to  the  stockholders,  de- 
positors, and  creditors  thereof,  and  for  their 
use.  a  book  containing  a  list  of  all  stock- 
holders in  such  corporation,  and  the  number 
of  shares  of  stoclc  held  by  each;  and  every 
such  corporation  must  kee])  posted  in  its 
othce,  in  a  conspicuous  jilace,  accessible  to 
the  public  generally,  a  notice  signed  by  the 
president  or  secretary,  showing: 

First.  The  names  of  the  directors  of  such 
corporation. 

Second.  The  number  and  value  of  shares 
of  stock  held  by  each  director. 

The  entries  on  such  book  and  such  notice 
shall  be  made  and  posted  within  twenty-four 
hours  after  any  transfer  of  stock,  and  shall 
be  conclusive  evidence  against  eacli  director 
and  stockliolder  of  the  number  of  shares  of 
stock  held  by  each.  The  provisions  of  this 
section  shall  apply  to  all  banking  corpora- 
tions formed  or  existing  before  twelve 
o'clock,  noon,  of  the  day  on  which  this  Code 
took  effect,  as  well  as  to  those  formed  after 
such  time. 

See  Const,  art.  XII,  §§  5,  14;  C.  C,  §  356. 

[Section  referred  to  and  construed.  Chapman  v. 
Doray,  89  Cal.   54;   s.   c.  26  Pac.    Rep.   605.] 

§  32ia.  Every  corjioration  that  has  been  or 
may  be  created  under  the  general  laws  of 
this  State  may  change  its  principal  place  of 
business  from  one  place  to  another  in  the 
same  county,  or  from  one  city  or  county  to 
another  city  or  county  within  this  State. 
Bef<»re  such  change  is  made,  tlie  consent,  in 
Avriting,  of  the  holders  of  two-thirds  of  the 
capital  stock  must  be  obtained  and  filed  in 
the  ofTice  of  the  cori)oration.  "When  such 
consent  is  obtained  and  filed,  notice  of  the 
inteiuled  removal  or  change  must  l)e  iiub- 
lislied.  at  least  once  a  week,  for  three  suc- 
cessive weeks,  in  some  newspajier  imblislied 
in  the  county  Avherein  said  principal  place 
of  business  is  situated,  if  there  is  one  pub- 
lished therein;  if  not,  in  a  newspaper  of  an 
adjoining  coimly.  giving  the  name  of  the 
county  or  city  wher(>  it  is  situated,  and  that 
to  which  it  is  intended  to  remove  it. 

See  Const.,   art.   XII,    S   ]  I,   and   note. 


CHAPTER  II. 

Corporate  Stock. 

Art.     I.  Stock  and  stockholders. 
II.  Assessments  of  stock. 

ARTICLE  I.     STOCK  AND  STOCKHOLDERS. 

Sec.  322.  Liabilities  of  stockholders.    They  may  be 
released,  when. 
32.3.  Certilicates,  bow  and  when  issued. 
324.  Transfer  of  sliares. 

.325.  Transfer  of  shares  held  by  married 
women,  etc.  Dividends  payable  to 
married   women. 

326.  Non-resident   stockholders.    Bonds. 

327.  Contract  to  relieve  directors  void. 

§  322.  Each  stockholder  of  a  corporation  is 
individually  and  personally  liable  for  such 
portions  of  its  debts  and  liabilities  as  the 
jimount  of  stock  or  shares  OAvned  by  him 
bears  to  the  whole  of  the  subscribed  capital 
stock  or  shares  of  the  corporation,  and  for  a 
like  proportion  only  of  each  debt  or  claim 
iigaiust  the  corporation.  Any  creditor  of  the 
corporation  may  institute  joint  or  several 
actions  against  any  of  its  stockliolders  for 
the  proportion  of  his  claim,  payable  by  each, 
and  in  sucli  action  the  court  must  ascertain 
the  proportion  of  the  claim  or  debt  for  which 
each  defendant  is  liable,  and  a  several  judg- 
ment must  be  rendered  against  each,  in  con- 
formity therewitli.  If  any  stockholder  pays 
his  proportion  of  any  debt  due  from  the  cor- 
lioration,  incurred  while  he  was  such  stock- 
liolder, he  is  relieved  from  any  further  per- 
sonal liability  for  such  debt;  and  if  an  action 
lias  been  brought  against  him  upon  stich 
debt,  it  shall  be  dismissed  as  to  him.  upon 
his  i)aying  the  costs,  or  such  pi-oiiovtion 
thereof  as  may  be  properly  chargeable 
against  him.  The  liability  of  each  stock- 
holder is  determined  by  the  amount  of  stock 
or  shares  owned  liy  him  at  the  time  the  debt 
or  liability  was  incurred;  and  such  liability 
is  not  released  by  any  subsequent  transfer 
of  stock.  The  term  stockholder,  as  used  in 
this  section,  shall  apply  not  only  to  such  per- 
sons as  appear  by  the  books  of  the  corpora- 
tion to  be  such,  but  also  to  every  equitable 
owner  of  stock,  although  the  same  appear 
on  the  books  in  tlie  name  of  another,  and 
also  to  every  person  who  has  advanced  tlio 
ir.stallments  or  purcliase  money  of  stock  in 
the  name  of  a  minor,  so  long  as  the  latter 
remains  a  minor;  and  also  to  every  guardian 
or  other  trustee  who  voluntarily  invests  any 
trust  funds  in  the  stock.  Trust  funds  in  tlie 
liands  of  a  guardian  or  trustee  sliall  not  be 
lialile  under  the  provisions  of  this  section 
by  reason  of  any  sucli  investment,  nor  shall 
the  person  for  Avliose  benefit  tlie  investment 
is  made  be  responsilile  in  respect  to  tliCstoi-k, 
until  he  becom(>s  competent  and  able  to  con- 
trol the  same;  but  the  responsibility  of  the 
guardian  or  trustee  making  the  investment 
shall  continue  until  that  period.  Stock  held 
as  collateral  security,  or  by  a  trustee,  or  in 
any  otliei*  representative  cayiacity.  does  not 
make  the  liolder  thereof  a  stockholder  within 
the  meaning  of  this  section,  except  in  the 


CALIFORXIA. 


23 


Certificates  of  stock,  Civ.  C,  §  323. 


cases  above  mentioned,  so  as  to  charge  bim 
witli  any  proportion  of  tlie  debts  or  liabilities 
of  the  corporation;  but  the  pledgor,  or  per- 
j,on  or  estate  represented,  is  to  be  deemed 
the  stockholder  as  respects  such  liability. 
In  coiTOi'ations  having  no  capital  stock,  each 
member  is  Individually  and  personally  lia- 
ble for  his  proportion  of  its  debts  and  lia- 
bilities, and  similar  actions  may  be  brouglit 
against  him,  either  alone  or  jointly  with 
other  members,  to  enforce  such  lial)ility  as 
by  this  section  may  be  brought  against  one 
or  more  stockliolders,  and  similar  Judgments 
may  be  rendered.  The  liability  of  each  stoclv- 
holder  of  a  corporation  formed  tinder  the 
laws  of  any  otlier  State  or  Territory  of  the 
United  States,  or  of  any  foreign  country, 
and  doing  business  witliin  tliis  State,  shall 
be  the  same  as  tlie  lialtility  of  a  stockholder 
of  a  corporation  created  under  the  Constitu- 
tion and  laws  of  this  State. 

See  Const.,  art.  XII,  §  3. 

[In  this  State  each  principal  is  answerable,  per- 
sonally, for  his  i)roportion  of  debts  and  liabilities 
of  coinpany.  Mining  Co.  v.  Woodbury,  14  Cal. 
2<>5.  In  California  neither  a  strict  or  liberal  con- 
struction is  to  be  artopt(>d  whore  it  will  operate 
to  defeat  the  obvious  intent  of  the  statute,  but 
It  should  be  reasonably  construed.  Id.;  David- 
son V.  Rankin,  .'U  Cal.  oO.j.  A  subscriber  for 
shares  Is  responsible  as  a  stockholder,  although 
he  has  not  paid  for  his  stock  or  received  certifi- 
cate. A  corporation  may  give  a  subscriber 
credit  for  his  stock  as  for  any  other  property. 
Certificates  of  stock  are  mere  evidence  of  prop- 
ertv,  which  niav  exist  without  certificates.  Mit- 
chell V.  Ki'ckman,  (J4  Tnl.  117;  s.  c,  28  Pac.  Rep. 
110;  In  re  Mining  (Ni.,  7  Saw.  .30.  Merely  signing 
an  agreement  to  take  stock  in  an  unincorporated 
company  does  not  constitute  one  a  stockholder 
after  incorporation.  R.  R.  Co.  v.  Hildreth,  53 
Cal.    123. 

One  who  never  accepts,  but  refuses  to  accept, 
any  stock  is  not  a  stockholder,  even  though  secre- 
tarv  enters  his  name  on  the  books  as  such.  Mud- 
gett  V.  Ilorrell,  .33  Cal.  25.  Liability  of  stock- 
holder for  corporate  debts  is  primary  and  origi- 
nal, and  not  that  of  guarantor  or  surety.  Mining 
Co.  V.  Woodhurv.  14  Cal.  205;  Davidson  v.  Rankin, 

34  id.  503;  Young  v.  Rosenbaum,  39  id.  646;  Bank 
V.  Hill,  50  id.  107;  Favmonville  v.  McCollough.  Id. 
2S5;  Mitchell  v.  Beckman,  64  id.  117;  s.  c,  28  Pac. 
Rep.  110;  Morrow  v.  Superior  Court,  64  Cal.  3.83. 
Any  legislation  attempting  to  limit  or  postpone  its 
lialiility.  or  make  it  secondar.v  to  that  of  the 
corporation,  would  be  unconstitutional  and  void. 
(See  Const.,  art.  XTI.  §  .'{.)  Sec,  also,  French  v. 
Teschomacker,   24  ("al.   518;   Larrabee  v.    Baldwin, 

35  III.  155.  The  liability  is  not  dependent  or  con- 
tingent ui)on  the  r(>covery  against  the  corporation, 
nor  is  it  an'ected  b.v  a  suspension  of  the  remedy 
against  the  co^ioration.  Davidson  v.  Rankin,  34 
Cal.  503;  Young  v.  Rosenbaum,  3fl  id.  646.  In  an 
action  against  stockholder,  no  defense  that  corpo- 
rate property  which  has  been  pl(>(lged  to  i)Iaintifr 
remains  undisposed  of.  Bank  v.  Hill,  supra.  But 
a  discharge  of  all  or  part  of  debt  of  corporation  is 
pro  tanto  a  discharge  of  the  liability  of  stockhold- 
ers. Bank  v.  Pilaris,  .5S  Cal.  380.  As  between 
themselves,  corporation  As  principal  debtor,  and 
stockholders  are  sureties  or  guarantors.  I'rince  v. 
Lynch,  38  Cal.  528.  The  action  authorized  b.v  sec- 
tion 322  does  not  exclude  the  equitable  remedy  to 
enforce  the  pavment  of  unpaid  assessments  on 
stock.  Harmon  v.  Page,  62  Cal.  448.  But  other- 
wise in  case  of  mining  corporations.  In  re  Mining 
Co.,  7  Saw.  30;  s.  c.  8  id.  .366.  A  release  of  the  cor- 
poration b.v  the  creditor  releases  stockholders. 
And  where  a  creditor  releases  one  stockholder 
from  all  personal  liability,  he  thereb.v  discharges 
corporation  and  other  stockholders  to  same  ex- 
tent.     Prince    v.    Lynch,    38   Cal.    538.      The   com- 


plaint in  an  action  to  enforce  liability  of  stock- 
holders for  indebtedness  of  corporation  must 
state  ])roportion  of  stock  owned  by  defendant  at 
time  debt  was  incurred  bears  to  whole  subscribed 
stock  at  that  time,  or  facts  from  which  such  pro- 
portion may  be  deduced.  Bidwell  v.  Babcock,  87 
Cal.  20;  s.  c,  25  I'ac.  Rep.  7.52.  The  liability  of 
each  stockholder  to  capital  stock  is  several  and 
not  joint;  therefore  upon  a  creditor's  bill  b.v  a 
.judgment  creditor,  it  is  not  necessary  that  all 
stockholders  should  l>e  made  parties  defendant. 
Baiues  v.  Babcock,  95  Cal.  582;  s.  c,  27  Pac.  Rep. 
6(4;  30  id.  776.  The  remedy  given  by  section  322 
is  jiurely  statutor.v,  and  furnishes  to  creditors  of 
corporations  additional  security,  by  making  stock- 
holders directl.v  liable  for  their  proportion  of  cor- 
porate debts,  and  was  not  intended  to  diminish 
assets  of  corporation  b.v  releasing  stockholders 
from  their  indebtedness  to  the  cori)oration  on  ac- 
count of  unjiaid  subscriptions  for  stock,  and  to 
take  awa.v  from  the  creditor  the  right  to  resort 
to  a  court  of  eipiity  to  compel  its  payment.    Id. 

Action  against  stockholder  to  recover  his  pro- 
portion of  a  corporate  debt  in  an  action  upon  a 
contract.  Kenned.v  v.  Bank,  97  C.-il.  93;  s.  c,  31 
Pac.  Rep.  846.  It  must  be  commenced  within 
three  years  after  liabilitv  was  created.  Hunt  v. 
AVard,  99  Cal.  012;  s.  c,  34  Pac.  Rep.  .3.3.5.  Bank 
v.  Steamship  Co.,  103  Cal.  594;  s.  c,  .37  Pac.  Rep. 
499.  Statute  of  limitations  runs  from  date  and 
not  maturit.v  of  indebtedness.  Hunt  v.  Ward, 
supra.  Pledgee  of  stock  not  necessarily  liable. 
Borland  v.  Bank,  99  Cal.  89;  s.  c.,  33  Pac.  Rep. 
737. 

Action  by  judgment  creditor  to  enforce  unpaid 
subscription  to  stock;  joinder  of  parties  and 
cause  of  aetion  held  good.  Ryan  v.  .Tacques,  103 
Cal.  28(1;  s.  c,  oi  I'ac.  Rep.  186.  Re(iulsites  and 
construction    of   plendings      Id. 

Stockholders  may  have  benefit  of  statute  of  this 
State  imposing  liabilit.v  on  stockholders  for  their 
respective  proportions  of  the  corporate  debts,  as 
against  other  stockholders  in  same  corporation. 
Brown  V.  Merrill,  ](i7  Cal.  446:  s.  c,  40  Pac.  Rep. 
557.  Stockholders  in  this  State  are  not  jointl.v  or 
severall.v  llal)lo  for  corporate  debts;  but  each 
stockholder  has  a  several  liabilit.v  proportionately 
to  amount  of  his  stock;  and  when  he  has  paid 
his  portion  of  an.v  debt,  or  of  all  corporate  debts, 
he  is  free  from  all  lialjility,  and  has  no  cause  of 
action  against  an.v  other  stockholder  for  money 
so  paid.  Id.  To  enforce  liability  of  stockholders, 
it  is  incumbent  upon  plaintiff  to  prove  whole 
amount  of  stock  outstanding  to  enable  court  to 
determine  liabilitv.  Knowles  v.  Sandercock,  107 
Cal.   629;   s.   c,  4o   Pac.   Rep.   1047. 

What  is  sufficient  proof  of  amount  of  stocli  sub- 
scribed.    Id. 

Stockholder  who  is  a  creditor  of  the  corporation 
may  sue  other  stockholders  for  their  proportionate 
share  of  the  liabilities.     Id. 

Jurisdiction  of  court  under  above  section. 
Orimwood  v.  Barrv,  118  Cal.  274;  s.  c,  50  Pac. 
Rep.   430.] 

§  323.  All  corporations  for  profit  must  is- 
sue certificates  for  stock  when  fully  paid  up, 
signed  by  the  president  and  secretary,  and 
uiay  provide.  In  their  by-laws,  for  issuing 
certificates  prior  to  the  full  payment,  under 
such  i-estrictions  and  for  such  purposes  as 
their  by-laws  may  provide. 

[A  corporation  for  profit  may  give  credit  to  sub- 
scribers to  its  capital  stock  for  stock:  and  may,  by 
proper  provisions  in  its  by-laws,  issue  certificates 
to  such  stockholders  prior  to  full  payment  for  the 
stock.  L.  &  W.  Co.  V.  Herberger,  82  Cal.  603; 
s.  c.  23  Pac.  Rep.  134:  Mitchell  v.  Beckman,  64 
Cal.   117:  s.  c,  28  Pac.  Rep.   110. 

Cancellation  of  unissued  certificates  of  stock 
does  not  eflect  cancellation  of  subscription,  and 
such  subscription  cannot  bo  cancelled,  even  b.v 
order  of  board  of  directors,  without  unanimous 
consent  of  all  stockholders,  except  for  fraud  or 
mistake.  Fruit  Co.  v.  Coon,  107  Cal.  447;  s.  c, 
40   I'ac.    Rep.    .542. 


24 


CALIFORNIA. 


Shares  of  stock,  Civ.  C,  §§     324-326. 


Issuance  of  a  certificate  is  not  necessarily  pre- 
liminary to  ownership  or  asscssiibility  of  stock. 
Ut>scission  of  subscription  to  stock  may  be  proved 
by  circumstantial  evidence.     Burden  of  proof.    Id.] 

§  324.  (As  amended  March  2G,  1895.)  When- 
ever the  capital  stoelc  of  any  corporation  is 
rtividcil  into  shares,  and  certificates  tlierefor 
are  issnod,  sncli  sliares  of  stock,  except  as 
lieroinafter  provided,  are  personal  property, 
and  may  be  transferred  by  indorsement  by 
the  signatnre  of  the  proprietor,  his  agent, 
attorney,  or  legal  representative,  and  the  de- 
livery of  the  certificate;  but  snch  transfer  is 
not  valid,  except  as  to  tlie  parties  thei'eto, 
until  the  same  is  so  entered  upon  the  books 
of  the  corporation  as  to  show  the  names  of 
tlie  parties  by  wliom  and  to  wliom  trans- 
ferred, the  number  of  the  certificate,  the 
niunber  or  designation  of  the  shares,  and 
the  date  of  the  transfer;  Provided,  how- 
ever. That  any  corporation  organized  for, 
or  engaged  in  the  business  of  selling, 
distril>uting,  supplying,  or  delivering  water 
for  irrigation  purposes  or  for  domestic 
use.  may  in  its  by-laws  provide  that 
water  shall  only  be  so  sold,  distributed, 
supplied,  or  delivered  to  owners  of  its  capita] 
stock,  and  tliat  such  stock  shall  be  appur- 
tenant to  certain  lands  when  the  same  are 
described  in  the  certificate  issued  therefor; 
and  Avlien  such  certificate  shall  be  so  issued, 
and  a  certified  copy  of  such  by-laws  re- 
corded in  tlie  office  of  the  county  recorder  in 
tlie  county  where  such  lands  are  situated, 
tlie  shares  of  stock  so  located  on  any  land 
sliall  only  be  transferred  with  said  lands, 
and  shall  pass  as  an  appurtenance  thereto. 

See  §  3.54  (0). 

fEssenti.ils  of  a  sale  of  shares  of  stock  so  as  to 
transfer  title  thereto.  Borland  v.  Bank,  99  Cal. 
SO:    s.    c,    .*n   P.nc.    Rep.    7."?7. 

Except  as  between  transferror  and  transferee, 
Transfer  of  shares  of  stock  is  not  valid  until  en- 
tered upon  books.  Weston  v.  Mining  Co..  .5  Cal. 
ISfi.  But  a  transfer  not  so  entered  upon  books  is 
pood  as  to  persons  having  actual  notice  of  it. 
AVeston  v.  Mining  Co.,  0  Cal.  42.5;  Naglee  v. 
Wharf  Co..  20  id.  .53.S:  Poo.  v.  TOlmore.  .35  id. 
r..53;  Parrott  v.  Byers,  40  id.  014;  Winter  v.  Min- 
ing Co..  .5.3  id.  428.  As  between  the  parties,  the 
certificate  passes  bv  indorsement  and  deliverr. 
Brown  v.  Cns  Light  Co..  5S  Cal.  420.  But  it  has 
boon  expressly  declared  by  the  supreme  court  that 
certificates  of  stock  are  not  negotiable  securities 
in  a  coinnierclal  sense.  Atkins  v.  Gamble,  42  Cal. 
90;  Barstow  v.  Mining  Co.,  04  id.  3SS;  s.  c.  1 
Pae.  Bop.  .'!40;  Sherwood  v.  Mining  Co..  50  Cal. 
412.  The  bona  fide  purchaser  of  a  certificate  from 
the  apparont  owner  takes  the  same  freed  from 
the  defect  in  the  transferrer's  title.  Winter  v. 
Mining  Co..  .53  Cal.  428.  The  word  "  trustee  " 
after  the  name  of  the  transferrer  is  not  notice 
of  seeret  equities.  B.rewstor  v.  Sime.  42  Cal. 
1.39;  Thompson  v.  Toland.  48  id.  99.  Mandamus 
■will  not  lie  to  compel  corporation  to  enter  the 
transfer  upon  the  eonipany's  books.  Sharehold- 
er's remedy  is  in  damages  for  refusal.  Kimball 
V.  Water  Co.,  44  Cal.  173.  But  see  Voo.  v. 
Crockett,  9  id.  112:  Sherwood  v.  Mining  Co..  .50 
id.  412.  whore  it  seems  to  have  been  admitted 
that  mandamus  was  the  jiroper  remedy.  Arti- 
cles of  complaint  in  such  action.  Edwards  v. 
Bank.  .59  Cal.  1.30.  Foroltrn  executor's  indorse- 
ment and  delivery  of  corlifioate  entitlod  trans- 
feroe  to  have  transfer  made  on  oompanv's  books 
Brown  v.  C,as  Bight  Co..  .58  Cal.  42C,.  "it  is  not 
sufllcient  excuse  for  refusing  to  transfer  stock  that 


assignor  was  indebted  to  company  unless  com- 
pany had  a  lien  upon  the  stock  at  time  of  'trans- 
fer. I'eo.  v.  Crockett,  9  Cal.  112.  A  corporation 
may  have  a  lion  upon  shares  of  a  stookholder  for 
hi.s'  debt  If  by-laws  so  expressly  provide.  And 
whether  such  by-laws  may  be  adopted  depends 
upon  charter.  I'endergast  v.  Bank,  2  Saw.  108. 
In  an  action  to  determine  ownership  of  stock,  the 
corporation  and  purchaser  with  notice  are  proper 
parties  defendant.  Johnson  v.  Kirby.  iJ  West.  Coast 
IJep.  482.  Transfer  by  pledgee  of  stock,  where 
dividends  thereon  have  eqmiled  their  indebtedness, 
will  be  enjoined.  Smith  v.  Mining  Co.,  14  Cal. 
242.  A  by-law  imposing  a  lien  on  stock,  seeking 
to  charge  same  therewith  in  hands  of  bona  fide 
purchaser,  is  in  conllict  with  above  section,  and 
not  enforcible.  Bank  v.  Bank,  63  Cal.  359;  Water 
Co.  V.  Herberger,  SJ  id.  003;  s.  c,  23  I*ac.  Kep. 
184.  Section  324  applied.  Jennings  v.  Bank,  79 
Cal.  331;  s.  c,  21  I'ac.  Rep.  852;  Tafltt  v.  li.  R. 
Co.,  84  Cal.  137;  s.  c,  24  I'ac.   Rep.  436. 

One  who  contracts  to  purchase  stock  on  a  given 
day  must  take  it  at  that  day.  If  he  fails  to  do 
so  he  is  liable  for  purchase  price  and  interest  and 
assessment  levied  after  his  breach  of  the  con- 
tract. Gay  v.  Dare,  103  Cal.  454;  s.  c,  37  I'ac. 
Kep.  466.] 

§  325.  Shares  of  stock  in  corporations  held 
or  owned  by  a  married  woman  may  be  trans- 
ferred by  her,  her  agent  or  attorney,  with- 
out the  signature  of  her  husband,  in  the  same 
manner  as  if  such  married  woman  Avere  a 
feme  sole.  All  dividends  payable  upon  any 
shares  of  stock  of  a  corporation  held  by  a 
married  woman  may  be  paid  to  such  married 
woman,  her  agent  or  attorney,  in  the  same 
manner  as  if  she  were  unmarried,  and  it  is 
not  necessary  for  her  husband  to  join  in  a 
receipt  therefor;  and  any  proxy  or  power 
given  by  a  married  woman  touching  any 
shares  of  stock  of  any  corporation  owned 
by  her  is  valid  and  binding  without  the 
signature  of  her  husband,  the  same  as  if  she 
were  unmarried. 

§  320.  When  the  shares  of  stock  in  a  cor- 
poration are  owned  by  parties  residing  out 
of  the  State,  the  president,  secretary,  or  di- 
rectors of  the  corporation,  before  entering 
any  transfer  of  the  shares  on  its  books,  or 
issuing  a  certificate  therefor  to  tlie  trans- 
feree, may  require  from  the  attorney  or 
agent  of  the  non-resident  owner,  or  from  the 
person  claiming  under  the  transfer,  an  affi- 
davit or  other  evidence  that  the  non-resident 
owner  was  alive  at  the  date  of  the  trans- 
fer, and  if  such  affidavit  or  other  satisfactory 
evidence  be  not  furnished,  may  require  from 
the  attorney,  agent,  or  claimant  a  bond  of 
indemnity,  with  two  sureties,  satisfactory 
to  the  officers  of  the  corporation;  or,  if  not 
so  satisfactory,  then  one  approved  by  a  dis- 
trict judge,  or  the  county  judge  of  the  cotmty 
in  which  the  principal  office  of  the  corpora- 
tion is  situated,  conditioned  to  protect  the 
corporation  against  any  liability  to  the  legal 
representatives  of  the  owner  of  tlie  shares, 
in  case  of  his  or  liertlenlh  before  the  trans- 
fer; and  if  such  affidavit  or  other  evidence 
or  bond  be  not  furnished  when  required,  as 
herein  provided,  neither  the  corporation,  nor 
any  officer  thereof,  shall  be  liable  for  re- 
fusing to  enter  the  transfer  on  the  books  of 
the  corporation.    (In  effect  .Tuly  1,  1874.) 

rstook  owned  by  non-resident  may  be  sold  by  his 
executor  and  the  certificate  indorsed  bv  the  exec- 


CALIFORNIA. 


25 


Assessments  of  stock,  Civ.  C,  §§  327-333. 


utors  entitles  purchaser  to  a  transfer  of  stock 
upon  the  books.  Browu  v.  Gas  Light  Co.,  58  Cal. 
42G.] 

§  327.  Any  contract  or  contracts,  verbal  or 
written,  lioreafter  made,  wliereby  it  is 
scjught  directly  or  indirectly  to  relieve  any 
director  or  trustee  of  any  corporation  or 
joint-stock  association  from  any  liability  im- 
posed bj'  section  three  of  article  XII  of  the 
Constitution  of  California,  are  hereby  de- 
clared to  be  and  shall  be  null  and  void.  (In 
(>lfect  April  12,  1880.) 

[Section  referred  to  and  construed.  Silva  v. 
Campbell,   84  Cal.  422;  s.   c.  24  I'ac.   Rep.   310.] 

ARTICLE    II.      ASSESSMENTS    OF    STOCK. 

Sec.  331.  Directors  nia.v  levy  assessments. 
3.32.  Limitation.     How  levied. 

333.  Levy  of  as.sessment.     Old  assessment  re- 

maining unpaid. 

334.  AVhat  order  shall  contain. 

335.  Notice  of  assessment.      Form. 

336.  Publication   and   service. 

337.  Delinquent  notice.     Form. 

338.  Contents  of  notice. 

339.  How  published. 

340.  Jurisdiction  acquired,   how. 

341.  Sale  to  be  by  public  auction. 

342.  Highest   bidder   to  be   the   purchaser. 

343.  In   licfault    of    bidders,    corporation    may 

purchase. 

344.  Disposition   of   stock   purchased   by    cor- 

poration. 

345.  Extension   of   time  of  delinquent   sale. 

346.  Assessments   shall   not   be  invalidated. 

347.  Action  for  recovery  of  stock,  and  limita- 

tion thereof. 

348.  Affidavits    of    publication.      Affidavits    of 

sale.     To  be  filed. 

349.  "Waiver   of   sale.      Action    to   recover   as- 

sessment. 

§  331.  The  directors  of  any  corporation 
formed  or  existing  under  the  laws  of  this 
State,  after  one-fourth  of  its  capital  stock 
has  been  subscribed,  may,  for  the  purpose 
of  paying  expenses,  conducting  business,  or 
paying  debts,  levy  and  collect  assessments 
upon  the  subscribed  capital  stoclt  thereof,  in 
the  manner  and  form,  and  to  the  extent,  pro- 
vided herein.    (In  effect  July  1,  1874.) 

[Corporations  formed  and  existing  under  laws 
of  this  State  may  levy  and  collect  assessments 
for  corporate  purposes  on  shares  of  stock  upon 
which  subscriptions  have  been  fully  paid.  R.  R. 
Co.  V.  Spreckles,  65  Cal.  193;  s.  c,  3  I'ac.  Rep. 
661,  802.  An  assessment  by  an  electric-light  com- 
pany for  necessary  repairs  of  its  engine  and  ma- 
chinery should  be  clearly  authorized  by  above 
section.  Younglove  v.  Steinmau,  80  Cal.  375;  s.  c, 
22  Pac.  Rop.  189.  Under  our  statutes,  the  only 
lien  given  to  corporations  for  profit  upon  their 
subscribed  capital  stock,  and  which  does  not  de- 
pend upon  ijossession  of  certificate  of  stock,  is  to 
secure  payment  of  assessments  levied  for  the  pur- 
pose of  paying  expenses,  conducting  business,  and 
paying  debts.  Water  Co.  v.  Herberger,  82  Cal. 
603;  s.  c,  23  Pac.  Rep.  134.  Installments  or 
"  calls,"  referred  to  in  above  section,  are  not  in- 
cluded in  term  "  assessments  "  as  used  in  the 
Constitution.  Water  Co.  v.  Superior  Ct.,  92  Cal. 
r.O;  s.  c,  28  Pac.  Rep.  54.  Stockholders'  liability 
for  unpaid  assessments  on  corporate  stock  is 
founded  on  contract,  and  a  .iustice's  court  has 
jurisdiction  to  enforce  the  same.  Alpers  v.  Su- 
perior Ct.,  3  M'est  Coast  Rep.  526. 

Where  all  stock  is  fully  paid  up  it  is  assessable. 
Oreen  v.  Medical  Co.,  96  Cal.  322;  s.  c,  31  .Pac. 
Uep.  ](iO.  Assessments  upon  stock  issued  below 
par.    Id. 

When,  by  consent  of  all  stockholders,   reserved 


stock  is  sold  by  corporation  for  less  than  its  par 
value,  it  is  to  be  considered  as  fully  paid  up  stock. 
Id. 

A  stockholder  is  liable  to  pay  his  subscription  to 
stock  according  to  its  terms.'  The  full  amounts 
may  be  called  for  at  once,  and  it  is  not  a  necessary 
condition  that  directors  should  first  have  levied 
assessments  upon  the  stock  under  the  Code. 
Kolilcr  V.  Agassiz,  99  Cal.  9;  s.  c,  33  Pac.  Kep. 
741. 

Assignee  of  an  insolvent  corporation  succeeds  to 
all  the  rights  of  the  corporation  to  enforce  sub- 
scription to  stock.     Id. 

False  relations  of  promoters  of  a  corporation,  ef- 
fect of.  Water  Co.  v.  Flash,  97  Cal.  610;  s.  c,  32 
Pac.  Kep.  600.  Promoter  defined.  Fiduciary  re- 
liition  to  corporation.  Id.;  Burbank  v.  Dennis, 
101   Cal.   90;   s.   c,  35  Pac.   Rep.   444. 

Fraudulent  transaction  by  a  promoter;  corpora- 
tion may  elect  either  to  set  aside  transaction,  or 
to  recover  jiromoter's  secret  profits.  Id.  Knowl- 
edge by  directors  of  fraud  or  promoters  is  not 
knowledge  to  stockholders.  Id.  Subscription  for 
stock  of  a  corporation  subsequently  to  be  formed 
will  sustain  an  action  on  its  complete  incorpora- 
tion, against  subscribers  to  recover  calls  duly 
made  upon  the  stock.  San  Joaquin,  etc.,  Co.  v. 
Beecher,  101  Cal.  71.);  s.  c,  35  Pac.  Rep.  349.  Ef- 
fect of  organization  upon  executory  contract  to 
take  stock.  Id.  Asses-sments  ujjon  stock  levied 
by  do  facto  officers  are  valid.    Id. 

Under  above  section  complaint  in  action  to  col- 
lect assessment  on  stock  is  defective  where  it 
fails  to  show  that  one-fourth  of  capital  stock  has 
been  subscribed.  Inv.  Co.  v.  Merrill,  41  Pac.  Rep. 
487. 

In  absence  of  any  provision  therefor,  a  corpora- 
tion cannot  levy  on  its  capital  stock  until  «ifter 
full  amount  has  been  subscribed.     Id. 

A  corijoration  cannot  maintain  action  on  sub- 
scription for  a  corporation  to  be  formed  for  a 
different  purpose.  L.  <&  P.  Co.  v.  Johnson,  41 
Pac.  Rep.  1016. 

Liability  of  stockholder  who  acquired  his  stock 
by  purchase,  and  not  by  an  original  subscription. 
H.  cV  A.  Works  V.  Houser,  41  Pac.  Rep.  809.] 

§  332.  No  one  assessment  must  exceed  ten 
per  cent,  of  the  amount  of  the  capital  stock 
named  in  the  articles  of  incorporation,  ex- 
cept in  the  cases  in  this  section  otherwise 
provided  for,  as  follows: 

1.  If  the  whole  capital  of  a  corporation  has 
not  been  paid  up,  and  the  corporation  is  un- 
able to  meet  its  liabilities  or  to  satisfy  the 
claims  of  its  creditors,  the  assessment  may 
be  for  the  full  amount  unpaid  upon  the 
capital  stock;  or  if  a  less  amount  is  sufficient, 
then  it  may  be  for  such  a  percentage  as  will 
raise  that  amount. 

2.  The  directors  of  railroad  corporations 
may  assess  the  capital  stock  in  installments 
of  not  more  than  ten  i)er  cent,  per  month, 
unless  in  the  articles  of  incorporation  it  is 
otherwise  provided. 

3.  The  directors  of  fire  or  marine  insurance 
corporations  may  assess  such  a  percentage 
of  the  capital  stock  as  they  may  deem 
proper. 

[Section  referred  to  and  applied.  R.  R.  Co.  v. 
Spreckles,  65  Cal.  194;  s.  c,  2  West  Coast  Rep. 
7.52.  8.33;  L.  &  P.  Co.  v.  Johnson,  93  Cal.  5J9;  s.  c, 
29  Pac.  Rpp.  126.  Action  for  as.sessments  exceed- 
ing ten  per  cent,  of  stock;  burden  of  proof;  pre- 
sumption. Fniit  Co.  v.  Coon,  107  Cal.  447;  s.  c, 
40  Pac.   Rep.  542.] 

§  333.  No  assessment  must  be  levied  while 
any  portion  of  a  previous  one  remains  un- 
paid, unless: 

1.  The  power  of  the  corporatit)n  has  been 


26 


CALIFORXIA. 


Assessments  of  stock,  Oiv.  C,  §§  334-341. 


exercised  in  accordance  with  the  provisions 
of  this  articU'  ftir  tlie  purpose  of  collecting 
such  previous  assessment; 

2.  Tlie  collection  of  the  previous  assess- 
ment has  been  enjoined;  or, 

3.  The  assessment  falls  within  the  pro- 
visions of  either  the  first,  second,  or  third 
subdivision  of  section  three  hundred  and 
thirty-two. 

[Section  rpfcrrod  to  and  applied.  R.  R.  Co.  v. 
Spreokles,  Go  Cal.  194;  s.  c,  3  I'ac.  Rep.  661,  802.] 

§  33-K  Every  order  levying  an  assessment 
must  specify  the  amount  thereof,  when,  to 
wlioni.  and  where  payal)le;  fix  a  day,  sub- 
secpient  to  the  full  term  of  publication  of  the 
assessment  notice,  on  which  the  unpaid  as- 
sessment shall  be  delinquent,  not  less  than 
thirty  nor  more  than  sixty  days  from  the 
time  of  making  the  order  levying  the  assess- 
ment; and  a  day  for  the  sale  of  delinquent 
stoclv,  not  less  than  fifteen  nor  more  than 
sixty  days  from  the  day  the  stock  is  de- 
clared delinquent. 

§  335.  Upon  the  making  of  the  order,  the 
secretary  shall  cause  to  be  published  a  notice 
thereof,   in  the  following  form: 

(Name  of  coiporation  in  full.  Location  of 
principal  place  of  business.)  Notice  is  hereby 
given,  that  at  a  meeting  of  the  directors, 
held  on  the  (date),  an  assessment  of  (amount) 
per  share  was  levied  upon  the  capital  stock 
of  the  corporation,  payable  (when,  to  whom, 
and  where).  Any  stock  upon  which  this 
assessment  shall  remain  unpaid  on  the  (day 
fixed),  will  be  delinquent  and  advertised  for 
sale  at  public  auction,  and,  unless  payment 
is  made  before,  aaMII  be  sold  on  the  (day  ap- 
pointed), to  pay  the  delinquent  assessment, 
together  with  costs  of  advertising  and  ex- 
penses of  sale. 

(Signature  of  seci'etary,  and  location  of 
office.) 

[Assessment  upon  subscribed  stock;  statutory 
form  of  notice.  San  Joaquin,  etc.,  Co.  v.  Beecher, 
101  Cal.  70;  s.  c,  35  Pac.  Rep.  349.] 


§  336.  The  notice  must  be  personally  served 
upon  each  stockholder,  or,  in  lieu  of  personal 
service,  must  be  sent  through  the  mail,  ad- 
dressed to  each  stockholder  at  his  place  of 
residence,  if  known,  and  if  not  known,  at 
the  place  where  the  principal  office  of  the 
corporation  is  situated,  and  be  published 
once  a  week,  for  four  successive  weeks,  in 
some  newspaper  of  general  circulation  and 
devoted  to  the  publication  of  general  news, 
published  at  the  place  designated  in  the 
articles  of  incorporation  as  the  principal 
place  of  business,  and  also  in  some  news- 
paper pul)lished  in  the  county  in  which  the 
works  of  the  corporation  are  situated,  if  a 
paper  be  published  therein.  If  the  works  of 
the  cori)oration  are  not  Avithin  a  State  or 
Ten-itory  of  the  United  States,  publication 
in  a  paper  of  the  place  where  they  are  situ- 
ated is  not  necessary.  If  there  be  no  news- 
paper published  at  tlie  place  designated  as 


the  principal  place  of  business  of  the  cor- 
poration, tlien  tlie  publication  must  be  made 
in  some  other  news]»apcr  of  tlie  county,  if 
there  be  one,  and  if  lliere  be  none,  then  in  a 
newspaper  publislicd  in  an  adjoining  county. 
(In  effect  July  1,  1874.) 

*§  337,  If  any  portion  of  the  assessment 
mentioned  in  the  notice  lemains  unpaid  on 
the  day  specified  therein  for  declaring  the 
stock  delinquent,  the  secretary  must,  unless 
otherwise  ordered  by  the  board  of  directors, 
cause  to  be  published  in  the  same  papers  in 
which  the  notice  hereinbefore  provided  for 
shall  have  been  published,  a  notice  sub- 
stantially in  the  following  form: 

(Name  in  full.  Location  of  principal  place 
of  business.)  Notice.—  There  is  delinquent 
upon  the  foUoAving  described  stock,  on  ac- 
count of  assessment  levied  on  the  (date), 
(and  assessments  levied  previous  thereto,  if 
any),  the  seA'cral  amounts  set  opposite  the 
names  of  the  respective  shareholders,  as 
folloAA's:  (Names,  number  of  certificate, 
number  of  shares,  amount.)  And  in  accord- 
ance with  laAA'  (and  an  order  of  tlie  board  of 
directors,  made  on  the  [date],  if  any  such 
order  shall  have  been  made),  so  many  shares 
of  each  parcel  of  such  stock  as  may  be  neces- 
sary, will  be  sold,  at  the  (particular  place), 
on  the  (date),  at  (the  hour)  of  such  day,  to 
pay  delinquent  assessments  thereon,  to- 
gether with  costs  of  advertising  and  ex- 
penses of  sale. 

(Name  of  secretary,  with  location  of -office.) 

[Under  above  section,  board  of  directors  may 
order  notice  of  sale  of  corporate  stock  for  non- 
payment of  assessment  to  be  published  in  a  news- 
paper otbor  than  that  in  which  notice  of  assess- 
ment appeared.  H.  &  A.  Works  v.  Houser,  41 
I'ac.  Rep.  809.] 

S  338.  The  notice  must  specify  every  cer- 
tificate of  stock,  the  number  of  shares  it 
represents,  and  the  amount  due  thereon,  ex- 
cept where  certificates  may  not  have  been 
issued  to  parties  entitled  thereto,  in  which 
case  the  number  of  shares  and  amount  due 
thereon,  together  with  the  fact  that  the  cer- 
tificates for  such  shares  have  not  been 
issued,  must  be  stated. 

§  339.  The  notice,  when  published  in  a 
daily  paper,  must  be  published  for  ten 
days,  excluding  Sundays  and  holidays,  pre- 
vious to  the  day  of  sale.  When  published  in 
a  weekly  paper,  it  must  be  published  in  each 
issue  for  tAvo  weeks  previous  to  the  day  of 
sale.  The  first  publication  of  all  delinquent 
sales  must  be  at  least  fifteen  days  prior  to 
the  day  of  sale. 

§  340.  By  the  publication  of  the  notice,  the 
corporation  acquires  jurisdiction  to  sell  and 
convey  a  perfect  title  to  all  of  the  stock  de- 
scribed in  the  notice  of  sale  upon  which  any 
portion  of  the  assessment  or  costs  of  adver- 
tising remains  unpaid  at  the  hour  appointed 
for  the  sale,  but  must  sell  no  more  of  such 
stock  than  is  necessary  to  pay  the  assess- 
ments due  and  costs  of  sale. 

§  341.  On  the  day,  at  the  place,  and  at  the 
time   appointed    in   the   notice  of   sale,   the 


CALIFORXIA. 


27 


Assessments  of  stock,  Civ.  0.,  §§  343-349. 


secretary  must,  unless  otherwise  ordered  by 
tlie  directors,  sell  or  cause  to  be  sold  at  pub- 
lic auctiou,  to  the  highest  bidder  for  cash, 
so  many  shai'es  of  each  parcel  of  the  de- 
scribed stoclv  as  may  be  necessary  to  pay 
the  assessment  and  cliarjrcs  thereon,  accord- 
ing to  the  terms  of  sjiU-;  if  jiayment  is  made 
before  the  time  hxed  for  sale,  tlic  party  pify- 
iug  is  only  required  to  pay  the  actual  cost  of 
advertising,  in  addition  to  the  assessment. 

§  342.  The  person  offering  at  such  sale  to 
pay  the  assessment  and  costs  for  the 
smallest  number  of  shares  or  fraction  of  a 
share  is  the  highest  bidder,  and  the  stock 
piu'chased  must  be  transferred  to  him  on 
the  stock-l>ooks  of  tlie  corjioration.  on  the 
payment  of  The  assessment  and  costs. 

§  343.  If.  at  the  sale  of  stock,  no  bidder 
offers  tlie  amount  of  the  assessments,  and 
costs,  and  clinrges  due,  the  same  may  Ije  bid 
in  and  purchased  by  the  corporation,  through 
the  secretary,  president,  or  any  director 
thereof,  at  the  amoimt  of  the  assessments, 
costs,  and  cliarges  due:  and  the  amount  of 
the  assessments,  costs,  and  charges  must  be 
credited  as  paid  in  full  on  the  books  of  the 
corporation,  and  entry  of  tlie  transfer  of  the 
stock  to  the  cor]ioration  must  be  made  on 
the  books  thereof.  While  the  stock  remains 
the  property  of  the  corporation  it  is  not 
assessable,  nor  must  any  dividends  be  de- 
clared thereon:  but  all  assessments  and 
dividends  must  be  apportioned  upon  the 
stock  held  by  the  stockholders  of  the  cor- 
poration. 

[The  presumption  Is  th.at  the  corporation  has 
none  of  Its  stock  to  sell.  M;inf.  Co.  v.  Schafer,  .57 
Cal.  .30G.  Purchaso  by  a  banking  corporation  of 
shares  of  its  stock,  though  ultra  vires,  docs  not 
extinguish  the  stock.  Effect  of  such  a  transaction. 
Bank  v.  Wickersham.  99  Cal.  655;  s.  c.  34  Pac. 
P.ep.   444.] 

§  344.  All  purchases  of  its  own  stock  made 
by  any  corporation  vest  the  legal  title  to  the 
same  in  tlie  corporation;  and  the  stock  so 
purchased  is  lield  subject  to  the  control  of 
the  stockholders,  who  may  make  such  dis- 
liosition  of  the  same  as  they  deem  fit,  in  ac- 
cordance with  the  liy-laM's  of  the  corporation 
or  vote  of  a  majority  of  all  the  remaining 
shares.  AVhenever  any  portion  of  the  capital 
stock  of  a  corporation  is  held  by  tlie  cor- 
poration by  purchase,  a  majority  of  tlie  re- 
maining shares  is  a  majority  of  the  stoclc 
for  all  purposes  of  election  or  voting  on  any 
question  at  a  stockholders'  meeting. 

[The  stock  purchased  by  a  corporation  under 
this  section,  at  a  sale  for  delinquent  assessments. 
Is  held  subject  to  control  of  stockholders,  and  can- 
not be  leyied  on  under  an  execution  against  the 
oorpnraiion.  Robinson  v.  Mining  Co.,  72  Cal.  32; 
s.  c.   13  Pac.   Kcp.  Go.] 

§  34.").  The  dates  fixed  in  any  notice  of 
assessment  or  notice  of  delinquent  sale,  pub- 
lished according  to  the  provisions  hereof, 
may  be  extended  from  time  to  time  for  not 
more  tlian  thirty  days,  by  order  of  tlie  di- 
rectors, entered  on  the  records  of  the  coi*- 
poration;  but  no  order  extending  the  time  for 


the  performance  of  any  act  specified  in  any 
notice  is  effectual  unless  notice  of  such  ex- 
tension or  postponement  is  appended  to  and 
published  Avith  the  notice  to  Avhich  the  order 
relates. 

§  346.  No  assessment  is  invalidated  by  a 
failure  to  make  publication  of  the  notices 
hereinbefore  provided  for,  nor  l)y  tlie  non- 
performance of  any  act  reciuircd  in  onler  to 
enforce  the  payment  of  the  same;  l)ut  in 
case  of  any  substantial  error  or  omission  in 
the  course  of  proceedings  for  collection,  all 
previous  proceedings,  except  the  levying  of 
the  assessment,  are  void,  and  publication 
must  be  begun  anew. 

[An  injunction  will  not  Issue  to  restrain  the  sale 
of  stock  to  satisfy  a  valid  assessment  thereon 
which  had  become  delinriuent.  merely  beca\isc  the 
notice  of  the  sale  was  published  for  "an  insufficient 
length  of  time,  unless  the  stockholder  has  paid, 
or  offered  to  pay,  the  amount  of  the  assessment. 
Purham  v.  Manf.  Co.,  7G  Cal.  2G;  s.  e.,  17  I'ac. 
Rep.    939.] 

§  347.  No  action  must  be  sustained  to  re- 
cover stock  sold  for  delinquent  assessments, 
upon  the  ground  of  irregularity  in  the  as- 
sessment, irregularity  or  defect  of  the  notice 
of  s.ile,  or  defect  or  irregularity  in  the  sale, 
unless  the  party  seeking  to  maintain  such 
action  first  pays  or  tenders  to  the  corpor.a- 
tion,  or  the  party  holding  the  stock  sold,  the 
sum  for  which  the  same  was  sold,  together 
witli  all  subsequent  assessments  which  may 
have  been  paid  thereon,  and  intei-est  on  such 
sums  from  the  time  they  were  paid;  and  no 
such  action  must  be  sustained  unless  the 
same  is  commenced  by  the  filing  of  a  com- 
plaint and  the  issuing  of  a  summons  thereon 
witliin  six  months  after  such  sale  was  made. 

§  348.  The  puldication  of  notice  required 
by  this  article  may  be  proved  by  the  affi- 
davit of  the  printer,  foreman,  or  principal 
clerk  of  the  newspaper  in  which  the  same 
was  published;  and  the  affidavit  of  the  sec- 
retary or  auctioneer  is  prima  facie  evidence 
of  the  time  and  place  of  sale,  of  the  quantity 
and  particular  description  of  the  stock  sold, 
and  to  whom,  and  for  Avhat  price,  and  of 
the  fact  of  the  purchase  money  being  paid. 
The  affidavits  must  lie  fihnl  in  the  office  of 
the  corporation,  and  copies  of  the  same,  cer- 
tified by  the  secretary  thereof,  are  prima 
facie  evidence  of  the  facts  therein  stated. 
Certificates  signed  by  the  secretary  and  un- 
der the  seal  of  the  corporation  are  prima 
facie  evidence  of  the  contents  thereof.  (In 
effect  July  1,  1874.) 

§  349.  On  the  day  specified  for  declaring 
the  stock  delinquent,  or  at  any  time  subse- 
quent thereto  and  liefore  the  sale  of  the  de- 
linquent stock,  tlie  board  of  directors  may 
elect  to  waive  further  proceedings  under  this 
chapter  for  the  collection  of  delinquent  as- 
sessments, or  any  part  or  portion  thereof, 
and  may  elect  to  proceed  b.v  action  to  re- 
cover the  amount  of  the  assessment  and  tlie 
costs  and  expenses  already  incurred,  or  any 
part  or  portion  thereof. 

[This  section  does  not  create,  and  was  not  In- 
tended   to    create,    any    personal    liability    for    ns- 


28 


CALIFOKNIA. 


General  powers,  Civ.  C,  §  354  (l-o». 


sessments,  unless  from  the  terms  of  the  subscrip- 
tion such  linbilitv  was  incurred.  In  re  Mining 
Co.,  7  Saw.  30;  s.  c,  8  id.  36G. 

Power  of  directors  to  waive  proceedings  under 
above  section,  for  sale  of  stock  for  nonpayment 
of  assessments  and  sue  to  recover  the  assessment. 
Inv.  Co.  V.  Merrill,  41  Pac.  Kep.  487.] 


CHAPTER  III. 

Corporate  Powers. 

Art.       I.  General  powers. 
II.  Records. 

III.  Kxinuination    of   corporations. 

IV.  Judgment  against  and  sale  of  corporate 

property. 

ARTICLE  I.     GENERAL  POWERS. 

Sec.  S'A.  Powers  of  corporations. 

3r>.">.  Limitation  of  powers. 

S.'iO).  P.anking   expressly   prohibited. 

357.  Misnomer     does    not    invalidate     instru- 
ment. 

ii'iS.  Corporation  to  organize  within  one  year. 

359.  Increasing      and       diminishing      capital 

stock,  how. 

360.  Corporations  may  acquire  real  property, 

and  how  much. 
3G1.  Consolidation  of  mining  corporations. 

362.  Articles  of  incorporation,  how  amended. 

363.  Corporations  to  own  property. 

363.  Correction    of    erroneous    filing    of    cor- 
poration. 

§  3."4.  Every  corporation,  as  such,  has 
power: 

1.  Of  succession,  by  its  corporate  name,  for 
the  period  limited;  and  when  no  period  is 
limited,  perpetually. 

Code  limit,  fifty  years.     C.  C,  §  290. 

[A  corporation  is  recognized  in  law  only  by  its 
corporate   name.    Curtiss   v.    Murry,   26   Cal.    633.] 


2.  To  sue  and  be  sued,  in  any  court. 

Place  where  corporation  may  be  sued.  Const., 
art.  XII,  §  16.  Judgment  against  and  sale  of  cor- 
porate property.  C.  C,  §§  388-393.  Service  of 
summons.  C.  C.  P.,  §§  411,  412.  Verification  of 
pleading.  Id.,  §  446.  Receivers.  Id.,  §§  564  et  seq. 
Actions  for  usurpations.  Id.,  §§  803  et  seq.  Crim- 
inal proceedings  against  corporation.  Pen.  C,  §§ 
1390-1.397.  Existence  of  corporation  cannot  be 
questioned  in  private  suit.     §  358. 

[A  corporation  must  be  sued  by  its  corporate 
name.  Curtiss  v.  Murry,  26  Cal.  6:"?.  If  sev- 
eral persons  associate  and"  form  a  corporation,  they 
cannot  be  sued  as  individuals  for  debts  of  the 
corporation.  Id.  If  the  president  of  the  corpora- 
tion signs,  as  president,  a  paper  stating  that  per- 
son named  therein  has  credit  for  a  given  sum  for 
work  done  for  corporation,  the  instrument  itself 
does  not  constitute  a  cause  of  action  against  cor- 
poration or  ag.'iinst  persons  comjjosing  it.  Id.  The 
right  of  a  member  of  an  incorporated  company  to 
sue  a  corporation  is  undoubted.  Barnstead  v.  Min- 
ing Co.,  5  Cal.  299:  Culbertson  v.  Wabash  N.  Co.. 
4  McLean,  547.  When  corporation,  on  a  proper 
demand  from  a  stockholder,  refuses  to  Institute  ac- 
tion, stockholders  may  sue  in  their  own  names. 
Cogswell  V.  Hull,  39  Cal.  320.  In  an  action  by  a 
stockholder  in  such  cases,  it  is  necessary  to  aver 
a  demand  and  a  refusal,  without  which  the  action 
will  not  be  sustained.  Id.  General  rule  is.  that 
an  action  against  trustees  for  misappropriation  of 
funds  must  be  hrontrht  in  name  of  corporation. 
Id.  In  an  action  against  trustees,  an  averment 
In  complaint  that  the  board  is  composed  "  nearly, 
if  not  entirely,"  of  same  persons  who  committed 


the  wrong  complained  of,  presents  no  Issuable 
fact,  and  is,  therefore,  bad  pleading.  Id.  Right 
of  stockholder  to  redeem  corporate  property  which 
has  been  sold  under  execution.  Wright  v.  Min- 
ing Co.,  40  Cal.  20. 

A  corporation  whose  original  and  only  business 
is  tiiat  of  mining  by  the  hydraulic  process,  and  of 
selling  water  to  others  to  be  used  for  like  pur- 
pose, may  be  temporarily  enjoined  upon  an  ex- 
parte  application  without  notice  to  it  from  de- 
positary discharging  its  mining  debris  in  certain 
streams,  or  from  selling  its  wiiter  to  others  to  be 
used  for  purpose  of  producing  a  like  result.  Canal 
Co.  v.  Superior  Ct.,  66  Cal.  311;  s.  c,  5  Pac.  Rep. 
490. 

Mortgagor  of  property  who  has  dealt  with  mort- 
gagee as  a  corporation,  estopped  to  deny  its  cor- 
porate capacity  in  action  to  foreclose  the  mort- 
^'age.  Bank  v.  Bovd,  99  Cal.  604;  s.  c,  34  Pac. 
Uep.    .3.S7. 

Defense  of  ultra  vires  by  a  corporation  is  looked 
upon  with  disfavor  by  courts.  Kennedy  v.  Bank, 
101  Cal.   495;  s.  c,  35  I*ac.   Rep.   1030. 

An  averment  of  existence  of  de  facto  corporation 
is  as  issuable  as  an  averment  of  the  existence  of 
a  corporation  de  jure.  Martin  v.  Deetz,  102  Cal. 
55:   s.   c,    36  Pac.    Rep.   368. 

In  an  action  by  stockholder,  on  behalf  of  himself 
and  other  stockholders,  for  damages  for  injury 
to  corporation,  and  for  an  accounting,  a  finding, 
with  admission  of  plaintiff,  that  a  demand  upon 
the  corporation  to  bring  the  action  and  its  re- 
fusal to  do  so  were  simulated,  and  not  in  good 
faith,  nrgative  right  of  plaintiff  to  maintain  the 
action.  Morrison  v.  Stone,  103  Cal.  94;  6.  c,  37 
Pac.   Rep.   142. 

Fact  that  judge  is  a  first  cousin  by  marriage 
to  a  stockholder  does  not  disqualify  him  to  decide 
a  case  in  which  the  corporation  is  interested. 
Robinson  v.  S.  P.  Co.,  105  Cal.  526;  s.  c,  38  Pac. 
Rep.  94,   722.] 

3.  To  make  and  use  a  common  seal,  and 
alter  the  same  at  pleasure. 

[A  conveyance  of  real  property  by  a  corporation 
must  be  under  its  corporate  seal.  It  may  alter  its 
seal  at  pleasure,  and  may  adopt  as  its  own  the  pri- 
vate seal  of  an  individual,  but  in  latter  case  the 
seal  adopted  must  be  used  as  that  of  the  corpo- 
ration. Richardson  v.  W.  &  M.  Co.,  22  Cal.  150. 
If  to  a  deed,  purporting  to  be  that  of  the  corpo- 
ration, a  seal  be  affixed  as  that  of  the  individual 
agent  who  signs  it,  such  seal  cannot  be  treated 
as  that  of  the  corporation.  A  declaration  in  the 
instrument  that  the  seal  is  affixed  as  that  of  the 
agent  is  conclusive  of  its  character  and  eftect.  Id. 
It  is  not  necessary  to  state  in  the  conveyance  by 
the  corporation  tliat  the  seal  used  is  that  of  the 
corporation.  This  fact  may,  in  the  absence  of  any 
declaration  to  the  contrary,  be  presumed  from 
the  language  of  the  conveyance  or  proved  by 
evidence  aliunde.  Id.  When  common  seal  of  cor- 
poration is  afHxed  to  an  instrument  in  writing, 
purporting  to  be  executed  by  it,  and  signatures 
of  proper  officers  are  affixed  to  it  and  proved, 
courts  will  presume  that  officers  did  not  exceed 
tlieir  authority,  and  the  seal  itself  is  i)rima  facie 
evidence  that  it  was  affixed  by  propor  authority. 
Association  v.  Bustamente,  .52  Cal.  102.  It  is  'veil 
settled  in  the  T'nited  States,  contrary  to  the  com- 
mon law  doctrine,  that  a  corporation  may  make 
a  contract  witliout  a  seal.  Bank  v.  Patterson.  7 
Cranch,  299;  Fleckner  v.  Bank.  8  Wheat.  .3.38; 
12  Cal.  64.  And  that  corporations  may  appoint 
agents  bv  resolution  or  vote  without  corporate  seal. 
Osborn  v.  Bank,  9  Wlieat.  738.  A  deed,  without 
the  corporate  seal,  purporting  to  liave  been  exe- 
cuted on  behalf  of  a  corporation  by  its  board  of 
trnstiH's,  is  inadmissible  as  evidence  witliout  first 
showing  their  autliority  to  execute  the  sanie.  The 
recital  of  such  authority  in  the  deed  is  not  evi- 
dence. Gashwiler  v.  Willis,  33  Cal.  11.  Whether 
this  rule  would  be  dllTerent  when  the  regularly 
adopted  corporate  seal  is  shown  by  competent 
proof  to  be  affixed  to  deed,  not  dc»cided.     Id. 

One  claiming  under  a  quitclaim  deed,  without 
a  seal  executed  by  a  corporation,  need  not  show 
that  it  was  executed  under  order  of  directors, 
unloss  actual  fraud  is  sliown.  Fudickar  v.  Irr. 
Dist.,  41  Pac.  Rep.  1024.] 


CALIFORNIA. 


29 


General  powers,  Civ.  C,  §  354  (4-8). 


4.  To  purchase,  hold,  and  convey  such  i-eal  | 
and  personal  estate  as  the  purposes  of  the 
corporation  may  require,  not  exceeding  the 
amount  limited  in  this  part. 

Eminent  domain.  Const.,  art.  I,  §  14;  art.  XII, 
§  S.  Real  estate  not  to  be  held  more  than  five 
yoars.  Id.,  §  0.  How  mnch  may  be  acquired.  C 
C,  §  .^60.  Artifles  must  be  filed  in  counties  where 
property  is  owned.     C.  C,  §  2!)9. 

[Ownership  of  property  Is  not  essential  to  ex- 
istence of  a  corporation,  nor  is  corporation  dis- 
solved by  sale  of  its  property.  Sullivan  v.  Min- 
ing ("o.,  "39  Cal.  4.")9.  A  corporation  may  sell  all 
its  property  for  a  corporate  or  lawful  purpose. 
And  the  jtower  to  sell  and  convey  is  as  broad  as 
the  power  to  purcliase  and  hold,  and  is  granted 
on  the  same  terms.  Ditch  Co.  v.  Zellerbach,  37 
Cal.  .">SS;  Peo.  V.  rollege.  3S  Id.  IGO.  Power  to 
sell  and  convey  corporate  propert.v  can  be  con- 
ferred only  by  the  board  of  trustees  assem- 
bled and  acting  as  such.  The  board  may  confer 
tills  power  U110I1  themselves  as  individual  trustees. 
or  upon  any  other  person  or  persons.  Gashwiler 
V.  AVillis.  33  Cal.  12.  The  president,  as  such,  has 
no  authority  to  buy  or  sell  real  estate  in  the  cor- 
porate name.  Bliss  v.  C.  «.V:  I.  Co.,  3  West  Coast 
Rei>.   ->-l. 

Where  a  conveyance  purpoi-ting  to  be  exe- 
ci'ted  by  a  corporation  bears  corporate  seal  ap- 
parently atflxed  by  the  custodian  thereof,  and 
signatt'Ves  of  officers  are  proved,  the  presumption 
is  that  such  conveyance  was  executed  by  regular 
and  proper  authoritv.  McCracken  v.  San  Fran- 
cisco. K!  Cal,  639;  Ditch  Co.  v.  Zellerbach,  37  id. 
543.   ,i98. 

It  must  be  presumed,  as  against  third  parties, 
tliat  a  corporation  liad  pfiwer  to  purchase  and 
hold  land  conveved  bv  deed.  Pank  v.  Staples,  98 
Cal.   ISO;   s.    c,  .•{2   Pac.    Uep.   9.36. 

Dedication  l)y  railroad  company  of  a  portion  of 
Its  land  as  a  liiirhwav  for  jiublic  use  is  not  ultra 
Tires.  Peo.  v.  U.  u!  Co.,  98  Cal.  66o;  s.  c,  33 
Pac.   Rep.   728. 

If  grantor  of  a  deed  is  in  fact  a  corporation  and 
the  corporate  seal  is  affixed  thereto,  a  statement 
in  the  deed  that  it  is  incorpornteil  is  not  essential. 
L.  i^:  W.  Co.  v.  Swartz,  99  Cal.  278:  s.  c,  33  Pac. 
Rep.   878. 

President,  being  empowered  to  do  a  general 
business  for  the  cornoration,  may  lease  premises 
for  its  use,  and  bind  it  for  rent  under  provisions 
of  the  lease.  ITawlev  v.  Paving  Co.,  106  Cal.  3.37; 
s.   c.  .39  Pac.    Rep.  6(i9. 

Domestic  corporation,  having  expressly  as- 
sumed a  mortgage  of  a  foreign  corporation,  is  es- 
topped to  denv  its  va'i'iitv.  Alvord  v.  Gold  Co., 
106  Cal,   547;    s,    c,   40   Pac.    Rep,   27.] 

ii.  To  appoint  such  subordinate  officers  or 
ajrents  as  tlie  l)usinoss    of    tlie    corporation 
may    reciuii'o,    and    to    :illow    tlicm    suitable  . 
compensation.  | 

[The  authority  of  an  .oeent  to  rnake  a  contract  | 
may  be  inferred  from  his  admitted  relations  to 
tlie  corf)oration.  or  from  its  coi-r«e  of  business. 
Crowley  V.  Mi'i'Ug  Co..  .">  Cal.  273:  Pixley  v.  R. 
R.  Co..  3.'{  id.  1!)2.  Appointnient  of  an  agent  may 
be  either  by  jireviotis  authority,  or  bv  subseouent 
ratitication  bv  the  corporation.  Forbes  v.  Turn- 
pike Co..  .".0  Cal.  340:  Seeley  v.  San  ,Iose,  etc.,  Co.,  ; 
59  id.  22:  Pixley  v,  R.  R.  Co..  supra.  Rut  con- 
tracts of  asents  cannot  be  ratified  if  they  are 
such  as  couhl  not  originallv  liave  been  authorized,  i 
Pixley  V.  R.  R.  Co.,  .33  Cal.  183:  Wallace  v.  San 
Jose,  29  id.  ISO.  Torporate  existence  must  pre- 
cede apixiintmcnt  of  agent.  Kelly  v.  Ruble,  3  West 
Coast  Rep.  737.  A  coriiorntion  must  act  through 
officers  and  agents,  and  wh;it  it  may  do'  itself  it 
may  do  throueh  them.  McKiernan  v.  I.enzen,  56 
Cal.  61.  Power  of  president  of  corporation  to 
carrv  on  its  business  and  manage  its  finance. 
Seeley  v.  San  .lose,  etc.,  Co..  .59  Cal.  22.  Presi- 
dent of  a  corporation,  who  is  also  a  stockholder  ; 
is,  in  absence  of  any  usage  of  the  company  to  the 


contrary,  entitled  to  compensation  for  his  services 
as  president.  If  rate  is  not  fixed  by  contract,  he 
is  entitleil  to  what  his  services  are  reasonably 
worth.  Rosborough  v.  Canal  Co.,  22  Cal.  .5,56, 
Where  officer  is  elected  for  one  year,  with  compen- 
sation at  a  certain  sum  per  month,  statute  of 
limitations  does  not  begin  to  run  against  any 
portion  of  his  claim  for  salar.v  until  end  of  year. 
Id.  In  an  action  by  director  to  recover  on 
(juantum  meruit  for  services  rendered,  a  by-law 
of  company  providing  that  directors  should  receive 
no  compensation  for  services  as  such,  except 
expenses,  was  relevant  and  admissible  in  evi- 
dence. Barstow  v.  R.  U.  Co.,  42  Cal,  465.  Di- 
rector allowed  to  recover  for  services  as  superin- 
tendent. Xeall  v.  Hill,  16  Cal.  14.5.  Officers  and 
agents,  not  directors,  are  entitled  to  recovr-r  on  a 
quantum  meruit,  where  no  price  is  stipulated, 
Fraylor  v.  Mining  Co..  17  Cal.  594;  Bee  v.  R.  R, 
Co.,  46  id.  2-IS.  The  power  of  removal  of  private 
or  ministerial  officers  of  a  private  corporation  be- 
longs to  the  corporation  alone.  Courts  cannot  re- 
move such  oflicers,  Neall  v.  Hill,  16  Cal,  14.5. 
The  aid  of  courts  can  be  invoked  only  as  against 
such  officers  as  are  intrusted  with  management  of 
affairs  of  the  corporation,  and  as  against  these, 
the  remedy  is  in  law  and  not  in  equit.v.     Id. 

Private  corporations,  with  regard  "to  appoint- 
ment of  agents  and  making  contracts,  are  upon 
same  footing  as  natural  persons,  unless  limited  to 
some  particular  mode  bv  their  charter,  Carev  v. 
Petroleum  Co.,  .33  Cal.  696. 

Fraudulent  concealment  by  bookkeeper  binding 
upon  corporation.  Stockton,  etc..  Works  v.  Ins. 
Co.,  98  Cal,  5.57;  s.   c,  33  Pac,   Rep.   6.33. 

Extra  compensation  allowed  to  secretary,  pre- 
sumption that  he  performed  extra  services,  Zel- 
lerbach V,  Alleuberg,  99  Cal.  57;  s.  c,  33  I'ac. 
Rep.   786. 

Powers  of  general  managing  agent,  Greig  v. 
Riordan,   99  Cal.  316;   s.  c,   33  Pac,   Rep.   913.] 

G.  To  make  by-laws,  not  inconsistent  with 
<'inj-  existing-  law,  for  the  management  of  its 
property,  the  regulation  of  its  affairs,  and 
for  the  transfer  of  its  stock. 

See  C.  C,  §  301,  note. 

[Transfer  of  shares  of  capital  stock  of  a  cor- 
poration by  owner  tliereof  to  a  Ijona  fide  pur- 
chaser for  vahie,  vests  title  in  sucli  transferee  free 
of  equities  between  seller  and  the  corporation  of 
which  purchaser  was  ignorant  at  tiine  of  trans- 
fer, though  provided  for  by  a  by-law  of  the  cor- 
poration. Existence  of  such  b.v-law  is  not  enough 
to  charge  purchaser  witli  notice,  I'ower  of  cor- 
porations to  make  by-laws  for  transfer  of  their 
stock  does  not  include  power  to  create  liens 
thereon,  affecting  purchasers  for  value  without 
notice.     Bank  v.  Bank,  63  Cal,  359.] 

7,  To  adiuit  stoclvholders  or  members,  and 
to  sell  their  stock  or  shares  for  the  payment 
of  assessments  or  installments. 

See  C.  C,  §§  3.31    et  scq, 

S.  To  enter  into  any  obligations  or  con- 
tracts essential  to  the  tran.saction  of  its 
ordinary  affairs,  or  for  the  purposes  of  the 
corporation. 

See  subd.  4,  ante,  as  to  real  estate  contracts. 

[Corporations  may  borrow  money  to  carry  on 
business  for  which  they  were  created,  an<l  issue 
the  usual  evidence  of  debt  therefor,  although  such 
right  is  not  expressly  reserved  bv  charter.  Magee 
V.  .Mining  Co.,  5  Cal."  2.58:  Seeley'v,  San  .lose,  etc., 
Co..  .59  id.  22.  In  an  execution  of  a  note  or  other 
obligation,  if  it  appears  from  the  entire  instru- 
ment that  it  was  the  intention  to  make  it  an 
obligation  of  the  coriioration,  it  is  such,  and  not 
an  individual  obligation.  Smith  v.  Flour  Mills 
Co.,  6  Cal.  1:  Haskell  v.  Cornish,  13  id,  45:  Shaver 
V,   Mining   Co.,   21  id,   45;    Blanchard  v.   Kaull,   44 


30 


CALIFORNIA. 


General  powers,   Civ.  C.',  §§  355-359. 


1(1.  440:  Bank  v.  Colby.  G4  id.  852;  s.  c.  28  Pac. 
Rep.  118.  A  oorix)riitlon  may  enter  Into  a  con- 
tract of  guaranty.  Low  v.  K.  R..  52  Cal.  53.  And 
niav  make  an  assignment.  McKlernan  v.  Lenzen, 
5C  Cal.  01. 

The  entering  into  the  contraet  by  a  corporation 
Is  a  determination  on  its  part  tliat  it  was  essential 
within  this  section.  Hates  v.  IJeach  Co.,  41  Pac. 
Rep.  Sr>5.  ,  ,  ^  ,i,       i 

Promissory  notes  executed  by  secretary  without 
autlioritv  of  directors,  not  binding  on  corporation. 
Paulv  V."  Paulv.  KtT  Cal.  8;  s.  c.  4(»  Pac.  Uep.  29. 

A  eorporation  must  account  for  benetits  received 
under  an  ultra  vires  contract,  witliout  Interest  on 
the  amount  found  due.  Fruit  Co.  v.  Coon,  107 
Cal.    447:   s.   c.   4(i   Pac.    U.-p.    .'.42. 

Fact  that  town  corporations  have  same  directors 
does  r.ot  prevent  them  from  being  different  cor- 
porations, with  right  to  contract  with  each  other. 

[Powers  In  ueinTnl.—  Corporations  are  bound 
to  follow  strictly  the  letter  of  their  by-laws,  and 
can  exercise  no  power,  unless  granted  to  them, 
or  nbsolutelv  necessary  to  carry  out  the  itower  so 
graivted.  Sinith  v.  Morse.  2  Cal.  .".24:  Smith  v. 
Flour  Mills  Co..  fi  id.  1:  Neall  v.  Hill.  K!  id.  145; 
.Vrgenti  v.  San  Francisco,  id.  255;  Ditch  Co.  v. 
Zellcrl.ach.  37  id.  543:  Peo.  v.  College,  88  id.  16fi,: 
Vandall  v.  Dock  Co.,  40  id.  8:5;  Turnpike  Co.  v.  111., 
m  V.  S.  R3:  Huntington  v.  Rank.  id.  .SSS:  Fer- 
tilizing Co.  v.  Hyde  Park,  97  id.  006.  Mode  of 
exercising  exi)resse(l  i)owers  is  detf^rmined  by 
statute:  incidental  powers  may  be  exercised  by 
officers  and  agents.  Smith  v.  Flour  Mills  Co..  6 
Cal.  1:  AVater  Co.  v.  Pluming  Co..  22  id.  029; 
Carey  v.  Petroleum  Co.,  33  id.  090.  One  corpora- 
tion may  take  stock  in  another.  Evans  v.  Bailey, 
4  West  Coast  Uep.  427.  General  subject  of  "  ultra 
vires  "  discussed.  r>itch  Co.  v.  Zellerbach,  supra. 
One  railroad  corporation  has  power,  upon  a  suffi- 
cient consideration,  to  guarantee  payment  of  bonds 
of  another.  Low  v.  R.  R.  Co..  .52  Cal.  .53.  A  cor- 
poration has  capacity  to  enter  into  any  obligation 
or  contract  essential  for  its  purpose,  and  for  the 
transaction  of  its  orUinai-y  affairs;  and,  where 
power  to  contr.'ict  exists.  It  may  be  exercised  by 
the  corporation  or  its  agents,  in  the  same  wav 
as  a  natural  person  can  contract,  unless  restrained 
by  charter  to  some  particular  mode  of  contracting. 
>icKiernan  v.  Lenzen.  .50  Cal.  01.  Powers  in  gen- 
eral of  corporations  di.scussed.  AYater-AVorks  v. 
Schottler,  02  Cal.  104.  Section  .304  construed.  Un- 
derhili  v.  Santa  Barbara,  etc.,  Co.,  93  Cal.  309; 
s.    c,   28   Pac.    Rep.    1049. 

An  assignment  of  an  account  due  to  a  corpora- 
tion is  sufficient  if  made  by  secretary  or  managing 
agent  with  general  authority.  Tuller  v.  Arnold, 
9S  Cal.  .522:  s.  c.  33  Pac.  Rep.  445. 

Corporation  which  engages  in  business  of  inn- 
keeiiing  cannot  plead  that  Its  acts  as  such  are 
ultra  vires.  Magee  v.  Iniprov.  Co.,  98  Cal.  678; 
s.    c,   :!3   Pac.    Rep.    772. 

Purchase  by  a  banking  corporation  of  shares 
of  its  capital  stock,  though  ultra  vires,  does  not 
extinguish  the  stock.  ElTect  of  such  a  transac- 
tion. B.-ink  V.  AVickersbam.  99  Cnl.  0.55;  s.  c,  .34 
Pac.  Retj).  444.  Nation.-il  bank,  may  take  shares 
In  any  corporation  as  collateral  security.  Ken- 
nedy V.  Bank,  101  Cal.  495;  s.  c,  33  Pac.  Rep. 
10,"9.  Defense  of  ultra  vires  by  a  corporation  is 
lix.ked  upon   with   disfavor  by  courts.     Id. 

Lease  of  municipal  franchise  for  electric  light 
and  gas  j)urposes  to  third  p:irty  held  to  be  ultra 
vires  and  void  as  ag.-iinst  public  policy.  I^ight 
Co.   v.   Sims,   104  Cal.  320;  s.  c,  37  Pac.   Rep.   1042. 

President  has  aulhorit.v  to  employ  an  attorney 
for  the  corporation.  Streeten  v.  Robinson,  102 
Cal.  .542;  s.  c,  ,30  Pac.  Rep.  940.  Under  certain 
circumstances,  a  physiciiin.  Fraser  v.  Bridge  Co., 
103  Cal.   79;   s.    c.   30   Cal.    10:!7. 

One  private  corporation  has  no  implied  author- 
ity to  invest  in  shares  of  another.  Knowles  v. 
Sandercock,  107  Cal.  029;  s.  c,  40  Pac.  Rep.   111.] 

§  .'?."».").  In  addition  to  tlio  powers  enumerated 
in  the  prccodinf;  section,  and  to  those  ex- 
pressly {.'iven  in  that  title  of  this  part  under 
which  it  is  inooriiorated,  no  corporation 
shall  possess  or  exercise  any  corporate  pow- 


ers, except  such  as  are  necessary  to  the 
exercise  of  the  powers  so  enumerated  and 
given. 

[Section  construed.  AVatcr-Works  v.  Schottler, 
02  Cal.  104.] 

§  .S.")().  No  corporation  shall  create  or  issue 
bills,  notes,  or  other  evidences  of  debt,  ui)on 
loans  or  otherwise,  for  circulation  as  money. 

A'iolation  of  this  section  is  a  crime.  Const.,  art. 
XII,  §  5;  Pen.  C,  §  048.  But  corporation  may 
execute  negotiable  instrument.s.     §  .354  (8),  note. 

§  3r)7.  The  misnomer  of  a  corporation  in 
any  Avritten  instrument  doi^  not  invalidate 
the  instrument,  if  it  can  be  reasonably  as- 
certained from  it  what  corporation  is  in- 
teuded. 

[Misnomer  of  corporation  in  an  indictment; 
when  not  a  fatal  variance.  Peo.  v.  I'ottcr,  35 
Cal.  110.  An  assessment  against  a  corporation 
is  not  invalid  because  of  a  slight  discreiiancy  in 
the  cor)(orate  name  on  the  assessment-roll.  Peo. 
V.  Mining  Co.,  .39  Cal.  511.  Section  applierl  and 
construed.  T'nderhill  v.  Santa  liarbara.  etc.,  Co., 
93  Cal.   314;  s.   c.   28  I'ac.    Rei).    1049.] 

§  3.58.  If  a  corporation  does  not  organize 
and  commence  the  transaction  of  its  business 
or  the  construction  of  its  works  within  one 
year  from  the  date  of  its  incoriioration,  its 
coriiorate  powers  cease.  The  due  incorpora- 
tion of  any  company,  claiming  in  good  faith 
to  be  a  corporation  under  tliis  part,  and 
doing  business  as  such,  or  its  right  to  ex- 
ercise corporate  iiowers,  shall  not  be  in- 
quired into,  collaterally,  in  any  ])rivate  suit 
to  which  such  de  facto  corporation  may  be 
a  party;  but  such  inquiry  may  be  had  at  the 
suit  of  the  State  on  information  of  the 
attorney-general. 

See  §  334  (2),  note. 

Street  railway  companies  must  commence  in  one 
year;  railroads  in  two  years. 

[Question  discussed  as  to  what  is  the  commence- 
ment of  transaction  of  corporate  business  within 
one  year  from  time  of  filing  certificat(>.  Peo.  v. 
R.  R.  Co.,  45  Cal.  300.  If  a  franchise  is  granted 
to  construct  a  street  railroad  within  a  certain 
time,  with  condition  that  if  iirovisio'ns  of  act 
are  not  con)i)licd  with  franchise  sliall  ho  forfeited, 
failure  to  lay  tracks  within  time  limited  works 
forfeiture  of  the  right  without  a  .iudgment  at 
suit  of  State  declaring  forfeiture,  and  legislature 
may  confer  the  franchise  upon  any  other  com- 
pany or  ))erson.  R.  R.  Co.  v.  R.  R.  Co.,  45  Cal. 
3(>5.  An  inquiry  as  to  right  of  company  to  act  as 
a  corporation  can  only  be  had  .-it  suit  of  State  on 
information  by  attorney-general.  Rondell  y.  Fay, 
32  Cal.  354.  The  irregularity  or  noii-|>erformance 
of  acts  relating  to  organization  of  c(u-poration  can 
onl.v  be  investigated  in  a  direct  j>roceeding  In- 
stituted by  State  for  that  purpose  and  not  in  a 
collater.-il  .-iction.  AVater-AVorks  v.  S.-in  Francisco, 
22  <'al.  441.  Above  section  applied.  Road  Co. 
V.  Supervis(.rs.  04  Cal.  09:  s.  c,  28  I'ac.  Rej).  496; 
Peo.  V.  Stanford.  77  Cal.  372;  s.  c,  IS  I'ac.  Rep. 
85;  19  id.  093;  Ditch  Co.  v.  Crane,  80  Cal.  186; 
s.  c,  22  Pac.  Rep.  76;  M.  &  M.  Co.  v.  Mach. 
AA'orks,  82  Cal.   180;  s.  c,  23  I'ac.   Rep.  45.] 

§  359.  (As  amended  March  23,  1893.)  No 
corporation  shall  issue  stocks  or  bonds  ex- 
cept for  money  paid,  laljor  done,  or  property 


CALIFORXIA. 


31 


Increase  or  decrease  of  stock;  real  estate,  Civ.  C,  §§  360,  361. 


actually  received,  and  all  fictitious  increase 
of  stock  or  indebtedness  is  void.  Every  cor- 
Ijoratiou  may  increase  or  diminish  its  capital 
stock,  create  or  increase  its  l)()n(lc(l  in(lt'l)ted- 
ness,  subject  to  tlio  followiiiu  provisions: 

First.  The  capital  stock  of  a  corporation 
may  1»e  increased  or  diminished  at  a  meet- 
ing of  the  stockholders  by  a  vote  represent- 
ing at  least  two-thirds  of  tlie  snljscribed 
capital  stock;  such  meeting  must  be  called 
by  tlie  l)oard  of  directors,  and  notice  must 
be  given  by  pulilication  in  a  newspaper  pulv 
lished  in  tlie  county  where  the  principal 
place  of  business  of  such  corporation  is  lo- 
cated, or  if  lliere  be  none  pid)lislied  in  said 
county,  then  in  a  newspaper  published  in  an 
adjoining  comity,  sucli  paper  to  be  desig- 
nated by  tlie  board  of  directors  in  the  order 
calling  the  meeting. 

Second.  The  notice  must  s])ecify  the  ob- 
ject t)f  the  meeting,  and  the  amount  to  which 
it  is  proposed  to  increase  or  diminish  tlie 
capital  stock,  the  time  and  place  of  holding 
the  meeting,  AA'hich  latter  must  be  at  the 
princijial  ]ilace  of  business  of  the  corpora- 
tion, and  at  the  building  where  the  board  of 
directors  usually  meet.  The  notice  herein 
provided  must  l)e  published  once  a  week  for 
at  least  sixty  days.  The  capital  stoclc  can- 
not be  diminished  to  an  amount  less  than  the 
indelitedness  of  the  corporation. 

Third.  The  bonded  indebtedness  of  a  cor- 
poration may  lie  created  or  increased  by  a 
vote  of  the  stockholders  representing  at  least 
two-thirds  of  the  subscribed  capital  stock  at 
a  meeting  called  by  the  board  of  directors, 
and  after  notice  of  the  time  and  place  of  the 
meeting,  publislied  in  the  same  manner  and 
for  the  time  al)ove  prescribed,  which  notice 
shall  state  the  amount  of  the  1>onded  in- 
debtedness which  it  is  proposed  to  create,  or 
the  amount  to  which  it  is  proposed  to  in- 
crease such  indebtedness,  and  shall  in  all 
other  respects  contain  the  same  matters  as 
are  above  provided  and  set  forth  in  the 
notice  of  a  meeting  to  increase  or  diminish 
the  caijital  stock. 

Fourtli.  In  addition  to  the  notice  by  pub- 
lication, the  secTetary  of  the  corporation 
shall  also  address  a  notice  to  each  of  the 
stockholders  whose  name  appears  on  the 
company's  books  as  sufficiently  addressed  at 
his  place  of  residence  if  known,  and  if  not 
known,  then  at  the  ]irinci)>nl  i)lace  of  liusi- 
ness  of  the  corporation,  which  notice  shall 
be  mailed  to  such  stockholders  at  least  thirty 
days  before  the  day  appointed  for  such  meet- 
ing. 

And  upon  such  increase  or  diminution  of 
the  capital  stock  or  creation  or  increase  of 
b(>nded  indebtedness  being  made  as  herein 
provided,  a  certificate  must  he  signed  by  the 
chairman  and  secretary  of  the  meeting  and 
a  majority  of  the  directors,  showing  a  com- 
pliance with  the  requirements  of  this  sec- 
tion, the  amount  to  wliicli  the  capital  stock 
has  lieen  increased  or  diminished,  or  the 
amount  of  ihe  bonded  indebtedness  created 
or  to  which  the  bonded  Indebtedness  may 
have    been     iiu-reased,   and    the   amount   of 


stock  represented  at  the  meeting,  and  the 
whole  vote  by  which  the  object  was  accom- 
plished. The  certificate  must  be  filed  in  the 
office  of  the  clerk  of  the  county  where  the 
original  articles  of  incorporation  are  filed, 
and  a  certified  copy  thereof  in  the  office  of 
the  secretary  of  State;  and  thereupon  the 
capital  stock  shall  be  so  increased  or  dimin- 
ished, or  the  bonded  indebtedness  may  be 
created  or  increased  accordingly.  When  the 
liy-laws  of  the  corporation  prescribe  the  pa- 
per in  which  notice  of  meeting  is  to  be  pub- 
lished, the  notices  herein  provided  for  shall 
lie  published  in  such  paper,  unless  publica- 
tion thereof  shall  have  ceased. 

Above  section  before  amended  was  annulled  as 
being  in  conflict  with  Const.,  art.  XII,  §  11. 
Ewing  v.  Mining,  59  Cal.  649. 

[By  tbe  capital  stock,  the  statnte  intends  the 
capital  of  the  corporation  on  which  it  transacts 
business,  whether  such  capital  consists  of  money, 
property  or  other  valuable  commodities.  In  no 
other  sense  could  the  terms  "  capital  stock  of  the 
company,"  as  employed  in  this  section,  have  any 
significance.  Martin  v.  Zellerbach,  38  Cal.  ."JOO. 
An  increase  of  capital  stock  of  a  corporation,  and 
the  issuing  of  additional  shares,  to  be  sold  at  a 
price  less  than  the  nominal  pur  value  of  the 
stock,  to  suppl.v  a  fund  actually  required  for  the 
use  of  the  corporation,  is  not  a  "  fictitious  in- 
crease of  stock."  within  meaning  of  art.  XII,  §  11 
of  the  Constitution.  Stein  v.  How,  65  Cal.  616; 
s.  c,  4  Pac.   Kep.  662. 

This  section  must  be  constru>^d  as  rendering 
void  certificate  of  stock  issued  upon  credit,  and 
not  as  rendering  void  a  condition  as  to  the  pa.v- 
ment  of  a  non-negotiable  note  given  therefor.  Jef- 
ferson V.  Hewitt,  103  Cal.  624;  s.  c,  37  Pac.  Rep. 
638. 

Persons  receiving  stock  in  violation  of  above 
section  do  not  become  stockholders.  Kellermau 
v.  Maire,  48  Pac.  Rep.  377.] 

§  3G0.  No  corporation  shall  acquire  or  hold 
any  more  real  property  than  may  be  reason- 
ably necessary  for  the  transaction  of  its 
business,  or  the  construction  of  its  works, 
except  as  otherwise  specially  provided.  A 
corporation  may  acquire  real  property,  as 
provided  in  title  VII,  part  III,  Code  of  Civil 
Procedure,  Avhen  needed  for  any  of  the  uses 
and  purposes  mentioned  in  said  title  (sec- 
tions 1237-1263).    (In  effect  July  1,  1874.) 

Right  of  eminent  domain.  Const.,  art.  I.  §  14; 
art.  XII,  §  8.  Prop'erty  not  to  be  held  more  than 
five  years.  Id.,  §  9.  Power  to  hold  property.  0. 
C,  §  354  (4).  >§§  12.37-12a^.  C.  C.  P.,  relate  to  con- 
demnation proceedings  and  are  omitted.)  Articles 
to  be  filed  where  corporation  owns  property.  C. 
C,  §  299. 

[The  power  of  a  corporation  by  the  law  under 
which  it  is  created,  to  purchase  a  partlc\ilar 
character  of  property  cannot  be  questioned  in  an 
action  between  it  and  another  corporation  or  per- 
son. It  is  a  question  between  the  corporation  and 
the  State,  to  be  determined  in  a  proceeding  by 
the  latter  for  a  forfeiture.  Telegraph  (.  o.  v. 
Telegraph  Co..  22  Cal.  398;  Water  Co.  v.  Fluming 
Co.,  id.  621;  Mining  Co.  v.  Clarkin.  14  id.  545.  A 
corporation  has  no  more  right  to  purchase  an 
equitalile  estate  for  an  unauthorized  purpose,  than 
to  purchase  a  legal  estate  for  the  same  purpose. 
Coleman  v.   San  Rafael,  etc.,  Co.,  49  Cal.  517.] 

§  301.  It  shall  be  lawful  for  two  or  more 
corporations  formed,  or  that  may  hereafter 


32 


CALIFOR^^IA. 


Consolidation  of  mining  corporations;  amendment  of  articles.  Civ.  C,  §§  362,  363. 


be  formed,  under  the  laws  of  this  state,  for 
mining  purposes,  which  own  or  possess  miu- 
inir  claims  or  lands  adjoining  each  other,  or 
lyin.ir  in  the  same  vicinity,  to  consolidate 
their  capital  stock,  dehts,  property,  assets, 
and  franchises  in  such  manner  and  upon 
such  terms  as  may  be  agreed  upon  by  the 
respective  boards  of  directors  or  trustees  of 
such  companies  so  desirinjr  to  consolidate 
their  interests;  but  no  such  consolidation 
shall  take  place  without  the  written  consent 
of  the  stockholders  representinj;  two-thirds 
of  the  capital  sto<k  of  each  c-<inipany:  and  no 
sxich  consolidation  shall  in  any  way  relieve 
s\ich  companies,  or  the  stockholders  thei'etif, 
from  any  and  all  .lust  liabilities;  and  in  case 
of  such  consolidation,  due  notice  of  the  same 
shall  be  piven  by  advoi'tisinj?  for  one 
month  in  at  least  one  newspaper  in  the 
county  and  State  where  the  said  mining 
property  is  situated,  if  there  be  one  pub- 
lished therein,  and  also  in  one  newspaper 
published  in  the  county,  or  city  and  county, 
vhere  the  principal  place  of  business  of  any 
of  said  companies  shall  be.  And  when  the 
said  consolidation  is  completed,  fi  certificate 
thereof,  containing:  the  manner  and  terms 
of  said  consolidation,  shall  be  filed  in  the 
office  of  the  county  clerk  of  the  county  in 
which  the  original  certiticate  of  incoi^ora- 
tion  of  any  of  said  companies  shall  be  filed, 
and  .a  copy  thereof  shall  be  fded  in  the  office 
of  the  secretary  of  State.  Such  certificate 
shall  be  signed  by  a  majority  of  each  board 
of  trustees  or  directors  of  the  original  com- 
parties;  and  it  shall  be  their  duty  to  call 
within  thirty  days  after  tlio  filius  of  such 
c(>rtificate,  and  after  at  least  ten  days'  pub- 
lic notice,  a  meeting  of  the  stoclcholders  of 
all  of  said  companies  so  consolidated,  to 
elect  a  board  of  trustees  or  directors  for  the 
consolidated  company  for  the  year  thence 
next  ensuinjr.  The  said  certificate  shall  also 
contain  all  the  requirements  prescribed  by 
section  two  hundred  and  ninetv  of  said  Civil 
Code. 

This  act  shall  apply  to  all  corporations 
formed  under  the  laws  of  this  State, 
whether  formed  under  the  said  Civil  Code, 
or  prior  tliereto.    fin  effect  March  20,  1876.) 

§  362.  fAs  amended  March  11,  1S03.)  Any 
corporation  may  amend  its  articles  of  asso- 
ciafion  or  certificate  of  incorporation  by  a 
ma.iorit.v  vote  of  its  board  of  directors  or 
trustees,  and  b.v  a  vote  or  written  assent  of 
the  stockholders  representiuir  at  least  two- 
thirds  of  the  subscribed  capital  stock  of 
such  corporation,  and  a  copv  of  the  said 
articles  of  association  or  certificate  of  incor- 
poration, as  thus  amended,  duly  certified  to 
be  correct  by  the  president  and  secretar.v  of 
the  board  of  directors  or  trustees  of  such 
corporation,  shall  be  filed  in  the  office  or 
offices  where  the  original  or  certificate  of  in- 
corporation are  required  b.v  this  Code  to  be 
filed;  and  from  the  time  of  so  filinjr  such 
copy  of  the  amended  articles  of  association 
or  certificate  of  incorporation,  such  corpora- 
tion shall  have  the  same  powers,  and  it  and 


the  stockholders  thereof  shall  thereafter  be 
sub.iect  to  the  same  liabilities  as  if  such 
anKMidment  had  been  embraced  in  the  orig- 
inal articles  or  certificate  of  incorporation; 
Provided,  That  the  time  of  the  existence  of 
such  corporation  shall  not  be  b.v  such  amend- 
ment extended  beyond  the  time  fixed  in  the 
original  articles  or  certificate  of  incorpora- 
tion; Provided  further.  That  such  original 
and  amended  articles  or  certificate  of  incor- 
iwration  shall  together  contain  all  the 
matters  and  things  requinnl  under  which  the 
original  articles  of  association  or  certificate 
of  incorporation  were  executed  and  filed; 
.\nd  provided  further.  That  nothing  herein 
contained  shall  be  construed  to  cure  or 
amend  any  defect  existing  in  any  original 
certificate  of  incorporation  heretofore  filed, 
b.v  reason  that  such  certificate  does  not  set 
fortli  the  matters  required  to  make  the  same 
valid  as  a  certificate  of  incorporation  at  the 
time  of  its  filing;  And  also  provided.  That 
if  the  assent  of  two-thirds  of  the  said  stock- 
lioldei's  to  such  amendment  has  not  been  ob- 
tained, that  a  notice  of  the  intention  to  make 
the  amendment  shall  first  be  advertised  for 
thirty  (30)  days  in  some  newspaper  pub- 
lished in  the  town  or  count.v.  or  city  and 
county,  in  which  the  principal  place  of  busi- 
ness of  the  association  or  corporation  is  lo- 
cated, before  the  filing  of  the  proposed 
amendment;  And  provided  also.  That  noth- 
ing in  this  section  shall  be  construed  to 
authorize  any  corporation  to  diminish  its 
capital  stock. 

§  363.  By  a  imanimous  vote  of  all  the  di- 
rectors at  any  regular  meetin.g.  an.v  corpora- 
tion existing  or  hereafter  to  be  formed  under 
the  laws  of  this  State,  may  acquire  and  hold 
the  lots  and  building  on  and  in  which  its 
business  is  carried  on,  and  may  improve  the 
same  to  any  extent  required  for  the  con- 
venient transaction  of  its  business. 

§  2.  This  act  shall  take  effect  immediately. 
(Approved  :\larcli  r,,  ISSO.) 

§  363.  Wlien  articles  of  incorporation  have 
been  prepared,  subscribed,  and  executed  in 
accordance  witli  the  provisions  of  sections 
two  hundred  and  ninety  and  two  hundred 
and  ninety-two  of  the  Civil  Code,  and  such 
original  articles  filed  by  error  or  inadvert- 
ence with  the  clerk  of  a  county  otiier  than 
that  named  in  the  articles  of  incorporation 
ns  the  count.v  in  ■w'hicli  the  princinal  place  of 
business  is  to  be  transacted,  and  tlie  secre- 
tary of  State  shall  have  issued  a  certificate 
of  incorporation  based  on  a  certified  copy  of 
such  orisrinal  articles  of  incorporation,  any 
stockholder  or  director  of  siich  corporation 
may  petition  the  superior  court  of  the  comit.v 
in  which  said  oriainal  articles  of  incorpora- 
tion were  filed  for  an  order  to  withdraw 
such  oiMginal  articles  of  incorporation,  and 
file  in  i)]ace  thereof  a  certified  copy  of  the 
coi).v  thereof  on  file  in  the  office  of  the  sec- 
retar.v of  State.  Such  i)etition  must  be  veri- 
fied, and  must  state  clearl.v  the  facts,  show- 
insr  that  such  articles  of  incorporation  were 
filed  by  inadvertence  and  mistake;  and  notice 


CALIFOEXIA. 


33 


Records;  examination  of  corporations,  Civ.  C,  §§  377,  378,  382,  383. 


of  the  hearing  of  said  petition  must  be  given 
for  at  least  ten  days  before  the  day  of 
liearing,  by  publication  in  a  newspaper  pub- 
lished in  the  county  where  such  petition  is 
filed.  Upon  the  day  set  for  hearing  the 
petition  the  superior  court  may  grant  an 
order  allowing  such  original  articles  of  in- 
corporation to  be  withdrawn,  and  a  certified 
copy  of  the  copy  in  the  office  of  the  secretary 
of  State  in  the  place  thereof  filed;  and  the 
original  articles  of  incoi-poration  must  be 
filed  within  ten  days  thereafter  in  the  comity 
in  which  the  principal  place  of  business  is 
to  be  transacted,  as  stated  in  such  articles 
of  incorporation,  and  a  certified  copy  of  the 
order  allowing  such  action  must  be  filed 
with  the  certified  copy  in  the  office  of  the 
secretary  of  State,  after  which  said  corpora- 
tion shall  be  entitled  to  all  rights  and  priv- 
ileges of  a  private  corporation,  and  the  title 
to  any  property  it  may  have  previously  ac- 
quired shall  not  be  affected  by  reason  of 
the  failure  to  file  the  original  articles  of  in- 
corporation in  the  first  instance. 

§  2.  All  acts  and  parts  of  acts  in  conflict 
with  this  act  are  hereby  repealed. 

S  .S.  This  act  sliall  take  effect  immediately. 
(Approved  March  19.  18S9.) 

AKTICLE  11.     RECORDS. 

Sec.  377.  Records  —  of  what,  and  how  kept. 

378.  Other  reeords  to  be  kept  by  corporations 
for  profit,  and  others. 

§  377.  All  corporations  for  profit  are  re- 
quired to  keep  a  record  of  all  their  business 
transactions;  a  journal  of  all  meetings  of 
their  directors,  members,  or  stockholders, 
with  the  time  and  place  of  holding  the  same, 
whether  regular  or  special,  and  if  special,  its 
object,  how  authorized,  and  the  notice 
thereof  given.  The  record  must  embrace 
evei-j'  act  done  or  ordered  to  be  done:  who 
were  present,  and  who  absent:  and,  if  re- 
quested by  any  director,  member,  or  stock- 
holder, the  time  sliall  be  noted  when  he 
entered  the  meeting  or  obtained  leave  of  ab- 
sence therefrom.  On  a  similar  request,  the 
ayes  and  noes  must  be  taken  on  any  propo- 
sition, and  a  record  thereof  made.  On 
similar  request,  the  protest  of  any  director, 
moniber,  or  stockholder,  to  any  action  or  pro- 
posed action,  must  be  entered  in  full  —  all 
such  records  to  be  open  to  the  inspection  of 
any  director,  member,  stoclcholder,  or  cred- 
itor of  the  corporation. 

See  Const.,  art.  XII,  §  14;  Pen.  C,  §§  oGo,  569. 
Legislature  may  examine  reeords.  C.  C,  §  .383. 
Banking  corporation  must  keep  certain  records. 
0.  C,  §  321. 

[The  acts  of  directors  of  n  corporation,  ordered 
to  be  entered  of  record,  but  which  secretary,  by 
neglect  or  mistake,  does  not  enter,  may  be  proved 
by  parol  testimony.  Homestead  Assn.  v.  Wil- 
liams. .^0  Cal.  3.">.'i.  Also,  if  corporation,  for  rea- 
sons deemed  sufficient  by  it,  postpones  formal 
entry  of  acts  of  board  of  directors,  they  may  be 
proved  by  parol  testimony.  Id.  A  corporation 
may  introduce  parol  evidence  to  show  that  a 
resolution  of  its  board  of  trustees,  spread  upon 
the  minutes  of  its   proceedings,   does  not  express 


correctly  the  proposition  which  was  voted  bv  the 
board.  Mining  Co.  v.  Gllson,  51  Cal.  341.  A  vote 
of  board  of  directors  may  be  presumed  from  its 
acts,  though  there  is  no  proof  of  such  vote  on 
the  corporate  record.  Pixley  v.  R.  R.  Co.,  33  Cal. 
184.  Refusal  to  allow  a  stockholder  to  inspect 
its  account-books  not  suflicient  to  entitle  him  to 
maintain  an  action  for  dls.solution  of  the  corpora- 
tion. Burhara  v.  Manf.  Co.,  76  Cal.  24;  s.  c.  17 
Pac.  Rep.  J>40.  Transactions  of  board  of  directors 
should  be  recorded.  Mining  Co.  v.  .Mining  C."i>..  78 
Cal.  633;  s.  c,  21  Pac.  Rep.  373.  Section  applied. 
Salfleld  V.  L.  I.  &  R.  Co.,  94  Cal.  549;  s.  c.  29 
Pac.    Rep.    1105.] 


§  378.  In  addition  to  the  records  required 
to  be  kept  by  the  preceding  section,  corpora- 
tions for  profit  must  keep  a  book,  to  be 
known  as  the  "  Stock  and  Transfer  Book," 
in  which  must  be  kept  a  record  of  all  stock; 
the  names  of  the  stockholders  or  members, 
alphabetically  arranged;  installments  paid 
or  unpaid;  assessments  levied  and  paid  or 
unpaid;  a  statement  of  every  alienation,  sale, 
or  transfer  of  stock  made,  the  date  thereof, 
and  by  and  to  whom;  and  all  such  other 
records  as  the  by-laws  prescribe.  Corpora- 
tions for  religious  and  benevolent  purposes 
must  provide  in  their  by-laws  for  such 
records  to  be  kept  as  may  be  necessary. 
Such  stock  and  transfer  book  must  be  kept 
open  to  the  inspection  of  any  stockholder, 
member,  or  creditor. 

See  preceding  section  and  notes. 

ARTICLE   III.      EXAMINATION   OF   CORPORA- 
TIONS, ETC. 

Sec.  382.  Examination  into  affairs  of  corporations, 
how  made  by  officers  of  State. 

383.  Examination  made  by  the  legislature. 

384.  Chapter  and  article  may  be  repealed. 

§  382.  The  attorney-general  or  district  at- 
torney, whenever  and  as  often  as  required 
by  the  governor,  must  examine  into  the 
affairs  and  condition  of  anj'  corporation  in 
this  State,  and  report  sucli  examination,  in 
writing,  together  with  a  detailed  statement 
of  facts,  to  the  governor,  who  must  lay  the 
same  before  the  legislature;  and  for  that 
purpose  the  attorney-general  or  district  at- 
torney may  administer  all  necessary  oaths 
to  the  directors  and  officers  of  any  corpora- 
tion, and  may  examine  them  on  oath  in 
relation  to  the  affairs  and  condition  thereof, 
and  may  examine  the  books,  papers,  and 
documents  belonging  to  such  corporation,  or 
appertaining  to  its  affairs  and  condition. 

See  Pen.  C,  §  565. 

[Section  referred  to.  Peo.  v.  Savings  Soc,  72 
Cal.  23;   s.   c,   13  Pac.    Rep.  48.] 


§  383.  The  legislature,  or  either  branch 
thereof,  may  examine  into  the  affairs  and 
condition  of  any  corporation  in  this  State 
at  all  times;  and,  for  that  purpose,  any  com- 
mittee appointed  by  the  legislature,  or  either 
l>ranch  thereof,  may  administer  all  neces- 
sary oaths  to  the  directors,  officers,  and 
stockholders  of  such  corporation,  and  may 


34 


CALIFOKXIA. 


.Tiulguiont  against  corporate  property;  exteusiou   aiul  dissulution.   Civ.  C,  §§  o-S^r-iOO. 


examine  them  on  oath  in  relation  to  the 
affairs  and  condition  thereof;  and  may  ex- 
amine tlie  safes,  boolis,  papers,  and  docu- 
ments belonging  to  such  corporation,  or 
pertaining  to  its  affairs  and  condition,  and 
compel  the  production  of  all  keys,  books, 
papers,  and  documents  by  summary  process, 
to  be  issued  on  application  to  any  court  of 
record  or  any  judge  thereof,  under  such 
rules  and  regulations  as  the  court  may  pre- 
scribe. 

See  Const,  art.  XII,  §  14;  C.  C,  §§  377,  378; 
Pen.  C,  §  565.  Bankinff  corporation  to  keep  cer- 
tain records.    C.  C,  §  321. 

§  3S^.  The  legislature  may  at  any  time 
amend  or  repeal  this  part,  or  any  title,  chap- 
ter, article,  or  section  thereof,  and  dissolve 
all  corporations  created  thereunder;  but  such 
amendment  or  repeal  does  not,  nor  does  the 
dissolution  of  any  such  corporation  take 
away  or  impair  any  remedy  given  against 
any  such  corporation,  its  stockholders  or 
otticers,  for  any  liability  which  has  been 
previously  incurred. 

See  Const.,  art.  XII,  §  1.  Voluntary  dissolution. 
C.  C.  P.,  §§  1227-12:^3. 

ARTICLE  IV.   JUDGMENT  AGAINST  AND 
SALE  OF  CORPORATE  PROPERTY. 

Sec.  388.  Franchise  may  be  treated  as  property, 
and  sold  under  execution. 

3S9.  Purchaser  to  transact  business  of  cor- 
poration. 

.300.  Purchaser  may  recover  penalties,  etc. 

301.  Corporation  to  retain  powers  after  sale. 

302.  Redemption  of  franchise. 

393.  When  iiroceedlngs  under  execution  may 
be  had. 

§  388.  (As  amended  Fel>ruary  23,  1897.) 
For  the  satisfaction  of  any  judgment  against 
any  i)orson,  company,  or  conjoration  author- 
ized to  receive  tolls.  +he  franchise  and  all 
the  rights  and  privileges  tlierefif  may  oe 
levied  uimn  and  sold  under  execution,  in  the 
same  manner,  and  with  tlie  same  effect,  as 
any  other  property.     (In  effect  July  1,  1874.) 

[The  franchises  of  a  corporation  are  privileges 
granted  and  held  in  personal  trust,  and  cannot 
he  transferred  by  forced  sale,  or  Ijy  voluntary  as- 
signment, except' by  permission  of  the  government, 
and  when  that  permission  is  granted,  the  mode 
of  transfer  i)ointed  out  luust  be  followed.  "Wood 
v.  Turnpike  Co.,  24  Cal.  474:  Thomas  v.  Arm- 
strong. 7  id.  2^0:  Munroe  v.  Thomas,  ~>  id.  470. 
Question  of  validity  of  transfer  of  a  corporation's 
franchise  concerns  the  public  alone.  R.  R.  Co. 
V.  R.  R.  Co.,  4.")  Cal.  ?,V>t>.  Corporation  is  a  neces- 
sary party  def<'ndant  to  action  which  seeks 
to  enforce  its  judgment  by  sale  of  corporate  fmn- 
chlses.  P.rncia  v.  Nelson,  42  id.  107.  A  franchise 
of  a  ^agon  road  mav  be  sold  on  execution.  Welsh 
V.  County.  SO  C:il.  :ui\  s.  c,  22  Pac.  Rep.  2.54. 
Above  section  applied.  S.  P.  Co.  v.  Burr,  .86  Cal. 
283;    s.    c,   24    Pac.    Rep.    10.32.] 

§  389.  The  purchaser  at  the  sale  must  re- 
ceive a  certificate  of  purchase  of  tlie  fran- 
chise, and  be  immediately  let  into  the 
possession  of  all  property  necessary  for  the 


exercise  of  the  powers  and  the  receipt  of  the 
proceeds  thereof,  and  must  thereafter  con- 
duct the  business  of  such  corporation,  with 
all  its  powers  and  privileges,  and  subject  to 
all  its  liabilities,  until  the  redemption  of 
the  same,  as  hereinafter  provided. 

§  390.  The  purcliaser,  or  his  assignee,  is  en- 
titled to  recover  any  penalties  imposed  by 
law  and  recoverable  liy  the  con)oration  for 
an  injury  to  tlie  franchise  or  property 
thereof,  or  for  any  damages,  or  other  cause, 
occurring  during  the  time  he  holds  the  same, 
and  may  use  the  name  of  the  coi'poration  for 
the  purpose  of  any  action  necessary  to  re- 
cover the  same.  A  recovery  for  damages  or 
any  penalties  thus  had  is  a  bar  to  any  sub- 
sequent action  by  or  in  behalf  of  the  coii^ora- 
tiou  for  the  same. 

[See  Munroe  v.  Thomas,  5  Cal.  470;  Thomas  v. 
Armstrong,  7  Id.  286;  Wood  v.  Turnpike  Co.,  24 
id.  487.] 

§  391.  The  corporation  whose  franchise  is 
sold,  as  in  this  article  provided,  in  all  other 
respects  retains  the  same  powers,  is  l)ound 
to  the  discliarge  of  the  same  duties,  and  is 
liable  to  the  same  penalties  and  forfeitures, 
as  l)efore  such  sale. 

§  392.  The  corporation  may,  at  any  time 
within  one  year  after  such  sale,  redeem  the 
franchise,  by  paying  or  tendering  to  the 
purcliaser  thereof  the  sum  paid  therefor, 
with  ten  per  cent,  interest  thereon,  but  with- 
out any  allowance  for  the  toll  which  he  may 
in  the  meantime  have  received;  and  upon 
such  payment  or  tender  the  franchise  and 
all  the  rights  and  privileges  thereof  revert 
and  belong  to  the  corporation,  as  if  no  such 
sale  had  been  made. 

§  393.  The  sale  of  any  franchise  under 
execution  must  be  made  in  the  county  in 
which  the  corporation  has  its  principal  place 
of  business,  or  in  which  the  property,  or 
some  portion  thereof,  upon  which  the  taxes 
are  paid,  is  situated.  (In  effect  July  1, 
1874.) 

CHAPTER  IV. 

Extension  and  Dissolution  of  Corporation. 

Sec.  309.   Proceedings  to  disincorporate. 

400.  On   dissolution,   directors   to  be   trustees 

for  creditors. 

401.  Any    corporation   may   extend   its   corpo- 

r.ite  existence,  how. 

402.  How    corporations     may    continue     their 

existence.     (Repealed.) 

403.  Title  I  to  apply  to  all  corporations  with 

certain  exceptions. 

§  399.  The  dissolution  of  corporations  Is 
provided  for: 

1.  If  involuntary  —  in  chapter  V,  of  title  X, 
part  II,  of  the  Code  of  Civil  Procedure.  (Sec- 
tions 802-810.) 

2.  If  voluntaiT  — in  title  VI.  pai-t  III,  of 
the  Code  of  Civil  Procedure.  (Sections  1227- 
1233.) 

§  400.  T'nless  other  persons  are  appointed 
by  the  court,  the  directors  or  managers  of 


CALIFORXIA. 


35 


Foreign  corporations,   Civ.  C,   §§  401— KJ3,  1185. 


the  affairs  of  such  corporation  at  the  time 
of  its  dissolution  are  trustees  of  the  creditors 
and  stocliholders  or  members  of  the  corpora- 
tion dissolved,  and  have  full  power  to  settle 
the  affairs  of  the  corporation. 

[Power  recognized  in  this  section  does  not  au- 
thorize court  to  take  upon  itself  power  to  settle 
affairs  of  e  corporation  or  to  appoint  a  receiver 
for  that  p\::rpose.  Ins.  Co.  v.  Superior  Ct.,  101 
Cal.  135:  ss.  o.,  35  I'ac.   Rep.  549. 

Two  foregoing  sections  referred  to.  Havemeyer 
V.  Superinr  Ct.,  8i  Cal.  358,  305;  s.  c,  24  Pac. 
iCep.  121.] 

§  401.  Every  corporation  formed  for  a 
period  less  than  fifty  years  may,  at  any  time 
prior  to  the  expiration  of  the  term  of  its 
corporate  existence,  extend  such  term  to  a 
period  not  exceeding  fifty  years  from  Its 
formation.  Such  extension  may  be  made  at 
any  meeting  of  the  stockholders  or  members, 
called  by  the  directors  expressly  for  con- 
sidering the  subject,  if  voted  by  stoclxholders 
representing  two-thirds  of  the  capital  stock; 
or  by  two-thirds  of  the  members;  or  may  be 
made  upon  the  written  assent  of  that  num- 
ber of  stockholders  or  members.  A  certifi- 
cate of  the  proceedings  of  the  meeting  upon 
such  vote,  or  upon  such  assent,  shall  be 
signed  by  the  chairman  and  secretary  of  the 
meeting  and  a  majority  of  the  directors,  and 
be  filed  in  the  office  of  the  county  clerk, 
whei-e  the  original  articles  of  incorporation 
were  filed,  and  a  certified  copy  thereof  in  the 
office  of  the  secretary  of  State,  and  there- 
upon the  term  of  the  corporation  shall  be 
extended  for  the  specified  period.  (In  effect 
July  1,  1874.) 

See  Const.,  art.  XII,  §  7. 

§  402  of  said  Code  is  repealed.  (In  effect 
July  1,  1874.) 

§  408.  The  provisions  of  this  title  are  ap- 
plicalde  to  eveiT  corporation,  unless  such 
corporation  is  excepted  from  its  operation, 
or  unless  a  special  provision  is  made  in 
relation  thereto,  inconsistent  with  some  pro- 
vision in  this  title,  in  which  case  the  special 
provision  prevails. 

See  following  act. 


AN  ACT  RELATING  TO   FOREIGN 
CORPORATIONS. 

Sec.  1.  A  resident  must  be  designated  upon  whom 
process  nia.v  he  served. 

2.  Penalty  for  failure  to  designate. 

3.  Privileges  on  compliance. 

Section  1.  Evei*y  coi-poratiou  heretofore 
created  l)y  the  laws  of  any  other  State,  and 
doing  business  in  this  State,  shall,  within 
one  hundred  and  twenty  days  after  the  pas- 
sage of  this  act,  and  any  corporation  here- 
after created  and  doing  business  in  this 
State,  within  sixty  days  from  the  time  of 
commencing  to  do  business  in  this  State, 
designate  some  person  residing  in  the 
county  in  which  the  principal  place  of  busi- 


ness of  said  corporation  in  this  State  is,  upon 
whom  process  issued  by  authority  of  or 
under  any  law  of  this  State  may  Ije  served, 
and  within  the  time  aforesaid  shall  file  such 
designation  in  the  office  of  the  secretary  (^f 
State;  and  a  copy  of  such  designation,  duly 
certified  by  such  officer,  shall  be  evidence  of 
such  appointment;  and  it  shall  be  lawful  to 
serve  on  such  person  so  designated  any  pro- 
cess issued  as  aforesaid.  Such  service  shall 
be  made  on  such  person  in  such  manner  as 
shall  be  prescriiied  in  case  of  service  re- 
quired to  be  made  on  foreign  coii)orations, 
and  such  service  shall  be  deemed  to  Ije  a 
valid  service  thereof. 

§  2.  Every  corporation  created  by  the  laws 
of  any  other  State  Avhich  shall  fail  to  com- 
ply with  the  provisions  of  the  first  section 
of  this  statute,  shall  be  denied  the  benefit 
of  the  statutes  of  this  State  limiting  the 
time  for  the  commencement  of  civil  actions. 

§  3.  Every  corporation  created  by  the  laws 
of  any  other  State  which  shall  comply  with 
the  provisions  of  the  first  section  of  this 
statute,  shall  be  entitled  to  the  benefit  of 
the  statutes  of  this  State  limiting  the  time 
for  the  commencement  of  civil  actions. 
(Approved  April  1,  1872.) 

Service  of  summons  on  foreign  corporation.  C. 
C.  P.,  §§  411,  412. 

Division    Second.      Part   IV.      Acquisition 
of  Property. 

TITLE   IV.      TRANSFER. 

CHAPTER   IV. 

ARTICLE  II. 

Acknowledgment  of  Instruments. 

Sec.  11S5.  Requisites  for  acknowledgments. 

1190.   Form    of   acknowledgment    by    corpora- 
tion. 

§  1185.  The  acknowledgment  of  an  in- 
strument must  not  be  taken,  unless  the  offi- 
cer taking  it  knows,  or  has  satisfactory 
evidence,  on  the  oath  or  affirmation  of  a 
credible  witness,  *  *  *  if  executed  by  a 
corporation,  that  the  person  making  such 
acknowledgment  is  the  president  or  secre- 
tarv  of  sucli  corporation. 

§  1190.  The  certificate  of  acknowledgment 
of  an  instrument  executed  by  a  corporation 
must  be  substantially  in  the  following  form: 


ss 


State  of  

County  of 

On  this  day  of  ,  in  the  year  of 

before  me  (here  insert  the  name  and 
quality  of  the  officer),  personally  appeared 
,  known  to  me  (or  proved  to  me  <>n 
the  oath  of  )    to  l)e  the  president  (or 

the  secretary)  of  the  corporation  that  exe- 
cuted the  within  instrument,  and  acknowl- 
edged to  me  that  such  corporation  executed 
the  same. 


36 


CALIFORXIA. 


Service    of  summons  on  corporations,  C.  Civ.  Pro.,  §§  17,  411,  412. 


TITLE      VI.     WILLS. 

CHAPTER  I. 

Execution  and  Revocation  of  Wills. 

Stc.  11275.   Business    corporatioDS     may     not    take 
property  by  will. 

S  127").  A  testamentary  disposition  may  be 
made  to  anj'  person  capable  by  law  of  tak- 


ing the  property  so  disposed  of,  except  cor- 
porations otlior  than  those  formed  for 
scicntiru',  literary,  or  solely  ediicaticdial  pur- 
poses cannot  tak(?  under  a  will,  unless  ex- 
pressly authorized  by  statute. 

See  C.  C,  §  288,  note. 

[A  school   distriot   can   take  by   will.     Estate  of 
Buhner,  59  Gal.  131.] 


CODE  OF  CIVIL  PROCEDURE. 


Preliminary  Provisions. 

Sec.  17.   "  Person  "  to  include  a  corporation. 

§  17.  *  *  *  The  Avord  "  person "  in- 
cludes a  corporation,  as  well  as  a  natural 
person;    *    *    * 

See  Pen.  C,  §  7.  Term  "  corporation  "  Includes 
what.  Const.,  art.  XII,  §  4.  Corporation  defined. 
C.  C.  §§  283,  284. 

[The  word  "  person,"  in  its  legal  signification,  is 
a  generic  term,  and  was  intended  to  include  arti- 
ficial as  well  as  natural  persons.  Douglass  v. 
Steamship  Co.,  4  Cal.  304.  In  the  Political  Code 
the  word  "  person  "  includes  corporate,  as  well 
as  natural  persons.  Water-Works  v.  Schottler, 
G2  Cal.  116.  The  provision  of  the  fourteenth 
amendment  of  the  United  States  Constitution, 
that  no  State  shall  "  deny  to  any  person  within 
its  jurisdiction  the  equal  protection  of  the  laws," 
applies  to  natural  persons  only,  and  does  not  ap- 
ply to  corporations,  or  artificial  persons.  R.  R. 
Co.  V.  Board,  GO  Cal.  35.  Contra,  Railroad  Tax 
cases,  8  Saw.  238.  Section  referred  to  and  applied. 
Peo.  V.  City,  66  Cal.  289;  s.  c,  5  Pac.  Rep.  350.] 

Part  II.     Civil  Actions. 

Title       V.  Manner  of  commencing. 
YII.  Provisional  remedies. 

TITLE    V.      MAXXER   OF   COMMENCING. 

Sec.  411.  Summons,  upon  whom  served. 
412.  Publication  of  summons,   when. 

§  411.  The  summons  must  be  served  by 
delivering  a  copy  thereof,  as  follows: 

1.  If  the  suit  is  against  a  corporation 
formed  under  the  laws  of  this  State:  to  the 
president  or  other  head  of  the  corporation, 
secretary,  cashier,  or  managing  agent 
thereof; 

2.  If  the  suit  is  against  a  foreign  corpora- 
tion, or  a  non-resident  joint-stock  company 
or  association,  doing  business  and  having  a 
managing  or  business  agent,  cashier,  or  sec- 
retary Avithin  this  State:  to  such  agent, 
cashier,  or  secretary. 

Power  of  corporation  to  sue  and  be  sued.  C.  C, 
§  354  (2).  May  be  sued  where.  Const.,  art.  XII, 
§  16.  Summons  upon  information  or  indictment 
of  a  corporation.  Pen.  C,  §§  1.300-1.397.  See  act 
relating  to  foreign  corporations,  at  p.  35. 

fin  a  suit  against  a  corporation,  the  summons 
must  be  served  on  one  of  the  ofTicers  or  agents 
named  in  the  Practice  Act.  Aiken  v.  Mining  Co..  0 
Cal.  180,.  Sheriffs  return  on  summons  against  a  eor 
poration.  that  he  served  the  same  on  president 
and  secretary  of  company,  is  prima  facie  evidence 


that  persons  named  in  return  were  such  officers. 
Kowe  V.  Water  Co.,  10  Cal.  441.  Service  of  sum- 
mons upon  president  de  jure  of  a  corporation  held 
to  1)0  valid,  although  he  had  ceased  to  act  as  such. 
Service  upon  the  j)resident  de  facto  miglit  also  have 
been  good.  Nav.  Co.  v.  Struver,  41  Cal.  616. 
Return  of  sheriff  showing  that  he  had  served 
summons  "  upon  Janies  Street,  one  of  the  pro- 
prietors of  the  company;  "  held  insufficient,  it 
not  apiiearing  that  Street  was  president,  or  head 
of  the  corporation,  or  secretary,  cashier,  or  man- 
aging agent  thereof.  O'Brien  v.  Canal  Co.,  10 
Cal.  343.  Service  of  summons  on  person  desig- 
nated by  foreign  corporation  as  one  upon  whom 
process  "might  be  served,  is  a  suflScient  service  on 
the  corporation,  so  long  as  such  designation  re- 
mains unrevoked,  although  service  was  made  after 
adoption  of  this  Code,  and  on  a  person  who  Is 
neither  an  agent,  cashier,  secretary  or  any  other 
officer  of  the  corporation.  Canal  Co.  v.  Superior 
Ct.,  66  Cal.  311;  s.  c,  5  Pac.  Rep.  490.  Notice  of 
appeal  from  a  justice's  court  may  be  served  on 
adverse  party  personally,  notwithstanding  he  was 
represented  by  an  attorney.  And  where  adverse 
party  is  a  corporation,  service  on  its  manager  is 
suHicient  to  give  the  superior  court  jurisdiction. 
Rv.  Co.  V.  Superior  Ct.,  79  Cal.  103;  s.  c,  21  Pac. 
Rep.  609.] 

§  412.  (As  amended  March  23,  1893.)  Where 
the  person  on  Avliom  service  is  to  be  made 
*  *  *  is  a  foreign  corporation  having  no 
managing  or  business  agent,  cashier,  or  sec- 
retary within  the  State,  and  the  fact  appears 
by  affidavit  to  the  satisfaction  of  the  court 
or  a  judge  thereof,  and  it  also  appears  by 
such  affidavit,  or  by  the  verified  complaint 
on  file,  that  a  cause  of  action  exists  against 
the  defendant  in  reepoct  to  whom  the  service 
is  to  be  made,  or  that  he  is  a  necessarj-  or 
proper  party  to  the  action,  or  when  it  ap- 
pears by  such  affidavit,  or  by  the  complaint 
on  file  herein,  that  it  is  an  action  Avhich 
relates  to  or  tlie  subject  of  which  is  real  or 
personal  property  in  this  State,  in  Avhich 
such  person  defendant  or  foreign  corporation 
defendant  lias  or  claims  a  lien  or  interest, 
actual  or  contingent,  therein,  or  in  which  the 
relief  demanded  consists  wholly  or  in  part 
in  excluding  such  person  or  foreign  corpora- 
tion from  any  interest  therein,  such  court  or 
judge  may  make  an  order  that  the  service 
be  made  by  the  publication  of  the  summons. 

Section  413  provides  that  publication  must  be 
made  at  least  once  a  week  for  not  less  than  two 
months.    See  §  749. 

[This  procedure  is  constitutional.  Kitel  v.  Foote, 
30  Cn\.  4.''.0:  Mcfaiiley  v.  Fulton.  44  id.  .3.50.  As  to 
extent  to  which  jurisdiction  may  be  thus  ac(iuired, 
see  Pennoyer  ^•.  NefC  05  I'.  S.'714:  TIart  v.  S;in 
som,  110  id.  151.  This  section  must  I)e  strictly 
construed.      Jordan  v.  Giblin,  12  Cal.  100.      Order 


CxVLIFORXIA, 


37 


Pleading;    attaelinitnt;  receivers,  C.  Civ.  Pro.,  §§  446,  541,  542,  564-568. 


for  publication,  sufBciencv  of.  Anderson  v.  Goff, 
72  Cal.  Co;  s.  c,  18  Pac.  Rop.  78.  The  fact  that 
cause  of  action  exists  may  l^e  shown  citlicr  Ijy 
attiflavit  or  by  verified  complaint  on  file.  If  com- 
plaint be  not  verified,  the  affidavit  may  refer  to 
and  adopt  its  statement.  In  such  case,  the  oath 
to  tlie  affiadvit  is  an  affidavit  to  the  contents  of 
the  document  referred  to  and  adopted.  Ligare  v. 
U.  11.  Co.,  7G  Cal.  010;  s.  c,  18  Pac.  Kep.  777. 
Jtequisites  of  the  affidavit.  Id.;  Furnish  v.  Mullan, 
76  Cal.  646;  s.  c,  18  Pac.  liep.  So4;  Dunlap  v. 
Steere,  92  Cal.  345;  s.  c,  28  Pac.  Kep.   563.] 

TITLE  VI.      PLEADINGS. 

CHAPTER  VI. 

Verification  of. 

Sec.  446.  Verification   by   corporation. 

§  446.  Every  pleading  must  be  subscribed 
bj'  the  party  or  his  attorney;  *  *  *  when 
a  corporation  is  a  party,  the  verification  may 
be  made  by  any  officer  thereof. 

[What  is  sufficient  verification  by  agent.  New- 
man v.  Bird,  CO  Cal.  372.  Question  of  defective 
verification  cannot  be  raised  bv  demurrer.  Seattle, 
etc.,  Co.  V.  Thomas,  57  Cal.  197.  If  plaintiff  goes 
to  trial  without  objection  for  want  of  verification 
of  the  answer  he  cannot  raise  the  question  after 
decision  is  rendered  against  him.  San  Francisco 
v.  Itscll,  80  Cal.  57;  s.  c,  22  Pac.  Rep.  74.] 

TITLE  VII.      PROVISIONAL  REMEDIES. 

Ch.  4.  Attachment. 
5.  Receivers. 


CHAPTER  IV. 

Attachment. 

Sec.  .541.   Shares  of  stock  may  be  attached. 
542.  Attachment,  how  made. 

§  541.  The  rights  or  shares  which  the  de- 
fendant may  hare  in  the  stock  of  any  cor- 
poration or  company,  together  Avith  the 
interest  and  profit  thereon,  *  *  *  may  be 
attached,  and  if  judgment  be  recovei'ed,  be 
sold  to  satisfy  the  judgment  and  execution. 

§  542.  The  sheriff  to.  whom  the  writ  is 
directed  and  delivered,  must  execute  the 
same  without  delay,  and  if  the  undertaking 
mentioned  in  section  five  hundred  and  forty 
be  not  given,  as  follows: 

4.  Stocks  or  shares,  or  interest  in  stocks 
or  shares,  of  any  corporation  or  company, 
must  be  attached  by  leaving  with  the  presi- 
dent, or  other  head  of  the  same,  or  the  sec- 
retary, cashier,  or  other  managing  agent 
thereof,  a  copy  of  the  writ,  and  a  notice 
stating  that  the  stock  or  interest  of  the  de- 
fendant is  attached,  in  pursuance  of  such 
writ. 

CHAPTER  V. 

Receivers. 

Sec.  .564.  Appointment  of  receiver. 

565.  Appointment    of    receiver    upon    dissolu- 
tion of  corporation. 
568.  Powers  of  receiver. 

§  504.  A  receiver  may  be  appointed  by  the 
court  in  which  an  action  is  pending,  or  by 
the  judge  thereof: 


5.  In  the  cases  when  a  corporation  has 
been  dissolved,  or  is  in.solvent,  or  in  immi- 
nent danger  of  insolvency,  or  has  forfeited 
its  corporate  rights. 

[A  court  of  Ofjuity  has  no  jurisdiction  over  cor- 
porations, for  purpose  of  restraining  their  opera- 
tions or  winding  up  their  business.  Such  court 
may  compel  the  officers  of  corporation  to  ac- 
count for  any  breach  of  trust,  but  .iurisJiction 
for  this  purpose  is  over  officers  per.s6naliy,  nnd 
not  over  the  corporation.  Hence,  in  this  case,  it 
was  error  in  court  below  to  appoint  a  receiver 
and  decree  a  sale  of  the  property  and  a  settle- 
ment of  affairs  of  the  corporation.  Xeall  v.  Hill, 
16  Cal.  146.  Such  decree  necessarily  results  in  a 
dissolution  of  corporation,  and  would  be  doing  in- 
directly what  the  court  has  no  power  to  do  di- 
rectly. Id.  The  general  and  ordinarv  jurisdiction 
of  courts  of  equity  does  not  embrace  power  to 
appoint  receiver  of  property  of  a  corporation  in 
aid  of  a  suit  prosecuted  against  it  bv  private  per- 
sons, but  such  power,  if  it  e.\ists  at  all.  must  be 
derived  from  statute  conferring  it  upon  the  court. 
The  above  section  does  not  confer  it.  French 
Bank  Case,  53  Cal.  495.  .lurisdiction  of  superior 
court  over  estate  of  insolvent  corporation.  Ins. 
Co.  V.  Superior  Ct.,  101  Cal.  135;  s.  c,  35  Pac. 
Rep.   549.] 


§  505.  Upon  the  dissolution  of  any  corpora- 
tion, the  superior  court  of  the  county  in 
which  the  corporation  carries  on  its  business 
or  has  its  principal  place  of  business,  on  ap- 
plication of  any  creditor  of  the  corporation, 
or  of  any  stockholder  or  member  thereof, 
may  appoint  one  or  more  persons  to  be  re- 
ceivers or  trustees  of  the  corporation,  to 
take  charge  of  the  estate  and  effects  thereof, 
and  to  collect  the  debts  and  property  due 
and  belonging  to  the  corporation,  and  to  pay 
the  outstanding  debts  thereof,  and  to  divide 
the  moneys  and  other  property  that  shall  re- 
main over  among  the  stockholders  or  mem- 
bers. 

Involuntary  dissolution  of  corporation.  C.  C.  P., 
§§  802  et  seq.  Voluntary  dissolution.  C.  C.  P., 
§§  1227  et  seq. 

[Section  construed.  Havemever  v.  Superior  Ct., 
84  Cal.  366:  s.  c,  24  Pac.  Rep.  121:  Ins.  Co.  v. 
Sup.  Ct.,  101  Cal.  1.35;  s.  c.  .35  Pac.  Rep.  .549.  A 
judgment  against  a  corporation  for  usurping  fran- 
chises does  not  dissolve  it  so  as  to  allow  appoint- 
ment of  a  receiver  under  above  section.  Yore  v. 
Superior  Ct.,  41  Pac.   Rep.  477.] 


§  508.  The  receiver  has,  under  the  control 
of  the  court,  power  to  bring  and  defend 
actions  in  his  own  name,  as  receiver;  to 
take  and  keep  possession  of  the  propert.v,  to 
receive  rents,  collect  debts,  to  compound  for 
and  compromi.se  the  same,  to  make  transfer!?, 
and  generally  to  do  such  acts  respecting  the 
property  as  the  court  may  authorize. 

[Section  construed.  Dennery  v.  Superior  Ct., 
81  Cal.  11:  s.  c.  24  I'ac.  Rep.  147.  Functions  and 
powers  of  receivers  of  cori>orations  discussed  at 
length.  Ry.  Co.  v.  Wade.  91  Cal.  449;  s.  c.  27 
Pac.  Rep.  70S.  An  action  cannot  be  brousrht 
against  a  receiver  without  leave  of  the  court,  but 
service  of  an  attachment  is  not  bringing  an  action 
and  property  may.  therefore,  be  attached  (and 
priorltv  gained>  in  hands  of  a  receiver.  .Vdaiii-;  v. 
Woods,  9  Cal.  28;  Naglee  v.  Minturn,  8  id.  .540.] 


38 


CALIFORNIA. 


Usurpation  of  frauLhi.ses;    voluntary  dissolution,  C.  Civ.  Pro.,  §§  803-809,  12l'T. 


TITLE    X.     ACTIONS     IN     PARTICULAR 
CASES. 

CHAPTER  V. 

Actions  for  Usurpation  of  Franchises. 

Sec.  803.  Action.s     against    party     usurping    fran- 
chises. 

808.  AVlion  several  persons  elnini  franoliise. 

809.  If    defendant    found    guilty,    what   judg- 

ment to  be  rendered. 

§  803.  An  action  may  be  brought  by  tbe 
attorney-general,  in  tbe  name  of  tbe  people 
of  this  State,  tipou  bis  own  information,  or 
upon  tbe  complaint  of  a  private  party, 
against  any  perscni  who  usurps,  intrudes 
into,  or  unlawfully  holds  or  exercises  any 
*  *  *  franchise  within  this  State.  And 
the  attorney-general  must  bring  tbe  action 
whenever  be  has  reason  to  believe  that  any 
such  *  *  *  franchise  has  been  usurped, 
intruded  into,  or  unlawfully  held  or  exercised 
by  any  person,  or  when  be  is  directed  to  do 
so  by  tbe  governor. 

[The  using  of  an  abbreviated  corporate  name 
by  officers  of  a  corporation  organized  under  par- 
ticular name,  is  not  an  usurpation,  nor  will  it 
support  a  proceeding  by  quo  warranto  to  oust  them 
from  the  enjovment  of  their  franchise.  Peo.  v. 
Bogart.  4.5  Cal.  7.3.  "When  right  to  act  as  a  cor- 
poration is  denied,  company  claiming  to  be  -such 
must  sliow  that  it  claims  in  good  faith  to  be  a 
corporation  under  laws  of  this  State,  and  is  doing 
business  as  such  corporation.  R.  R.  Co.  v.  Plumas 
Co.,  37  Cal.  358.  Pleadings  in  proceedings  by  quo 
warranto  to  try  writ  to  exercise  corporate  pow- 
ers. Id.  In  an  action  to  enforce  forfeiture  of  a 
corporate  franchise  on  account  of  nonuser  and 
misuser,  complaint  must  speciflcall.v  allege  that 
defendant  has  a  legal  existence  as  a  corporation. 
Peo.  v.  Stanford.  77  Cal.  .3G0;  s.  c,  18  Pac. 
Rep.  8.">;  19  id.  69.3.  In  an  action  to  have  it 
determined  that  certain  persons  are  unlawfully 
claiming  to  bo  and  are  exercising  functions  of 
a  private  corporation  had  never  had  an  exist- 
ence, persons  usurijinsr  frfnicliise  are  the  only 
proper  defendants.  If  the  corporation  be  made  a 
defendant  as  such,  its  corporate  existence  is  ad- 
mitted. Id.  In  such  an  action,  an  answer  which 
denies  that  individual  defendants  are  claiming  or 
exercising  franchises,  the  aus^ver  states  com- 
plete defense  as  to  them.  Id.  If  alleged  usurpa- 
tion is  claimed  to  result  from  cessation  of  corpo- 
rate existence,  facts  showing  the  termination  of 
its  existence  must  be  set  forth.  And  if  claim 
be  that  organization  was  defective,  facts  showing 
the  defects  claimed  to  exist  must  he  specifically 
alleged.  Id.  Judgment  decreeing  usurpation  of 
franchise  —  nonexistence  of  corporation  must  be 
determined.  Id.  State  not  estopped  to  maintain 
action  for  forfeiture,  when.  Id.  Not  estopped 
to  deny  corporate  existence  or  franchise,  when. 
Id.  When  a  corporation  fails  to  perform  duties 
which  it  was  incorporated  to  perform,  and  in 
which  the  public  have  an  interest,  or  does  acts 
wliich  are  not  authorized  or  it  is  forbidden  to  do, 
State  may  forfeit  its  franchise  and  dissolve  it  by 
an  information  in  nature  of  a  quo  warranto.  Peo. 
V.  Dashaway  Assn.,  84  Cal.  114:  .s.  c.,  Ii4  Pac. 
Rep.  277.  In  such  an  action  willful  acts  and 
neglects  of  its  oflicers  are  attributable  to  the  cor- 
poration, and  will  render  it  liable  to  judgment  or 
decree  of  dissolution.  Id.  Grant  of  corporate 
francliise  is  always  sul)ject  to  the  implied  condi- 
tion  tliat   it   will   not   be  abused.     Id. 

Superior  court  has  no  jurisdiction  to  appoint  re- 
ceiver of  property  of  a  corporation  in  a  quo  war- 
ranto proceeding.  ui)on  judgment  of  forfeiture  of 
its  corporate  charter.  Ilaveinever  v.  Superior  Ct., 
84  Cal.  .327;  s.  c.  24  Pac.  l{ei>.  121.  Disijosition 
of  dissolved  cori)oration.  Id.  Riglits  of  directors, 
stocliliolders   and   creditors   upon    involuntary    dis- 


solution. Id.  I'p  to  date  of  its  dissolution,  a 
corporation,  ponding  an  action  for  forfeiture  of 
its  franchise.  lia.s  same  power  to  dispose  of  its 
(;ro])erty  honestly  and  in  good  faith  that  any  cor- 
poration  has.     1(1. 

In  a  proceeding  by  State  in  nature  of  quo  war- 
ranto to  deprive  a  corporation  de  facto  of  its 
charter  and  procure  its  dissolution  on  ground  of 
want  of  substantial  compliance  with  statutory 
re(]uirements  of  its  formation,  the  corporation  de 
facto  is  a  necessary  party,  and  making  it  such, 
with  averment  that  it  is  a  corporation  de  facto, 
but  not  de  jure,  does  not  estop  State  from  ques- 
tioning its  corporate  character.  I'eo.  v.  Water 
Co..  97  Cal.  27U;  s.  c,  32  Pac.   Rep.  230. 

Filing  of  articles  in  wrong  county  fatal  to  crea- 
tion of  a  corporation  de  facto.  Martin  v.  Deetz. 
I<t2  Cal.  ;">;  s.  c,  30  Pac.  Rep.  308.  Corporations 
de   facto  and   de  jure  deflned.     Id. 

In  an  action  by  the  State  to  dissolve  a  delin- 
quent corporation,  it  has  no  interest  either  in  the 
assets  or  debts  of  the  corporation,  and  when  it 
has  secured  the  dissolution,  its  functions  in  the 
actions  have  ceased.  Ins.  Co.  v.  Superior  Ct., 
lUl   Cal.   135;   s.   c,   35   I'ac.   Rep.   549. 

"When  cause  of  fQrfeiture  of  a  corporate  privi- 
lege or  franchise  exists,  it  can  be  invoked  only 
at  instance  of  the  State.  City  v.  R.  R.  Co.,  101 
Cal.  333;   s.   c,  35  I'ac.   Rep.  993.] 


§  808.  When  several  persons  claim  to  be 
entitled  to  the  same  *  *  *  franchise,  one 
action  may  be  brought  against  all  such  per- 
sons, in  order  to  try  their  respective  rights 
to  such    *    *    *    franchise. 

§  800.  When  a  defendant,  against  whom 
such  action  has  been  brought,  is  adjudged 
guilty  of  usurping  or  intruding  into,  or 
imlawfnlly  holding  any  *  *  *  franchise, 
or  privilege,  judgment  must  be  rendered  that 
such  defendant  be  excluded  from  tbe  *  *  * 
franchise,  or  privilege,  and  that  he  pay  the 
costs  of  tbe  action.  Tbe  court  may  also,  in 
its  discretion,  impose  upon  the  defendant  a 
fine  not  exceeding  five  thousand  dollars, 
which  fine,  when  collected,  must  be  paid 
into  the  treasurj^  of  the  State. 

[Does  Constitution  of  1879  restoring  writ  of  quo 
warranto,  which  was  abolished  by  Code  of  1872, 
have  the  effect  to  repeal  sections  803  to  809  of 
this  Code?  Peo.  v.  r>ashaway  Assn.,  84  Cal.  115; 
s.  c,  24  Pac.  Rep.  277.  The  rendition  of  judg- 
ment authorized  by  this  section  ends  the  proceed- 
ing, and  no  receiver  can  be  appointed  unless  a 
new  suit  is  commenced  by  a  creditor  or  stock- 
holder for  that  pvirpose.  Havenieyer  v.  Superior 
Ct.,  84  Cal.  327;  s.  c,  24  Pac.  Rep.  121.  A  jndg- 
nH>nt  against  a  corporation  for  usurping  franchises 
does  not  dissolve  the  corporation  so  as  to  allow 
appointment  of  a  receiver  under  C.  C.  Pro.,  §  .505. 
Yore  V.  Superior  Ct.,  41  Pac.  Rep.  477.] 


Part  III.     Special  Proceedings.- 

TITLE   XI.      A  OLL'NTARY  DISSOLUTION   OP 
CORPORATIONS, 

Sec.  1227.  Corporation,  how  dissolved. 

1228.  Application,   what  to  contain. 

1229.  Application,   how   signed  ancj  verified. 

1230.  Filing     application    and     publishing    of 

notice. 

1231.  Objections  may  be  filed. 
12.32.    Hearing  of  application. 
1233.  Judgment-roll   and  appeals. 

§  1227.  A  corporation  may  be  dissolved  by 
tbe  superior  court  of  tbe  county  where  its 


CALIFORXIA. 


39 


Voluntary  dissolution;  frauds  in  management,  C.  Civ.  Pro.,  §§  1228-1233;  Pen.  C,  §1  7,  557,  558. 


principal  place  of  business  is  situated,  upon 
its  voluntary  application  for  that  purpose. 

Dissolution  by  legislature.  Const.,  art.  XII,  §  1; 
C.  C,  §  384.  Involuntary  dissolution.  C.  C.  T., 
§S  802  et  seq.    Receivers.    C.  C.  P.,  §  563. 

[The  method  prescribed  by  the  Code  for  dis- 
solution of  a  corporation  is  exclusive,  and  there 
can  be  no  distributins  of  its  capital  stock  under 
any  other  circumstances.  Kohl  v.  Lilienthal,  81 
Cal.  378;  see  Havemeyer  v.  Superior  Ct.,  84  Cal. 
327;   s.   c,  24  Tac.   Rep.   121.] 


§  122S.  The  application  must  be  in  writing, 
and  must  set  forth: 

1.  That  at  a  meetinc:  of  the  stockholders 
or  members  called  for  that  purpose,  the  dis- 
solution of  the  corporation  was  resolved 
npon  by  a  two-thirds  vote  of  all  the  stock- 
holders or  members; 

2.  That  all  claims  and  demands  against  the 
corporation  have  been  satisfied  and  dis- 
charged. 

§  1229.  The  application  must  be  signed  by 
a  majority  of  the  board  of  trustees,  directors, 
or  other  officers  having  the  management  of 
the  affairs  of  the  corporation,  and  must  be 
verified  in  the  same  manner  as  a  complaint 
in  a  civil  action. 


§  1230.  If  the  court  is  satisfied  that  the  ap- 
plication is  in  conformity  with  this  title,  a 
judge  thereof  must  order  it  to  be  filed  with 
the  clerk,  and  that  the  clerk  give  not  less 
than  thirty  nor  more  than  fifty  days'  notice 
of  the  application,  by  publication  in  some 
newspaper  published  in  the  county;  and  if 
there  are  none  such,  then  by  advertisements 
posted  up  in  three  of  the  principal  public 
places  in  the  county. 

§  1231.  At  any  time  before  the  expiration 
of  the  time  of  publication  any  pei'son  may 
file  his  objections  to  the  application. 

§  1232.  After  the  time  of  publication  haa 
expired  the  court  may,  upon  five  days'  notice 
to  the  persons  who  have  filed  objections,  or 
without  further  notice,  if  no  objections  have 
been  filed,  proceed  to  hear  and  determine 
the  application,  and  if  all  the  statements 
therein  made  are  shown  to  be  true,  must 
declare  the  corporation  dissolved. 

§  1233.  The  application,  notices,  and  proof 
of  publication,  ol)jectious  (if  there  be  any), 
and  declaration  of  dissolution,  constitute  the 
judgment-roll;  and  from  the  judgment  an 
appeal  may  be  taken,  as  from  other  judg- 
ments of  the  superior  courts. 

[See  Kohl  v.  Lilienthal.  81  Cal.  378;  s.  c,  20 
Pac.  Rep.  401:  22  id.  680;  Ilaveniever  v.  Superior 
Ct.,   84  Cal.   365;  s.   c,  24  Pac.   Rep.   121.] 


PENAL  CODE. 


Preliminary  Provisions. 

Sec.  7.   "  Person  "   includes  corporation. 

§  7.  ■*  *  *  The  word  "  person "  in- 
cludes a  corporation  as  well  as  a  natural 
person;    ♦     *     * 

See  C.  C.  P.,  §  17,  note. 

Part  I.     Crimes  and  Punishments. 

TITLE    XIII.       CRIMES    AGAINST    PROP- 
ERTY. 

CHAPTER  XIII. 

Fraudulent   Insolvencies   by    Corporations 
and  other  Frauds  in  their  Management. 

Sec.  557.  Fraud  in  subscribing  for  stock. 

558.  Frauds  in   procuring  organization  or  in- 

creasing capital. 

559.  L'nauthorized  use  of  name  in  prospectus, 

etc. 

560.  Misconduct  of  directors. 

563.  Frauds  in  keeping  accounts  in  books  of 

corporations. 

564.  Officers    of    corporation    publishing   false 

report  of  its  condition. 

565.  Officer   of   corporation    to   permit    an    in- 

spection of  its  books. 
568.  Directors    of    corporations    presumed    to 

have  knowledge  of  its  affairs. 
560.  Directors  present  at  mooting. 

570.  Same,  wheu  directors  absent  from  meet- 

ing. 

571.  Foreign  corporations. 

572.  Directors  defined. 

§  557.  Every  person  who  signs  the  name 
of  a  fictitious  person  to  any  subscription  for 
or  agreement  to  take  stock  in  anj'  corpora- 

8 


tion  existing  or  proposed,  and  every  person 
who  signs  to  any  subscription  or  agreement 
the  name  of  any  person,  knowing  that  such 
person  has  not  means  or  does  not  intend  in 
good  faith  to  comply  with  all  the  terms 
thereof,  or  under  any  understanding  or 
agreement  that  the  terms  of  such  subscrip- 
tion or  agreement  are  not  to  be  complied 
with  or  enforced,  is  guilty  of  a  misdemeanor. 

Subscription  to  articles  of  incorporation.  C.  C, 
§  202.  To  capital  stock.  C.  C,  §  293.  Oath  to 
subscription.     C.   C,   §  295. 

§  558.  Every  officer,  agent,  or  clerk  of  any 
coriioration,  or  of  any  persons  proposing  to 
organize  a  corporation  or  to  increase  the 
capital  stock  of  any  corporation,  who  know- 
ingly exhibits  any  false,  forged,  or  altered 
book,  paper,  voucher,  security,  or  other  in- 
strument of  evidence  to  any  public  officer  or 
board  authorized  by  laAV  to  examine  the 
organization  of  such  corporation,  or  to  in- 
vestigate its  affairs,  or  to  be  allowed  an  in- 
crease of  its  capital,  with  intent  to  deceive 
such  officer  or  board  in  respect  thereto,  is 
punishable  by  imprisonment  in  the  State 
prison  not  less  than  three  nor  more  than 
ten  years. 

Civil  liability  of  officers  for  making  false  cer- 
tificate, etc.  C.  C,  §  316.  Organization  of  cor- 
poration. C.  C,  §  283.  Records.  C.  C,  §§  377, 
378.    Increasing  stock.    C.  C,  §  359. 

[Renuisitos  of  indictment  asrainst  agent  of  a 
coi'poratioii  for  having  made  false  entrv  in  cor- 
porate books.    Peo.  v.  Palmer,  53  Cal.  615.J 


40 


CALIFORXIA. 


Frauds  in  mauagemeut  of  corporations,  Pen.  C,  §§  559-570. 


§  559.  Every  person  who,  without  being 
autliorized  so  to  do,  subscribes  the  name  of 
auother  to  or  inserts  the  name  of  anotlier  in 
any  prospectus,  circuhir,  or  otlier  advertise- 
ment, or  announcement  of  any  corporation 
or  joint-stoclv  association,  existing  or  in- 
tended to  be  formed,  whh  intent  to  permit 
the  same  to  be  published,  and  thereby  to 
lead  persons  to  bebeve  that  the  person  whose 
name  is  so  subscribed  is  an  otticer,  agent, 
member,  or  promoter  of  such  corporation  or 
association,  is  guilty  of  a  misdemeanor. 

§  500.  Every  director  of  any  stock  corpora- 
tion who  concurs  in  any  vote  or  act  of  the 
directors  of  such  corporation,  or  any  of  them, 
bj'  which  it  is  intended,  either: 

1.  To  make  any  dividend,  except  from  the 
siu-plus  protits  arising  from  the  business  of 
the  corporation,  and  in  the  cases  and  manner 
allowed  by  law;  or. 

2.  To  divide,  withdraw,  or  in  any  manner 
except  as  provided  by  law  pay  to  the  stock- 
holders, or  any  of  them,  any  part  of  the 
capital  stock  of  the  corporation;  or, 

3.  To  discount  or  receive  any  note  or  other 
evidence  of  debt  in  payment  of  any  install- 
ments actually  called  in  and  required  to  be 
paid,  or  with  the  intent  to  provide  the  means 
of  making  such  payment;  or, 

4.  To  receive  or  discount  any  note  or  other 
evidence  of  debt  with  the  intent  to  enable 
any  stockholder  to  withdraw  any  part  of  the 
money  paid  in  bj^  him,  or  his  stock;  or, 

5.  To  receive  from  any  otlier  stock  corpora- 
ticn,  in  exchange  for  the  s'  aies,  notes,  bonds, 
or  other  evidences  of  debt  of  their  own  cor- 
poration, shares  of  the  capital  stock  of  such 
other  corporation,  or  notes,  bonds,  or  other 
evidences  of  debt  issued  by  such  other  cor- 
poration; is  guilty  of  a  misdemeanor. 

[Section  cited  and  applied.  Trust  Co.  v.  Dor- 
Bey,  72  Cal.  5G;  s.  c,   12  Pac.   Rep.  49.] 


§  5G3.  Every  director,  officer,  or  agent  of 
any  corporation  or  joint-stock  association, 
who  knowingly  receives  or  possesses  himself 
of  any  proi)erty  of  such  corporation  or  asso- 
ciation, otherwise  than  in  payment  of  a  just 
demand,  and  who,  Avith  intent  to  defraud, 
omits  to  make,  or  to  cause  or  direct  to  be 
made,  a  full  and  true  entry  thereof  in  the 
books  or  accounts  of  such  corporation  or  asso- 
ciation, and  every  director,  offlcer,  agent,  or 
member  of  any  corporation  or  joint-stock 
association  who,  Avith  intent  to  defraud,  de- 
stroys, alters,  mutilates,  or  falsifies  any  of  the 
books,  papers,  writings,  or  securities  belong- 
ing to  such  cori)oration  or  association,  or 
makes,  or  concurs  in  making,  any  false  en- 
tries, or  omits,  or  concurs  in  omitting,  to 
make  any  material  entry,  in  any  book  of 
accounts,  or  other  record  or  document  kept 
by  such  cori>oration  or  association,  is  piinish- 
able  by  imprisonment  in  the  State  prison 
not  less  than  three  nor  more  than  ten  years, 
or  by  imprisonment  in  the  county  jail  not 
exceeding  one  year,  and  a  fine  not  exceeding 


five  hundred  dollars,  or  by  both  such  fine 
and  imprisonment. 

[Indlctniout  under  this  section  against  agent  of 
a  corporation,  for  making  false  entries  in  com- 
pany's books,  should  specify  particular  entry  coni- 
i)lained  of,  and  should  at  least  state  the  substance 
of  it,  aeeording  to  its  legal  ell'ect.  An  averment 
held  insuthcient.     I'eo.  v.  i'almer,  53  Cal.  i>15.] 

§  504.  Every  director,  officer,  or  agent  of 
any  corporjition  or  joint-stock  association, 
who  knowingly  concurs  in  making,  publish- 
ing, or  posting  any  written  report,  exhibit, 
or  statement  of  its  aifairs  or  pecuniary  con- 
dition, or  book  or  notice  containing  any 
material  statement  which  is  false,  or  re- 
fuses to  make  any  book  or  post  any  notices 
required  by  laAV,  in  the  manner  required  by 
law,  other  than  such  as  are  mentioned  in 
this  chapter,  is  guilty  of  a  felony. 

See  C.  C,  §§  316  and  558,  note. 

[This  section  defines  two  or  more  oflfenses.  In- 
dictment having  charged  defendant  with  commis- 
sion of  both  offenses,  it  is  demurrable.  I'eo.  v. 
Cooper,  53  Cal.  (j47.] 

§  505.  Every  offlcer  or  agent  of  any  cor- 
poration, having  or  keeping  an  office  within 
this  State,  who  has  in  his  custody  or  con- 
trol any  book,  paper,  or  document  of  such 
corporation,  and  Avho  refuses  to  give  to  a 
stockholder  or  member  of  such  corporation, 
lawfully  demanding,  during  office  hours,  to 
inspect  or  take  a  copy  of  the  same,  or  of 
any  part  thereof,  a  reasonable  opportunity 
so  to  do,  is  guilty  of  a  misdemeanor. 

[See  Cotheal  v.  Brouwer,  1  Selv.  567.] 

§  508.  Every  director  of  a  corporation  or 
joint-stock  association  is  deemed  to  possess 
such  a  knowledge  of  the  affairs  of  his  cor- 
poration as  to  enable  him  to  determine 
whether  anj'  act,  proceeding,  or  omission  of 
its  directors  is  a  violation  of  this  chapter. 

§  509.  Every  director  of  a  corporation  or 
joint-stock  association  who  is  present  at  a 
meeting  of  the  directors  at  Avhich  any  act, 
proceeding  or  omission  of  such  directors,  in 
violation  of  this  chapter  occurs,  is  deemed 
to  have  concurred  therein,  unless  he  at  the 
time  causes  or  in  AA'riting  requires  his  dis- 
sent therefrom  to  be  entered  in  the  minutes 
of  the  directors. 

§  570.  Every  director  of  a  corporation  or 
joint-stock  association,  although  not  present 
at  a  meeting  of  the  directors  at  Avhich  any 
act,  proceeding,  or  omission  of  such  direct- 
ors, in  violation  of  this  chapter  occurs,  is 
deemed  to  liaA'e  concurred  therein,  if  the 
facts  constituting  such  violation  appear  on 
the  records  or  minutes  of  the  proceedings 
of  the  board  of  directors,  and  he  remains  a 
director  of  the  same  company  for  six  months 
thereafter,  and  does  not  within  that  time 
cause,  or  in  Avriting  require,  his  dissent  from 
sucli  illegality  to  be  entered  in  the  minutes 
of  the  directors. 


CALIFORNIA. 


41 


Criininal  proceedings  against  corporations,  Pen.  C,  §§  571,  572,  1389,  1390-1397- 


§  571.  It  is  no  defense  to  a  prosecution  for 
a  violation  of  the  provisions  of  this  chapter 
that  the  corporation  was  one  created  by 
the  laws  of  another  State,  government,  or 
countr3%  if  it  was  one  carrying  on  business 
or  keeping  an  office  therefor  within  this 
State. 

§  572.  The  term  "  director,"  as  used  in  this 
chapter,  embraces  any  of  the  persons  having 
by  law  the  direction  or  management  of  the 
affairs  of  a  corporation,  by  whatever  name 
such  persons  are  described  in  its  charter  or 
known  by  law. 

See  New  York  Penal  Code,  §§  645-608. 


SPECIAI.  SECTION   RELATING  TO   EM- 
PLOYMENT   OP    »lINORS. 

Sec.  1389.  Minors  In  employ  of  corporations  not  to 
be  sent  to  certain  places. 

§  13S9.  (Enacted  March  15,  1887.)  No 
minors  in  the  employ  of  any  telephone  com- 
pany, special  delivery  company,  or  associa- 
tion, or  any  other  corporation,  or  person  or 
persons,  engaged  in  the  delivery  of  pack- 
ages, letters,  notes,  messages,  or  other  mat- 
ter, shall  be  assigned  by  such  corporation, 
or  person  or  persons,  to  hire  such  minors  to 
the  keepers  of  houses,  variety  theaters,  or 
other  places  of  questionable  repute,  or  to 
other  persons  connected  with  such  places  of 
questionable  repute,  nor  permit  them  to  en- 
ter such  place  of  illegal  or  questionable 
calling;  that  this  law  shall  apply  alike  to 
managers,  superintendents,  and  agents  of 
such  corporations,  and  to  be  enforced  against 
them.* 


Part  II.    Criminal  Procedure. 

TITLE    XX.       MISCELLANEOUS    PROCEED- 
INGS. 

CHAPTEB  IX. 

Proceedings  against  Corporations. 

Sec.  1390.   Summons  upon  Information,  etc. 

1391.  Form  of  summons. 

1392.  When,  and  how  served. 

1393.  Examination  of  the  charge. 

1394.  Certiticate    of    magistrate    and    return 

thereof. 

1395.  Grand    jury    to     investigate    If     magis- 

trate certifies  there  is  sufficient  cause. 

1396.  Appearance  and  plea. 

1397.  Fine  on  conviction,  how  collected. 

§  1390.  Upon  an  information  or  present- 
ment against  a  corporation,  the  magistrate 
must  issue  a  summons,  signed  by  him,  with 
his  name  of  office,  requiring  the  corporation 
to  appear  before  him,  at  a  specified  time  and 


•Violation  of  this  section  is  a  misdemeanor. 


place,  to  answer  the  charge,  the  time  to  be 
not  less  than  ten  days  after  the  issuing  of 
the  summons. 

Summons  in  civil  cases.    C.  C.  P.,  §§  411,  412. 


§  1391.  The  summons  must  be  substantially 
in  the  following  form: 

County  of  (as  the  case  may  be). 

The  People  of  the  State  of  California  to  the 
(name  of  the  corporation): 

You  are  hereby  summoned  to  appear  be- 
fore me  at  (naming  the  place),  on  (specifying 
the  day  and  hour),  to  answer  a  charge  made 
against  j'ou  upon  the  information  of  A.  B. 
(or  the  presentment  of  the  grand  jury  of  the 
county,  as  the  case  may  be),  for  (designating 
the  offense  generally). 
Dated  at  the  city  (or  township)  of , 

this day  of ,  18 

G.  H., 

Justice  of  the  Peace  (or  as  the  case  may  be). 


§  1392.  The  summons  must  be  served  at 
least  five  days  before  the  day  of  appearance 
fixed  therein,  by  delivering  a  copy  thereof 
and  showing  the  original  to  the  president  or 
other  head  of  the  corporation,  or  to  the  sec- 
retary, cashier,  or  managing  agent  thereof. 

§  1393.  At  the  appointed  time  in  the  sum- 
mons, the  magistrate  must  proceed  to  in- 
vestigate the  charge  in  the  same  manner  as 
in  the  case  of  a  natural  person,  so  far  as 
these  proceedings  are  applicable. 

§  1394.  After  hearing  the  proofs,  the  magis- 
trate must  certify  upon  the  depositions, 
either  that  there  is  or  is  not  sufficient  cause 
to  believe  the  corporation  guilty  of  the  of- 
fense charged,  and  must  return  the  deposi- 
tion and  certificate,  as  prescribed  in  section 
eight  hundred  and  eighty-three. 

§  1395.  If  the  magistrate  returns  a  certifi- 
cate that  there  is  sufficient  cause  to  believe 
the  corporation  guilty  of  the  offense  charged, 
the  grand  jury  may  proceed,  or  the  district 
attorney  file  an  information  thereon,  as  in 
case  of  a  natural  person  held  to  answer. 

§  1396.  If  an  indictment  is  found,  or  in- 
formation filed,  the  corporation  may  appear 
bj'  counsel  to  answer  the  same.  If  it  does 
not  thus  appear,  a  plea  of  not  guilty  must  be 
entered,  and  tlie  same  proceedings  had 
thereon  as  in  other  cases. 

§  1397.  AVhen  a  fine  is  imposed  upon  a  cor- 
poration on  conviction,  it  may  be  collected 
by  virtue  of  the  order  imposing  it,  by  the 
slieriff  of  the  county,  out  of  its  real  and 
personal  property,  in  the  same  manner  as 
upon  an  execution  in  a  civil  action. 


42 


CALIFOEXIA. 


Acts  of  1S91.    1SU7. 


LEGISLATIVE  ACTS  ENACTED  SUBSEQUENTLY  TO  CODES. 


Act  1.  To  provide  for  payment  of  wages  by   cor- 
porations. 
2.  Concerning;   wages  of  employes. 

Act   1. 

AN  ACT  to  provide  for  tlie  pajmont  of  the 
wages  of  mechanics  and  laborers  em- 
ployed by  corporation.s. 

The  People  of  the  State  of  California, 
represented  in  Senate  and  Assembly,  do 
tnact  as  follows: 

Section  1.  Every  corporation  doing  busi- 
ness in  this  State  shall  pay  the  mechanics 
and  laborers  employed  by  it  the  Avages 
earned  by  and  due  them  weekly  or  monthly, 
on  such  day  in  each  weelv  or  mouth  as  shall 
be  selected  b.v  .said  corporation. 

§  2.  A  violation  of  the  provisions  of  section 
one  of  this  act  shall  entitle  each  of  the  said 
mechanics  and  laborers  to  a  lien  on  all  the 
property  of  said  corporation  for  the  amount 
of  their  wages,  which  lien  shall  take  pref- 
erence over  all  other  liens,  except  duly  re- 
corded mortgages  or  deeds  of  trust;  and  in 
any  action  to  recover  tlie  amount  of  such 
wages  or  to  enforce  said  lien,  the  plaintiff 
shall  be  entitled  to  a  reasonable  attorney's 
fee,  to  be  fixed  by  the  court,  and  which 
shall  form  part  of  the  judgment  in  said  ac- 
tion, and  shall  also  be  entitled  to  an  attach- 
ment    against    said    property. 

(Approved  March  31,  1S91.) 

Act  2. 

AN  ACT  requiring  every  coi-poration  doing 
business  in  this  State  to  pay  their  em- 
ployes, and  each  of  them,  at  least  once 
in  each  and  every  mouth,  the  wages  earned 
by  such  employe;  to  limit  the  defenses 
whicli  may  be  set  up  by  such  corporation 
to  assignments  of  wages,  set-off  or  counter- 
claims, or  the  absence  of  such  employe  at 
the  time  of  malcing  payment,  and  in  case 
of  such  absence  the  Avages  are  payable 
upon  demand;  to  prohibit  assiguments  of 
wages  for  the  purpose  of  evading  the  pro- 
visions of  this  act,  and  agreements  to  ac- 
cept wag(  s  at  longer  periods  than  as  herein 
provided  as  a  condition  of  employment; 
to  fix  a  penalty  for  this  violation  of  the 
provisions  of  tliis  act  by  such  corporation, 
and  to  provide  for  the  disposition  of  any 
fines  recovered  from  corporations  violating 
the  same. 

The  People  of  the  State  of  California,  rep- 
resented in  Senate  and  Assembly,  do  enact 
as  follows: 

Section  1.  Every  corporation  doing  busi- 
ness in  this  State  shall  i)ay.  at  least  once  a 
month,  each  and  every  employe  employed  by 
such  corporation,  in  transacting  or  ciirrying 
on  its  business,  fir  in  tlie  i)errormance  of  la- 
bor for  it,  tlie  wages  earned  by  such  em- 
ploye during  the  preceding  month;  I'rovided. 
however.  That  if  at  the  time  of  payment  any 
employe  shall  be  absent,  or  not  engaged  in 


his  usual  employment,  he  shall  be  entitled  to 
said  payment  at  any  time  thereafter  upon 
demand. 

§  2.  A  violation  of  any  of  the  provisions 
of  section  one  of  this  act  shall  entitle  ejich 
of  said  employes  to  a  lien  on  all  the  jirop- 
erty  of  said  corporation  for  the  amount  of 
their  wages,  which  lieu  shall  take  pi'cference 
over  all  other  liens,  except  duly  recorded 
mortgages  or  deeds  of  trust;  and  in  any  ac- 
tion to  recover  the  amouut  of  such  wages, 
or  to  enforce  said  lien,  the  plaintiff  shall  be 
entitled  to  a  reasonable  attorney's  fee,  to 
be  fixed  by  the  coin-t,  and  whicli  shall  form 
part  of  the  judgment  in  said  action,  and 
shall  also  be  entitled  to  an  attachment 
against  said  property.  An  unrecorded  deed 
shall  be  no  defense  to  such  actions. 

§  3.  That  on  the  trial  of  any  action  against 
such  corporation  for  a  violation  of  the  pro- 
visions of  tills  act,  such  corporation  shall 
not  be  alloAved  to  set  up  any  defense  for  a 
failure  to  pay  monthly  any  employe  en- 
gaged in  transacting  or  carrying  on  its  busi- 
ness the  wages  earned  by  such  employe  dur- 
ing the  preceding  month,  other  than  the  fact 
that  such  wages  were  not  earned,  except  a 
valid  assignment  of  such  wages,  a  set-off 
or  counterclaim  against  the  same,  or  the 
absence  of  such  employe  from  his  usual 
employment  at  the  time  of  the  payment  of 
the  wages  so  earned  by  him. 

§  4.  No  assignment  of  future  wages  pay- 
able monthly  under  the  provisions  of  this 
act,  shall  be  made  to  the  corporation  from 
which  such  wages  are  or  may  become  due, 
to  any  person,  on  behalf  of  such  corporation, 
for  the  purpose  of  evading  the  provisions  of 
this  act.  and  all  such  assignments  are  hereby 
declared  to  be  invalid. 

§  5.  No  corporation  shall  require,  and  no 
employe  of  such  corporation  shall  make,  any 
agreement  to  accept  wages  at  longer  pe- 
riods than  as  provided  in  this  act  as  a  con- 
dition of  employment. 

§  G.  All  wages  earned  by  any  employe  en- 
gaged in  the  service  of  any  corporation  in 
this  State  shall  be  paid  in  lawful  moneys  of 
the  United  States,  or  in  checks  negotiable  at 
face  value  on  demand. 

§  7.  Any  coiiioration  violating  any  of  the 
provisions  of  this  act  shall  be  subject  to  a 
fine  not  exceeding  one  hundred  dollars,  or 
less  than  fifty  dollars,  for  each  violation, 
the  same  to  be  imposed  liy  any  court  in  tliis 
State  having  jurisdiction  of  offenses  in  which 
the  iieiuilty  does  not  exceed  a  fine  of  one 
hundred  dollars;  vsaid  fine  to  be  paid,  by 
the  judge  or  magistrate  before  whom  a  re- 
covery may  be  had  under  the  provisions  of 
this  act,  into  the  general  fund  of  the  treasury 
of  the  county  in  which  said  conviction  may 
be  had. 

§  S  This  act  shall  take  effect  and  be  in 
force  from  and  after  the  first  day  of  April, 
eighteen  hundred  and  ninety-seven. 

(Approved  March  2i),  lSi>7.) 


INDEX  TO  CALIFORNIA. 


ACKNOWLEDGMENT:  Tage. 

requisitea  for 35 

form  01',  by  corporation   35 

ACTIONS: 

against   corporations,  where  brought    9 

not  to  be  maintained  unless  articles  are  filed 1(3 

to   inquire   into   elections    21 

to  enforce  stockholders'  liability 22,  23 

corporation  may  maintain  and  defend   28 

summons,   service  on   corporations    36 

pleadings,  verification 37 

for  usurpation  of  franchise   38 

judgment  of  ouster 38 

AMENDMENT: 

of  articles  of   incorporation 32 

certificate  to  be  filed   32 

corporate  existence  not  extended   32 

ARTICLES  OF  INCORPORATION: 

fees  for  filing  and  recording   12 

contents  of 14 

of  railroad,  wagon  road  or  telegraph  companies 15 

subscribed  by  whom   15 

affidavit  of  payment  of  subscriptions   15 

certificate  issued,  upon  filing 15 

copies   as   evidence    16 

to  be  filed  in  each  county  where  property  is  owned 16 

amendment  of,   how   made    32 

certificate  to  be  filed   32 

corporate  existence  not  extended   32 

erroneous   filing,   correction   of    32,  33 

ASSESSMENTS: 

directors  may  make    25 

not  to  exceed  10  per  cent,  unless  stock  is  unpaid 25 

previous  one  must  be  paid    25,  26 

order  levying,  what  to  specify  26 

notice,  contents 26 

service 26 

unpaid,  notice  of   26 

sale  of  stock  for  unpaid   26,  27 

highest  bidder 27 

may  be  bid  in  by  corporation 27 

purchase  of,  by  corporation,  with  title   27 

extension  of  time  in  notices   27 

not  invalidated  by  failure  to  give  notices 27 

action  not  sustained  for  irregularities   27 

publication   of  notices,   how  proved    27 

waiver  of  delinquent  proceedings  27 

ASSETS  AND  LIABILITIES: 

books  to  be  kept  containing   8,  9 


44  INDEX  TO  CALIF0E:N"IA. 

ATTACHMENT:  '  Tage. 

shares  of  stock  subject  to   3T 

bow   made   on    '^"^ 

BANKING  CORPORATIONS : 

created  under  general  laws   7^ 

may  elect  to  bave  capital  stock    16 

list  of  stockbolders  and  notice  to  be  posted  22 

BONDED  INDEBTEDNESS: 

creation  or  increase  of,  meeting  for •  31 

notice  of  meeting   31 

BONDS: 

not  to  be  issued  except  for  money,  property,  etc 30,  31 

BOOKS: 

stock,  to  be  kept  at  principal  office ^ 

what  to  contain 8 

to  bo  open  to  inspection  ^ 

assets  and  liabilities ^ 

of  by-laws 1^ 

BUSINESS: 

charter   must   specify    ^ 

BY-LA  AYS: 

may  fix  term  of  directors 14 

corporations  must  adopt 17 

meetings  of  stockholders  for  adoption    17 

to   provide   for   what 17 

certified  by  directors  IS^ 

to  be  copied  in  book   18 

repeal   or   amendment    IS 

power  may  be  delegated  to  directors 18 

power  to  adopt 29 

CANALS: 

subject  to  legislative  control    9 

CAPITAL  STOCK: 

increaso  or  decrease,  fee  for  certificate  12 

amount,  articles  to  state , 14 

subscriptions  to,  of  railroad,  telegraph  and  wagon  road  companies 15 

ten  per  cent,  to  be  paid  in 15 

banking  corporations  may  have 16 

not  to  bo  withdrawn    19 

corporate  debts  not  to  exceed   19 

increaso  or  decrease,  meetings  for   31 

notice   of   meeting    31 

CERTIFICATE  OF  INCORPORATION    (See  Articles  of  Incorporation): 

fees  for  issuing   12 

issued   upon   filing   articles 15 

CERTIFICATES  OF  STOCK: 

president  and  secretary  to  issue   23 

transfer,  how  made U4 

CHARTERS    (See  Articles  of  Incorporation): 

legislature  not  to  extend   8 

COMMON  CARRIERS: 

regulated  by  legislature .  i> 

CONSOLIDATION: 

of  mining  corporations,  meetings 32 

effect  of 32 

stockholders  to  consent   32 

certificate  to  be  filed    32 


INDEX  TO  CALIFOEiS^IA.  45 

CONTINUANCE:  Page. 

ol!  corporate  existoiK-o  uiidor  Code   14 

diroftors  to  elect   14 

certificate  to  be  filed   14 

CONTRACTS: 

lawf)  impairing  obligation    G 

corporation  may  make   21) 

CORPORATIONS: 

created  under  general  laws    7 

debts,  how  secured   7 

term  includes  what   7 

are  public  or  private i;) 

private,   how   formed    13 

CREDIT: 

of  state,  county,  etc.,  not  to  be  loaned 6 

CREDITORS: 

liability  of  stockholders 7 

of  directors  for  unlawful  disposition  of  capital 10 

enforced  by  action 1^2 

CRIMINAL  TROCEEDINGS: 

against   corporations    41 

DEBTS,   CORPORATE: 

legislature  to  provide  for  security  of 7 

stockholders  liable  for    7 

enforcement  by  action 22,  23 

not  to  exceed  capital  stock 79 

DECREASE: 

of  capital  stock,  meetings  foe 31 

notice  of  meeting   31 

DIRECTORS: 

liability  of,   for  embezzlement    7 

election,  right  of  stockholders  to  vote 8 

may  elect  to  continue  existence  under  Code 14 

number,  articles  to  determine 14 

change  in,  stockholders  may  make  14 

certificate  of  change  to  be  filed 14 

by-laws  may   fix  term    14 

elected  annually 17 

by-laws  to  prescribe  qualifications 18 

to  certify  to  by-laws  18 

by-lawa  when  may  be  made  by   18 

to  manage  corporate  affairs   IS 

to  be  stockholders 18 

majority   must   be  residents    IS 

quorum  must  act 18 

vacancies,  how  filled   1!) 

election,  vote  of  stockholders 10 

how  conducted IJ) 

cumulative  voting   10 

organization  of  board   10 

duties  of 10 

dividends  made  from  surplus  profits 10 

not  to  create  debts  beyond  capital 10 

not  to  divert  capital   V.) 

liability  of.  for  unlaAvful  disposition   ...  * 1*^ 

division  of  land  and  water  rights   ^'"^ 


46  IXDEX  TO  CALIFORXIA. 

DIRECTORS— (Continued):  Page. 

removal  from  office   UQ 

meeting  of  stockholders  for 20 

meetings,  held  at  principal  place  of  business 21 

contracts  to  release  liability,  void  25 

assessments,  may  make.    (See  Assessments.)   25 

wrongful  acts  by  40 

fraudulent  entries  of  accounts   40 

knowledge  presumed   by    40 

Avhen  deemed  to  have  concurred  in  wrongful  acts 40 

DISSOLUTION: 

cither  voluntary  or  involuntary 34 

directors  when  to  be  trustees 34,  35 

appointment  of  receivers  upon   37 

powers  of  receivers  37 

voluntary,   application    38,  39 

application  in  writing 39 

directors  to  sign   39 

notice  of  application 39 

judgment 39 

DIVIDENDS: 

declared  from   profits    19 

payable  to  married  women   24 

unlawful,   a  misdemeanor    40 

ELECTION: 

of  directors,  right  of  stockholders  to  vote 8 

held  annually 17 

to  be  by  ballot   19 

how  conducted 19 

cumulative  voting 19 

majority  of  stock  represented  at  20 

vote  set  aside  by  court  20,  21 

may  bo  adjourned   -1 

proceediuga  in  court  to  inquire  into 21 

of  officers  to  fill  vacancies 21 

EMBEZZLEMENT: 

liability  of  directors  for 7 

EMINENT  DOMAIN: 

property  and  franchises  of  corporations  may  be  taken 8 

EMPLOYES: 

wages  to  be  paid  weekly  or  monthly   42 

assignment  to  corporation  42 

contract  not  to  be  made  to  avoid 42 

violations  of  acts,  penalties   42 

EXAMINATION: 

of  corporations  by  attorney-general 33 

statement  made  to  governor 33 

legislature  may  make 33 

false  exhibit  of  books,  papers,  etc 39 

EXECUTION: 

sale  of  franchise  of  toll  company  under 34 

rights  and  duties  of  purchaser 34 

redemption    34 

where   made    34 


IXDEX  TO  CALIFOKNIA.  47 

EXISTENCE,  CORPORATE:  .  ■    Page. 

feea  for  certificates  of  extension   12 

continuance  of,  under  Code 14 

directors  to  vote  for  14 

certificate  to  be  filed 14 

term  of,  articles  to  state  14 

unless  stated  in  articles 15 

extension,  how  made   35 

EXTENSION: 

of  corporate  existence    35 

FALSE: 

certificates,  reports,  etc.,  by  officers   21,  40 

exhibit  of  papers,  etc.,  to  examining  officers 39 

FEES: 

for  filing  articles  of  incorporation   V2 

recording  articles 12 

issuing  certificates  of  incorporation   12 

filing  certificate  of  increase  of  capital  stock 12 

issuing  certificate  of  increase 12 

filing  and  issuing  certificate  of  continuance 12 

FOREIGN  CORPORATIONS: 

not  to  receive  greater  privileges 9 

designation  of  person  for  service  of  process 35 

effect  of  failure  to  make 35 

service  of  summons  on,  by  publication 36 

FRANCHISE: 

legislature  not  to  extend  7 

may  be  taken  by  eminent  domain 8 

leasing  or  alienation,  limitation   8 

of  toll  company,  sold  under  execution 34 

rights  of  purchaser   34 

redemption 34 

sale,  where  made 34 

usurpation  of,  action  for  38 

FRAUDULENT: 

announcements  or  prospectus  40 

entries  in  accounts   40 

GAS  COMPANIES: 

rates,  legislature  may  regulate   7 

GOVERNOR: 

to  require  attorney-general  to  investigate  corporation 12 

report  of  attorney-general  to 33 

INCORPORATION: 

not  to  be  inquired  into  collaterally 30 

INCREASE: 

of  capital  stock,  fees  for  certificates 15i 

meetings  of  stockholders  for 31 

certificate  to  be  filed 31 

of  bonded  indebtedness,  meeting  for   31 

certificate  to  be  filed 31 

INFORMATION: 

against  corporation *^ 

summons,   from    '*^ 

how  served ^^ 


proceedings  upon 


41 


imposition  of  fine 


48  IXDEX  TO  CALIFOKIs^IA. 

JUSTICE  OF  THE  PEACE:  '  Page. 

call  of  stockholders'  meetings   ^^ 

LIABILITY: 

of  stockholders  for  corporate  debts 7 

directors,  for  money  embezzled 7 

of  stockholders,  how  enforced  22,  23 

contracts   to  relieve,   void '■^^ 

MEETINGS  OF  STOCKHOLDERS: 

for  adoption  of  by-laws  1^ 

election  of  directors,  annually 1' 

by-laws  to  regulate  conduct,  etc 17 

number  to  constitute  quorum 17 

to  prescribe  for  publication  of  notices IH 

for  removal  of  directors   -t) 

call  by  justice  of  the  peace  20 

majority  of  stock  must  be  represented   20 

votes  at,  set  aside  by  court 20,  21 

adjournments 21 

shares  of  minor  or  insane  person  21 

validation  of  proceedings  by  consent 21 

held  at  principal  place  of  business   21 

called  by  notice  in  writing,  when 21,  22 

for  increase  or  decrease  of  capital  stock 31 

for  creation  or  increase  of  bonded  indebtedness 31 

mining  corporation,  consolidation   31,  32 

MINING  CORFORATIONS: 

consolidation  of,  stockholders  to  consent 32 

certificate  to  be  filed   32 

MINORS: 

not  to  be  sent  to  certain  places 41 

MISNOMER: 

of  corporation,  not  to  invalidate  instrument   30 

MONEY: 

corporation  not  to  create  bills  and  notes  to  circulate  as 30 

NAME,  CORFORATE: 

articles   to    state    14 

misnomer,  not  to  invalidate  instruments 30 

NONRESIDENT: 

transfer  of  stock  by   24 

afiidavit  or  bond  may  be  required  24 

NOTICES: 

of  meetings,  by-laws  to  prescribe • IS 

OFFICERS:  i 

compensation  and  duties,  by-laws  to  proscribe 18 

tenure  and  election,  by-laws  to  prescribe 18 

false  certificates,   etc    21 

power  to  appoint  and  fix  compensation 29 

false  exhibits  and  entries  by 39 

making   fraudulent   entries    40 

refusing  to  allow  stockholders  to  inspect  books,  etc 40 

PERSON: 

term  includes  corporation    36 

PERSONAL  ESTATE: 

corporation  may  hold  and  convey 28 


IXDEX  TO  CALIFOEXIA.  49 

TLACB  OF  BUSINESS:  <  Page. 

corporations  to  have  within  state S 

books  to  be  kept  at 8 

contain  names  of  stockholders,  etc 8 

articles   to    state    14 

meetings  of  stockholders  and  directors  held  at 21 

change  of,  how  made 22 

notice  of,  to  be  published 22 

PLEADINGS: 

verification  of   37 

POWERS,  CORPORATE: 

specified 28 

decisions,  generally 30 

necessary,  implied 30 

cease,  unless  business  is  transacted 30 

PRESIDENT    (See  Officers;  Directors): 

directors  to  elect   19 

PRIVATE  CORPORATIONS: 

formed  for  any  lawful  purposes   14 

continuance  of  existence,  under  Code   14 

certificate  of,  to  be  filed 14 

PRIVILEGES: 

special  not  to  be  granted 6 

not  to  be  granted  to  corporations   6 

PROPERTY: 

not  to  be  taken  without  compensation    5 

compensation  to  be  ascertained  by  jury 5 

term  includes  what   12 

PROXY: 

method  of  voting  by,  by-laws  to  prescribe 17 

stockholders  may  vote  by 19 

of  married  woman    24 

PURPOSES: 

articles  to  state   14 

QUORUM: 

number  constituting,  by-laws  to  prescribe 17 

directors  to  act   18 

RAILROADS: 

subject  to  legislative  control  5J 

rights  of  intersection,  etc   9 

officers  not  to  furnish  material  to 9 

free  passes  not  to  be  issued  to  public  officers 9 

combinations  with  owners  of  vessels  9 

rates,  when  not  to  be  reduced  9 

discriminations  illegal 10 

districts,  state  to  be  divi(Jed    10 

commissioner  in  each  district 10 

commissioners,   powers  of    10 

rates  of  fare,  established  by   10 

companies,  articles  of  incorporation   l*'^ 

RATES: 

telegraph  and  gas,  legislature  to  regulate 7 

railroad,  commissioners  to  establish   10 

REAL  ESTATE: 

not  to  be  held,  except  for  corporate  purpose  8 

large  tracts,  by  corporations  against  public  interests  11 

when  may  be  divided  among  stockholders 19 


50         -  IXDEX  'J'O  CALIFORXIA. 

REAL  ESTATE  —  (Continued):  Page. 

corporation  may  hold  and  convey 28 

limitation  on  amount  to  be  held 31 

RECEIVERS: 

appointment  on  dissolution   37 

powers  of 37 

RECORD: 

of  business  transactions  to  be  kept 33 

what  to  embrace 33 

REMOVAL: 

of  directors  from  office   20 

SEAL,  COMMON: 

corporation  may  have 28 

SECRETARY   OF   STATE: 

fees  for  filing  papers  with 12 

SERVICE: 

of  summons  on  corporation 36 

in   criminal   proceedings    41 

SPECIAL  LAWS: 

extinguishing  debts  of  corporations,  not  to  be  passed 6 

granting   special   privileges    6 

STOCK: 

shares,  general  laws  to  regulate  sale  6 

contracts  for  sale  to  be  delivered  in  future,  void 6 

not  to  be  issued  except  for  money,  labor  and  property 8,  30 

state  not  to  subscribe  to 8 

transfer,  at  place  of  business 8 

books,  to  contain  names  of  owners,  etc 8 

to  be  open  to  inspection   8 

to  contain  assets  and  liabilities  9 

shares   not  taxable    12 

owners  of,  termed  stockholders  16 

certificate,  to  be  issued 23 

shares  are  personal  property 24 

transfer,  how  made   24 

by  married  women   24 

by  nonresident 24 

assessments,  directors  may  make 25 

limitation  of  amount   25 

on  railroad  companies   25 

not  to  be  made  while  previous  one  is  unpaid 25,  26 

notice,    contents    26 

service  of  notice   26 

publication  of  notice,  how  proved   27 

unpaid,   notice   of    26 

waiver  of  delinquencies   27 

sale  of,   to  pay    26 

extension  of  time  in  notices 27 

not  invalidated  by  failure  to  publish '. 27 

action  not  sustained  for  irregularity ? 

sale  of,  for  unpaid  assessments 26,  27 

highest   bidder  at    27 

may  be  bid  in  by  corporation   27 

title  vests  in  corporation 27 

and  transfer  book  to  be  kept 33 

shares,  subject  to  attachment   37 

fraudulent  subscriptions 39 


IXDEX  TO  CALIFORNIA.  51 

STOCK  —  (Contiuued) :  I'age. 

capital,  iucrease  or  decTcase,  fee  for  certificate    12 

amount,  articles  to  state 14 

subscriptions  to,  of  railroad,  etc.,  corporations   15 

ten  per  cent,  to  be  paid  in  15 

banking  corporations  may  elect  to  have   16 

not  to  be  withdrawn 19 

increase  or  decrease,  meetings  for  31 

notice   of   meeting   for    31 

certificate  to  be  filed   31 

STOCK  AND  TRANSFER  BOOK: 

corporation  to  keep 33 

STOCKHOLDERS: 

liabilitj-  of,  for  corporate  debts   7 

right  to  vote  8 

may  elect  to  continue  existence  under  Code 14 

owners  of  stock  are   16 

adoption  of  by-laws    17 

method  of  voting  by  proxy    17 

directors  must  be  18 

votes  for  directors 19 

unlawful  division  of  capital  among 19 

when  land  and  water  rights  may  be  divided  19 

meetings,  called  by  justice  of  the  peace 20 

liability  of,  for  corporate  debts 22 

how    determined    22 

actions  to  enforce   22 

trust  funds  not  subject  to   22 

of  pledgee  of   stock    22 

contracts  to  release  from  liability  are  void  25 

STORAGE: 

rates,  legislature  may  regulate   7 

SUBSCRIPTION: 

signing  name  of  fictitious  person  39 

fraudulent,    for    prospectus 40 

SUCCESSION: 

corporation  to  have  28 

SUB  AND  BE  SUED: 

corporation  may   28 

SUMMONS: 

service  of,  on  corporations 36 

on  foreign  corporation,  by  publication  36 

designation  of  person  for 35 

in  criminal  proceedings   41 

service   of    41 

TAXATION: 

property  subject  to   11 

'    power  of,  never  to  be  suspended 11 

of  incomes,  may  be  provided  for 11 

double,  not  permitted 12 

shares  of  stock,  not  subject  to  12 

assessment  of  franchises   13 

TELEGRAPH  COMPANIES: 

rates,  legislature  may  regulate   7 

articles  of  incorporation   15 


52  IXDEX  TO  CALIFOEXIA. 

TOLL-COMPANY:  Pas^- 

sale  of  franchise  under  execution 34 

rights  and  duties  of  purchaser 34 

redemption    34 

where  made   34 

TRANSFER: 

of  certificates  of  stock 24 

by  married  women   24 

by  agent  of  non-readent  24 

TRANSPORTATION  COMPANIES: 

subject  to  legislatire  control 9 

free  passes  not  to  be  issued  to  public  oflScers 9 

TREASURER    (See  Officers): 

directors  to  elect   19 

TRUST  FUNDS: 

not  liable  for  corporate  debts 22 

VERIFICATION: 

of  pleadings  37 

VOTING.    (See  Elections.) 


I 


COLORADO. 


TABLE  OF  CONTENTS. 


CONSTITUTIONAL  PROVISIONS.  paoe. 

Art.      II.  Bin  of  rights  5 

y.  Legislative  department   6 


X.  Revenue 


6 


XI.  Public  indebtedness    6 

XV.  Corporations    "^ 

STATUTES  OF  COLORADO. 

Ch.    3.  Aliens    9 

15.  Blacklisting 9 

29.  Conveyances   9 

30.  Corporations   10 

Div.  1.  Organization  and  government.      General  provisions 10 

36.  Criminal  Code   23 

Div.     8.  Offenses  against  public  justice 23 

10.  Offenses  against  public  morality 23 

12.  Offenses   by  cheats   and   swindlers    23 

50.  Fees  and  salaries  24 

Div.  2.  Fees  of  State  officers 24 

72.  Judgments  and  executions   24 

Div.  9.  Property  subject  to  levy    24 

74.  Justices  and  constables   25 

101.  Public  health   2.5 

107.  Revenue    25 

Div.  1.  General  provisions 25 

2.  Assessments  25 

3.  Collection  of  taxes   26 

LEGISLATIVE   ACTS   ENACTED   SUBSEQUENTLY  TO   1890. 
9 


COLORADO. 


CO^STITUTIO]^  OF  COLORADO      18TG. 


PKOVISIONS  RELATING  TO  CORPORATIONS. 


ARTICLE  II. 

Bill  of  Rights. 

Sec.  11.  Laws    Impairing    obligation  of    contracts 
and  granting  irrevocable  privileges  void. 
15.  I'rivate    property    not    to    be    taken    for 
public  use  without  just  compensation. 

ARTICLE  V. 

Legislative  Department. 

Sec.  25.   Special   laws  prohibited   in   certain   cases. 

85.  Private     corporations     not     to     Interfere 

with  municipal  functions. 

86.  Trust  funds  not  to  be  invested  in  stocls 

or  bonds  of  private  corporations. 
88.  No  obligation  or  liability  of  any  corpora- 
tion owned  by  the  State  shall  be  extin- 
guished except  by  payment. 


ARTICLE  X. 

Revenue. 

Sec.     9.  Power  to  tax  corporations  shall  never  be 
suspended. 
10.  All  corporations  subject  to  taxation. 

ARTICLE  XI. 

Public  Indebtedness. 

Sec.     1.  State  not   to   loan  Its   credit  to  corpora- 
tions. 
2.  Xor  become  a  shareholder  In  any  corpora- 
tion. 


ARTICLE  XV. 

Corporations. 

Sec.  1.  Existing  corporations  not  having  com- 
menced business,  charter  to  be  void. 

2.  Charters  not  to  be  extended  or  amended 
by  special  law.  Corporations  must  be 
organized  under  general  laws. 

S.  General  assembly  may  revoke  charters 
now  existing. 

4.  Railroads   are   public   highways,    and   rail- 

road companies  common  carriers. 

5.  Competing  lines  may   not  consolidate. 

6.  Unreasonable  discrimination  in  rates  pio- 

hibited. 

7.  Transportation  companies  may  have  bene- 

fit of  future  legislation,  how. 


Sec.     8.  Right  of   eminent  domain   shall    never  be 
abridged. 
9.  Stock  or  bonds  not   to  be  Issued  except 
for  value. 

10.  Foreign    corporations    must    have    one    or 

more  known  places  of  business. 

11.  Street    railroads    not    to    be    constructed 

without   consent  of   local   authorities. 

12.  Retrospective  laws  for  benefit  of  corpora- 

tions not  to  he  passed. 

13.  Telegraph   lines   may   be  constructed  and 

maintained. 

14.  Consolidation   of   railroad,    telegraph   and 

express  companies. 
15.  Liability   of  corporations   to   injured  em- 
ployes. 


ARTICLE  n. 

Bill  of  Rights. 

§  11.  No  *  *  *  law  impairing  the  obli- 
gatiou  of  contract.s,  or  retrospective  in  its 
operation,  or  mailing  any  irrevocable  grant 
of  special  privileges,  franchises  or  immuni- 
ties, shall  be  passed  by  the  general  assembly. 

Existing  charters  may  be  revoked.  Art.  15,  §  3. 
Retrospective  laws  for  benefit  of  corporations,  pro- 
hibited. Id.,  §  12.  Dissolution  shall  not  impair 
remedies.  §  509.  Reorganization  not  to  affect 
pending  actions.  §  630.  General  assembly  may 
alter  or  repeal  corporation  laws.    §  634.    See  §  635. 

fProvisions  in  a-  charter  allowing  exemptions 
from  taxation  is  a  jiart  of  the  contract  between 
the  corporation  and  the  State,  and  the  obligation 
cannot  be  impaired  by  any  subsequent  legislation, 
either  statutorv  or  constitutional.  Conir«.  v. 
Semlnarv,  12  Col.  499;  s.  c,  21  Pac.   Rep.  490.] 


§  15.  Private  property  shall  not  be  taken 
or  damaged,  for  public  or  private  use,  with- 
out just  compensation.  Such  compensation 
shall  be  ascertained  by  a  board  of  commis- 
sioners, of  not  less  than  three  freeholders, 
or  by  a  jury,  when  reqnired  by  the  owner 
of  the  property,  in  such  manner  as  may  be 
prescribed  by  law,  and  until  the  same  shall 
be  paid  to  the  owner,  or  into  court  for  the 
owner,  the  property  shall  not  be  needlessly 
disturbed,  or  tlie  proprietary  rights  of  tlie 
owner   therein   divested;   and    whenever   an 


COLORADO. 


Legislation;  revenue;  public  indebtedness  —  Const.,  Arts,  v,  x,  xi. 


attempt  is  made  to  take  private  property  for 
a  use  alleged  to  be  public,  tbe  question 
w'betber  tbe  contemplated  use  be  reallj^  pub- 
lic, shall  be  a  judicial  question,  aud  deter- 
mined as  such  without  regard  to  any  legis- 
lative assertion  that  the  use  is  public. 

Right  of  eminent  domain  shall  never  be  abridged. 
Art.  XV,  §  8.  Foreign  corporation  not  to  acqfiire 
title  to  agricultural  land.  §§  100-103.  Certain 
corporations  may  acquire  rights  of  way.  §§  616, 
617. 

ARTICLE  V. 
Legislative  Department. 

§  25.  The  general  assembly  shall  not  pass 
local  or  special  laws  in  any  of  the  following 
enumerated  cases,  that  is  to  saj': 

ISth.  Chartering  or  licensing  ferries  or  toll 
bridges. 

22d.  Granting  to  any  corporation,  associa- 
tion or  individual  the  right  to  lay  down 
railroad  tracks. 

23d.  Granting  to  any  coi-poration,  associa- 
tion or  individual  any  special  or  exclusive 
privilege,   immunity  or  franchise  whatever. 

Corporations  must  be  organized  under  general 
laws.    Art.  XV,  §  2. 


IjThe  right  to  construct  and  operate  a  street 
railway  in  a  city  Is  a  franchise  which  the  sover- 
eign authority  alone  can  grant.  R.  R.  Co.  v. 
R.  R.  Co.,  2  Col.  673.  And  cannot  be  granted 
except  by  general  law.  Id.  And  such  authority 
cannot  be  delegated.  Id.  The  prevailing  spirit 
of  the  Constitution  is  opposed  to  special  legisla- 
tion. Brown  v.  Denver,  7  Col.  309;  s.  c,  3  Pac. 
Rep.  455.  Whether  a  general  law  can  be  made 
applicable  in  any  given  case  is  a  legislative  ques- 
tion, not  judicial.  Id.;  Carpenter  v.  Peo.,  8  Col. 
122;  s.  c,  5  Pac.  Rep.  828;  Rodgers  v.  Peo.,  9  Col. 
451.  Contra,  Coulter  v.  Routt  Co.,  9  Col.  261;  s.  c, 
11  Pac.  Rep.  199.] 


§  35.  The  general  assembly  shall  not  dele- 
gate to  any  special  commission,  private  cor- 
poration or  association,  any  power  to  make, 
supervise  or  interfere  with  any  municipal 
Improvement,  money,  property  or  effects, 
whether  held  in  trust  or  otherwise,  or  to  levy 
taxes,  or  perform  any  municipal  function 
whatever. 

§  36.  No  act  of  the  genei'al  assembly  shall 
authorize  the  investment  of  trust  funds  by 
executors,  administrators,  guardians,  or 
other  trustees,  in  the  bonds  or  stock  of  any 
private  corporation. 

§  38.  No  obligation  or  liability  of  any  per- 
son, association  or  corporation,  held  or  owned 
by  the  State,  or  any  municipal  corporation 
therein,  shall  ever  be  exchanged,  transferred, 
remitted,  released,  or  postponed,  or  in  any 
way  diminished  by  the  general  assembly, 
nor  shall  such  liability  or  obligation  be  ex- 
tinguished except  by  payment  thereof  into 
the  proper  treasury. 

See  art.  11,  |§  1.  2. 


ARTICLE  X. 

Revenue. 

§  9.  The  power  to  tax  corporations  and 
corporate  property,  real  and  personal,  shall 
never  be  relinquished  or  suspended. 

See  §§  3781,  3783,  3789,  3791,  3861,  3862. 

[A  statute  or  contract  liniiting  the  taxing  power 
must  be  closely  scrutinized,  and  no  enlargement 
of  its  scope  should  be  permitted.  Cemrs.  v.  Semi- 
nary, 12  Col.  497;  s.  c,  21  Pac.  Rep.  490.] 


§  10.  All  corporations  in  this  State,  or  doing 
business  therein,  shall  be  sui).iect  to  taxa- 
tion for  State,  county,  school,  municipal, 
and  other  pui-poses,  on  the  real  and  personal 
property  owned  or  used  by  them  within  the 
territorial  limits  of  the  authority  levying  the 
tax. 

See  preceding  section. 

[Carlisle  v.  Pullman,  etc.,  Co.,  8  Col.  326;  s.  c, 
7  Pac.  Rep.  164.] 

ARTICLE  XI. 

Public  Indebtedness. 

§  1.  Neither  the  State  nor  any  county,  city, 
town,  township  or  school  district  shall  lend 
or  pledge  the  credit  or  faith  thereof,  directly 
or  indirectly,  in  any  manner  to  or  in  aid  of 
any  person,  company  or  corporation,  public 
or  private,  for  any  amount  or  for  any  pur- 
pose whatever,  or  become  responsible  for  any 
debt,  contract  or  liability  of  any  person, 
company  or  corporation,  public  or  private, 
in  or  out  of  the  State. 

See  Art.  V,  §  38,  and  §  2,  post. 

§  2.  Neither  the  State  nor  any  county,  city, 
town,  township  or  school  district,  shall  make 
any  donation  or  grant  to,  or  in  aid  of,  or 
become  a  subscriber  to,  or  shareholder  in, 
any  corporation  or  company,  or  a  joint  owner 
with  any  person,  company  or  coiTDoration, 
public  or  private,  in  or  out  of  the  State,  ex- 
cept as  to  such  OAvnership  as  may  accrue  to 
the  State,  by  escheat,  or  by  forfeiture,  by 
operation  or  provision  of  law;  and  except  as 
to  such  ownership  as  may  accrue  to  the 
State,  or  to  any  county,  city,  town,  town- 
ship or  school  district,  or  to  either  or  any 
of  them,  jointly  with  any  person,  company 
or  corporation,  by  forfeiture  or  sale  of  real 
estate  for  non-payment  of  taxes,  or  by  dona- 
tion or  devise  for  public  use,  or  by  purchase 
by  or  on  behalf  of  any  or  either  of  them, 
jointly  with  any  or  either  of  them,  under 
execution  in  cases  of  fines,  penalties  or  for- 
feiture of  recognizance,  breach  of  condition 
of  official  bond,  or  of  bond  to  secure  public 
moneys,  or  the  performance  of  any  contract 
in  which  they  or  any  of  them  may  be  jointly 
or  severally  interested. 

See  art.  V,  §  38,  and  §  1,  ante. 


COLOEADO. 


Corporations  —  Const.,  Art.  xv,  §§  1-8. 


[XoilliPi"  the  St.ate  nor  auy  county,  city,  town, 
township  or  school  district  can  make  any  dona- 
tion or  grant  to,  or  in  aid  of,  or  become  a  sub- 
scriber or  shareholder  in  any  corporation  or  com- 
pany.   R.  R.  Co.  V.  Lea,  5  Col.  192.] 


ARTICLE  XV. 

Corporations. 

§  1.  All  existlnjr  charters  or  grants  of 
special  or  exclusive  privileges  \inder  which 
the  cori^orators  or  grantees  shall  not  have 
organized  and  commenced  business  in  good 
faith  at  the  time  of  the  adoption  of  this 
Constitution  shall  thereafter  have  no 
validity. 

See  §  633. 

[Provision  in  a  charter  allowing  exemptions 
from  taxation  Is  a  i)art  of  the  contract  between 
the  corporation  and  the  State,  and  the  oblisa- 
tion  cannot  be  Impaired  by  any  subsequent  legis- 
lation, either  statutory  or  constitutional.  Comrs. 
v.  Seminary,  12  Col.  499;  s.  c,  21  Pac.  Rep.  490.] 

§  2.  No  charter  of  incorporation  shall  be 
granted.  extende<l,  changed  or  amended  bj' 
special  laAv.  except  for  such  municipal,  char- 
itable, educational,  penal  or  reformatory  cor- 
porations as  are  or  may  be  under  the  control 
of  the  State;  but  the  general  assembly  shall 
provide  by  general  laws  for  the  organization 
of  corporations  liereafter  to  be  created. 

Special  laws  prohibited.  Art.  V,  §  25.  General 
laws  for  incorporating.  §§  472  et  seq.  They  may 
be  altered  or  repealed.     §  634. 

[The  subject-matter  of  art.  XV  relates  to  pri- 
vate corporations.  The  reference  to  municipal 
and  other  corporations  in  section  2  was  for  the 
purpose  of  excepting  them  from  the  provision 
respecting  special  legislation.  Carpenter  v.  Peo., 
8  Col.  116;  s.  c.  5  Pac.  Rep.  828.  The  charter  of 
a  coi-poration  is  its  constitution,  and  gives  it  all 
the  powers  it  possesses.  Id.  Private  corporations 
are  under  the  control  of  the  State,  but  in  a  much 
more  limited  sense  than  municipal  corporations  in 
their  charters,  or  in  the  organic  law,  so  far  as 
fundamental  charges  in  such  charters  are  con- 
cerned. Carpenter  V.  Peo.,  8  Col.  126;  s.  c,  5  Pac. 
Rep.  828.  A  provision  in  a  statute  adopted  by  our 
legislature  may.  when  accepted  by  a  private  citi- 
zen or  corporation,  result  in  a  contract  which 
succeeding  legislatures  are  powerless  to  repudiate. 
Peo.  V.  Hall,  8  Col.  48.5;  s.  c,  9  Pac.  Rep.  34.] 


§  3.  The  general  assembly  shall  have  the 
power  to  alter,  revoke  or  annul  any  charter 
of  incorporation  now  existing  and  revocable 
at  the  adoption  of  this  Constitution,  or  any 
that  may  hereafter  be  created,  whenever  in 
their  opinion  it  may  be  injurious  to  the  citi- 
zens of  the  State,  in  such  manner,  however, 
that  no  injiistice  shall  be  done  to  the  cor- 
porators. 

General  Laws  may  be  altered  or  repealed.    §  634. 

§  4.  All  railroads  shall  be  pul)lic  highways, 
and  all  railroad  companies  shall  be  common 
carriers.  Any  association  or  corporation  or- 
ganized for  the  purpose  shall  have  the  right 
to  construct  and  opei'ate  a  railroad  between 


any  designated  points  within  this  State,  and 
to  connect  at  the  State  line  with  railroads 
of  other  States  and  Territories.  Every  rail- 
road company  shall  have  the  right  with  its 
road  to  intersect,  connect  with  or  cross  any 
other  railroad. 

May  condemn  rights  of  way.  §§  616,  617.  Con- 
solidation prohibited.    §  5,  post.    See  §  14,  post. 

[As  to  use  of  streets,  and  compensation  to  abut- 
ting property  owners  when  street  is  used  for 
railroad  purposes.  Denver,  etc.,  Co.  v.  Domke. 
11  Col.  247;  s.  c,  17  Pac.  Rep.  777.  Construction 
of  last  clause  of  section  4.  Denver,  etc.,  R.  Co. 
v.  Atchison,  etc.,  Co.,  13  Fed.  Rep.  546;  Same  v. 
Same,  15  id.  6.50;  110  U.  S.  685;  s.  c,  4  Sup.  Ct. 
Rep.  18.5.  The  above  section  is  not  in  conflict 
with  §  8,  art.  I,  of  the  United  States  Constitution. 
Id.  And  does  not  prevent  Issue  being  tendered 
in  condemnation  proceedings  under  section  2  of 
this  article.  Denver,  etc.,  Co.  v.  R.  R.  Co.,  34 
Fed.  Rep.  386.  Railroad  companies  are  quasi  public 
corporations,  their  directors  acting  in  the  double 
capacity  of  agents  for  the  company  and  trustees 
for  the  public.    R.  R.  Co.  v.  Taylor,  6  Col.  1.] 

§  5.  No  railroad  corporation,  or  the  lessees 
or  managers  thereof,  shall  consolidate  its 
stocli,  property  or  franchises  with  any  other 
railroad  corporation  owning  or  having  under 
its  control  a  parallel  or  competing  line. 

See  §  14,  post. 

§  6.  All  individuals,  associations  and  cor- 
porations shall  have  equal  rights  to  have 
persons  and  property  transported  over  any 
railroad  in  this  State,  and  no  undue  or  un- 
reasonable discrimination  shall  be  made  in 
charges  or  in  facilities  for  transportation  of 
freight  or  passengers  within  the  State,  and 
no  railroad  company,  nor  any  lessee,  man- 
ager or  employe  thereof,  shall  give  any 
preference  to  individuals,  associations  or 
corporations  in  furnishing  cars  or  motive 
power. 

[Free  passes  prohibited  to  all  public  officials 
and  legislators  by  Const.,  art.  XII.  §  6.  Railroads 
are  entitled  to  fair  and  reasonable  rates  of  com- 
pensation. R.  R.  Co.  V.  Taylor,  6  Col.  1.  And 
where  such  rates  cannot  be  agreed  upon,  it  is 
for  the  courts  to  decide.  Id.  Establishm'^nt  of 
maximum  rates  of  transporation.  and  laws  for- 
bidding discrimination,  no  obstacles  to  the  en- 
forcement of  the  rights  of  express  companies.  Id. 
Railroad  company  a  quasi  public  corporation.  Di- 
rectors are  trustees  for  the  public.  Td.  This 
section  is  but  declaratory  of  the  common  h'W. 
Bayles  v.  Ry.  Co.,  13  Col."  191;  22  Pac.  Rep.  344. 
And  imposes  no  greater  obligation  on  comp.nnlAs. 
Atchison,  etc..  Co.  v.  Denver,  etc.,  Co.,  110  U.  S. 
674;  s.   c,  4  Sup.   Ct.   Rep.   185.] 

§  7.  No  railroad  or  other  transportation 
company  in  existence  at  the  time  of  the 
adoption  of  this  Constitution,  shall  have  the 
benefit  of  any  futtu'e  legislation  without 
first  filing  in  the  office  of  the  secretary  of 
State  an  acceptance  of  the  provisions  of  this 
Constitution,  in  binding  form. 

See  §§  1,  2,  ante. 

§  8.  The  right  of  eminent  domain  shall 
never  be  abridged,  nor  so  construed  as  to 


8 


COLOKADO. 


Corporations  —  Const.,  Art.  xv,  §§  9-15. 


prevent  the  general  assembly  from  taking 
the  property  and  franchises  of  incorporated 
companies  and  subjecting  them  to  public 
use,  the  same  as  the  property  of  individuals; 
aud  the  police  power  of  the  State  shall 
never  be  abridged  or  so  construed  as  to  per- 
mit coi-porations  to  conduct  their  business 
in  such  manner  as  to  infringe  the  equal 
rights  of  individuals  or  the  general  well- 
being  of  the  State. 

Uight  of  eminent  domain.  See  art.  II,  §  15,  and 
cross-references. 

[For  the  construction  of  last  clause,  see  Ry. 
Co.  V.  DeBusk,  12  Col.  294;  s.  c,  20  Pac.  Rep.  752; 
Same  v.  Moffatt,  12  Col.  310;  s.  c,  20  Pac.  Rep. 
7.50;  Rv.  Co.  V.  Henderson,  10  Col.  1;  s.  c,  13  Pac. 
Rtp.  91G.] 

§  0.  No  corporation  shall  issue  stoclv  or 
bonds,  except  for  labor  done,  service  per- 
formed, or  money  or  property  actually  re- 
ceived, and  all  tictitious  increase  of  stock  or 
indebtedness  shall  be  void.  The  stock  of 
corporations  shall  not  be  increased  except  in 
pursuance  of  general  law,  nor  without  the 
consent  of  the  persons  holding  a  majority  of 
the  stock,  first  obtained  at  a  meeting  held 
after  at  least  thirty  days'  notice  given  in 
pursuance  of  law. 

See  §  618. 

[Stocks  and  bonds  issued  In  violation  of  above 
section  are  ipso  facto  Invalid,  and  do  not  consti- 
tute their  holders  shareholders  in  a  corporation. 
Arkansas,  etc..  Co.  v.  F.  L.  &  T.  Co.,  13  Col.  587; 
s.  c,  22  Pac.  Rep.  959.] 


§  10.  No  foreign  corporation  shall  do  any 
business  in  this  State  without  having  one 
or  more  known  places  of  business  and  an 
authorized  agent  or  agents  in  the  same,  upon 
whom  process  may  be  served. 

See  §§  499-502.  Foreign  corporation  not  to  ac- 
quire agricultural  lands.  §§  100,  101,  103.  See 
act  in  relation  to  foreign  corporations,  at  p. 
27.  Publication  of  certain  legal  notices.  See  act 
of  1895,  at  p.  29. 

[This  section  enforced  by  section  499  of  stat- 
utes, which  is  not  In  conflict  with  United  States 
Constitution.  Utley  v.  Mining  Co.,  4  Col.  369. 
A  corporation  is  the  creature  of  local  laws,  and 
recognition  of  its  existence  and  enforcement  of 
its  contracts  without  the  limits  of  the  sovcr- 
eigntv  which  created  it.  is  dependent  upon  com- 
ity. Id.  What  is  sufficient  compliance  with  this 
S('ction.  Goodwin  v.  Mortg.  Co.,  110  If.  S.  5;  s.  c, 
3  Sup.   Ct.   Rep.  473.] 

§  11.  No  street  railroad  shall  be  constructed 
within  any  city,  town  or  incorporated  vil- 
lage, without  the  consent  of  the  local  au- 
thorities having  the  control  of  the  sti-eet  or 


highway  proposed  to  be  occupied  by  such 
street  railroad. 

§  12.  The  general  assembly  shall  pass  no 
law  for  the  benefit  of  a  railroad  or  other 
corporation,  or  any  Individual  or  association 
of  individuals,  retrospective  in  its  operations, 
or  which  imposes  on  the  people  of  any 
county  or  municipal  subdivision  of  the  State, 
a  new  liability  in  I'espect  to  transactions  or 
considerations  already  passed. 

See  art.  II,  §  11. 

§  13.  Any  association  or  corporation,  or  the 
lessees  or  managers  thereof,  organized  for 
the  purpose,  or  any  individvial,  shall  have 
the  right  to  construct  and  maintain  lines  of 
telegraph  within  this  State,  and  to  connect 
the  same  with  other  lines,  and  the  general 
assembly  shall  by  general  law  of  uniform 
operation  provide  reasonable  regulations  to 
give  full  effect  to  this  section.  No  telegraph 
company  shall  consolidate  with  or  hold  a 
controlling  interest  in  the  stock  or  bonds  of 
any  other  telegraph  company  owning  or 
having  control  of  a  competing  line,  or  ac- 
quire, by  purchase  or  otherwise,  any  other 
competing  line  of  telegraph. 

See  next  section. 

§  14.  If  any  railroad,  telegraph,  express  or 
other  corporation  organized  under  any  of  the 
laws  of  this  State,  shall  consolidate,  by  sale 
or  otherwise,  with  any  railroad,  telegraph, 
express  or  other  corporation  organized  un- 
der any  laws  of  any  other  State  or  Territoiy, 
or  of  the  United  States,  the  same  shall  not 
thereby  become  a  foreign  corporation,  but 
the  courts  of  this  State  shall  I'etain  juris- 
diction over  that  part  of  the  corporate  prop- 
erty within  the  limits  of  the  State  in  all 
matters  which  may  arise,  as  if  said  con- 
solidation had  not  taken  place. 

See  §  4,  ante.  Consolidation  prohibited.  §  5, 
ante. 


§  15.  It  shall  be  unlawful  for  any  person, 
company  or  corporation  to  reqtiire  of  its 
servants  or  employes,  as  a  condition  of  their 
employment  or  otherwise,  any  contract  or 
agreement  whereby  such  person,  company 
or  corporation  shall  be  released  or  discharged 
from  liability  or  respousibilit.v  on  account 
of  personal  injuries  received  by  such  ser- 
A'ants  or  employes  wliile  in  the  service  of 
such  person,  company  or  corporation,  by 
reason  of  the  negligence  of  such  person, 
company  or  corporation,  or  the  agents  or 
employes  thereof,  and  such  contract  shall 
be  absolutely  null  and  void. 


COLOEADO. 


Aliens;  blacklisting;  conveyances  —  Stat.,  §§  100,  101,  Ki."!,  Sl'-K  2M,  427,  453. 


STATUTES  OF  COLORADO   -  1891. 


CHAPTER  III. 

Aliens. 

Sec.  100.  Foroign  corporations  probibited  from  ac- 
quiring title  to  agricultural  lands. 

101.  Attorney-gciicral  to  institute  proceed- 
ings for  forfeiture. 

103.  Non-resident  corporation  or  a  syndicate 
may  acquire  title  to  city  and  mineral 
lands. 

§  100.  From  and  after  the  passage  of  this 
act  non-resident  aliens,  and  corporations  or 
syndicates  organized  under  the  laws  of  any 
foreign  government,  shall  be  forever  pro- 
hibited from  acquiring  the  title  to,  or  any 
use,  interest  or  benefit  in  any  body  or  tract 
of  agricultural,  arid  or  range  land  within 
the  State  of  Colorado,  where  such  body  or 
ti'act  of  land  in  compact  form  exceeds  in  any 
instance  two  thousand  (2,000)  acres. 

Requirements  of  foreign  corporation.  Const., 
art.  XV,  §  10;  §§  499-502. 

[Foreign  corporation  may  take  and  bold  real 
estate  and  mines.  Fritts  v.  rainier,  132  U.  S. 
282;  s.   c,   10  Sup.  Ct.   Rep.  282.] 

§  101.  Wlien  any  such  lands,  use,  interest 
or  benefit  therein  shall,  in  violation  of  the  in- 
tent of  this  act,  be  acquired,  or  puii)ort  to 
be  acquired,  upon  notice  thereof,  in  any 
form,  to  the  attorney-general,  it  shall  be  his 
duty  to  cause  proceedings  to  be  instituted  in 
the  district  court  of  the  proper  county  or 
counties,  to  cause  the  same  to  be  forfeited  to 
the  people  of  the  State  of  Colorado. 

§  103.  This  act  shall  not  be  so  construed  as 
to  prevent  any  non-resident  alien,  or  corpora- 
tion or  syndicate  organized  imder  the  laws 
of  any  foreign  government,  from  acquiring 
the  title  to  lands  within  the  limits  of  any  in- 
corporated town  or  city  in  this  State,  or  from 
acquiring  the  title  to  and  possessing  and 
working  any  of  the  mines  in  this  State,  or 
from  engaging  in  any  industry  in  this  State 
to  the  same  extent  as  citizens  or  residents  of 
the  United  States  or  this  State,  save  and 
except  only  as  limited  by  the  provisions  of 
section  one  of  this  act. 

[See  Fritts  v.  Palmer,  132  U.  S.  282;  s.  c,  10 
Sup.   Ct.  Rep.  282.] 

CHAPTER  XV. 

Blacklisting. 

Sec.  2.39.  Blacklisting  prohibited. 
240.  Penalty. 

§  239.  That  no  corporation,  company  or  in- 
dividual shall  blacklist  or  publish,  or  cause 


to  be  blacklisted  or  published,  any  employe, 
mechanic  or  laborer,  discharged  by  such 
corporation,  company  or  individual,  with  the 
intent  and  for  the  purpose  of  preventing 
such  employe,  mechanic  or  laborer  from  en- 
gaging in  or  securing  similar  other  employ- 
ment from  any  other  corporation,  company 
or  individual. 

§  240.  If  any  officer,  or  agent  of  any  cor- 
poration, company  or  individual,  or  other 
person,  shall  blacklist,  or  i^ublish,  or  cause 
to  be  blacklisted  or  published,  any  employe, 
mechanic,  or  laborer,  discharged  by  such 
corporation,  company  or  individual,  with  the 
intent  and  for  the  purpose  of  preventing 
such  employe,  mechanic  or  laborer  from  en- 
gaging in  or  securing  similar  or  other  em- 
ployment, from  any  other  corporation, 
company  or  individual,  or  shall  in  any  man- 
ner conspire  or  contrive  by  correspondence, 
or  otherwise,  to  prevent  such  discharged 
employe  from  securing  employment,  he  shall 
be  deemed  guilty  of  a  misdemeanor,  and 
upon  conviction  thereof  shall  be  fined  not 
less  than  fifty  (50)  dollars  nor  more  than  two 
hundred  and  fifty  (250)  dollars,  or  be  im- 
prisoned in  the  county  jail  not  less  than 
thirty,  nor  more  than  ninety  days,  or  both. 

Labor  unions  not  conspiracies.    §  1295. 


CHAPTER  XXIX. 

Conveyances. 

Sec.  427.  Corporations  may  convey  lands. 

453.  Conveyances,    how    executed    by    a    pri- 
vate corporation. 

§  427.  Any  person,  association  of  persons, 
body  politic  or  corporate,  who  shall  be  en- 
titled to  hold  real  estate,  or  any  interest  in 
real  estate  whatever,  shall  be  authorized  to 
convey  the  same  to  another  or  others,  or 
body  corporate  or  politic,  by  deed. 

Power  of  corporation  to  hold  and  conrey.    ^  470. 


§  453.  Private  corporations  authorized  by 
law  to  convey  any  of  their  real  estate,  may 
convey  the  same  in  the  manner  authorized 
by  this  chapter,  or  by  deed  under  their  com- 
mon seal,  subscribed  by  their  president  or 
other  head  oflicer. 

Manner  of  conveying  lands  by  corporation.  §§ 
622,  476,  427. 


10 


COLORADO. 


Organization  of  corporations  —  Stat.,  §§  472,  473. 


CHAPTER  XXX. 
Corporations. 

DIVISION      I.  —  ORGANIZATION  —  GOVERN- 
MENT. 

Sec.  472.  How  name  shall  commence  and  oml. 

1.  IXCORPOEATIOX  —  POWERS. 

Sec.  473.  Certificate  of  incorporation,  contents  of. 

474.  Corporations  may  procui'e  and  file  copy 

of  certificate. 

475.  Certificate  to  be   filed  and   recorded  by 

secretary   of    State.      Certificate   prima 
facie  evidence  of  corporate  existence. 

476.  General  powers. 

2.   SHARES  —  MANAGEMENT. 

Sec.  480.  Shares  personal  property.  Par  value. 
Action  to  recover  installments,  for- 
feiture. 

481.  Number  of  directors;  their  election  and 

powers. 

482.  Directors  may  be  elected  at  subsequent 

meetings. 

483.  Directors   shall   elect   oflacers. 

484.  By-laws. 

485.  Corporations  not  to  purchase  their  own 

stock. 

3.  LIABILITIES  —  DUTIES. 

Sec.  486.  Personal  liability  of  stocliholders. 

487.  President  and  directors  shall  certify  the 

amount  of  capital   fixed  and  paid  In. 

488.  Corporators  to  be  allowed  to  inspect  cor- 

porate books. 

4.  ASSESSMENTS  —  REPORTS. 
Sec.  489.  All  assessments  must  be  pro  rata. 

490.  Directors   may   issue   stock   in   payment 

for  property. 

491.  Corporation     to     make     annual     report, 

when. 

492.  Dividends   by   Insolvent   corporations. 

493.  Meetings;  where  and  how  called. 

494.  OflScers  liable  for  false  reports. 

5.   TRUSTEES  —  LIABILITIES  —  RECEIVERS. 

Sec.  495.  Trustee  or  pledgee  not  personally  liable. 

496.  Executors,   trustees,  etc.,   to  vote  stock. 

497.  Forfeiture    and    dissolution    of    insolvent 

corporation. 

498.  Corporation    may    accept    law    of    other 

States  or  government. 

6.  FOREIGN  CORPORATIONS. 

Sec.  499.  Foreign  corporations  to  file  certificate 
witli  secretary  of   State. 

500.  Also  copy  of  charter. 

501.  Failure  to  file,  liability. 

502.  Duty    of    secretary    of    State.      Copy    of 

charters    and    certificates    shall   be    re- 
ceived as  evidence. 

7.  LEGAL  PROCEEDINGS. 

Sec.  503.  Corporations  may  sue  and  be  sued  as 
natural  persons. 

504.  Certified    copy    of    articles    prima    facie 

evidence. 

505.  Consent  of  local  authorities  required  for 

construction    of    street    or    other    rail- 
roads. 

506.  Service     of     process     on     corporations. 

Venue  of  suits. 

8.   BUSINESS  MANAGEMENT. 

Sec.  507.   Statement  of  affairs;  who  may  demand. 

508.  Transfer  book   to   be   kept. 

509.  Dissolution     not     to      impair     remedies 

against  corporations. 


Sec.  616. 

617. 
618. 

619. 

620. 

621. 
&22. 
623. 
624. 

625. 


626. 
627. 
628. 
629. 
630. 
633. 

634. 

635. 


15.  GENERAL  PROVISIONS. 

Certain  corporations  may  condemn 
rights  of  way. 

And  may  enter  upon   lands  to  survey. 

Stock  or  bonds  not  to  be  issued  except 
for  value. 

Dissolution;  directors  to  be  trustees  of 
creditors  and  stockholders. 

Title  to  property  to  vest  in  such  di- 
rectors. 

Corporation  may  sue  its  members. 

Corporation  may  convey  land  by  deed. 

And   may   appoint   agents  to  convey. 

Corporations  must  be  formed  under  this 
act. 

Change  of  name  —  of  business  —  of 
amount  of  stock  —  consolidation  —  pro- 
ceedings —  only  of  same  kind. 

Special  meetings,  how  called. 

Voting  at  sucli  meeting. 

Consolidation. 

Publication  of  change  of  organization. 

Change  not  to  affect  pending  suits. 

How  companies  may  come  under  this 
act. 

General  assembly  may  alter,  amend  or 
repeal  this  act. 

Prior  corporations  confirmed  upon  com- 
plying with  this  act. 

§  472.  Coi'poratious  may  be  formed  under 
the  provisions  of  tliis  act,  for  any  lawful 
purpose,  but  the  corporate  name  of  every 
corporation  hereafter  organized  (except 
banks  and  corporations  not  for  pecuniary 
pioflt),  sliall  commence  with  the  word  "  the  " 
and  end  with  the  word  "  corporation," 
"  company,"  "  association,"  or  "  society," 
and  shall  indicate  by  its  corporate  name  the 
business  to  be  carried  on  by  said  corporation. 

Corporations  not  to  be  created  by  special  acts. 
Const,  art.  V,  §  25;  art.  XV,  §  2. 

[Object  of  statute  is  to  prevent  fraud  upon  the 
public.  State  v.  McGrath,  75  Mo.  424;  s.  c,  9 
Am.  Corp.  Cas.  519.] 

§  473.  At  any  time  hereafter  any  three  or 
more  persons  (except  as  hereinafter  pi"o- 
vided)  who  ma3'  desire  to  form  a  company 
for  the  purpose  of  carrying  on  any  lawful 
business,  may  mal^e,  sign  and  acliuowledge 
before  some  officer  competent  to  take  the  ac- 
Icnowledgment  of  deeds,  certificates  in  writ- 
ing, in  which  shall  be  stated: 

(1)  The  corporate  name  of  said  company. 

(2)  The  objects  for  which  the  company 
shall  be  created. 

(3)  The  amount  of  capital  stock  of  said 
company. 

(4)  The  term  of  its  existence,  not  to  exceed 
twenty  years,  except  as  hereinafter  pro- 
vided, save  and  except  to  make  perpetual 
corporations  insuring  lives  of  individuals 
which  have  been  heretofore  or  may  be  here- 
after organized  under  the  laws  of  Colorado. 

(5)  The  number  of  shares  of  which  the  said 
stock  shall  consist. 

(fi). The  number  of  directors  or  trustees  of 
said  company,  and 

(7)  The  names  of  those  who  shall  manage 
the  affah-s  of  such  company  for  the  first 
year  of  its  existence. 

(8)  The  name  of  the  town  or  place,  and  the 
county,  in  wliich  the  principal  office  of  the 
company  shall  be  kept. 


COLOKADO. 


11 


Organization  of  corporations  —  Stat.,  §§  474rA~G. 


(0)  The  name  of  the  coiiuty  or  counties  in 
which  the  principal  business  shall  be  carried 
on;  and  they  shall  malie  as  many  such  cer- 
tificates as  may  be  necessary,  so  as  to  file 
one  in  the  office  of  the  recorder  of  deeds  in 
each  of  such  county  or  counties,  and  one  in 
the  office  of  the  secretary  of  State;  and 
when  any  comjiany  shall  be  created  under 
the  laws'  of  this  State  for  the  purpose  of 
carryin.c:  on  part  of  its  business  beyond  the 
limits  thereof,  such  certificate  shall  state 
that  fact  and  shall,  also,  state  the  name  of 
the  town  and  county  in  this  State  in  which 
the  principal  office  of  said  company  shall  be 
kept,  and  shall  state  the  name  of  the  county 
in  which  the  principal  business  of  such  com- 
pany is  to  be  carried  on  within  this  State. 

Amendment  of  articles.    See  §§  625-630,  and  act 
of  1S91,  at  p.  27.    Corporate  powe\;'s.    §§  476,  481. 

[Sovereign  alone  can  grant  a  franchise.  D.  & 
S.  Ry.  Co.  V.  D.  C.  R.v.  Co.,  2  Col.  673.  Semble, 
that  the  general  law  of  the  territory  of  Colorado 
did  not  provide  for  granting  the  right  to  con- 
struct and  operate  a  street  railway.  Id.  A  rail- 
way so  constructed  without  authority  is  a  public 
nuisance  which  a  court  of  equity  will  enjoin.  Id. 
Grants  of  franchises  are  to  be  strictly  construed. 
D.  &  S.  Ry.  Co.  V.  D.  C.  Ry.  Co..  2  Col.  6S0.  And 
in  cases  of  doubt,  construction  is  to  be  in  favor 
of  the  people.  C.  &  G.  Co.  v.  Peo.,  5  Col.  45. 
A  corporation  having  been  recognized  by  legis- 
lative enactment,  all  inquiry  into  its  original 
organization  is  precluded.  Cowell  v.  Col.  S.  Co., 
3  Col.  82.  When  individuals,  officers,  etc.,  are 
ex  officio  corporations.  Smith  v.  Pipe.  3  Col.  196. 
A  corporation  is  resident  only  of  the  State  which 
creates  it.  It  cannot  migrate  to  another  sover- 
eigntv.  Cook  v.  Hager,  3  Col.  388:  Utley  v.  L.  M. 
Co.,  4  id.  371.  It  is  well  settled  in  Colorado  that 
the  validity  of  the  existence  of  a  corporation  can- 
not be  questioned  collaterally,  but  only  by  a  di- 
rect proceeding  instituted  by  the  State  for  that 
purpose.  And  neither  the  members  of  a  de  facto 
corporation,  nor  third  persons  who  have  con- 
tracted with  it  in  its  corporate  capacity,  will  be 
heard  to  deny  such  capacity  or  to  question  its 
corj>orate  exls'tence.  See  D.  &  S.  Ry.  Co.  v.  D. 
C.  Ry.  Co.,  2  Col.  673;  Cowell  v.  Col.  S.  Co.,  3  id. 
82;  tluniphrevs  v.  Mooney.  •">  id.  282:  I'eo.  v. 
Cheeseman,  7  id.  376:  s.  c,  3  Pac.  Rep.  716:  Jones 
v.  Hardware  Co.,  40  id.  457.  As  to  what  is  a  suffi- 
cient compliance  with  the  requisites  of  the  law  to 
constitute  a  corporation  de  facto;  see  Schroers  v. 
Fisk,  10  Col.  605;  s.  c.  16  Pac.  Rep.  285;  Duggan 
V.  M.  &  1.  Co..  11  Col.  116;  s.  c.  3  I'ac.  Rep. 
'"16;  Murnhv  v.  Moonev,  5  Col.  282;  Peo.  v.  Cheese- 
man,  supra:  Grand  R.  B.  Co.  v.  Rollins.  13  Col.  6; 
s.  c,  21  Pac.  Rep.  807:  Edwards  v.  D.  &  R.  G. 
R.  Co..  13  Col.  65:  s.  c,  21  Pac.  Rep.  1011;  Jones  v. 
Hardware  Co.,  supra;  Bates  v.  Wilson,  14  Col. 
141;  s.  c,  24  Pac.  Rep.  104.  Three  things  neces- 
sary to  constitute  a  de  facto  corporation.  (1)  A 
law  authorizing  the  creation  of  such  a  corpora- 
tion. (2)  A  bona  fide  attempt  to  comply  with  such 
law.  (.3)  A  user  of  corporate  powers.  Duggan  v. 
M.  &  I.  Co.,  supra.  Subscription  and  acknowl- 
edgment of  articles,  properly  authenticated,  may 
be  made  as  well  without  as  within  the  State. 
Humphreys  v.  Mooney,  supra.  Officer  taking  ac- 
knowledgment need  not  certify  that  he  is  per- 
sonally acquainted  with  the  parties  signing  the 
articles.  Peo.  v.  Cheeseman,  supra.  In  con- 
Ptrning  grants  of  corporate  franchises,  Federal 
courts  are  bound  to  follow  State  courts.  Mooney 
v.  Humphrey,  4  McCrary,  113;  s.  c,  12  Fed.  Rep. 
613.] 


§  474.  All  corporations  formed  under  the 
provisions  of  an  act  of  the  general  assembly 
of  this  State,  entitled  "An  act  to  provide  for 


the  formation  of  corporations,"  approved 
March  14,  1877,*  that  may  have  heretofore 
extended,  or  may  hereafter  extend  their  busi- 
ness into  counties  other  than  those  con- 
templated or  specified  in  their  original  cer- 
tificate of  incorporation,  may  procure  from 
the  secretary  of  State  a  certified  copj%  or 
copies,  of  the  certificate  filed  in  his  office, 
and  file  such  certified  copy  in  the  office  of 
the  recorder  of  deeds  in  each  county  or 
counties  in  which  such  business  has  been  or 
may  be  extended,  and  in  any  other  county 
in  which  the  business  of  such  corporation 
has  been  carried  on,  and  when  so  filed  .such 
certified  copy  shall  haA-e  the  same  force  and 
effect  as  an  original  certificate  filed  at  the 
time  of  the  incorporation  of  such  companies 
would  have. 

§  475.  When  the  certificates  shall  have  been 
filed  as  aforesaid,  tlie  secretary  of  State 
shall  record  and  carefully  preserve  the  same 
in  his  office,  and  a  copy  thereof  duly  certi- 
fied by  the  secretary  of  State  under  the  great 
seal  of  the  State  of  Colorado,  shall  be  evi- 
dence of  the  existence  of  such  company,  liut 
no  certificate  shall  be  filed  or  received  for 
two  corporations  bearing  the  same  name. 

See  §§  504,  502. 

[Existence  of  de  facto  corporation  cannot  be  at- 
tacked collaterally.  See  §  473,  note.  Where  own- 
ership is  alleged  in  a  corporation,  its  corporate 
existence,  at  least  de  facto,  must  be  proved. 
Miller  v.  Peo.,  13  Col.  166;  s.  c,  21  Pac.  Rep.  1025. 
As  to  what  is  sufficient  proof  of  corporate  exist- 
ence. Denver,  etc.,  Co.  v.  Dnscoll,  12  Col.  525; 
s.  c.  21  Pac.  Rep.  'lo.s:  Smith  v.  Cisson,  1  Col.  31. 
Articles  certified  by  the  county  recorder  may  also 
be  introduced,  to  prove  some  secondary  fact. 
Schiffer  v.  Adams,  13  Co)  .''-■('9:  s.  c,  22  Pac.  Rep. 
964. 

Right  of  corporation  to  which  property  was 
transferred  before  the  fee  for  filing  Its  articles  of 
incorporation  with  the  secretary  of  State  was 
paid,  to  claim  the  property  transferred  as  a  co- 
partnership. Jones  V.  Hardware  Co.,  40  Pac.  Rep. 
457.] 

§  476.  Corporations  formed  under  this  act 
shall  be  bodies  corporate  and  politic  in  fact 
and  in  name,  by  the  name  stated  in  such  cer- 
tificate, and  by  that  name  have  succession 
for  the  period  for  which  they  are  organized; 
may  in  any  court  of  law  or  equity  in  this 
State  sue  and  be  sued,  may  have  a  common 
seal,  which  they  may  alter  or  renew  at 
pleasure,  by  filing  an  impression  of  the  same 
in  the  office  of  the  secretary  of  State:  may 
own,  possess  and  enjoy  so  much  real  and 
personal  estate  as  shall  be  necessary  for  the 
transaction  of  their  business,  whether  ac- 
quired by  purchase,  grant,  devise,  gift  or 
otherwise  and  may,  from  time  to  time,  sell 
and  dispose  of  the  same  or  any  part  thereof 
when  not  required  for  the  use  of  the  cor- 
poration. They  may  borrow  money  and 
jjledge  their  franchises  and  property  both 
real  and  personal  to  secure  the  payment 
thereof;  and  may  have  and  exercise  all  the 


♦The   body   of   the   corporation     law     contained 
herein. 


12 


COLOKADO. 


Sluu-fs  of  stock—  Stat.,  §  480. 


powers  necessary  aiifl  requisite  to  carry  into 
effect  the  objects  for  Avliicli  tliey  may  be 
formed,  as  named  in  tlieir  certificate  of  in- 
corporation. 

Corporation  may  convey  lands.  §  427.  How. 
J§  453,  G22,  623.  Corporation  may  sue  and  be 
Bued.  See  §  503,  and  cross-references.  May  make 
by-laws.    §  484. 

[The  charter  of  a  corporation  is  its  constitution 
and   pives    it   all    the   powers   it   possesses.      Car- 
penter V.   Peo.,  8  Col.   116;   s.  c,  5  Pac.  Rep.  828. 
Grants   of   privileges   must    be   strictly    construed. 
I).  &  S.  Rv.  Co.  V.  D.  C.  Ry.,  2  Col.  680.     Corpo- 
rate powers  cun.^trued  strictly  against  corporation 
and   in   favor   of  the   public.      C.    &   G.    R.    Co.   v. 
People.  5  Col.  45.     Discussion  of  power  of  corpora- 
tion and  its  agents  to  make  contracts.     See  Spang- 
ler  V.  Butterfield.  6  Col.  356.    Express  authority  to 
liorrow  monev  not  necessary.     Mining  Co.  v.  Bank, 
2  Col.  2.")6;  s.  c,   5  Am.   Corp.    Cas.    176.     When  a 
contract  has  been  executed  and  enjoyed,  corpora- 
tion  is  estopped   to  deny   its   capacity.     Id.     Cor- 
iioration     and     corporate     powers     defined.    Utley 
V.  L.  M.  Co..  4  Col.  372-3.     Corporation  is  a  trustee 
for  its  stockholders.     Ditch  Co.  v.  Elliott.  10  Col. 
322;  s.  c,  15  Pac.  Rep.  691.     And  the  relation  be- 
tween  corporation  and   its   stockholders  is  one  of 
contract  arising   from   subscription   to    stock,    and 
to  be  construed  from  the  provisions  of  the  charter. 
Id.    Right  of  way  is  property,   which  can  be  sold 
under  this  section.     Bailey  v.  P.,  etc.,  Co.,  12  Col. 
234;  s.  c.  21  Pac.  Rep.  35.  The  power  to  purchase 
necessarilv  Implies  the  power  to  incur  obligation 
to  pav,   provisions  of  the  by-laws  to  the  contrary 
notwithstanding.       Arapahoe     Co.    v.    Stevens,    13 
Col.   540;   s.   c,   22  Pac.   Rep.  823.     The  body  cor- 
porate cannot  be  separated  from  Its  constituency. 
Ark.,    etc..    Co.    v.    F.    L.    &   T.    Co.,    13    Col.    587; 
R.   c.    22   Pac.    Rep.   947.      Suits   must   be   brought 
ill  the  name  and  by  authority  of  the  corporation. 
Id.      When   individual   shareholders   may   sue.     Id. 
When     corporation     must     be     made     defendant. 
Bvers  v.    Rollins,    13  Col.   22;   s.   c,    21   Pac.    Rep. 
894.      Corporation    liable    in    tort,  same    as    natu- 
ral   persons,    and     exemplary     damages     may     be 
awarded  against  them.     W.   U.  Tel.   Co.  v.   Eyser, 
2    Col.    141.      I>egrees   of   negligence;    contributory 
negligence.     Id.     Defendant  sued  as  a  corporation 
cannot   deny   its   own   existence,    either   in   abate- 
ment or  in  bar.     Id.     Agent  acting   within  scope 
of  autho;-ity,   when.     Id.     Extent  of  authority  of 
agent  to  employ  laborers.     Gregory  Co.  v.   Raber. 
1  Col.  511.     Corporate  seal  attached  to  an  instru- 
ment purporting  to  be  the  act  of  the  corporation 
and  signed  by  the  president,  prima  facie  evidence 
that  it   was   atHxed  bv   proper  authority.    Mining 
Co.  v.  Bank,  2  Col.  227;  s.  c,  5  Am.  Corp.  Cases, 
176. 

The  superintendent  of  a  mining  corporation  has 
no  authority,  by  virtue  of  his  office,  merely  to 
borrow  money.  Mining  Co.  v.  Bank,  2  Col.  565; 
s.  c,  5  Am.  Corp.  Cas.  176.  Nor  has  the  presi- 
dent, as  such,  authority  to  repay  such  unauthor- 
ized loan.  Id.  One  of  the  privileges  of  a  corpo- 
ration is  to  own  real  estate.  W.  C.  T.  U.  v. 
Taylor,  8  Col.  78;  s.  c,  5  Pac.  Rep.  826.  As  to 
p(iwer  of  corporation  to  hold  real  estate,  see  Cow- 
ell  V.  Col.  Sp.  Co.,  3  Col.  88;  aflirmed,  100  U.  S. 
tS').  The  ratification  of  the  acts  of  an  agent  is 
t.mtamount  to  original  authority.  Mining  Co.  v. 
Donat,  10  Col.  5.33;  s.  c,  16  I'ac.  Rep.  157.  And 
such  ratification  is  often  presumed  from  lapse  of 
time;  one  hundred  days  sunicient  to  presume  ratifi- 
cation. Id.  The  i)lea  of  ultra  vires  not  an  absolute 
defense  in  all  cases  of  exeess  of  power.  Sometimes 
such  a  defense  is  unconscionable.  Ins.  Co.  v. 
MeCIelland.  9  Col.  21;  s.  c,  9  I'ac.  Rep.  771.  Ultra 
vires,  when  a  defense.  Rollins  v.  Comrs.,  15 
Col.  103;  s.  c,  25  I'ac.  Rep.  319.  The  cessation 
of  official  relations  between  corporation  and  its 
manager  may  affect  contractual  relation  depend- 
ent thereon.  *  Coal  Co.  v.  Hinds,  15  Col.  17.3;  s.  c, 
25  Pac.  Rep.  502.     Validity  of  contract  with  min- 


ing companv  for  ores  to  be  mined.  S.  M.  Co.  v. 
S.\V:  R.  Co.,  10  Col.  118;  s.  v..  26  Pac.  Rep.  326. 
One  corporation  acting  as  agent  of  another.  Ins. 
Co.  V.  .loues,  16  Col.  515;  s.  c,  27  I'ac.  Rep.  8ii7. 
Rule  of  agency  not  changed  by  accidental  circum- 
stiiuces.      Id. 

A  corjioration  may,  by  entering  under  a  lease 
executed  by  an  officer  without  authority,  and  pay- 
ing rent,  ratify  it.  Jenet  v.  Albers,  43  Pac.  Rep. 
452. 

A  person  dealing  with  a  corporation  as  such, 
admits  its  corporate  existence.  I'lummer  v.  Mer- 
cantile Co.,  23  Col.  190;  s.  c,  47  Pac.  Rep.  294.] 

(§§  477,  478,  479,  relating  to  amendments  to  cer- 
tificate, are  repealed  by  act  of  April  6,  1891.  See 
p.  27.) 


§  480.  The  shares  of  stociv  shall  not  be  less 
than  one  dollar  nor  more  than  one  hundred 
dollars  each,  and  shall  be  deemed  personal 
property    and    transferable   as    such    in   the 
manner  provided  by  the  by-laws,  and  sub- 
scriptions therefor  shall  be  made  payable  to 
the  corporation,  and  shall  be  payable  in  such 
installments  and  at  such  time  or  times  as 
shall   be   determined    by    the    directors    or 
trustees;  and  an  action  may  be  maintained 
in  the  name  of  the  corporation  to  recover 
any  installment  which  shall  remain  due  and 
unpaid  for  the  period  of  twenty  days  after 
personal  demand  therefor,  or,  in  case  where 
personal  demand  is  not  made  within  thirty 
days  after,  a  written  or  printed  demand  has 
been  deposited  in  the  post-office,  properly  ad- 
dressed to  the  post-office    address    of    such 
delinquent    stockholder.      The    directors    or 
trustees  may  by  by-laws  prescribe  for  a  for- 
feiture or  sale  of  stock  on  failure  to  pay  the 
installments  or  assessments  that  may,  from 
time  to  time,  become  due,  but  no  forfeiture 
of   stock,   or   of  the   amount   paid   thereon, 
shall  be  declared  as  against  any  estate  or 
against  any  stockholder  before  demand  shall 
have  been  made  for  the  amount  due  thereon, 
eUher  in  person  or  by  written  or  printed  no- 
tice duly  mailed  to  the  last  known  address 
of  such  stockholder,    at    least    thirty    days 
prior  to  the  time  when  such  forfeiture  is  to 
take  effect;    Provided,  That  the  proceeds  of 
any  sale,  over  and  aboA-e  the  amount  due  on 
said  shares,  shall  be  paid  to  the  delin(iueut 
stockholder. 

Assessments  on  stock.  §  489.  Dividends.  §  492. 
Stock  not  to  be  issued  except  for  value.  Const., 
art.  XV,  §  9;  §  618.  Shares  of  stock  subject  to  levy 
and  sale.  §§  2576-2581.  Attachment  of.  §§  2706-7. 
Taxation  of.    §§  3781  et  seq. 

[This  section  gives  the  power  to  pass  by-laws 
regulating  the  transfer  of  stock.  Conway  v.  St. 
John,  14  Col.  30;  23  Pac.  Rep.  170.  Title  to  stock 
in  a  corporation,  as  against  creditors,  can  only 
pass  bv  transfer  on  books  of  corporation.  Id. 
Shares 'of  stock  in  a  company  duly  incorporated 
are  personal  property.  McClaskey  v.  Lake  View 
M  &  T  Go..  IS  Col.  65;  s.  c.  31  I'ac.  Rep.  .i33; 
Mercantile  Co.  v.  Davis.  IS  Col.  93;  s.  c,  31  Pac. 
Rep  49.">.  A  suit  bv  a  stockholder  to  have  cer- 
tain stock  cancelled,  not  brought  in  cood  faith, 
but  in  the  interest  of  a  rival  corporation,  cannot 
l)e  maintained.  Beshoar  v.  Chappell,  40  Pac.  Rep. 
244.] 


COLOEADO. 


13 


Election  of  directors  —  Stat.,   §§  481,  482. 


§  481.  (As  ameiKlecl  April  S,  1S0.">.)  The  cor- 
porate powers  shall  be  exercised  by  a  board 
of  directors  or  trustees  of  not  less  than 
three,  or  more  than  thirteen,  who  shall 
respectively  be  stockholders  in  said  company, 
and  who  shall  (except  the  first  year)  be  an- 
nually elected  by  the  stockholders,  at  such 
time  and  place  as  shall  be  directed  by  the 
by-laws  of  the  company;  and  public  notice 
of  the  time  and  place  of  holding  such  elec- 
tions, and  also  of  all  jreneral  or  special  meet- 
ings, shall  be  published  not  less  than  ten 
days  previous  thereto  in  a  newspaper  ptib- 
lisiied  in  or  nearest  to  the  place  in  which 
the  principal  otfice  of  the  company  shall  be 
kept,  as  specified  in  its  articles  of  incorpora- 
tion, and  by  delivering  personally  or  de- 
l.ositing  in  the  post-ofhce  at  least  thirty  days 
before  such  meeting  a  notice  properly  ad- 
dressed to  each  stockholder,  signed  by  the 
president  or  secretary,  stating  the  time  and 
object  of  said  meeting;  and  no  business  shall 
be  transacted  at  any  special  meeting  except 
such  as  shall  be  mentioned  in  said  notice; 
if,  hoAvever,  any  stockholder  shall  fail  to 
furnish  the  secretary  with  his  correct  post- 
office  address,  he  shall  not  be  entitled  to 
such  separate  notice.  Elections  of  directors 
or  trustees  shall  be  made  by  such  of  the 
stockholders  as  shall  attend  for  that  purpose, 
either  in  person  or  by  proxy;  Provided,  a 
majority  of  the  stock  issued  shall  be  repre- 
sented; and  if  a  majority  of  such  stock  shall 
not  be  represented,  such  meeting  may  be  ad- 
journed by  the  stockholders  present  for  a 
period  not  exceeding  sixty  days  at  any  one 
adjournment.  When  it  is  found  that  a  ma- 
jority of  the  stock  is  represented  at  such 
meeting  or  adjoiu'ned  meeting,  the  stock- 
holders shall  proceed  to  nominate  the  number 
of  directors,  trustees  or  managers  to  be 
elected,  each  stockholder  having  the  right  to 
nominate.  The  election  shall  be  by  ballot, 
on  which  each  person  voting  shall  write  the 
names  of  as  many  persons  as  are  to  be 
elected  from  the  nominees.  Each  stock- 
holder shall  have  the  right  to  vote  in  person 
or  by  proxy  for  the  number  of  shares  owned 
by  him  or  her,  and  in  balloting  for  directors 
he  or  she  may  vote  said  number  of  shares 
for  as  many  directors,  trustees  or  managers 
as  are  to  be  elected,  or  he  or  she  may  cumu- 
late such  shares  and  give  one  candidate  as 
many  votes  as  the  number  of  directors  mid- 
tiplied  by  the  number  of  his  or  her  shares  of 
stock  shall  equal,  or  to  distribute  them  on 
the  same  principle  among  as  many  candi- 
dates as  he  or  she  may  desire;  and  the  per- 
sons having  the  highest  number  of  votes  in 
consecutive  order  shall  be  declared  elected 
the  board  of  directors,  trustees  or  managers 
for  that  year,  and  such  directors,  trustees 
or  managers  shall  not  be  elected  in  any 
other  way.  And  when  any  vacancy  shall 
happen  among  the  directors  or  trustees,  by 
death,  resignation,  or  otherwise,  it  shall  be 
filled  for  the  remainder  of  the  year  as  shall 
be  provided  by  the  by-laws  of  said  company. 


The  board  of  directors  or  trustees  of  a  min- 
ing or  manufacturing  corporation  shall  not 
have  power  to  encumber  the  mines  or  plant 
of  such  corporation,  or  the  principal  ma- 
chinery incident  to  the  production  from  such 
mine  or  plant,  imtil  the  question  shall  have 
been  submitted  at  a  proper  and  legal  meet- 
ing of  the  stockholders  and  a  majority  of  all 
the  shares  of  stock  shall  have  voted  in  favor 
of  such  proposition:  and  any  mortgaging  or 
incumbering  of  such  property,  without  such 
consent  shall  be  absolutely  void,  and  the 
vote  upon  such  proposition  shall  be  entered 
on  the  minutes  of  the  corporation. 

Annual  report  of  directors.  §  491.  General  pow- 
ers. §  476.  Business  management  of  corporation. 
§§  507-509. 

[Declaration  of  director  regarded  as  an  admis- 
sion by  the  corporation.  Gregory  Co.  v.  Raber,  1 
Col.  51.J.  Stockholders  may  instruct  the  trustees 
as  to  the  course  to  be  pursued,  but  the  power  of 
a  corporation  is  vested  in  the  trustees,  and  'hey 
onlv  can  express  it  at  will.  Mining  Co.  v.  Bank, 
2  Col.  565;  s.  c,  5  Am.  Corp.  Cas.  176.  The  dele- 
gation of  power  to  the  trustees  is  exclusive.  Id. 
Oral  evidence  of  the  proceedings  of  corporate 
meeting,  of  which  a  record  is  shown  to  exist,  is 
Inadmissible.  Id.  And  strict  proof  of  authentic- 
ity of  record  is  required.  Id.  In  a  corporation 
a  majority  makes  a  quorum,  and  a  majority  of  a 
quorum  may  act.  I'eo.  v.  Lathrop,  3  Col.  452. 
President  and  secretary  cannot  bind  corporation 
by  a  note,  without  proof  of  authority.  Breed  v. 
Bank,  4  Col.  .^06.  The  ineligibility  of  persons  to 
act  as  officers  of  corporation  cannot  be  taken 
advantage  of  in  a  collateral  proceeding.  Hum- 
phreys V.  Mooney,  5  Col.  292.  The  persons  named 
in  tlie  certificate  as  directors  of  the  Company  for 
the  first  year,  are  created  such  by  operation  of 
law.  Id.  Mode  of  transacting  business  by  di- 
rectors. Longmant,  etc.,  Co.  v.  Coffman,  11  Col. 
533;  s.  c,  19  Pac.  Rep.  508.  Stockholders  alone 
can  be  direclris  under  the  laws  of  this  State. 
Byers  v.  Rollins,  13  Col.  26;  s.  c,  21  Pac.  Rep. 
894.  A  corporation,  both  at  common  law  and  un- 
der the  statute,  acts  by  and  through  its  trus- 
tees and  agents,  and  cannot  act  otherwise.  A.  R., 
etc.,  Co.  v.  F.  L.  &  T.  Co.,  13  Col.  598;  s.  c.  22 
Pac.  Rep.  958.  Directors  of  a  corporation  are  its 
agents,  and  represent  stockholders,  and  are 
therefore,  held  to  the  exercise  of  the  utjnost  good 
faith.  Bill  v.  Tel.  Co.,  16  Fed.  Rep.  14.  There- 
fore, corporations  may  repudiate  a  contract  made 
by  the  directors  when  they,  themselves,  are  the 
other  contracting  party.  Id.  Authority  of  otficer 
or  agent  of  corporation  to  execute  a  note,  how 
determined.  Foster  v.  Mining  Co.,  17  Fed.  Rep. 
130;  s.  c,  5  McCrary,  .331.  While  the  officers  of 
a  corporation  occupy  trust  relations  to  it,  trust 
relations  to  the  corporation  do  not,  as  to  stock- 
holders, create  trust  relations  inter  sese.  Gillett 
V.  Bowen,  23  Fed.  Rep.  625.  Directors  not  entitled 
to  compensation  for  services  as  such,  unless  pro- 
vided for  or  expressly  sanctioned  by  the  charter. 
Brown  v.  R.  M.  S.  .Mines,  17  Col.  421;  s.  c,  30 
Pac.  Rep.  66.  But  otherwise  if  services  are  clearly 
outside  ordinary  duties  of  directors  and  in  pursu- 
ance of  an  express  contract.  Id.  Question  whether 
a  purchase  of  corporate  property  by  a  director 
which  was  subsequently  ratiJied  by  the  stu'-khold- 
ers  was  not  fraudulent  as  to  corporate  creditors. 
Crymble  v.  Mulvaney,  40  Pac.  Rep.  499. 

i*ersons  acting  as  directors,  and  contracting 
debts,  are  estopped  to  deny  their  official  posi- 
tion.    .Tenet  v.  Albers,  43  Pac.  Rep.  4.52. 

And  the  fact  that  by  statute  directors  could 
hold  office  for  one  year  only  did  not  exempt  them 
from  liability  as  such  if  they  continued  in  office 
after  that  year.     Jenet  v.  Nims,  43  Pac.  Rep.  147.] 

§  482.  In  case  It  should  happen  at  any  time 
that  an  election  of  directors  or  trustees  shall 


14 


COLOEADO. 


Officers  and  agents  —  Stat.,  §§  48;i-i87. 


pot  be  lu'kl  on  the  day  designated  by  the 
by-laws  of  said  company,  Avhon  it  ought  to 
have  been  held,  the  company  for  that  reason 
j^hall  not  be  dissolved;  but  such  directors  or 
trustees  may  be  chosen  at  any  subsequent 
meeting  of  the  stockholders,  at  which  a  ma- 
jority of  the  stock  is  represented,  such  meet- 
ing to  be  called  by  the  directors  or  trustees, 
or  any  two  stockholders,  by  giving  public 
notice  of  the  time  and  place  of  holding  such 
meeting,  in  the  manner  provided  by  section 
0  of  this  cha])tor;  Provided,  If  a  majority 
of  such  stock  be  not  represented  at  the  meet- 
ing so  called,  the  same  may  be  adjourned  by 
the  stockholders  present,  for  a  period  not 
exceeding  sixty  days. 

§  4So.  The  directors  or  trustees  shall  elect 
one  of  their  number  to  be  president,  and 
may  elect  or  appoint  such  subordinate  offi- 
cers as  the  company  may,  by  its  by-laws, 
designate,  and  such  subordinate  officers 
shall,  if  required  by  the  company,  give  se- 
curity for  the  faithful  discharge  of  their 
official  duties. 

Annual  report  of  officers.  §  401.  Liability  for 
false  report.    §   494.    See  §§   3861-2. 

[An  agent  appointed  without  a  seal  by  the  presi- 
dent of  a  corporation  can  bind  the  corporation  by 
his  acts.  Tel.  Co.  v.  Graham,  1  Col.  182.  The 
usual  course  of  business  of  a  corporation  is  ad- 
dressed through  its  president,  and  he  cannot  at 
will  put  off  his  official  character,  assume  the  per- 
sonal status,  and  deny  to  those  having  business 
with  the  corporation  access  to  it  through  him. 
Mining  Co.  v.  Bank.  1  Col.  531:  Mining  Co.  v. 
Bank,  2  id.  2.58.  Powers  and  authority  of  presi- 
dent. 1  Col.  532.  Corporation  responsible  if  it 
employs  negligent  agents.  Tel.  Co.  y.  Claymore, 
2  Col.  .36.  Corporation  may  deny  Its  signature  to 
a  written  instrument  by  the  oath  of  its  authorized 
agent.  Mining  Co.  v.  Tappan,  2  Col.  124. 
Agent's  authority  to  sign  instrument  can  only 
be  denied  under  oath.  Id.  Authority  of  agent 
to  borrow  money:  when  must  be  express  and 
when  implied.  Spangler  v.  Butterfield,  6  Col.  364. 
When  superintendent  and  secretary  are  general 
agents  of  a  corporation  they  are  clothed  with  all 
powers  essential  to  its  proper  management.  Webb 
V.  Smith,  6  Col.  366.  Corporation  bound  by  con- 
tract under  seal.  AVilliams  v.  Canal  Co.,  13  Col. 
479;  22  I'ac.   Hep.  806. 

Personal    liability   of  officers.      Cook   v.    Merritt,  [ 
15    Col.    212:    s.    c,    25   Pac.    Rep.    176;    Buenz    v.  i 
Cook,  15  Col.  38;  s.  c,  24  Pac.   Rep.  679.      By-law  i 
/lelrgating  to  manager  full  power  to  manage  busi-  j 
ness^   construed.      S.    M.    Co.   v.    S.    &    R.    Co.,    16 
Col.  118:  s.  c.  26  Pac.  Rep.  326.    Courts  will  not, 
as   a   general   rule,    at   the   suit   of   a   stockholder,  \ 
interfere    with    internal    management    of     corpora- 
tion.    Miller  V.  Murray.  17  ("ol.  4u8:  s.  c.  .30  Pac. 
Rep.   46.     It   must   appear  that   he  cannot   redress 
either   through   the   managing   bociy   or    ihe   stock- 
holders.      Id.       Rule    in    such    cases    diff.'rent    in 
State    and     Federal    courts.     Id.     When    redress 
should  be  brought  through  stockholders.    Id.    One 
who  acts  as  agent  of  a  corporation  could  Jiot  deny 
his    official    character.       Janet    v.    Nims,    43    I'ac. 
Rep.  147.] 


§  484.  Th"  stockliolders  of  any  corporation 
formed  un<ler  the  proA-isions  of  this  act,  or 
the  directors  or  trustees,  if  the  certificate  of 
incorporation  so  provide,  sliall  have  power  to 
make  such  prudential  by-laws  as  they  deem 
proper  for  the  management  of  tlie  affairs  of 
the  company  not  inconsistent  with  the  laws 


of  this  State,  for  the  purpose  of  carrying  on 
all  kinds  of  business  within  the  objects  and 
purpose  of  such  company. 

By-laws  shall  provide  for  calling  directors'  meet- 
ings.   §  493. 

[All  corporations  created  by  special  statutes 
have  an  authority  and  capacity  to  establish  such 
rules  and  regulations  as  shall  be  necessary  for  the 
well  ordering  of  the  affairs  thereof.  Tel.  Co.  v. 
Graham,  1  Col.  185.] 

§  4S5.  It  shall  not  be  lawful  for  such  cor- 
porations to  use  any  of  their  fimds  for  the 
purchase  of  .stock  in  their  own  company  or 
corporation,  except  such  as  may  be  forfeited 
for  the  non-ijayment  of  assessments  thereon, 
except  as  hereinafter  provided. 

[Corporation  that  contracts  to  purchase  its  own 
stock  cannot  be  compelled  to  do  so.  Talmon  v. 
Mica  Co.,  22  N.  W.  Rep.  506.] 

§  486.  Each  stockholder  shall  be  liable  for 
the  debts  of  the  corporation  to  the  extent  of 
the  amount  that  may  be  unpaid  upon  the 
stock  held  by  him,  to  be  collected  in  the 
manner  herein  provided.  Whenever  any  ac- 
tion is  brought  to  recover  any  indebtedness 
against  the  corijoratiou,  it  shall  be  com- 
petent to  proceed  against  any  one  or  more 
stockholders  at  the  same  time,  to  the  extent 
of  the  balance  unpaid  by  such  stockholders 
upon  the  stock  owned  by  them  respectively, 
whether  called  in  or  not,  as  in  cases  of 
garnishment. 

See  §  497,  and  cross-references,  and  §  490. 

[Liability  of  stockholders  of  a  de  facto  corpora- 
tion. Plumphrey  v.  Mooney,  5  Col.  283:  see,  also, 
§  473,  note.  Creditor  may"  maintain  an  action  at 
law  under  this  statute.  Smith  v.  Londoner,  5 
Col.  365.  And  it  makes  no  difference  that  such 
creditor  is  a  stockholder,  if  his  own  stock  is  paid 
for  in  full.  Id.  Corporation  not  a  necessary  party. 
5  Col.  366.  Corresponding  statute  distinguished. 
Id.  In  pa.ving  a  judgment  under  this  section  a 
defendant  is  liquidating  his  indebtedness  to  the 
corporation.  5  Col.  370.  No  element  of  partner- 
ship liability  attaches.  Id.  Section  referred  to  in 
Taljor  V.  Man.  Co.,  11  Col.  426:  s.  c.  18  Pac.  Rep. 
537.  A  .loint  action  may  be  maintained  against  a 
corporation  and  owners  of  unpaid  capital  stock 
tl'.ereof.  Smith  v.  Ins.  Co..  14  Fed.  Rep.  .399;  4 
.McCraiy,  584.  But  this  section  does  not  give  any 
authorit.v  for  suing  the  corporation  with  the  trus- 
tees in  aii.v  cause  of  action  arising  under  this 
;;ectiiin.  Id.  Fxtent  of  individual  liability  of  offi- 
cers and  stockholders  of  banking  corporation  is 
the  amount  of  the  stock  held  by  each.  Buenz  v. 
Cook,  15  Col.  38;  s.  c,  24  Pac.  Rep.  679.] 

§  487.  The  president  and  a  majority  of  the 
directors  or  trustees,  after  the  payment  of 
the  last  installment  of  the  capital  stock  so 
fixed  and  limited  by  the  company,  shall 
malce  a  certificate  stating  the  amount  of  the 
capital  so  fixed  and  paid  in,  which  certificate 
shall  be  signed  and  sworn  to  by  the  presi- 
dent and  a  majority  of  tlie  directors  or  trus- 
tees, and  they  shall  record  the  same  in  the 
office  of  the  secretary  of  State,  and  a  copy 
in  the  office  of  the  recorder  of  deeds  of  the 


COLOKADO. 


15 


Books;  assessments;  annual  reports  —  Stat.,  §§  488-491. 


county   ^\-hereiu   the  business  of   said   co.n- 
pauy  is  carried  on. 

See  §  2577. 

[This  seotion  made  imperative.  Austin  v.  Berlin, 
13  Col.  200;  s.  c,  22  Pac.  Rep.  433.] 

§  488.  It  shall  be  the  duty  of  the  directors 
or  trustees  of  every  corporation,  except  rail- 
road and  tele.sraph  companies,  to  cause  to 
be  liept  at  its  principal  office  or  place  of 
business  in  this  State,  correct  books  of  ac- 
count of  all  its  business,  and  any  stock- 
holder in  such  corporation  shall  have  the 
right,  at  all  reasonaljle  times,  to  inspect  and 
examine  all  the  books,  accounts  and  papers 
of  the  corporation,  aud  shall  have  the  right 
as  aforesaid  to  demand  of  any  officer,  clerk, 
cashier,  or  agent  of  any  such  corporation  hav- 
ing in  his  control  or  custody  any  such  books, 
accounts,  or  papers,  as  such  stockholders 
may  desire  to  examine  or  inspect;  and  upon 
such  demand  being  made  m  writing,  every 
such  officer,  clerk,  cashier  or  agent  shall  hr- 
bound  to  produce  such  books,  accounts  and 
papers  to  such  stockholder,  and  afford  due 
opportunity  to  examine  and  inspect  the 
same;  and  such  stockholders  shall  have  the 
right  to  take  copies  or  make  extracts  there- 
from, but  shall  not  remove  from  the  office 
of  the  corporation  any  such  books,  accounts 
and  papers.  In  case  of  refusal  or  neglect, 
by  any  such  officer,  clerk,  cashier  or  agent, 
to  exhil)it  the  same,  or  to  allow  the  same 
to  be  inspected  and  copies  or  extracts  to  be 
taken  therefrom  by  any  stockholder  making 
such  request,  or  who  shall  secrete,  conceal 
or  destroy  any  books,  accounts  or  papers,  or 
who  shall  prevent,  or  endeavor  to  prevent, 
a  full  inspection  of  the  same,  shall  be 
deemed  guilty  of  a  misdemeanor,  and  be 
liable  to  a  penalty  of  two  hundred  dollars,  or 
such  less  sum  as  a  court  or  jury  may  find, 
to  be  recovered  by  action  of  debt,  at  suit  of 
the  person  aggrieved,  against  the  person  of- 
fending, in  the  district  court  of  the  county 
where  the  principal  office  of  such  corpora- 
tion is  located. 

Transfer-book  of  stock,  etc.    See  §  508. 


§  489.  All  assessments  or  installments  of 
the  stock  of  any  stock  corporation,  shall  be 
levied  by  the  directors  or  trustees  in  accord- 
ance witii  the  provisions  of  the  by-laws,  ex- 
cept as  hereinafter  provided,  but  any  assess- 
irents  or  installments  required  to  be  paid 
shall  be  levied  pro  rata  upon  all  shares  of 
such  stock,  except  as  hereinafter  provided. 

See  §  480. 

[The  unpaid  balance  upon  a  stockholder's  sub- 
scription Is  not  primarily  a  legal  debt  due  the 
corporation,  and  no  cause  of  action  can  be  main- 
tained therefor  in  Its  name  till  the  statutory  de- 
mand has  been  made  and  the  statutory  period 
thereafter  has  expired.  Ins.  Co.  v.  Tabor.  16  Col. 
531:  s.  c.  27  Pac.  Rep.  890.  But  by  proper  pro- 
ceedings in  equity,  the  unpaid  balance  may  be 
applied  to  the  discharge  of  corporation  debts.    Id.] 


?  490.  The  directors  or  trustees  of  any  cor- 
poration may  purchase  mines,  manufactories 
and  other  property  necessary  for  their  busi- 
ness and  issue  stock  to  the  amount  of  the 
value  thereof  in  payment  therefor;  and  the 
stock  so  issued  shall  be  declared  and  taken 
to  be  full-paid  stock  and  not  liable  to  any 
further  calls  or  assessments,  except  as  herein- 
after provided;  neither  shall  the  stockholders 
thereof  be  liable  to  any  further  payments 
under  the  provisions  of  section  eleven  (§  486) 
of  this  act,  but  in  all  statements  and  reports 
of  the  company,  this  stock  shall  not  be  stated 
or  reported  as  being  issued  for  cash  paid  into 
the  company,  but  shall  be  reported  in  this 
respect  according  to  the  facts. 

Stock  or  bonds  not  to  be  issued  except  for 
value.    §  618;  Const.,  art.  XV,  §  9. 

[Subscriptions  to  stock  not  necessarily  to  be 
paid  in  cash.  Corporation  may  issue  shares  in 
pavment  for  services  rendered.  Arapahoe,  etc., 
Co.  V.  Stevens,  13  Col.  .541;  s.  c,  22  Pac.  Rep.  82.3. 
But  shares  must  be  issued  either  "  for  labor  done, 
services  performed,  or  money  or  property  actually 
received  "  or  the  issue  is  unconstitutional  and  in- 
valid. Arkansas,  etc.,  Co.  v.  F.  L.  &  T.  Co.,  13 
Col.  601;  s.   c,  22  Pac.   Rep.  954.] 

§  491.  Every  such  corporation  shall  an- 
nually, within  sixtj-  days  from  the  first  day 
of  January,  make  a  report,  which  shall  state 
the  amount  of  its  capital  and  the  proportion 
actually  paid  in,  and  the  amount  of  existing 
delDts;  which  report  shall  be  signed  by  the 
president,  and  shall  be  verified  by  the  oath 
of  the  president  or  secretary  of  said  com- 
pany, under  its  corporate  seal,  and  filed  in 
the  office  of  the  recorder  of  deeds  of  the 
county  where  the  business  of  the  company 
shall  be  carried  on.  And  if  any  such  cor- 
poration shall  fail  so  to  do.  unless  the  capital 
stock  of  such  corporation  has  been  fully  paid 
in  and  a  certificate  made  and  filed  as  pro- 
vided in  section  twelve  (§  487)  of  this  act, 
all  the  directors  or  trustees  of  the  company 
shall  be  jointly  and  severally  liable  for  all 
the  debts  of  the  company  that  shall  be  con- 
tracted during  the  year  next  preceding  the 
time  when  such  report  should  by  this  section 
have  been  made  and  filed,  and  until  such 
report  shall  be  made. 

See  §§  481,  497.    False  report,  liability  for.    §  494. 

[This  statxite  in  its  nature  Is  penal;  the  llabil- 
itv  is  not  founded  upon  contract,  but  arises  from 
m'isconduct  in  office.  Gregory  v.  Bnnk,  3  Col.  3.32. 
Xecessary  averments  in  a  complaint  under  this 
section.  "  Spp  Aufenger  v.  Pub.  Co..  9  Col.  .377; 
s.  c.  12  Pac.  Rep.  400.  The  individual  liability 
oif  directors  is  not  extended  to  those  in  no  way 
chargeable  with  dereliction  of  duty.  Austin  v. 
Berlin.  13  Col.  200;  s.  c,  22  Pac.  Rep.  433.  Lia- 
bilitv  under  this  section.  See  Schroers  v.  Fisk,  10 
Col. '609:  s.  c.  16  Pac.  Rep.  285.  . 

A  joint  action  cannot  be  maintained  agamst 
the  officers  and  the  corporation  itself,  under  this 
section.  Smith  v.  Ins.  Co..  14  Fed.  Rpp.  399 
Complaint  against  officer  under  this  section  held 
insufficient  on  demurrer.  Mathews  v.  Patterson. 
16  r-ol  •>15-  s.  c.  26  Pac.  Rep.  812.  A  corporate 
creditor  cannot  waive  a  default  by  the  directors 
in  failing  to  file  the  statement  required  by  law 
and  aval!  himself  of  a  similar  default  in  the  fol- 
lowing year  to  prevent  the  running  of  the  liraita- 


16 


COLORADO. 


Improper  dividends;  directors'  meetings,  etc.— Stat.,  §§  492-497. 


tioii  a^Minst  his  claim.  Fml  &  Iron  Co.  v.  Lenbart. 
41  Pac.  Hep.  834.  Above  statute  Is  penal  in  its 
nature,  and,  therefore,  to  be  strictly  construed. 
Id.] 

§  492.  If  the  directors,  trustees  or  other 
oftioers  or  ageuts  of  any  corporation  shall  de- 
clare and  pay  any  dividend  when  such  corpo- 
ration is  insolvent,  or  any  dividend  the  pay- 
ment of  which  would  render  it  insolvent  or 
would  diminish  the  amount  of  its  capital 
stoclc,  all  directors,  trustees,  agents  or  offi- 
cers assenting  thereto  shall  be  jointly  and 
severally  liaijle  for  all  debts  of  such  corpora- 
tion theii  existing,  and  for  all  that  shall  there- 
after be  contracted  while  the  capital  remains 
so  diminished. 

§  493.  The  by-laws  of  every  corporation 
shall  provide  for  the  calling  of  meetings  of 
the  directors  or  trustees,  and  when  such  di- 
rectors or  trustees  shall  be  present  at  any 
meeting,  hoAvever  called  or  notified,  or  shall 
sign  a  written  consent  thereto,  on  the  record 
ot^  such  meeting,  the  acts  of  such  meeting 
shall  be  as  valid  as  if  called  and  notified; 
Provided,  That  unless  it  shall  be  stated  in 
the  certificate  of  incorporation  that  meetings 
of  the  directors  or  trustees  may  be  held  be- 
yond the  limits  of  this  State,  or  unless  such 
meeting  was  authorized  or  its  acts  ratified 
by  a  vote  of  a  majority  of  the  stoclcholders 
at  a  regular  meeting,  the  action  of  any 
meeting  held  beyond  the  limits  of  this  State 
shall  be  void. 

By-laws.    §  484. 

[Legality  or  regularity  of  certificate  of  incorpo- 
ration, wliich  provides  that  the  meetings  of  stock- 
holders and  directors  shall  be  held  outside  the 
State  where  incorporated,  cannot  be  attacked  col- 
laterally.    Humphreys  v.  Mooney,  5  Col.  293.] 

§  494.  If  any  certified  report  or  statement 
made,  or  public  notice  given,  by  the  officers 
of  any  corporation,  shall  be  false  in  any 
material  representation,  all  the  officers  who 
shall  have  signed  the  same,  liuowing  it  to 
be  false,  shall  be  jointly  and  severally  liable 
for  all  damages  arising  tlierefrom. 

§  495.  No  person  holding  stock  in  any  cor- 
poration as  executor,  administrator,  con- 
servator, guardian  or  trustee,  and  no  person 
holding  such  stoclv  as  collateral  security, 
shall  be  personally  subject  to  any  liability 
as  stoclvliolder  of  such  corporation,  but  the 
person  pledging  such  stock  shall  be  con- 
sidered as  holding  the  same,  and  shall  be 
liable  as  a  stockholder  accordingly,  and  the 
estate  and  funds  in  the  hands  of  such  exec- 
utor, administrator,  conservator,  guardian  or 
tiustee  shall  be  liable  in  like  manner  and  to 
the  same  extent  as  a  testator  or  intestate, 
or  the  ■\\'ard  or  person  interested  in  sueli  trust 
fiM:ds  would  liave  lieen  if  lie  had  been  living, 
and  had  been  competent  to  act,  and  held  the 
stock  in  his  own  name. 

Trust  funds  not  to  bo  invested  in  stocks.  Const., 
«rt.  V,  §  36. 


§  49G.  Every  executor,  administrator,  con- 
servator, guardian  or  trustee  shall  represent 
the  stock  in  his  hands  at  all  meetings  of  any 
such  corjioration,  and  may  vote  accordingly 
as  a  stockholder,  and  every  person  who  shall 
pledge  his  stoclv  may  nevertlieless  represent 
tlie  same  at  all  meetings  and  vote  accord- 
ingly. 

Identical  with  Illinois  statute.  Ch.  32,  §  24. 
Trust  funds  not  to  be  invested  in  stocks.  Const., 
art.  V,  §  36. 

§  497.  If  any  corporation,  or  its  authorized 
agent,  shall  do  any  act  which  shall  subject 
it  to  a  forfeiture  of  its  charter  or  corporate 
pov\-ers,  or  shall  allow  any  execution  or  de- 
cree of  anj'  court  of  record  for  a  paj-ment 
of  money,  after  a  demand  made  by  the 
cfficei's,  to  be  returned  "  no  property  found," 
or  to  remain  unsatisfied  for  ten  days  after 
such  demand,  or  shall  dissolve  or  cease  doing 
business,  leaving  debts  unpaid,'  suits  in 
equity  may  be  brought  against  all  persons 
who  Avere  stockholders  at  the  time,  or  liable 
in  any  way  for  the  debts  of  the  corporation, 
by  joining  the  corporation  in  such  suit,  and 
each  stockholder  may  be  required  to  pay 
such  debts  or  liabilities  to  the  extent  of  the 
unpaid  portion  of  his  stock;  and  courts  of 
equitj'  shall  have  full  power,  on  good  cause 
shown,  to  dissolve  or  close  up  the  business 
of  any  corporation,  to  appoint  a  receiver 
therefor,  who  shall  have  authority  by  the 
name  of  the  receiver  of  such  corporation 
(giving  the  name),  to  sue  in  all  courts,  and 
to  do  all  things  necessary  to  closing  up  its 
affairs  as  commanded  by  the  decree  of  the 
court. 

Personal  liability  of  stockholders.  §  486.  Of 
trustees  on  dissolution.  §  619.  Effect  of  dissolu- 
tion.    §§  509,  619,  620.    See  act  of  1891,  at  p.  27. 

[A  sovereignty  conferring  a  franchise  may  at 
any  time,  and  in  its  own  way,  inquire  into  the 
manner  in  which  the  franchise  is  used.  Road 
Co.  V.  Peo.,  5  Col.  42.  The  State,  through  its 
courts,  niav  waive  a  forfeiture  of  a  charter,  and 
it  is  generally  its  duty  to  do  so  where  infrac- 
tions are  not  willful.  Road  Co.  v.  Peo.,  5  Col. 
46.  It  is  a  general  rule  that  when  the  statute 
provides  a  remedy  to  test  the  right  to  exercise  a 
franchise,  it  is  exclusive  of  all  other  remedies.  R. 
R.  Co.  V.  Peo.,  5  Col.  60.  Charter  of  banking  cor- 
poration liable  to  forfeiture,  when.  Peo.  v.  Bank. 
7  Col.  226;  s.  c,  3  Pac.  Rep.  214.  Courts  have 
jurisidiction  to  appoint  receiver,  when.  Jones  v. 
I'.auk.  10  Col.  464;  s.  c,  17  Pac.  Rep.  272.  The 
appointment  of  a  receiver  does  not  dissolve  cor- 
poration, either  in  law  or  in  fact.  Id.  Nor  does 
mere  insolvency.  Id.  Courts  of  equity  have  no 
inherent  power  to  dissolve  a  corporation  in  the 
absence  of  statutorv  provisions.  Id.  Surrender  of 
franchises  is  not  an  official  act,  but  to  be  effectual 
must  be  the  act  of  the  stockholders  as  such.  Id. 
Assets  of  insolvent  corporation  constitute  a  trust 
fund  for  pro  rata  distribution  among  creditors, 
when.  .Tones  v.  Rank.  10  Col.  481;  s.  c,  17  Pac 
Rip.  272;  Rreeue  v.  Rank,  11  Col.  102;  s.  c,  17 
Pac.  Rop.  280.  Insolvency  alone  does  not  prevent 
mmoration  from  tiansact'ng  business.  Rreene  v. 
I'.auk,  11  Col.  99;  s.  c  ,  17  Pac.  Rep.  280.  Status 
of  insolvent  corporations  discussed.  Rreene  v. 
H'lnk.  11  Col.  97-192;  s.  c.  17  I'ac.  Rep.  280.  Un- 
der this  section  each  stockholder  is  liable  and  may 
b«.   joined   with   the   corporation   in   a   suit   for  all 


COLOEADO. 


17 


Furc-igu    corporations  —  Stat.,    §§   498-500. 


liabilities  a;,Minst  it.  Tabor  v.,  Mfs.  Co..  11  Col. 
426;  s.  c,  18  I'ac.  Itep.  iiil.  The  fiction  of  a  body 
corporate,  separate  and  distiaet  from  its  lueinbers 
is  uot  reeognized  in  equity.  Ark.,  etc..  Co.  v.  F. 
L.  &  T.  Co.,  13  Col.  598;  22  I'ac.  Rep.  958.] 


Foreign  Corporations. 

§  4118.  It  shall  and  may  be  lawful  for  any 
corporation  created  or  existing  under  the 
laws  of  this  State  for  the  purpose,  among 
others,  of  exercising  its  franchises  or  carry- 
ing ou  ])art  of  its  business  l)eyond  the  limits 
of  this  State,  and  in  another  State  or  Terri- 
tory of  the  United  States  or  elsewhere,  to 
accept  any  law  of  sucli  other  State  or  Terri- 
tory of  llie  United  States,  or  foreign  State 
and  government  and  to  exercise  within  the 
territory  of  such  other  State  or  Territory  or 
foreign  State  or  government,  all  such  au- 
thorities, powers,  privileges,  rights  and  fran- 
chises as  may  be  by  such  laws  conferred, 
subject  to  such  duties,  liabilities  and  re- 
strictions as  may  by  such  laws  be  imposed. 

FA  corporation  is  resident  only  of  the  State 
which  creates  it.  It  cannot  immisrrate  to  another 
sovereisrnty.  and  is  only  permitted  to  do  business 
in  another  State  through  comity.  Smith  v.  ripe, 
3  Col.  388;  Utley  v.  L.  SI.  Co.,  4  id.  371.] 


§  40n.  (As  amended  April  S.  189.S.")  Foreign 
corporations  shall,  before  they  are  author- 
ized or  permitted  to  do  any  business  in  this 
State,  mal^e  and  file  a  certificate,  signed  by 
the  president  and  secretary  of  such  corpora- 
tion, duly  acknowledged,  with  the  secretary 
of  State,  and  in  the  office  of  the  recorder  of 
deeds  of  the  county  in  which  such  business 
is  carried  on.  designating  the  principal  place 
where  tlie  Imsiness  of  such  corporation  shall 
be  carried  on  in  this  State,  and  an  authorized 
agent  or  agents  in  this  State  residing  at  its 
principal  place  of  btisiness  upon  whom  pro- 
cess may  be  served;  and  such  corporation 
shall  be  subjected  to  all  the  liabilities,  re- 
strictions and  duties  which  are  or  may  be 
imposed  upon  such  corporations  of  lilvc  char- 
acter organized  under  the  general  laws  ot 
this  State,  and  shall  have  no  other  or  greater 
powers.  And  no  foreign  or  domestic  cor- 
poration, established  or  maintained  in  any 
way  for  pecuniary  profit  of  its  stockholders 
or  members,  shall  purchase  or  hold  real 
estate  in  this  State  except  as  provided  for  in 
this  act,  and  no  corporation  doing  business 
iu  this  State,  incorporated  under  the  laws  of 
«ny  other  State,  shall  be  permitted  to  mort- 
gage, pledge  or  otherwise  encumber  its  real 
or  personal  property  situated  in  this  State, 
to  the  injury  or  exclusion  of  any  citizen, 
citizens  or  corporations  of  this  State,  who 
ai'e  creditors  of  such  foreign  corporation, 
and  no  mortgage  by  any  foreign  corporation, 
except  railroad  and  telegraph  companies, 
given  to  secure  any  debt  created  in  any  other 
State,  shall  take  effect  as  against  any  citizen 
or  corporation  of  this    State,  until    all    its 


liabilities  due  to  any  person  or  corporation 
in  this  State  at  the  time  of  recording  such 
mortgage,  have  been  paid  and  extinguished, 
Provided,  however.  That  if  anj-  foreign  cor- 
poration other  tlian  those  expressly  men- 
tioned herein,  intending  or  desiring  to 
mortgage  any  or  all  of  its  property  for  any 
debt  created  or  to  be  created  iu  any  other 
State,  shall  give  notice  of  such  intention  or 
desire  by  publication  for  six  (0)  successive 
weeks  prior  thereto,  in  some  dailj'  or  weekly 
newspaper  printed  within  the  county 
wherein  the  property  so  intended  or  desired 
to  be  mortgaged  is  situated,  or  if  there  be 
no  such  newspaper,  by  posting  such  notices 
in  five  (5)  public  places  within  such  county, 
rtquesting  all  citizens  and  corporations  of 
this  State,  having  any  claims  or  demands 
of  any  kind  or  nature  whatsoever  against 
the  said  foreign  corporation,  to  file  the  same 
dulj-  verified  with  the  county  clerk  of  the 
countj-  in  which  such  property  so  desired  to 
be  mortgaged  is  situated,  on  a  date  specified 
in  such  notice,  which  date  shall  be  subse- 
quent to  the  date  of  the  last  publication  of 
such  notice  or  in  case  of  failure  so  to  file 
such  claim  or  demand,  then  and  in  such  case, 
a  mortgage  given  by  such  foreign  corpora- 
tion to  secure  any  debt  created  in  any  other 
State,  shall  take  effect  as  against  any  citizen 
or  corporation  of  this  State,  who  shall  fail 
to  file  his  or  its  claim. 

See  Const.,  art.  XV,  §  10,  and  cross-references. 

[Corporation  has  no  legal  existence  beyond 
sovereignty  of  its  creation,  except  bv  courtesy. 
Cook  v.  Hager,  3  Col.  388;  Utley  v.  L."  M.  C.  Co., 
4  id.  371.  This  section  is  prohibitory,  but  such 
corporation  may  sue  or  be  sued  even  if  the  re- 
Quired  certificate  is  not  filed.  Tabor  v.  >Ianf.  Co., 
11  Col.  429;  s.  c,  18  Pac.  Rep.  537;  Utley  v.  L.  M. 
Co.,  supra.  But,  query,  whether  it  may  hold  and 
enjoy  property.  Id.  There  is  notliing  in  the  stat- 
utes requiring  corporators  and  officers,  any  more 
tlian  stockholders,-  to  be  residents  of  the  State 
granting  the  charter.  Humphreys  v.  Mooney,  5 
C()\.  292.  This  section  referred  to  in  W.  U.  T. 
Co.  A.  Conant,  11  Col.  112;  s.  c,  17  Pac.  Rep.  107. 
htatr.te  applicable  and  a  suffKient  answer  to  oon 
tract  made  before  filing  of  certiflcate.  Man.  Co. 
V.  Ferguson,  4  Fed.  Rep.  498;  s.  c.  reversed,  113 
U.  S.  727:  s.  c,  5  Sup.  Ct.  Rep.  739,  and  principles 
discussed  nt  lergrh. 

A  foreign  corporation  which  fails  to  file  the 
certiflcate  required  by  statute  may,  nevertheless, 
sue  for  goods  sold  and  delivered.  Fairbank,  etc.. 
Co.  V.  MacLeod,  8  Col.  App.  190;  s.  c,  45  Pac. 
Rep.  282.  Contracts  of  foreign  corporations,  made 
without  filing  statutory  certificates,  held  valid. 
Rockford  Ins.  Co.  v.  Rogers,  47  Pac.  Rep.  848.] 

§  aOO.  Every  company  incorporated  under 
the  laws  of  any  foreign  State  or  kingdom  or 
of  any  State  or  Territory  of  the  United 
States,  beyond  the  limits  of  this  State,  and 
now  or  hereafter  doing  business  within  this 
State  shall  file  iu  the  office  of  the  secretary 
of  State  a  copy  of  their  charter  of  incorpora- 
tion; or  in  case  such  company  is  incorporated 
by  certificate  under  any  general  incorpora- 
tion law,  a  copy  of  such  certificate  and  of 
such  general  incorporation  law  duly  certi- 
fied and  authenticated  by  the  proper  author- 


18 


COLORADO. 


Foreign  corporations;  legal  proceedings  —  Stat.,  §§  501-506. 


ity    of    such    foreign    State,    kingdom    or 
Territory. 

See  §  499,  and  Const.,  art.  XV,  §  10,  cross-refer- 
ences. 

rinsurance  companies  are  exempt  from  this  sec- 
tion. L.  of  1887,  p.  290.  A  single  purcliase  of 
macliinerv  is  not  "  doing  business  "  witliin  mean- 
ing of  tliis  section.  Iron  AVorlvS  v.  Mining  Co., 
15  Col.  4'J!);  p  c,  25  Tac.  Rep.  32.5;  Cooper  Manf. 
Co.  V.  Ferguson.  113  U.  S.  727;  s.  c,  5  Sup.  Ct. 
Rep.  739  ] 

§  501.  A  failure  to  comply  with  the  pro- 
visions of  sections  23  (§  499)  and  24  (§  500) 
of  this  act  shall  render  each  and  every 
othcer.  agent  and  stocliholder  of  any  such 
corporation,  so  failing  herein,  jointly  and  sev- 
erally personally  liable  on  any  and  all  con- 
tracts of  such  company  made  within  this 
State  during  the  time  that  such  corporation 
Is  in  default. 

[A  failure  to  so  file  is  not  ground  for  a  for- 
feiture of  tlie  cliarter.  Ins.  Co.  v.  Overholt.  4 
Dill  (Col.),  288.  Tlie  penalty  prescribed  in  this 
section  does  not  relieve  corporation  from  doing 
all  things  required  of  it  by  this  statute.  Utley 
V.  L.  M.  Co.,  4  Col.  372.] 

§  502.  The  several  certificates,  statutes  and 
charters  mentioned  in  section  twenty-four 
(24)  of  this  act,  (§  5U0),  shall  be  by  the  secre- 
tary of  State  filed  and  preserved  in  his  office 
as  a  part  of  the  record  thereof,  and  he  shall 
be  entitled  to  a  fee  of  fifty  cents  for  receiv- 
ing and  filing  every  such  certificate  and 
statute.  Copies  of  such  charters,  statutes 
and  certificates,  duly  certified  by  the  secre- 
tary of  State  under  his  seal  of  oflice,  shall 
be  received  in  all  courts  of  this  State,  as 
sufficient  evidence  of  the  corporate  character 
of  such  incorporations,  and  of  all  their  pow- 
ers, duties  and  liabilities,  and  the  originals 
thereof  may  in  like  manner  be  used  in  evi- 
dence of  these  matters  with  like  effect. 

See  Const.,  art  XV,  §  10,  and  cross-references. 

Legal  Proceedings  by  and  against  Corpo- 
rations. 

§  503.  Suits  may  be  instituted  and  prose- 
cuted by  and  against  any  corporation  formed 
Or  recognized  [organized]  under  this  act,  in 
the  same  manner  and  in  like  cases  as  natural 
persons. 

Proceedings  against  a  foreign  corporation  to  for- 
feit lands.  §  101.  Service  of  process  on  corpora- 
tions. §  506;  Acts  of  1891,  at  pp.  28,  29.  Publica- 
tion of.  Act  of  1895,  at  p.  29.  Corporation  may 
Bue  Its  members.  §  621.  And  is  subject  to  garnish- 
ment. §  2707.  Pending  suits  not  affected  by 
reorganization.  §  630.  Vt-nue  of  actions  against 
corporations.  §  506.  Corporation  may  sue  and  be 
sued.    §  476.    Receivers  may  sue.    §  497. 

[A  defendant  sued  as  a  corporation  cannot  leny 
its  existence,  either  in  abatement  or  In  bar.  irooll 
V.   Martin,   1  Col.   169;   D.   &  S.    Ry.   Co.   v.   D.   C. 


Ry.  Co.,  2  id.  679;  Tel.  Co.  v.  Eyser,  id.  141.  And 
plea  of  nul  tiel  corporation  is  a  plea  in'  bar.  Tel. 
Co.  V.  Evser,  2  Col.  158.  Corporation  is  liable 
for  its  torts.  Tel.  Co.  v.  Eyser,  2  Col.  141:  R.  R. 
Co.  V.  Ogden,  3  id.  503.  Contributory  negligence 
no  defense,  when.  Tel.  Co.  v.  Kysor,  supra.  Cor- 
poration may  be  sued  for  specilic  performance  of 
contract.  Frue  v.  Houghton,  6  Col.  324.  And  for 
money  had  and  received.  Manvill  v.  Mining  Co., 
17  Fed.  Rep.  425.  I'ltra  vires  no  defense,  when. 
Ins.  Co.  V.  McClelland,  9  Col.  21;  s.  c.  9  Pac.  Rep. 
771.  Corporation  cannot  maintain  suit  for  equi- 
table relief,  except  as  the  representative  of  the 
stockholders.  Ark.,  etc..  Co.  v.  F.  L.  &  T.  Co.,  13 
Col.  598;  22  Pac.  Rep.  958.  Suit  is  brought  with- 
out authority  when  not  ordei-ei  by  majoiUy  of 
trustees.  Id.  Hooks  and  records  of  corporation 
as  evidence.  Mining  (^o.  v.  Bank,  2  Col.  n75; 
Byers  v.  Hussey,  4  id.  521. 

Corporation  created  by  a  territorial  legislature 
cannot  sue  as  a  federal  corporation  in  the  United 
States  courts.  Express  Co.  v.  Ry.  Co.,  4  Mc- 
Crary,  79;  s.  c,  16  Fed.  Rep.  712.  And  the  mere 
fact  that  a  suit  is  by  or  against  a  federal  corpo- 
ration is  not,  of  itself,  sufficient  to  confer  juris- 
diction upon  a  federal  court.  Id.  Suit  by  stock- 
holders against  corporation;  prerequisites.  Foote 
v.  Mining  Co.,  17  Fed.  Rep.  46;  s.  c,  5  McCrary, 
251;  Hawes  v.  Oakland,  104  U.  S.  450.  A  corpora- 
tion sued  by  a  national  bank  for  money  loaned  it, 
cannot  set  up  as  a  bar  that  they  exceeded  in 
amount  one-tenth  of  its  capital  stock  actually  paid 
in.  (See  R.  S.  of  U.  S.,  §  5200.)  Mining  Co.  v. 
IJank,  96  U.  S.  640.  A  single  transaction  may  sub- 
ject foreign  corporation  to  jurisdiction  of  State 
courts.  Iron  Works  v  Mining  Co.,  15  Col.  499; 
s.  c,  25  Pac.   Rep.   325. 

In  an  action  by  a  stockholder  against  an  ofii(!er 
to  redress  an  injury  against  the  corporation,  the 
pleadings  must  show  a  demand  on  the  corporate 
authorities  to  sue.  or  an  excuse  therefor.  Beshoar 
V.  Chappell,  40  Pac.  Rep.  244.] 

§  504.  The  certified  copy  of  any  articles  of 
ir.corporation  and  changes  thereof  together 
with  all  indorsements  therein  (thereon)  under 
the  great  seal  of  the  State  of  Colorado,  shall 
be  taken  and  received  in  all  courts  and 
places  as  prima  facie  evidence  of  the  facts 
therein  stated. 

See  §§  475,  502. 

§  505.  Nothing  in  this  act  contained  shall 
be  construed  to  allow  the  construction  of 
any  street  or  other  railroad,  or  other  struc- 
ture or  sub-structure,  for  any  purpose  on, 
below  or  elevated  above  the  surface  of  the 
ground  of  any  street  or  alley  within  the 
limits  of  any  such  city  or  town,  by  any  cor- 
poration, pei'son  or  persons  whomsoever, 
without  the  consent  of  the  local  authorities 
of  such  city  or  town;  but  no  such  consent, 
however  enacted  or  expressed,  on  any  cou- 
sidera^  on  whatever,  shall  opeiate  to  reliev* 
or  protect  any  person,  persons,  or  corpora- 
tion or  corporatious  'constructing  any  sueb 
street  or  other  railroad,  or  structure  or  sub- 
structure, as  aforesaid,  against  any  claim 
for  damages  to  private  property,  which 
otherwise,  without  such  consent,  might  be 
lawfully  maintained  ag;iinst  sur-h  person  or 
I)ersons,  corporation  or  corporations. 

See  Const.,  art.  II,  §  15. 

§  50(J.  In  suits  again-t  any  corporation 
summons   shall   be    served    in    that   county 


COLORADO. 


19 


Statement  by  officers;  record  of  stockholders  —  Stat.,  §§  507,  .j(J8. 


where  the  principal  office  of  the  corporation 
is  kept  or  its  principal  business  carried  on, 
bj-  delivering  a  copy  to  the  president  thereof, 
if  he  may  be  found  in  said  county,  but  if  he 
is  absent  therefrom,  then  the  summons  shall 
be  served  in  like  manner  in  such  couutj-,  on 
either  the  vice-president,  secretary,  treasurer, 
cashier,  general  agent,  general  superintend- 
ent, or  stockholder  of  said  cori)oration, 
within  such  time  and  under  such  rules  as 
are  now  provided  by  law  for  the  service  of 
such  process  in  suits  against  real  persons, 
and  if  no  such  person  can  be  found  in  the 
county  where  the  principal  office  of  the  cor- 
poration is  kept,  or  in  the  county  where  its 
principal  business  is  carried  on,  to  serve  such 
process  upon,  a  stimmons  may  issue  from 
either  one  of  such  counties,  directed  to  the 
sheriff  of  any  county  in  this  State  where  any 
such  person  may  be  found,  and  served  with 
process.  If  such  corporation  keeps  no  prin- 
cipal office  in  any  county,  and  there  is  no 
county  in  which  the  principal  business  of 
such  corporation  is  carried  on,  then  suits 
may  be  brought  against  it  in  any  county 
where  the  above-mentioned  officers'  or  any, 
or  either  of  them,  may  be  found.  Provided,' 
That  the  plaintiff  may,  in  all  cases,  bring  his 
action  in  the  county  where  the  cause  of 
action  accrued. 

See  acts  of  1.S91,  at  pp.  28.  29.  See  §  50.3.  and 
cross-references. 

[Venue  of  action  to  recover  for  baggage  lost. 
In  the  county  to  which  it  was  checked.  R.  R.  Co. 
V.  Roberts.  6  Col.  .3.34.  This  section  construed. 
(onstructiDn  Co.  v.  Stout,  8  Col.  62;  s.  c,  5  Pac. 
Rep.  R27;  Tel.  Co.  v.  Conant,  11  Col.  113:  s.  c,  17 
Pac.  Hep.  107;  see.  also.  Ganebin  t.  Phelan,  5  Col. 
84;  Mining  Co.  v.  Lightbourne.  10  id.  430;  s.  c,  15 
Pac.  Rep.  78."j;  Tabor  v.  Manf.  Co.,  11  Col.  426: 
s  c,  18  Pac.  Rep.  537.  Confession  of  jndgniert 
by  corporation.  White  v.  Crow.  17  Fed.  Rep.  98; 
s.  c,  5  McCrar.v.  315.  Service  upon  rice-president 
is  suflicient,  even  though  return  does  not  show 
that  president  could  not  be  found  in  the  county. 
Mln'ng  Co.  v.  Frost.  15  Col.  310;  s.  c,  25  Pac.  Rep. 
506.  h'ervice  of  process  upon  stockholder  of  for- 
eign corporation.  See  Iron  Works  v.  Mining  Co., 
V>  Col.  499;  s.  c,  25  Pac.   Rep.  325.] 

§  507.  Whenever  any  person  or  persons 
owning  fifteen  (15)  per  cent,  of  the  capital 
stock  of  any  corporation  formed  under  this 
act,  shall  present  a  written  request  to  the 
secretary,  cashier  or  treasurer  thereof,  that 
they  desire  a  statement  of  the  affairs  of  such 
corporation,  it  shall  be  the  duty  of  such  sec- 
retary, cashier  or  treasurer,  to  make  a  state- 
ment of  the  affairs  of  said  company,  under 
oath,  embracing  a  particular  account  of  all 
its  assets  and  liabilities  in  detail,  and  to 
deliver  such  statement  to  the  persons  who 
presented  the  said  written  request  to  said 
secretary  or  treasurer,  within  twenty  days 
after  such  presentation:  and  shall  also,  at 
the  same  time,  place  and  keep  on  file  in  the 
office  of  the  company,  for  six  months  there- 
after, a  copy  of  such  statement,  which  shall 
at  all  times,  during  business  hours,  be  ex- 
hibited to  any  stockholder  of  said  corpora- 
10 


lion  demanding  an  examination  thereof;  such 
othcer,  however,  shall  not  be  required  to 
make  such  statement,  in  the  manner  afore- 
said, oftener  than  once  in  six  months. 

§  508.  (As  amended  April  14,  1893.)     It  shall 
be  the  duty  of  the  directors  or  trustees  of 
every  such    corporation,  except   railroad    or 
telegraph  corporations,  to  cause  a  book  to 
be  kept  by  the  secretary  or  clerk  thereof, 
containing  the  names  of  all  persons  alpha- 
betically arranged,  who  are,  or  shall  within 
one  year  have  been  stockholders  of  such  cor- 
poration,  and  showing  their  place  of  resi- 
'  dence,  the  number  of  shares  of  stock  held  by 
them  respectively,  and  the  time  when  they 
respectively    became    the    owners    of    such 
shares,  and  the  time  when  they  ceased  to  be 
such  stockholders,  and  the  amount  of  stock 
actually  paid  in,   and  what  proportion  has 
been  paid  in  cash;  which  book  shall,  during 
the  usual  business  hours  of  the  dav,  be  open 
for  the  inspection  of  the  stockho'lders  and 
creditors  of  the  company,  and  their  personal 
representatives,    at    the    office    or    principal 
place  of  business  of  such  company,  in  the 
county  where   its  business  operations  shall 
be  located;  and  any  and  every  such  stock- 
holder, creditor  or  representative,  shall  have 
a  right  to  make  extracts  from  such  books, 
and  no  transfer  of  stock  shall  be  valid  for 
any  purpose  whatever  except  to  render  the 
person  to  whom  it  shall  be  transferred,  lia- 
ble for  the  debts  of  the  company,  according 
to  the  provisions  of  this  act,  unless  it  shall 
have  been  entered  therein,   as  required  by 
this  section,  within  sixty  days  from  the  date 
of  such  transfer,    by   an    entry   showing  to 
and  from  whom  transferred;  or,  in  case  of 
the  pledge  of  any  such  stock,  a  memorandum 
be  made  upon  the  books  of  the  said  com- 
pany,    showing    to    whom    and    for    what 
amount  the  stock  has  been  pledged.    Such 
books  shall  be  presumptive  evidence  of  the 
facts  therein  stated  in  any  suit  or  proceed- 
ings against  such  corporation,  or  against  any 
one  or  more  stockholders.     Every  officer  or 
agent  of  any  such  company,  who'  shall  neg- 
lect to  make  any  proper  entry  in  such  book, 
or  shall  refuse  or  neglect  to  exhibit  the  same, 
or  allow  the  same  to  be  inspected,  and  ex- 
tracts taken  therefrom,  shall  be,  as  provided 
by  this  section,  deemed  guilty  of  a  misde- 
meanor, and  the  corporation  shall  forfeit  and 
pay  to  the  party  injured  a  penalty  of  fifty 
('jO)  dollars,  for  every  such  neglect  or  refusal, 
and  all  the  damages  resulting  therefrom. 

See  §  488. 

[Any  transfer  of  stof^k  by  a  corporation  upon 
Its  books,  in  the  absence  of  the  original  oertifl- 
cate,  is  made  at  its  peril.  Ditch  Co.  v.  Elliott, 
10  (ol.  327;  s.  c.  15  Pac.  Rep.  691.  Certificates 
of  stock  are  negotiable  and  pass  bv  indorsement, 
and  subject  to  same  rules  as  negotiable  instru- 
ments. Id.  This  section  takes  from  the  owner 
of  the  stock  the  right  to  transfer  it  in  accordance 
with  the  rales  of  common  law.  Conway  v.  St. 
.John,  14  Col.  .30;  23  Pac.  Rep.  170.  Under  the 
laws  of  this  State,  title  to  stock  in  a  corporation, 
as  against  creditors,  can  only  pass  bv  transfer  on 
books  of  company.     Id.     In  a  suit  to  compel  offl- 


20 


COLORADO. 


Effect  of  dissolution;  general  provisions  —  Stat..  §§  509,  G16-620. 


ocrs  of  a  corporation  to  register  a  transfer  of  cor- 
porate stock,  the  corporation  is  not  a  necessary 
partv.  Gould  v.  Heart,  41  Fort.  Rop.  240.  There 
must  be  at  least  a  substantial  compliance  with 
the  provisions  of  this  section,  in  order  to  protect 
the  propertv  ajrainst  future  assignments  or  levies. 
Weber  v.  Bullock.  19  Col.  214;  s.  c,  3.5  Pac.  Rep. 
1R,S.  Notwithstanding  a  compliance  with  this  sec- 
tion is  essential  to  transfer  of  legal  title  to  stock, 
court  of  equity  will  protect  equitable  title  of  au 
assignment.     Id. 

Under  above  section,  a  transfer  of  stock  unre- 
corded after  sixty  days  Is  not  good  against  the 
attaching  creditors  of  the  assignor.  Bank  v. 
Hastings,  42  Tac.   Rep.  691.] 

§  509.  The  dissolution  for  any  cause  what- 
ever of  corporations  created  as  aforesaid, 
shall  not  take  away  or  impair  any  remedy 
given  against  such  corporations,  its  stock- 
holders, or  officers,  for  any  liabilities  in- 
curred previous  to  its  dissolution. 

See  §§  497.  619,  620,  and  Act  of  1S91,  at  p.  27. 

General  Provisions. 

§  G16.  If  any  corporation  formed  under 
this  act  for  the  purposes  of  constructing  a 
road,  ditch,  bridge,  ferry,  tunnel,  telegraph 
ov  railroad  company,  shall  be  unable  to 
agree  with  the  owner  for  the  purchase  of 
any  real  estate  required  for  the  purposes  of 
any  such  corporation  or  company,  or  the 
transaction  of  the  business  of  the  same, 
or  for  right  of  way,  or  any  other  lawful 
purpose,  connected  with,  or  necessary  to  the 
operations  of  such  company,  such  corpox'a- 
tions  may  acquire  such  title  in  the  manner 
provided  by  law. 

See  Const.,  art.  II,  §  15,  note,  and  cross-refer- 
ences; art.  XV,  §  4. 

[Until  the  way  Is  located,  no  right  of  way  can 
be  said  to  attach  to  any  particular  land.  Riddall 
V.  Road  Co.,  5  Col.  230.  As  to  right  of  way 
through  canon  or  pass  too  narrow  to  permit 
passage  of  two  roads,  see  D.  &  R.  G.  Rv.  Co. 
V.  C.  C.  &  S.  J.  Ry.  Co.,  17  Fed.  Rep.  867;  Rv. 
Co.  V.  Ailing,  99  U.  S.  463.] 

§  G17.  Any  corporation  formed  under  the 
provisions  of  this  act,  for  the  purpose  of 
constructing  a  road,  ditch,  tunnel  or  railroad, 
may  cause  such  examination  and  survey  as 
may  be  necessai*y  to  the  selection  of  the 
most  advantageous  route,  and  for  such  pur- 
pose, by  its  officers,  agents  or  servants,  m.iy 
enter  upon  the  lands  or  any  person  or  cor- 
poration, but  subject  to  liability  for  all 
actual  damages  which  shall  be  occasioned 
thereby. 

See  Const.,  art.  II,  §  15,  note,  and  cross-refer- 
ences. 


§  018.  No  corporation  shall  issue  stock  or 
bonds  except  for  labor  done,  services  per- 
formed, or  money  or  property  actually  re- 
ceived, and  all  fictitious  increase  of  stock  or 
indebtedness  shall  be  void. 

See  Const.,  art.  XV,  §  9;  Statutes,  §  490. 


[Issue  of  stock  in  violation  of  this  section  I3 
unconstitutional  and  ipso  facto  invalid.  .\rk.. 
etc.,  Co.  v.  F.  L.  A:  T.  Co.,  13  Col.  601;  s.  c.  22 
I'ac.  Rop.  954.  Shares  may  be  issued  in  payment 
for  services  rendered  in  carrying  on  the  corporate 
business.  Arapahoe,  etc..  Co.  v.  Stevens,  13  Col. 
541;  s.   c,  22  Pac.   Rep.  823.] 


§  GU).  Upon  dissolution  by  expiration  of  its 
charter  or  otherwise  of  any  corporation 
now  existing  or  which  may  hereafter  be 
formed,  unless  some  other  person  or  persons 
be  appointed  by  some  court  of  competent 
.iurisdiction,  the  board  of  directors  or  trus- 
tees of  such  corporation  or  the  managers  of 
the  corporate  affairs,  by  whatever  name 
known,  acting  last  before  the  time  of  their 
dissolution,  and  the  survivors  of  them,  shall 
1)6  the  trustees  of  the  creditors  and  stock- 
holders of  the  corporation  dissolved,  and 
shall  have  full  power  to  settle  the  affairs  of 
the  same:  to  sue  for  and  collect  the  debts 
and  moneys  due  to  the  corporation,  or  to 
compound  and  settle  any  claims  thereof,  as 
they  may  deem  best;  to  have,  hold,  reserve, 
sell  and  dispose  of  property  real  and  per- 
sonal, of  any  such  corporation  dissolved;  to 
ad.iust  and  pay  all  the  debts  of  the  corpora- 
tion dissolved;  to  divide  the  residue  of  the 
moneys  and  property  belonging  to  the  cor- 
I'/oration  dissolved,  after  payment  of  debts 
and  the  necessary  and  reasonable  expenses, 
among  the  stockholders  holding  stock  in 
.'juch  corporation,  in  proportion  to  the  amount 
paid  upon  stock  of  each  stockholder.  All 
such  trustees  shall  be  jointly  and  severally 
liable  to  the  creditors  and  stockholder(s)  of 
such  corporation  dissolved,  to  the  extent  of 
the  property  and  effects  which  shall  come 
into  their  hands  or  possession  of  any  of  them, 
for  a  proper  and  faithful  discharge  of  the 
duties  of  said  trust  and  disposal  of  said 
property  and  effects. 

See  §§  497,  509. 

[Upon  dissohition  of  corporation  the  right  of  way 
for  a  ditch  would  not  revert  to  the  servient  es- 
tate, but  would  pass  as  other  propertv  under  this 
section.  Bailey  v.  Milling  Co.,  12  Col.  230;  s.  c, 
21  Pac.  Rep.  35.] 

§  G20.  The  title  to  all  real  and  personal 
estate  belonging  to  any  such  corporation 
sliall,  immediately  upon  the  dissolution 
tliereof,  unless  by  a  decree  of  court  of  com- 
petent jurisdiction,  declaring  such  dissolu- 
tion, it  is  otherwise  ordered,  pass  to,  and 
re.st  (vest)  in  such  trustees,  directors  or  man- 
agers, and  an  action  at  law  may  be  main- 
tained by  such  trustees,  or  directors,  or  the 
survivors  of  them,  in  their  own  names  by 
the  style  of  the  trustees  of  such  corporation 
dissolved  naming  it,  for  the  recovery  of  all 
such  property,  or  of  any  damage  done  to 
the  same,  or  for  the  recovery  of  any  debts 
due  such   corporation  dissolved. 

See  §§  497,  509. 


COLORADO. 


21 


Genernl  provisions  —  Stat.,  §§  G21-628. 


§  021.  All  bodies  corporate,  by  the  appro- 
priate action,  may  sue  for,  recover  aud  re- 
ceive from  their  respective  members  all 
arrears  or  other  debts,  dues  and  other  de- 
mands which  are  now  or  hereafter  may  be 
owing  to  them  in  like  mode,  manner  and 
form,  as  they  might  sue  for,  recover  and  re- 
ceive the  same  from  any  person  who  might 
not  be  one  of  their  body,  any  law,  usage  or 
custom  to  the  contrary  thereof  notwith- 
standing. 

See  §§  4S0,  503,  and  cross-references. 

§  622.  It  shall  be  lawful  for  any  corpora- 
tion to  convey  land  by  deed,  sealed  with  the 
common  seal  of  said  corporation,  and  signed 
by  the  president  or  the  presiding  member  of 
said  corporation;  and  such  deed  when  ac- 
knowledged by  such  officer  to  be  the  act  of 
the  corporation  i^rescribed  for  other  convey- 
ances for  lands,  shall  be  recorded  in  the 
recorder's  office  of  the  county  where  the  land 
lies,  in  like  manner  with  other  deeds. 

See  §§  427,  453,  476,  623. 

§  G2.3.  Corporations,  domestic  and  foreign, 
may,  by  written  powers  executed  in  the  man- 
ner provided  for  the  conveyance  of  real 
estate  by  corporations,  appoint  agents  or 
attorneys  in  fact  to  convey  their  real  estate, 
and  all  conveyances  executed  by  such  agents 
or  attorneys  in  fact  in  the  name  of  the  cor- 
poration, shall  pass  the  legal  title  of  such 
corporation  to  the  real  estate  thereby  con- 
veyed, as  effectually  as  if  such  conveyances 
had  been  executed  by  the  corporation  in  the 
manner  provided  by  law  for  the  conveyance 
of  real  estate  by  corporations;  and  it  shall 
not  be  necessary  to  affix  the  seal  of  the  cor- 
poration to  any  conveyance  so  executed  by 
such  agent  or  attorney  in  fact. 

As  to  holding  and  conveying  real  estate,  see 
J§  476,  622,  101-103. 


§  624.  No  corporation,  association  or  so- 
ciety, for  any  purpose  authorized  by  this  act, 
shall  be  formed  tinder  any  other  act. 

§  625.  Whenever  the  board  of  directors, 
managers  or  trustees  of  any  coiTJoration  ex- 
isting by  virtue  of  any  general  law  of  the 
Tenntory  of  Colorado,  or  the  laws  of  this 
State,  or  any  corporation  hereafter  organ- 
ized by  virtue  of  any  law  of  this  State,  may 
desire  to  change  the  name,  to  change  the 
place  of  business,  to  increase  or  decrease 
the  capital  stock,  to  increase  or  decrease  the 
number  of  directors,  managers  or  trustees, 
or  to  consolidate  said  corporation  with  any 
other  corporation  or  corporations  now  exist- 
ing, or  which  may  hereafter  be  organized, 
they  may  call  a  special  meeting  of  the  stock- 
holders of  such  corporation,  for  the  pui-pose 
of  submitting  to  a  vote  of  the  stockholders 
the  question  of  such  change  of  name,  change 
of  place    of   business,    increase  or  decrease 


of  number  of  directors,  managers  or  trus- 
tees, increase  or  decrease  of  capital  stock, 
or  consolidation  with  some  other  coii;)oration, 
as  the  case  may  be;  Provided,  That  in 
changing  the  name  of  any  corporation,  under 
the  provisions  hereof,  no  name  shall  be  as- 
sumed or  adopted  bj-  any  corporation  similar 
to,  or  liable  to  be  mistaken  for,  the  name  of 
any  other  corporation,  organized  under  the 
laws  of  this  State,  or  of  the  laws  of  the 
Territory  of  Colorado,  and  that  in  no  case 
shall  the  capital  stock  be  diminished  to  the 
prejudice  of  the  creditors  of  such  corpora- 
tion, or  the  number  of  directors,  managers 
or  trustees  be  reduced  to  less  than  three  (ex- 
cept in  the  cases  of  incorporation  for  the 
purpose  of  construction  of  railroad,  to  not 
less  than  five)  or  increase  to  more  than 
thirteen;  And  Provided  further.  That  the 
provisions  of  this  act,  in  reference  to  the 
consolidation  of  corporations,  shall  only  ap- 
ply to  corporations  of  the  same  kind,  en- 
gaged in  the  same  general  business,  and 
can-ying  on  their  business  in  the  same 
vicinity. 

See  §  599,  and  Act  of  1891,  at  pp.  27,  28. 

[Section  referred  to  in  Col.,  etc.,  Co.  v.  Rv.  Co., 
41  Fed.  Rep.  304.] 

§  626.  Such  special  meeting  shall  be  called 
by  delivering  personally,  or  depositing  in  the 
post-office,  at  least  thirty  days  before  the 
time  fixed  for  such  meeting,  a  notice  prop- 
erly addressed  to  each  stockholder,  signed 
by  the  president  or  secretary,  stating  the 
time  and  object  of  such  meeting. 

See  Act  of  1891,  at  pp.  27,  28. 

§  627.  At  any  such  meeting,  stockholders 
may  vote  in  person  or  by  proxy,  each  stock- 
holder being  entitled  to  one  vote  for  each 
share  of  stock  held  by  him;  and  votes 
representing  two-thirds  ot'  all  the  stock  of 
the  corporation  shall  be  necessary  for  the 
adoption  of  the  proposed  change  of  name  or 
place  of  business,  number  of  directors  or 
trustees,  amount  of  capital  stock,  or  con- 
solidation with  some  other  company  or 
companies. 

§  628.  Any  corporation,  existing  for  any  of 
the  purposes  enumerated  in  this  act,  may 
consolidate  by  uniting  the  properties  and 
concerns  of  two  or  more  corporations  in  one 
organization,  having  all  the  rights  and  priv- 
ileges of  this  act,  and  amenable  to  all  its 
liabilities,  by  complying  with  all  the  require- 
ments herein  provided,  to  wit:  Each  cor- 
poration desiring  to  consolidate,  each  with 
the  other,  may,  by  its  trustees  or  directors,  or 
by  the  stockholders  representing  a  majority 
of  the  stock,  call  a  meeting  of  the  stock- 
holders, as  provided  in  section  ninety-five  of 
this  act  (§  583).  and  vote  upon  the  proposition 
of  consolidation  that  shall  be  presented  in 
writing,  at  such  meeting,  when,  if  by  a  vote 
of  at  least  three-fourths  (%)  of  the  stock  of 


22 


COLORADO. 


General  provisions — Stat.,  §§    t)29-634. 


oath  company  severally,  the  proposition 
shall  be  approved,  the  trustees  or  directors 
shall  thereupon  elect  their  proportion  of  the 
directors,  less  one,  that  are  to  manage  the 
affairs  of  the  consolidated  company,  and 
upon  the  joint  meeting  of  the  directors  so 
elected,  the  said  directors  shall  elect  one  of 
the  stockholders  to  be  a  director  and  act 
with  them,  and  they  jointly  shall  constitute 
a  board  of  directors,  who  shall  organize  by 
electing  their  otticers  in  accordance  with  law. 
They  shall  prepare  a  certificate  of  incorpora- 
tion setting  forth  the  facts  of  the  consolida- 
tion, togetlior  Avith  all  other  matters  re- 
quired in  original  certificates  of  incorpora- 
tion, naming  therein  the  directors  elected  as 
herein  provided,  who  shall  serve  for  one 
year,  and  until  their  successors  are  elected; 
and  the  said  certificate  of  incorporation  sliall 
be  signed  and  acknowledged  by  at  least 
three  of  the  stockholders  of  each  of  the  con- 
solidating companies.  The  certificate  so 
signed  and  acknowledged  shall  be  filed  for 
record  in  the  ofiice  of  the  secretary  of  State, 
and  in  each  of  the  ofl^ces  of  the  countv  re- 
corders where  the  certificate  of  either  of  the 
companies  so  consolidated  are  on  file.  The 
trustees  or  directors  of  the  consolidating 
companies  shall,  each  by  proper  conveyance, 
convey  to  the  consolidated  companV  the 
property  and  effects  of  such  companies,  and 
shall  deposit  with  the  directors  of  the  con- 
solidated company  all  the  transfer  books, 
sfals,  books  and  papers  of  each  of  the  com- 
panies so  uniting.  The  directors  of  the  con- 
solidated corporation  shall  call  in  all  the 
stock  of  each  of  the  companies  forming  a 
part  of  the  consolidation,  cancel  the  same 
and  issue  in  lieu  thereof  the  stock  of  the 
new  organization  in  proportion  of  value  of 
the  old  to  the  new.  as  provided  in  the  plan 
of  consolidation:  Provided,  No  stock  shall 
be  issued  in  lieu  of  old  stock  except  upon 
the  presentation  of  the  old  stock  or  due 
proof  of  the  loss  or  destruction  of  the  old 
certificates  of  stock,  and  then  onlv  to  the 
parties  entitled  thereto.  When  the  com- 
panies have  consolidated  as  herein  provided 
V  „  xT^'  "^  ^^^^  companies  so  consolidated 
shall  thereafter  represent  only  its  interest  In 
the  new  organization,  whether  surrendered 
and  exchanged  or  not.  and  shall  be  subject 
toall  the  liabilities  of  assessment  and  for- 
feiture that  may  pertain  to  the  stock  of  the 
consolidated  company,  and  the  consolidated 
company  shall  be  responsible  for  and  shall 
assume  and  pay  all  the  just  liabilities  of 
each  of  the  companies  so  consolidated-  anv 
any  corporation  desiring  to  change  its  name 
place  of  business,  number  of  directors  or 
trustees,  or  amount  of  capital  stock  «!hall 
submit  the  question  at  an  annual  meeting 
or  a  special  meeting  called  for  that  pui-pose' 
in  accordance  with  the  provisions  of  section 
ninety-five  (§  583)  if,  at  anv  such  meeting 
three-fourths  of  all  the  stock  of  such  cor- 
poration shall  vote  in  favor  of  the  proposed 
change,  or  changes,  a  certificate  setting  forth 


the  fact,  or  facts,  verified  by  the  affidavit  of 
the  president  of  said  corporation,  and  hav- 
ing the  seal  of  the  corporation  affixed,  shall 
be  filed  for  record  with  the  secretary  of  State 
and  the  recorder  of  the  county  where  the 
principal  business  office  of  .said  corporation 
is  located. 

§  6'29.  Such  corporation  shall,  upon  the  fil- 
ing of  said  certificates,  cause  to  be  published 
in  some  newspaper,  in  or  nearest  the  county 
in  which  their  principal  ofiice  is  located,  a 
notice  of  such  changes  of  organization,  for 
three  successive  weeks. 

§  630.  Such  change  of  name,  place  of  busi- 
ness, increase  or  decrease  of  capital  stock, 
increase  or  decrease  of  number  of  directors, 
managers  or  trustees,  or  consolidation  of  one 
corporation  with  another  or  with  others, 
shall  not  affect  suits  pending  in  which  such 
corporation  or  corporations  shall  be  parties; 
nor  shall  such  change  affect  causes  of  action, 
nor  the  rights  of  persons  in  any  particular; 
nor  shall  suits  brought  against  such  corpora- 
tion by  its  former  name  be  abated. 

[Section  referred  to  in  Col.,  etc.,  Co.  v.  Ry.  Co., 
41  Fed.  Rep.  304.] 

§  633.  Any  corporation,  company  or  body 
politic  heretofore  formed  or  organized  and 
existing  under  any  special  act  of  the  legis- 
lative assembly  of  the  Territory  of  Colorado, 
or  under  any  of  the  general  laws  thereof, 
may  come  under  and  avail  themselves  of 
the  privileges  and  provisions  of  this  act, 
whenever  any  sucli  company,  corporation,  or 
body  politic  shall  file  in  the  office  of  the  sec- 
retary of  State,  and  in  the  office  of  the  re- 
corder of  deeds  in  the  county  or  counties 
where  such  company,  corporation  or  body 
politic  is  doing  business,  a  certificate  in  writ- 
ing, signed  by  the  president  and  attested  by 
tlie  secretary  of  such  company,  corporation,  or 
body  politic,  accepting  the  provisions  of  this 
act,  and  the  questions  of  acceptance  shall 
be  adopted  by  a  vote  of  two-thirds  of  all  the 
stockholders  of  said  company,  corporation, 
or  body  politic,  expressed  at  a  regular  meet- 
ing of  such  company,  corporation,  or  body 
politic,  or  at  a  meeting  held  for  that  purpose, 
Avhich  certificate  shall  express  such  vote. 

See  Const.,  art.  XV,  §  1. 

§  634.  The  general  assembly  may,  at  any 
time,  alter,  amend,  or  repeal  this  act,  and 
shall  at  all  times  have  power  to  prescribe 
such  regulations  and  provisions  as  it  may 
deem  advisable,  which  i-egulations  and  pro- 
visions shall  be  binding  on  any  and  all  cor- 
porations formed  under  the  provisions  of  this 
act.  And  provided,  further,  That  this  act 
shall  not  be  held  to  revive  or  extend  any 
private  charter  or  law,  heretofore  granted  or 
passed  concerning  any  corporation. 

See  Const.,  art.  XV,  §  3;  art.  II,  §  11. 

[A  leRislatnrp  cannot  bind  sucoopdin?  legisla- 
tures to  a  particular  mode  of  repeal.  Gregory  v. 
Bank,  3  Col.  336.] 


COLOKADO. 


23 


Geinial  provisions;  criminal  code  — Stat.,  §§  635,  1295,  1360,  1389,  1390. 


§  t>J."(.  The  provisions  of  this  act  shall  not 
in  any  manner  impair  the  rights  or  lessen 
the  liabilities  of  conioratious  novs'  in  exist- 
ence and  heretofore  created  under  the  laws 
of  the  Territory  of  Colorado;  but  such  coi'- 
porations  are  hereby  recognized,  and  their 
incoi'poration  confirmed;  but  nothing  in  this 
section  shall  be  so  construed  as  to  relieve 
such  coniorations  from  hereafter  complying 
with  the  provisions  of  this  act,  in  all  matters 
i-elating  to  the  conduct,  control  and  manage- 
ment of  any  such  corporation,  or  any  of  the 
affaii's  of  such  corporation. 

[This  section  preserros  all  rights  that  accrued 
under  former  laws,  and  was  not  intended  to  in- 
terfere with  actions  pending  for  enforcement  of 
rights  alleged  to  have  accrued  under  former  acts. 
Smith  v.  Londoner,  5  Col.  371.] 

CHAPTER  XXXVI. 
Criminal  Code. 

DIVISION    VIII.      OFFEXSES     AGAIXST 
PUBLIC    JUSTICE. 

5.   CONSPIRACY. 

Sec.  1295.  Not  unlawful  to  combine  to  secure  em- 
ployment, compensation,  etc.  rro- 
viso. 

DIVISIOX     X.      OFFEXSES     AGAINST 
PUBLIC    MORALITY. 

7.  OTHER  OFFEXSES. 
Sec.  1360.   Corporations  not  to  emit  bills  of  credit. 

DIVISIOX   XII.      OFFEXSES   BY  CHEATS 
AXD    SAVIXDLERS. 

Sec.  1389.   Officer    of    corporation    signing    fraudu- 
lent certificate  or  transfer. 
1390.   Corporation      officer      issuing,      selling, 
transferring  stock  fraudulently. 

§  1295.  It  shall  not  be  unlawful  for  any  two 
or  more  persons  to  unite,  or  combine,  or 
agree  in  any  manner,  to  advise  or  encourage, 
by  peaceable  means,  any  person  or  persons 
to  enter  into  any  combination  in  relation  to 
entering  into  or  remaining  in  the  employ- 
ment of  person,  persons  or  coi'poration,  or 
in  relation  to  the  amount  of  wages  or  com- 
pensation to  be  paid  for  labor,  or  for  the 
purpose  of  regulating  the  hours  of  labor,  or 
for  the  procuring  of  fair  and  just  treatment 
from  employes,  or  for  the  purpose  of  aiding 
and  protecting  their  welfare  and  interests 
in  any  other  manner  not  in  violation  of  the 
Constitution  of  this  State  or  the  laws  made 
in  pursuance  thereof;  Provided,  That  this 
act  shall  not  be  so  construed  as  to  permit 
two  or  more  persons,  by  threats  of  either 
bodily  or  financial  injury,  or  by  any  display 
of  force,  to  prevent  or  intimidate  any  other 
person  from  continuing  in  such  employment 
as  he  may  see  fit,  or  to  boycott  or  intimidate 
any  employer  of  labor. 

"  Blacklisting."  §§  239,  240. 


§  13G0.  If  any  person,  number  of  persons  or 

corporation    in    this    State,  without  special 

!  leave   from   the   legislative   assembly,    shall 

'  emit  or  utter  any  bill  of  credit,  make,  sign, 

draw  or  indorse  any  bond,  promissory  note, 

or  writing,  bill  of  exchange  or  order,  to  be 

used  as  a  general  circulating  medium,  and 

in   lieu  of  money  or   other  currency,   every 

j  such  person  or  persons,  or  members'  of  such 

I  coriioration   assenting   to   such   proceedings, 

;  being  thereof  duly  convicted,  shall  pay  a  fine 

not  exceeding  five    hundred    dollars,'  or    be 

imprisoned  not  exceeding  one  year. 

[Section  referred  to  as  silent  regarding  place  of 
imprisonment.  Semble,  it  would  be  in  county  jail. 
Brooks  v.  People,  14  Col.  416;  s.  c,  24  Pac"  Ren 
uo4.]  ■        ^' 


§  13S9.  Every  president,  cashier,  treas- 
urer, secretary  or  other  officer,  and  every 
agent  of  any  banlj,  railroad,  manufac- 
turing or  other  corporation,  who  shall 
wilfully  and  designedly  sign  with  intent  (to) 
issue,  sell,  pledge  or  cause  to  be  issued,  sold 
or  pledged,  any  false,  fraudulent  or  simu- 
lated certificate,  or  other  evidence  of  the 
ownership  or  transfer  of  any  share  or  shares 
of  the  capital  stocli  of  such  corporation,  or 
any  instrument  purporting  to  be  a  certificate 
or  other  evidence  of  such  ownership 
or  transfer,  for  the  signing,  issuing,  selling, 
pledging  of  which  such  president,  cashier, 
treasurer,  or  other  oflacer  or  agent,  shall  not 
be  authorized  by  the  charter  and  by-laws  of 
such  corporation,  or  by  some  amendment 
thereof,  shall  be  adjudged  guilty  of  felony; 
and  every  such  person  or  persons  shall  be 
liable  to  indictment,  and  on  conviction  shall 
be  punished  by  fine  not  exceeding  two  thou- 
sand dollars,  and  by  imprisonment  in  the 
penitentiary  not  more  than  ten  years,  as  the 
jury  shall  determine. 

§  1390.  Every  president,  cashier,  treasurer, 
secretary  or  other  officer,  and  every  agent, 
attorney,  servant,  or  employe  of  any  bank, 
railroad,  manufacturing  or  other  corporation, 
and  every  other  person  who  shall  knowingly 
and  designedly,  or  with  intent  to  defraud 
any  person  or  persons,  bank,  railroad,  manu- 
facturing or  other  corporation,  issue,  sell, 
transfer.  a.ssign  or  pledge,  or  cause  or  pro- 
cure to  be  issued,  sold,  transferred,  assigned 
or  pledged,  any  false,  fraudulent  or  simu- 
lated certificate  or  other  evidence  of  owner- 
ship, or  of  any  share  or  shares  of  the  capital 
stock  of  any  bank,  railroad,  manufacturing 
or  other  corporation;  every  person  so  issuing, 
selling,  transferring,  assigning  or  pledging, 
or  causing  tlie  same  to  be  done,  shall  be 
adjudged  guilty  of  felony,  and  shall  be  liable 
to  indictment,  and  on  conviction  shall  be 
punished  by  fine  not  exceeding  two  thousand 
dollars,  and  by  imprisonment  in  the  peni- 
tentiary not  more  than  ten  years,  as  the  jury 
shall  determine. 


24 


COLORADO. 


Fees  and  salaries;  judgnunts  and  executions  —  Stat.,  §§  1868-1870,  2576-2578. 


CHAPTER  L. 
Fees  and  Salaries. 

DIVISION  II.      FEES  OF  STATE  OFFICERS. 

Sec.  1SG8.   Secretary  of  State  —  corporation  fees. 
1SG9.    Rcpeaiing  act. 

1S70.  Mot     to    apply    to     companies     already 
organized.     Exception. 

§  1868.  Every  corporation,  joint-stock  com- 
pany or  association,  incorporated  bj'  or  uuder 
any  yeueral  or  special  law  of  this  Slate,  or 
by  or  under  any  general  or  special  laAV  of 
any  foreign  State  or  kingdom,  or  of 
any  State  or  Territory  of  the  United 
States  beyond  the  limits  of  this  State,  hav- 
ing capital  stock  divided  into  shares,  shall 
pay  to  the  secretary  of  State,  for  the  use  of 
the  State,  a  fee  of  ten  dollars,  in  case  the 
capital  stock  Avhich  said  corporation,  joint- 
stock  company  or  association,  is  authorized 
to  have,  does  not  exceed  one  hundred  thou- 
sand dollars;  but,  in  case  the  capital  stock 
thereof  is  in  excess  of  one  hundred  thousand 
dollars,  the  secretary  of  State  shall  collect  the 
further  sum  of  ten  (10)  cents  on  each  and 
every  thousand  dollars  of  such  excess,  and  a 
like  fee  of  ten  cents  on  each  thousand  of  the 
amount  of  each  subsequent  increase  of  stock. 
The  said  fee  shall  be  due  and  payable  upon 
the  fding  of  the  certificate  of  incorporation, 
articles  of  association,  or  charter  of  said  cor- 
poration, joint-stock  company  or  association, 
shall  have  or  exercise  any  corporate  powers 
or  be  permitted  to  do  any  business  in  this 
State  until  the  said  fee  shall  have  been  paid; 
and  the  secretary  of  State  shall  not  file  any 
certificate  of  incorporation,  articles  of  asso- 
ciation, charter  or  certificate  of  the  increase 
of  capital  stock,  or  certify  or  give  any  cer- 
tificate to  any  such  corporation,  joint-stock 
company  or  association,  until  said  fee  shall 
have  been  paid  to  him.  But  this  act  shall 
not  apply  to  corporations  not  for  pecuniary 
profit,  or  corporations  organized  for  religious, 
educational  or  benevolent  purposes. 

[1.  L.  1885.  p.  IS.-^.  repealed  by  section  1869. 
which  required  that  the  same  amounts  be  paid  to 
the  secretary  of  State,  "  upon  the  issuing  of  the 
certificate,"  etc.,  as  required  by  this  section  to  be 
paid  upon  fliing  the  certificate  of  incorporation, 
was  held  to  be  a  valid  law,  and  using  the  word 
"  issuing  "  instead  of  "  filing  "  did  not  invalidate 
it,  and  the  fees  required  could  be  collected.  Ed- 
wards V.  D.  &  R.  G.  R.  Co.,  13  Col.  59  (1889);  s.  c, 
21  I'ac.  Rep.  1011.] 

See  note  to  §  1868. 

§  18G9.  An  act  entitled  an  act  to  amend 
chapter  nineteen,  of  the  general  laws  of 
Colorado,  entitled,  "An  act  to  provide  for  the 
formation  of  corporations,"  approved  April 
10,  18S5,  is  hereby  repealed. 

§  1870.  This  act  shall  not  apply  to  any  cor- 
poration, company  or  association  which  has 
filed  its  certificate  of  incorporation,  articles 
of  incorporation  or  charter  prior  to  the 
passage  of  this  act,  except  when  it  may  here- 
after tile  a  certificate  of  increase  of  stock. 


CHAPTER  LXXII. 

Judgments  and  Executions. 

DIVISION    IX.      PROPERTY    SlIUJECT    TO 
LEVY. 

Sec.  2576.  Shares  of  stock  may  be  levied  upon 
under  execution  or  writ  of  attach- 
ment. 

2577.  Duty    of    president    to    furnish    number 

of  shares  held  by  defendant. 

2578.  Levy  on  shares,   how  made. 

2579.  Shares    attached   held   subject   to   judg- 

ment. 

2580.  Certificate  of  sale  of  stock  —  copy  left 

with  company  officers. 

2581.  I'urchaser    of    shares,     legal    owner  — 

rights. 

§  2576.  Rights  and  shares  of  stock  in  any 
corporated  company  owned  or  held  by  any 
defendant  in  execution,  or  by  any  person  in 
trust  for  or  to  the  use  of  any  defendant  in 
execution,  may  be  levied  upon  under  any 
execution  or  writ  of  attachment,  and  may  be 
sold  under  any  execution,  in  the  manner 
hereinafter  provided. 

Shares  of  stock  are  personalty.  §  480.  And  may 
be  attached.    §  2706. 

[Section  applies  as  well  to  attachments  issuing 
out  of  a  justice's  court  as  a  court  of  record.  Con- 
way V.  St.  John,  14  Col.  34;  s.  c,  23  Pac.  Rep. 
171.  Capital  stock  in  ditch  companies  is  personal 
property  and  subject  to  execution  and  sale  the 
same  as  other  personal  property.  Mercantile  Co. 
V.  Davis,  18  Col.  93;  s.  c,  31  Pac.  Rep.  495.] 


§  2.J77.  When  anj'  execution  or  writ  of 
attachment  shall  be  issued  against  any  per- 
son being  the  owner  of  any  shares  or  stock 
in  any  incorporated  company,  or  for  whom 
or  to  whose  use  any  shares  or  stock  in  any 
incorporated  company  are  held  by  any  per- 
son other  than  such  defendant,  it  shall  be 
the  duty  of  the  president,  cashier,  secretarj^ 
or  chief  clerk  of  such  incorporated  compauj', 
upon  the  request  of  the  otticer  having  such 
execution  or  writ  of  attachment,  to  furnish 
him  a  certificate  under  his  hand,  stating  the 
number  of  rights  or  shares  Avhich  the  de- 
fendant holds,  or  which  are  held  in  trust  for 
such  defendant,  or  to  his  use,  in  the  stock  of 
such  incorporated  company. 

See  last  section,  note. 

§  2578.  Any  officer,  upon  obtaining  infor- 
mation in  the  manner  provided  in  the  last 
section,  or  otherwise,  that  a  defendant  in 
any  execution  or  writ  of  attachment  held  by 
him,  owns  or  holds  any  rights  or  shares  in 
the  stock  of  anj'  incorporated  company,  or 
that  such  rights  or  shares  are  OAVued  or  held 
by  any  other  person  in  trust  for,  or  to  the 
use  of  such  defendant,  may  make  a  levy  of 
such  execution  or  writ  of  attachment  on 
such  rights  or  sliares,  by  leaving  a  true  copy 
of  such  writ  with  the  president,  secretary, 
cashier  or  chief  cleric  of  such  incorporated 
company;  and,  if  there  be  no  such  officer,  then 
with  some  other  otticer  of  such  incorporated 


COLOKADO. 


25 


Execution  and  attachment;  public  health—  Stat.,  §§  2579-2581,  2700,  270G,  2707,  3G04,  3605. 


fonipany,  -with  a  certificate  of  the  officer 
uialviug  the  levy,  settinj,'  forth  that  he  levies 
upon  ami  takes  iu  execution  or  attachment 
such  rij^hts  or  shares  to  satisfy  such  execu- 
tion or  attachment. 

See  §  2570,  note. 

§  2579.  Rights  or  shares  in  the  stock  of  any 
incorporated  company  levied  upon  by  virtue 
of  any  Avrit  of  attachment,  shall  be  held 
subject  to  the  judgment  rendered  in  the  ac- 
tion in  which  such  writ  is  issued,  and  when- 
ever any  execution  shall  be  levied  upon  any 
such  rights  or  shares,  the  same  shall  be  sold 
in  like  manner  as  personal  property  is,  by 
existing  law,  provided  to  be  sold. 

See  §  257G,  note. 

§  2580.  It  shall  be  the  duty  of  every  officer 
who  shall  sell  any  rights  or  shares  of  stock 
in  any  incorporated  company,  under  an  exe- 
cution, to  execute  to  the  purchaser  thereof 
a  certificate  in  writing,  reciting  the  sale  and 
payment  of  the  consideration,  and  convey- 
ing to  the  purchaser  such  rights  and  shares, 
and  such  officer  shall  also  leave  with  the 
president,  secretary,  cashier  or  chief  clerk,  or 
if  there  be  none,  with  anj'  other  officer  of 
such  incorporated  company,  a  true  copy  of 
such  certificate;  and  thereupon  it  shall  be  the 
duty  of  the  officer,  clerk,  or  other  person 
having  charge  of  the  books  of  such  incor- 
porated company,  to  make  such  entries  in 
the  books  of  sucli  company  as  may  be  neces- 
sary to  vest  the  legal  and  equitable  title  to 
stich  rights  or  shares  of  stock  in  the  pur- 
cliaser  of  the  same. 

§  2581.  Every  purchaser  of  rights  or  shares 
of  stock  in  any  incorporated  company,  at 
any  sale  thereof  made  by  any  officer,  upon 
receiving  a  certificate  of  the  sale  thereof  as 
provided  in  the  last  section,  shall  be  deemed 
and  held  to  be  the  legal  and  equitable  owner 
of  such  rights  or  shares  of  stock,  and  he 
shall  be  and  become  entitled  to  all  dividends 
thereon,  and  to  the  same  rights  and  priv- 
ileges as  a  member  of  such  incorporated 
company  as  the  defendant  in  execution  was 
theretofore  entitled  to,  notwithstanding  sucli 
rights  and  shares  of  stock  may  not  have 
been  transferred  upon  the  books  of  such 
company. 

CHAPTER  LXXIV. 

Justices  and  Constables. 

DIVISION   V.      A.TTACHMEXTS   AXD 
GARNISHMENTS. 

Sec.  2700.  AfTidnvit  for  attachment. 

270G.   Shares  of  stock  are  subject   to  attach- 
ment. 
2707.  Corporations  liable  to  garnishment. 

§  2700.  If  any  creditor,  or  credilde  person 
for  him,  sliall  make  and  file  with  any  justice 
of  the  peace  his  affidavit,  setting  forth  that 
the  defendant  in  such    affidavit    named    is 


justly  indebted  to  such  creditor,  in  a  sum  of 
monej^  not  exceeding  three  hundred  dollars, 
upon  a  contract  expressed  or  implied,  stat- 
ing the  amount  of  such  indebtedness,  as 
near  as  may  be,  and  shall  also  allege  any 
one  or  more  of  the  following  grounds  of 
attachment: 

First.  That  the  said  debtor  is  a  foreign 
corporation. 

Second.  That  the  said  debtor  is  not  a  resi- 
dent of  this  State. 
********  * 

§  2706.  The  rights,  shares  and  interest 
which  the  defendant  may  have  in  any  cor- 
poration, joint-stock  company  or  partnership, 
together  with  the  interests  and  profits 
thereon,  as  well  as  all  debts  due  the  defend- 
ant from  any  person,  shall  be  subject  to  be 
taken  by  virtue  of  the  writ  of  attachment, 
and  if  judgment  be  recovered  may  be  sold 
to  satisfy  the  judgment  and  execution. 

See  §§  2576-81. 

[See  Conway  v.  St.  John,  14  Col.  34;  23  Pac. 
Rep.  171.] 

§  2707.  (Every  corporation  other  than  muni- 
cipal liable  to  garnishment.) 

CHAPTER  CI. 

Public  Health, 

DIVISION    IV.      TO    PROTECT    FEMALE 
EMPLOYES. 

Sec.  3K01.   Seats  for  female  employes. 
3605.  Penalty. 

§  3604.  Every  person,  corporation  or  com- 
pany employing  females  in  any  manufactur- 
ing, mechanical  or  mercantile  establishments 
in  this  State,  shall  provide  suitable  seats 
for  the  use  of  the  females  so  employed,  and 
shall  permit  the  use  of  such  seats  by  them 
when  they  are  not  necessarily  engaged  in 
the  active  duties  for  which  they  are 
employed. 

§  360.5.  Any  person,  corporation  or  com- 
pany violating  any  of  the  provisions  of  this 
act,  shall  be  punished  by  fine  of  not  less 
than  ten  dollars  nor  more  than  thirty  dol- 
lars for  each  offense. 

CHAPTER  CVII. 
Revenue. 

DIVISION   I.      GENERAL   PROVISIONS. 

Sec.  3781.  Assessments  upon  corporate  stock. 

DIVISION   II.      ASSESSMENTS. 

1.   PERSONS. 

Sec.  3783.   Property  listed,  by  whom. 

3789.  Deductions,    none    on    account    of    Out- 
standing   subscriptions    to    corporate 
stock. 
3701.  Value  of  stock  to  be  listed. 


26 


COLORADO. 


Taxation  -  Stat.,  §§  3781,  3783,  3789,  3861,   3862. 


DIVISIOX    III.      COLLECTION    OF   TAXES. 

Sec.  3SG1.  Ofliccrs  of  corporation  to  furnish  names 
of  sliareholders. 
3SC2.  Violation  of  preceding  section,  penalty. 

§  3TS1.  *  *  *  There  shall  be  levied  and 
assessed  by  the  State,  county  and  municipal 
authorities' in  this  State,  upon  all  bank  stock, 
or  stock  in  any  moneyed  corporation  of  loan 
or  discount,  on  each  share  thereof  owned  by 
any  individual,  body  corporate,  corporation 
or  society,  a  sum  equal  to  but  not  f^reater 
in  proportion  to  the  value  thereof  tlian  is 
levied  or  assessed  upon  other  moneyed 
capital  or  personal  property  in  the  hands  of 
or  owned  by  individuals  in  tliis  State. 

§  3783.  *  *  *  The  property  of  persons 
or  corporations  whose  assets  are  in  the 
hands  of  receivers,  shall  be  listed  by  such 
receivers;  of  a  body  corporate,  company, 
society  or  partnership,  by  its  principal  ac- 
counting  otficer,   agent  or  partner;    *    *    * 

See  Const.,  art.  X,  §  9. 

§  3780.  In  making  up  the  amounc  of  credits 
which  any  person  is  required  to  list,  he  will 
be  entitled  to  deduct  from  their  (the)  gross 
amount  the  amount  of  all  bona  fide  debts 
owing  by  him;  *  *  *  but  *  *  *  no 
person  will  be  entitled  to  a  deduction  on  ac- 
count of  *  *  *  a  subscription  to  or  in- 
stallment payable  on  the  capital  stock  of 
anj-  company  or  incorporation,    *    *    * 


§  3791.  (Full  number  of  shares  of  bank 
stock  and  value  of  stock  or  share  in  any 
otlior  corporation  or  company  to  be  listed 
for  taxation.) 

[Section  referred  to.  I'eo.  v.  Lothrop,  3  Col. 
464.] 

§  38G1.  The  president,  treasurer,  cashier, 
secretary,  or  chief  clerk  of  any  corporation, 
the  shares  of  which  are  taxable  by  hnv,  at 
the  request  of  the  county  treasurer  shall 
give  him  a  certificate  under  his  hand,  show- 
ing the  number  and  amount  of  shares  held 
in  the  stock  of  such  corporation,  the  names 
of  the  holders  and  the  incumbrances  thereon, 
so  far  as  to  him  known;  and  such  treasurer, 
in  default  of  payment  by  the  corporation  of 
the  taxes  due  tiioreon  as  required  by  law, 
shall  distrain,  seize  and  sell  the  same,  and 
the  purchaser  thereof  shall  be  admitted  to 
all  the  rights,  powers  and  privileges  that  the 
holders  of  such  shares  had  at  the  time  of 
seizing  the  same,  and  shall  be  entered  by 
such  corporation  on  their  books  as  the  OAvner 
of  such  shares. 

§  3862.  If  any  corporation,  or  any  officer 
thereof,  shall  fail  to  comply  with  the  pro- 
visions of  the  preceding  section,  such  cor- 
poration shall  forfeit  to  the  State  the  sum 
of  one  thousand  dollars,  to  be  recovered  by 
civil  action  in  the  name  of  the  State  in  any 
court  of  competent  jurisdiction. 


LEGISLATIVE  ACTS  RELATING  TO  CORPORATIONS,  ENACTED 
SUBSEQUENTLY  TO  1890. 


1.  In   relation  to    offenses    against  the  elective 

franchise. 

2.  Relating  to  the  dissolution  of  corporations. 

3.  In  relation  to  foreign  corporations. 

4.  To  provide  for  the  amendment  of  articles  of 

incorporation. 
B.  To  provide  for  service  of  summons  upon  cor- 
porations. 

6.  Same,  in  justices'  courts. 

7.  To  provide  for  the  publication  of  certain  legal 

notices. 

8.  To  protect  employes  in  their  right  to  belong 

to  labor  organizations. 

9.  Creating   State   and   local   boards  of  arbitra- 

tion. 

10.  Concerning  fees  to  be  paid  by  corporations. 

11.  To  prevent  blacklisting  and  boycotting. 

Act  1. 

AN  ACT  in  relation  to  elections  and  crimes 
and  offenses  against  the  elective  fran- 
chise. 

Be  it  enacted  by  the  general  assembly  of 
the  State  of  Colorado: 

§  4.  *  *  *  It  shall  be  unlawful  for  any 
employer,  either  corporation,  association, 
company,  firm  or  person,  in  paying  its,  their 
or  his  employes  the  salary  or  Avages  due 
them,  to  inclose  their  pay  in  "iiay  envelopes" 


upon  which  there  is  written  or  printed  any 
political  mottoes,  devices  or  arguments,  con- 
taining threats,  express  or  implied,  intended 
or  calculated  to  influence  the  political  opin- 
ion, views  or  actions  of  such  employes. 
Xor  shall  it  be  lawful  for  any  employer, 
either  corporation,  association,  company, 
firm  or  person,  within  ninety  days  of  any 
election  provided  by  law,  to  put  up  or  other- 
wise exhibit  in  its,  their  or  his  factory,  work 
shop,  mine,  mill,  boarding-house,  office  or 
otlier  estal)lishment  or  place  where  its,  their 
or  his  employes  may  be  working  or  be 
present  in  the  course  of  such  employment 
any  handbill,  notice  or  placard  containing 
any  threat,  notice  or  information  that  in 
case  any  particular  ticket  or  candidate  shall 
be  elected,  work  in  its,  their  or  his  place  or 
establlslinient  will  cease  in  whole  or  in  part 
or  its,  their  or  his  estal)lishment  be  closed, 
or  the  wages  of  its,  their  or  his  workmen  be 
reduced;  or  other  threats,  express  or  implied, 
intended  or  calculated  to  influence  the  po- 
litical opinions  or  actions  of  its,  their  or  his 
employes.  Any  person  or  persons,  or  cor- 
poratioia  violating  any  of  the  provisions  of 


COLOKADO. 


27 


Dissolution;  foreign  corporations  —  Acts  of  1891. 


this  section,  shall  be  deemed  guilty  of  a  mis- 
demeanor and  any  person,  whether  acting 
in  his  individual  capacity  or  as  an  officer  or 
agent  of  any  corporation  so  guilty  of  such 
misdemeanor  shall  be  punished  as  herein- 
after prescribed. 

§  5.  It  shall  be  unlawful  for  any  corpora- 
tion or  any  officer  or  agent  of  any  corpora- 
tion to  influence  or  attempt  to  influence  by 
force,  violence  or  restraint  or  by  inflicting 
or  threatening  to  inflict  any  injury,  damage, 
harm  or  loss,  or  by  discharging  from  em- 
ployment or  promoting  in  employment,  or 
by  intimidation  or  otherwise  in  any  manner 
whatever,  to  induce  or  compel  any  employe 
to  vote  or  refrain  from  voting  at  any  elec- 
tion provided  by  law,  or  to  vote  or  refrain 
from  voting  for  any  particular  person  or  per- 
sons at  any  such  election.  Any  such  corpoi*a- 
tion,  or  any  officer  or  agent  of  such  cor- 
poration, violating  any  of  the  provisions  of 
this  section,  shall  be  deemed  guilty  of  a  mis- 
demeanor, and  be  subject  to  the  penalty 
hereinafter  provided,  and  in  addition  thereto, 
any  corporation  violating  this  section  shall 
forfeit  its  charter  and  right  to  do  business 
in  this  State. 

§  10.  The  provisions  of  this  act  shall  ex- 
tend so  far  as  applicable  to  all  elections  pro- 
vided by  law,  either  general,  sjiecial  or 
primary. 

§  11.  All  acts  and  parts  of  acts  inconsist- 
ent with  tlie  provisions  of  this  act  are  hereby 
repealed:  Provided,  That  the  repeal  of  such 
acts  or  parts  of  acts,  or  any  of  them  shall 
not  be  construed  to  afl'ect  any  offense  com- 
mitted or  any  prosecution  or  proceeding  in- 
stituted or  pending  under  the  laws  so 
repealed. 

(Approved  March  7,  1891.) 

Act  2. 

AN  ACT  relating  to  the  dissolution  of  cor- 
porations, formed  under  the  laws  of  the 
State  of  Colorado. 

Be  it  enacted  by  the  general  assembly  of 
the  State  of  Colorado: 

Section  1.  Whenever  tlie  stocliholders  of 
any  corporation,  formed  under  the  laws  of 
the  State  of  Colorado,  desire  to  dissolve  the 
corporation,  prior  to  the  time  limited  by  law, 
or  bj"  tlie  terms  of  its  articles  of  incorpora- 
tion, they  may  do  .so  upon  vote  of  two- 
thirds  (2-8)  of  the  entire  stock  of  the  cor- 
poration, at  a  meeting  of  tlie  stockholders 
of  said  corporation,  wliidi  sliall  liave  been 
called  for  the  purpose  of  considering  the 
propriety  of  dissolving  such  corporation;  but 
such  dissolution  shall  not  take  place  until 
all  debts  owing  by  tlie  corporation  shall  have 
been  fully  paid.  And  notice  of  such  meeting 
is  to  be  given,  in  the  manner  provided  by 
law  for  the  calling  of  stockholders'  meetings 
for  the  purpose  of  amending  articles  of  in- 
corporation. And  wlien  a  dissolution  shall 
have  been  so  ordered,  the  president  and  sec- 


retary of  such  corporation  shall  make  and 
sign  a  notice  of  dissolution,  under  the  seal 
oC  such  corporation,  one  copy  of  which  shall 
be  filed  in  the  office  of  the  secretary  of  State, 
and  one  copj-  of  which  shall  be  filed  in  every 
countj'  in  which  the  ai'ticles  of  incorporation 
of  such  corporation  were  filed;  and  a  copy 
of  such  notice  shall  be  published  in  some 
newspaper  printed  in  each  of  said  counties, 
for  the  period  of  six  (G)  weeks;  and,  upon 
the  filing  and  publication  of  such  notice,  as 
aforesaid,  such  corporation  shall  be  deemed 
to  have  been  dissolved  forever. 

§  2.  All  property  belonging  to  such  cor- 
poration at  the  time  of  the  dissolution  shall, 
by  the  trustees  or  directors  of  such  con^ora- 
tion,  be  converted  into  cash,  and  distributed 
pro  rata  among  the  stockholders  of  the  said 
corporation;  said  distribution  to  take  place 
within  six  (6)  months  from  the  time  of  con- 
verting said  propertv  into  cash. 

(Approved  April  1,  1891.) 

See  §  497,  and  cross-references. 

Act  3. 

AN  ACT  in  relation  to  foreign  corporations. 

Be  it  enacted  by  the  general  assembly  of 
the  State  of  Colorado: 

Section  1.  No  foreign  corporation  doing 
business  in  this  State,  shall  be  permitted  to 
effect  a  reconstruction,  by  liquidation  or 
otherwise,  nor  shall  any  such  reconstruction 
or  liquidation  take  eifect  as  against  any 
citizen  of  this  State,  unless  all  the  rights, 
shares  and  interests  of  any  citizen  of  this 
State  shall  have  been  or  shall  be  protected, 
and  the  stock  interests  of  any  citizen  of 
this  State  in  such  coi-poration  shall  have 
been  or  shall  be  fully  reorganized,  and  in  its 
original  condition  without  diminution  in 
number,  amount  or  face  value. 

§  2.  Whereas  in  the  opinion  of  the  general 
assembly  and  (an)  emergency  e.xists,  there- 
fore this  act  sliall  be  in  force  and  talie  effect 
from  and  after  its  passage. 

(Approved  April  3,  1891.) 

See  Const.,  art.  XV,  §  10,  and  cross-references. 

Act  4. 

AN  ACT  to  provide  for  the  amendment  of 
articles  of  incoiiioration  of  corporations 
organized  under  the  laws  of  Colorado 
and  to  repeal  an  act  entitled  "An  act  to 
provide  for  the  amendmoiit  of  articles  of 
incorporation  of  incorporated  companies  " 
except  railroad  companies,  approved  March 
25,  1885,  and  all  acts  in  conflict  with  the 
provisions  hereof. 

Be  it  enacted  by  the  general  assembly  of 
the  State  of  Colorado: 

Section  1.  That  any  cox'poration  organized 
under  the  laws  of  this  State  may  amend  its 
articles  of  incorporation  in  any  respect. 
Provided,    No   corporation   shall   bj'   amend- 


28 


COLORADO. 


Amendment  of  articles;  summons  —  Acts  of  1S91. 


ments  so  change  its  articles  as  to  work  a 
change  in  the  object,  or  purpose  for  which 
such  corporation  was  originally  organized, 
Provided;  That  any  diich  company  may 
amend  its  articles  so  as  to  allow  it  to  take 
stock  in  telephone  companies  for  the  pur- 
pose of  affording  facilities  to  such  ditch  com- 
panies in  carrying  on  their  business  only. 

§  2.  Any  proposed  amendment,  or  amend- 
ments, may  be  voted  upon  by  the  stock- 
holders at  their  regular  annual  meeting. 
Provided;  That  the  published  notice  of  such 
annual  meeting  required  by  law,  and  by  the 
by-laws  of  the  corporation  shall  have  con- 
tained a  notice  that  such  proposed  amend- 
ment, or  amendments,  giving  the  pui'port  of 
the  same  would  be  presented,  and  acted 
upon,  at  such  meeting,  or  any  proposed 
amendment,  or  amendments,  may  be  voted 
upon  at  a  special  meeting  of  the  stockholders 
called  by  ctrder  of  the  board  of  directors  or 
trustees  of  the  corporation.  Provided;  That 
such  special  meeting  shall  be  called,  and 
notice  thereof  be  given  as  required  by  the 
by-laws  of  the  corporation  and  as,  provided 
in  section  three  hundred  and  forty-seven 
(247)*  of  the  general  statutes  of  Colorado. 

§  3.  Whenever  the  holder,  or  holders  of  one- 
third  in  amount  of  the  stock  subscribed,  is- 
sued credited  to  the  holders  thereof,  or 
outstanding,  as  shown  by  the  stock-books 
of  any  corporation  created  under  the  laws 
of  the  State,  shall  in  writing  request  the 
president,  or  other  head  officer  thereof  to 
call  a  meeting  of  the  stockholders  thereof 
for  the  purpose  of  considering  a  proposed 
amendment  or  amendments,  to  the  articles 
of  incorporation  of  such  corporation,  setting 
forth  in  such  written  request,  the  substance 
of  each  proposed  amendment,  or  amend- 
ments; such  president,  or  other  head  officer 
shall  without  unnecessary  delay,  call  a  meet- 
ing of  the  board  of  directors,  or  trustees  of 
such  corporation  as  the  case  may  be,  and 
pi-esent  such  request  to  such  board,  and 
thereupon  it  shall  be  the  duty  of  such  board 
of  directors,  or  trustees  to  call  a  special 
meeting  of  the  stockholders,  of  such  corpora- 
tion to  be  called  for  the  purpose  of  con- 
sidering said  proposed  amendment,  or 
amendments,  to  its  articles  of  incorpoi'ation, 
for  a  time  not  less,  than  thirty,  nor  more 
than  si.\ty  days,  thereafter;  which  said 
meeting,  shall  be  called  in  the  manner  pro- 
vided in  section  three  hundred  and  forty- 
seven  (347)*  of  the  general  statutes  of  Col- 
orado, and  shr.ll  be  held  at  the  place  ap- 
pointed by  the  said  board,  and  designated 
in  such  notice. 

§  4.  At  any  such  stockliolders'  meeting 
called,  and  held  as  provided  in  section  two 
(2),  or  in  section  three  (.3)  of  this  act,  stock- 
holders may  vote  in  person  or  by  proxy, 
each  stockholder  being  entitled  to  one  vote 
for  each  share  of  stock  liold  by  him,  and 
standing  in  his  name  upon  the  books  of  The 
company,  and  the  voting  shall  be  by  ballot. 


►§  626. 


§  5.  If  at  any  such  meeting  the  proposed 
amendment,  or  amendments,  to  the  articles, 
of  incorporation  of  the  corporation  shall  re- 
ceive the  vote  of  two-thirds  of  all  the  stock 
of  said  corporation  then  subscribed,  and  in 
good  faith  outstanding,  such  amendment  or 
amendments,  shall  be  deemed  adopted  and 
a  certificate  sotting  forth  the  fact,  or  facts, 
signed  by  the  president,  or  other  head  officer 
of  said  corporation  and  verified  by  his  atfi- 
davit,  and  attested  by  the  secretary  thereof, 
with  the  seal  of  the  corporation  thereunto 
aftixed,  sliall  be  filed  for  record,  with  the 
secretary  of  State,  and  a  like  certificate  shall 
be  filed  in  the  ottice  of  the  recorder  of  each 
county  wherein  the  original  articles  of  in- 
corporation were  filed,  and  thereafter,  said 
amendments  or  amendments,  shall  be  in 
full  force  and  efiiect  to  the  same  extent,  as 
if  the  same  had  been  included  in  the  original 
articles  of  incorporation. 

§  G.  "An  act  entitled  'An  act  to  provide 
for  the  amendments  of  articles  of  incorpora- 
tions of  incorporated  companies  except  of 
railroad  companies' "  approved  March  25 
188.5,  and  all  other  acts,  and  parts  of  acts 
in  conflict  with  any  of  the  provisions  of  this 
act  are  hereby  repealed. 

(Approved  April  6,  1891.) 

Certificate,  requirements  of.  §  473.  See  §§  625 
et  seq.  Tbis  act  repeals  §§  477,  478  and  479  of  the 
statutes. 

[All  stockholders  being  present  and  assenting, 
a  valid  amendment  to  constitution  of  corporation 
may  be  passed  at  a  time  other  than  that  pre- 
scribed In  the  constitution  (dictiim).  Byers  v. 
Hussey,  4  Col.  522.  When  member  is  bound  to 
take  notice  of  amendment.  Id.  Unauthorized 
increase  of  capital  stock  does  not  invalidate  the 
oriainal  stock.  Byers  v.  Rollins,  1.3  Col.  22;  s.  C, 
21  Pac.  Uep.  804.  An  owner  who  has  pledged  his 
stock  may  represent  it  at  all  meetings  of  stock- 
holders and  vote  accordingly.  Miller  v.  Murray, 
17  Col.  408;  s.  c,  30  Pac.  Rep.  46.] 

Act  5. 

AN  ACT  to  amend  section  38  of  an  act  for 
"  an  act  to  provide  a  code  of  procedure  in 
civil  actions  for  courts  of  record  in  the 
State  of  Colorado,  and  to  repeal  all  acts 
inconsistent  therewith,"  approved  April  7, 
1887. 

Be  it  enacted  by  the  general  asseijibly  of 
the  State  of  Colorado: 

Section  1.  That  section  38  of  an  act  en- 
titled "An  act  to  provide  a  code  of  pro- 
cedure in  civil  actions  for  courts  of  record 
in  the  State  of  Colorado,  and  to  repeal  all 
acts  inconsistent  therewith,"  approved  April 
7,  1887,  be  amended  so  as  to  read  as  follows: 
§  38.  A  summons  shall  be  served  as  fol- 
lows: 

7th.  If  the  action  be  against  a  private 
corporation,  by  delivering  a  copy  of  tlic  sum- 
mons to  the  president  or  other  chief  officer 
of  such  corporation,  or  to  the  secretary, 
treasurer,  cashier  or  other  general  agent 
thei-eof;  but  if  no  sucli  officer  of  the  corpo- 
ration can  be  found  in  the  countj'  in  which 


COLORADO. 


29 


Summons;  publication  of  notice  — Acts  of  1891. 


the  action  is  brought,  then  service  may  be 
made  by  delivering  a  copy  of  the  summons 
to  any  stockholder  of  such  corporation,  who 
may  be  found  in  such  county. 

8th.  If  the  action  be  against  a  railroad 
company,  Avhotlier  organized  under  the  laws 
of  this  State  or  of  any  other  State  or  Terri- 
tory, and  whether  the  charter  prescribes  the 
manner  or  place  of  the  .service  of  process  on 
such  company,  the  summons  may  be  served 
by  delivering  a  copy  thereof  to  the  president, 
or  vice-president,  or  secretary,  or  treasurer, 
or  cashier  of  such  company;  Provided,  That 
if  no  such  officer  be  foxind  in  the  county,  in 
which  the  action  is  brought,  service  of  sum- 
mons may  be  made  by  delivering  a  copy 
thereof  to  any  regular  or  acting  ticket  agent 
of  such  company,  having  his  office  in  the 
county  in  which  the  action  is  brought. 

9th.  If  the  action  be  against  a  foreign  cor- 
poration, or  joint-stock  company  or  associa- 
tion, organized  under  the  laws  of  another 
State  or  Territory,  and  doing  business  within 
this  State  the  summons  shall  be  served  hj 
delivering  a  copy  to  any  agent  of  such  cor- 
poration, company  or  association  found  in 
the  county  In  which  the  action  is  brought. 
If  no  such  agent  be  found  in  such  county, 
then  by  delivering  a  copy  of  the  summons 
to  any  stockholder  who  may  be  found  in 
such  county. 

§  2.  This  act  shall  be  liberally  construed, 
and  no  service  of  summons  shall  be  set  aside 
or  quashed  for  any  technical  error,  defect 
or  omission,  either  in  the  summons  or  in  the 
service  of  the  summons  which  error,  defect 
or  omission  does  not  affect  some  substantial 
right  of  the  defendant  or  defendants  there- 
with served. 

§  .3.  All  acts  or  parts  of  acts  inconsistent 
with  the  provisions  of  this  act  are  hereby 
repealed;  but  nothing  herein  contained  shall 
be  hold  to  repeal  any  provision  of  law.  now 
in  force  which  authorizes  or  permits  a  sum- 
mons to  be  served  in  any  other  county  of 
the  State,  than  that  in  Avhich  the  action  is 
brought. 

(Approved  April  13,  1891.) 

See  §  .50fi,  and  next  net. 

[Service  upon  vice-president  if?  snfflcient,  even 
thoiisrh  return  does  not  show  tli.Tt  president  coidd 
not  bo  found  in  tlie  county.  Mining  Co.  v.  Frost, 
15  Coi.  .-^lO;  s.  c,  25  Pac.  "Rep.  506.] 

Act  6. 

AN  ACT  to  provide  for  the  service  of  sum- 
mons in  justice's  courts,  police  courts  and 
courts  not  of  record,  upon  private  corpora- 
tions. 

Be  it  enacted  by  the  general  assemblj'  of 
the  State  of  Colorado: 

Section  1.  In  all  suits  brought  in  any 
justice  court,  police  court  or  coui't  not  of 
record  in  this  State,  service  of  summons 
may  be  made  upon  private  or  foreign  cor- 
porations in  the  manner  following,  to  wit: 


when  suit  is  brought  in  the  county  in  whicli 
such  corporation  has  its  principal  otlice,  or 
in  which  its  principal  business  is  carried  on. 
service  may  be  made  by  delivering  a  copy 
of  the  summons  to  the  president  or  other 
head  of  such  corporation,  or  to  the  secretary, 
cashier,  treasurer,  or  general  manager 
thereof,  or,  in  case  of  the  absence  of  said 
otticers  from  the  county,  then  upon  any 
stockholder  residing  in  the  county  in  which 
such  suit  is  brought.  In  all  other  cases 
service  of  summons  may  be  made  upcm  such 
corporation  by  delivering  a  copy  thereof  to 
tlie  principal,  local  or  station  agent  of  such 
corporation,  resident  and  employed  in  the 
county  in  which  suit  is  brought.  Provided; 
That,  in  all  suits  brought  against  corpora- 
tions in  the  courts  hereinbefore  designated, 
summons  shall  be  made  returnable  in  not 
less  than  twenty  days,  nor  more  than  thirty 
days  from  date  of  issuance  of  summons,  and 
shall,  to  make  service  valid  and  effectual, 
be  served  at  least  ten  days  prior  to  the  re- 
turn day  designated  in  the  summons.  In 
case  of  failure  of  service,  alias  and  pluries 
summons,  if  necessary,  may  be  issued. 
Nothing  herein  contained  shall  be  construed 
to  authorize  the  commencement  of  suit  be- 
fore any  justice  of  the  peace  in  any  precinct 
or  township  other  than  that  in  which  suit 
may  be  commenced  by  plaintiff,  as  is  now 
provided  by  law. 
(Approved  April  1.3,  1S91.) 

See  preceding  act. 

Act  7. 

AN  ACT  to  provide  for  the  publication  of 
certain  legal  notices. 

Be  it  enacted  by  the  general  assembly  of 
the  State  of  Colorado: 

Section  1.  The  governor,  secretary  of  State 
and  treasurer,  shall  on  or  before  the  third 
Mondaj^  in  April  in  each  year,  designate  a 
daily  newspaper,  published  in  the  city  of 
Denver,  in  which  shall  hereafter  be  pub- 
lished during  the  year  following  such 
designation,  *  *  *  j^u  notices  and  ad- 
vertisements required  by  law  to  be  published 
in  a  newspaper  in  actions  against  foreign 
corporations.    *    *     * 

(Approved  April  18,  1891.) 

See  Const.,  art.  XV,  §  10,  as  to  foreign  corpora- 
tions. 

Act  8. 

AN  ACT  to  protect  employes  and  guarantee 
their  right  to  belong  to  labor  organiza- 
tions, unions,  societies  or  political  parties; 
and  to  provide  a  penalty  for  violation 
thereof. 

Be  it  enacted  by  the  general  assembly  of 
the  State  of  Colorado: 

Section  I.  That  it  shall  be  unlawful  for 
any   individual,   company   or  corporation   or 


30 


COLORADO. 


Employes;    arbitration  —  Acts  of  1897. 


anj'  member  of  any  firm,  or  agent,  oflBcer  or 
employe  of  any  company  or  corporation,  to 
prevent  employes  from  forminjr.  joining:  or 
belonging  to  any  lawfnl  lalx)r  organization, 
union,  society  or  political  party,  or  to  coerce 
or  attempt  to  coerce  employes  by  discharg- 
ing  or  threatening  to  discharge  them  from 
their  employ  or  the  employ  of  any  firm,  com- 
pany or  coriwration  because  of  their  con- 
nection with  such  laAvfnl  labor  organization, 
imion,  society  or  political  party. 

§  2.  Any  person  or  any  mendier  of  any 
firm,  or  agent,  officer  or  employe  of  any 
such  company  or  corporation,  violating  the 
provisions  of  section  one  of  this  act  shall 
be  deemed  guilty  of  a  misdemeanor,  and  upon 
conviction  thereof  shall  be  tiued  in  any  sum 
not  less  than  one  hundred  dollars,  nor  more 
than  five  himdred  dollars,  or  imprisoned  for 
a  peiiod  not  less  than  six  months  nor  more 
than  one  year,  or  both,  in  the  discretion  of 
the  court. 

(Approved  March  IS,  1S97.) 

Act  9. 

AN  ACT  creating  a  State  and  local  boards 
of  arbitration  and  providing  for  the  adjust- 
ment of  differences  arising  between  em- 
ployers and  employes  and  defining  the 
powers  and  duties  thereof  and  making  an 
appropriation  therefor. 

Be  it  enacted  by  the  general  assembly  of 
of  the  State  of  Colorado: 

Section  1.  There  shall  be  established  a 
State  board  of  arbitration  consisting  of  three 
members,  which  shall  be  charged,  among 
other  duties  provided  by  this  act,  with  the 
consideration  and  settlement  by  means  of 
arbitration,  conciliation  and  adjustment, 
when  possible,  of  strikes,  lockouts  and  labor 
or  wage  controversies  arising  between  em- 
ployers and   employes. 

§  2.  That  immediately  after  the  passage 
of  this  act  the  governor  shall  appoint  a 
State  board  of  arbitration  consisting  of  three 
qualified  resident  citizens  of  the  State  of 
Colorado  and  above  the  age  of  thirty  years. 
One  of  the  memljers  of  said  board  shall  be 
selected  from  the  ranks  of  active  members 
of  bona  fide  lalior  organizations  of  the  State 
of  Colorado,  and  one  shall  be  selected  fi'om 
active  employers  of  labor  or  from  organiza- 
tions representing  employers  of  labor.  The 
third  niemltcr  of  the  board  shall  be  appointed 
by  the  governor  from  a  list  whicli  shall  not 
consist  of  more  than  six  names  selected  from 
entirely  disinterested  ranks  submitted  by  the 
two  members  of  the  board  al)ove  designated. 
If  any  vacancy  shoidd  occur  in  said  board, 
the  governor  sliall,  in  the  same  manner,  ap- 
point an  cligil>le  citizen  for  the  remainder 
of  the  term,  as  hereinl)efore  provided. 

§  3.  The  third  member  of  said  board  shall 
be  secretary  thereof,  whose  duty  it  shall  be, 
in  addition  to  his  duties  as  a  member  of  the 
board,  to  keep  a  full  and  faithful  record  of 


the  proceedings  of  the  board  and  perform 
such  clerical  work  as  m.ay  be  necessary  for 
a  concise  statement  of  all  ofiicial  business 
that  may  be  transacted.  He  shall  be  tlie 
custodian  of  all  documents  and  testimony  of 
an  orticial  character  relating  to  the  business 
of  the  board;  and  shall  also  have,  imder 
direction  of  a  majority  of  the  board,  power 
to  issue  subpoenas,  to  administer  oaths  to 
witnesses  cited  before  the  board,  to  call  for 
and  examine  books,  papers  and  documents 
necessary  for  examination  in  the  adjustment 
of  labor  differences,  with  tlie  same  authority 
to  enforce  their  production  as  is  possessed 
by  courts  of  record  or  the  judges  thereof  in 
this  Static. 

§  4.  Said  members  of  the  board  of  arbitra- 
tion shall  take  and  subscribe  the  constitu- 
tional oath  of  office,  and  be  sworn  to  the 
due  and  faithful  performance  of  the  duties 
of  their  ivspective  offices  before  entering 
upon  the  discharge  of  the  same.  The  secre- 
tary of  state  shall  set  apart  and  furnish  an 
office  in  the  State  capitol  for  the  proper  and 
convenient  transaction  of  the  business  of 
said  board. 

§  5.  That  whenever  any  grievance  or  dis- 
pute of  any  nature  shall  arise  between  em- 
ployer and  employes,  it  shall  be  lawful  for 
the  parties  to  submit  the  same  directly  to 
said  board,  in  case  such  parties  elect  to  do 
so.  and  shall  jointly  notify  said  board  or  its 
clerk  in  writing  of  such  desire.  Whenever 
such  notification  is  given  it  shall  be  the  duty 
of  said  board  to  proceed  with  as  little  delay 
as  possible  to  the  locality  of  such  grievance 
or  dispute,  and  inquire  into  the  cause  or 
causes  of  such  grievance  or  dispute.  The 
parties  to  the  grievance  or  dispute  shall 
thereupon  submit  to  said  board  in  writing, 
clearly  and  in  detail,  their  grievances  and 
complaints  and  the  cause  or  causes  therefor, 
and  severally  agree  in  writing  to  sub- 
mit to  the  decision  of  said  board  as  to 
the  matters  so  submitted,  promising  and 
agreeing  to  continue  on  in  business  or  at 
work,  without  a  lockout  or  strike  until  the 
decision  is  rendered  by  the  board,  provided 
such  decision  shall  be  given  within  ten  days 
after  the  completion  of  the  investigation.  The 
board  shall  thereupon  proceed  to  fully  inves- 
tigate and  iuiiuii'e  into  the  matters  in  con- 
troversy and  to  take  testimony  under  oath 
in  relation  thereto;  and  shall  have  poAver 
under  its  chairman  or  clerk  to  administer 
oaths,  to  i.ssue  subpoenas  for  the  attendance 
of  witnesses,  the  production  of  books  and 
papers  in  like  manner  and  with  the  same 
powers  as  provided  for  in  section  S  of  this 
act. 

§  G.  That,  after  the  matter  has  been  fully 
heard,  the  said  board,  or  a  majority  of  its 
members,  shall,  within  ten  days,  render  a 
decision  thereon  in  writing,  signed  by  them 
or  a  majority  of  them,  stating  such  details 
as  Avill  clearly  show  the  nature  of  the  de- 
cision and  the  points  disposed  of  by  them. 
The  clerk  of  said  board  shall  file  four  copies 


COLORADO. 


31 


Arbitration  —  Acts  of  1897. 


of  such  decision,  one  witli  the  secretary  of 
State,  a  copy  seiTed  to  each  of  the  parties  to 
the  controversy,  and  one  copy  retained  by 
the  board. 

§  7.  That  whenever  a  strike  or  loclcout  sluiU 
occur  or  seriously  threaten  in  any  part  of 
the  State,  and  shall  come  to  the  knowledge 
of  the  members  of  the  board,  or  any  one 
thereof  by  a  written  notice  from  either  of 
the  parties  to  such  threatened  strike  or  lock- 
out, or  from  the  mayor  or  clerk  of  the  city 
or  town,  or  from  the  justice  of  the  peace 
of  the  district  where  such  strike  or  lockout 
is  threatened,  it  shall  be  their  duty,  and 
they  are  hereby  directed,  to  proceed  as  soon 
as  practicable  to  the  locality  of  such  strike 
or  lockout  and  put  themselves  in  communica- 
tion with  the  parties  to  the  controversy  and 
endeavor  by  mediation  to  effect  an  amicable 
settlement  of  such  controversy,  and,  if,  in 
their  judgment,  it  is  deemed  best,  to  inquire 
into  the  cause  or  causes  of  the  controversy, 
and  to  that  end  the  board  is  hereby  author- 
ized to  subpoena  witnesses,  compel  their  at- 
tendance and  send  for  persons  and  papers 
in  like  manner,  and  with  the  same  power 
as  it  is  authorized  by  section  3  of  this  act. 

§  8.  That  the  fees  of  witnesses  before  said 
board  of  arbitration  shall  be  two  dollars 
($21  for  each  day's  attendance,  and  five  (5) 
cents  per  mile  over  the  nearest  traveled 
route  in  going  to  and  returning  from  the 
place  where  attendance  is  required  by  the 
board.  All  subpoenas  shall  be  signed  by  the 
secretary  of  the  board  and  may  be  served 
by  any  person  of  legal  age  authorized  by  the 
board  to  seiwe  the  same. 

§  9.  The  parties  to  any  controversy  or 
difference  as  described  in  section  5  of  this 
act  may  submit  the  matters  in  dispute  in 
writing  to  a  local  board  of  arbitration  and 
conciliation;  said  board  may  either  be  mutu- 
ally agreed  upon  or  the  employer  may  desig- 
nate one  of  such  arbitrators,  the  employes  or 
their  duly  authorized  agent  another,  and  the 
two  arbitrators  so  designated  may  choose 
a  third  who  shall  be  chairman  of  such  local 
board;  such  board  shall  in  respect  to  the 
matters  referred  to  it  have  and  exercise  all 
the  powers  which  the  State  board  might  have 
and  exercise,  and  its  decision  shall  have 
such  binding  effect  as  may  be  agreed  upon 
by  the  parties  to  the  controversy  in  the 
written  submission.  The  jurisdiction  of  such 
local  board  shall  be  exclusive  in  respect  to 
the  matter  submitted  to  it,  but  it  may  ask 
and  receive  the  advice  and  assistance  of  the 
vState  board.  Such  local  board  shall  render 
its  decision  in  writing  within  ten  days  after 
the  close  of  any  hearing  held  by  it,  and 
shall  file  a  copy  thereof  with  the  seci-etary 
of  the  State  board.  Each  of  such  local  ar- 
bitrators shall  be  entitled  to  receive  from  th(> 
treasurer  of  the  city,  village  or  town  in  which 
the  controversy  or  difference  that  is  the  sub- 
ject of  arbitration  exists,  if  such  payment  is 
appi'oved  l)y  the  mayor  of  such  city,  the 
board  of  trustees  of  such  village,  or  the  town 


board  of  such  town,  the  sum  of  three  dollars 
for  each  day  of  actual  service  not  exceeding 
ten  days  for  any  one  arbitration:  Provided, 
That  Avhen  such  hearing  is  held  at  some 
point  having  no  organized  town  or  city  gov- 
ernment, in  such  case  the  costs  of  such  hear- 
ing shall  be  paid  jointly  by  the  parties  to 
the  controversy:  Provided,  further.  That  in 
the  event  of  any  local  board  of  arbitration  or 
a  majority  thereof  failing  to  agree  within 
ten  (10)  days  after  any  case  being  placed  in 
their  hands,  the  State  board  shall  be  called 
upon  to  take  charge  of  said  case,  as  provided 
by  this  act. 

§  10.  That  said  Sta.te  board  shall  report 
to  the  governor  annually,  on  or  before  the 
fifteenth  day  of  November  in  each  year,  the 
work  of  the  board,  which  shall  include  a 
concise  statement  of  all  cases  coming  before 
the  board  for  adjustment. 

§  11.  That  the  secretary  of  State  shall  be 
authorized  and  instructed  to  have  printed 
for  circulation  one  thousand  (1,000)  copies  of 
the  report  of  the  secr(>tary  of  the  board,  pro- 
vided the  volume  shall  not  exceed  four  hun- 
dred (400)  pages. 

§  12.  That  two  members  of  the  board  of 
arbitration  shall  each  receive  the  sum  of 
five  hundred  dollars  (.$500)  annually,  and 
shall  be  allowed  all  money  actually  and  nec- 
essarily expended  for  traveling  and  other 
necessary  expenses  while  in  the  performance 
of  the  duties  of  their  ottlce.  The  member 
herein  designated  to  be  the  secretary  of  the 
board  shall  receive  a  salary  of  tM"elve  hun- 
dred dollars  ($1,200)  per  annum.  The  sal- 
aries of  the  members  shall  be  paid  in  monthly 
instalments  by  the  State  treasurer  upon  war- 
rants issued  by  the  auditor  of  the  State.  The 
other  expenses  of  the  board  shall  be  paid  in 
like  manner  upon  approved  vouchers  signed 
by  the  chairman  of  the  board  of  arbitra- 
tion and  the  secretary  thereof. 

§  13.  The  terms  of  office  of  the  members 
of  the  board  shall  be  as  follows:  That  of 
the  members  who  are  to  be  selected  from 
the  ranks  of  labor  organizations  and  from 
the  active  employers  of  labor  shall  be  for 
two  years,  and  thereafter  every  two  years 
the  governor  shall  appoint  one  from  each 
class  for  the  period  of  two  years.  The  third 
member  of  the  board  shall  be  appointed  as 
herein  provided  every  two  years.  The  gov- 
ernor shall  have  power  to  remove  any  mem- 
bei's  of  said  board  for  cause  and  fill  any 
vacancy  occasioned  thei'cby. 

§  14.  For  the  purpose  of  carrying  out  the 
provisions  of  this  act  there  is  hereby  appro- 
priated out  of  the  general  revenue  fund  the 
sum  of  seven  thousand  dollars  for  the  fiscal 
years  1897  and  1898,  only  one-half  of  which 
shall  be  used  in  each  year,  or  so  much  thereof 
as  may  be  necessary,  and  not  otherwise 
appropriated. 

§  l.").  In  the  opinion  of  the  general  assem- 
lily  an  emergency  exists;  therefore,  this  act 
shall  take  effect  and  be  In  force  from  and 
after  its  passage. 

(Approved  March  31,  1897.) 


32 


COLOEADO. 


Orpanizatiou  fee;  blacklistiug  —  Arts  oi  IS'JT. 


Act  10. 

AN  ACT  concerning  coi-poratious. 

Be  it  enactf'd  by  tlie  general  assembly  of 
the  State  of  Colorado: 

Section  1.  Every  conwration,  joint-stock 
company  or  association  incorporated  by  or 
under  any  general  or  special  law  of  tliis 
State,  or  by  or  under  any  general  or  special 
law  of  any  foreign  State  or  kingdom,  or  of 
any  State  or  territory  of  the  United  States 
beyond  the  limits  of  tliis  State,  having  capi- 
tal stock  divided  into  shares,  shall  pay  to 
tlie  secretary  of  State  for  the  use  of  the 
State,  a  fee  of  ten  dollars,  in  case  the  capi- 
tal stock  which  said  coiporation.  joint-stock 
rompany  or  association,  is  authorized  to  have, 
does  not  exceed  fifty  thousand  dollars;  but, 
in  case  the  capital  stock  thereof  is  in  excess 
of  fifty  thousand  dollars,  the  secretary  of, 
State  shall  collect  the  further  sum  of  fifteen^ 
cents  on  each  and  every  thousand  dollars  of 
such  excess,  and  a  like  fee  of  fifteen  centi< 
on  each  thousand  of  the  amount  of  each  sub-'' 
sequent  increase  of  stock.  The  said  fee  shall/ 
be  due  and  payable  upon  the  filing  of  cer- 
tificate of  incoiiioration,  articles  of  associa- 
tion, or  charter  of  said  incoiporation.  joint- 
stock  company  or  association,  in  the  office  of 
the  secretary  of  State;  and  no  such  coipora- 
tion,  joint-stock  company  or  association  shall 
have  or  exex'cise  any  coi'porate  powers  or 
be  penuitted  to  do  any  business  in  this  State 
until  the  said  fee  shall  have  been  paid;  and 
the  secretary  of  State  shall  not  file  any  cer- 
tificate of  incoiiioi'ation.  articles  of  associa- 
tion, charter  or  certificate  of  the  increase  of 
capital  stock,  or  certify  or  give  any  cer- 
tificate to  any  such  conioratiou.  joint-stock 
company  or  association,  until  said  fee  shall 
have  been  paid  to  him.  But  this  act  shall 
not  apply  to  corporations  not  for  pecuniary 
profit,  or  coi-porations  organized  for  religious, 
educational  or  benevolent  pui-poses. 

§  2.  Any  foreign  corporation  doing  busi- 
ness in  this  State,  that  has,  since  the  filing  of 
its  certificate  in  this  State,  increased  its  capi- 
tal stock,  without  paying  the  fees  prescribed 
by  the  law  of  this  State  at  the  time  of  such 
increase,  or  that  shall  hereafter  increase  its 
capital  stock,  shall  be  liable  to  pay  the  fees 
prescribed  l)y  tliis  act,  and  it  is  herel)y  made 
the  duty  of  the  secretary  of  State  to  at  once 
cause  action  to  be  In-ought  against  any  for- 
eign corporation  for  recovery  of  such  fees, 
and  a  certified  copy  of  the  certificate  of  such 
increase,  on  file  in  any  foreign  State,  shall 
be  sufficient  evidence  to  sustain  a  judgment 
for  the  amount  of  such  fees,  and  an  action 
in  the  nature  of  a  writ  of  quo  warranto  shall 
lie  against  any  foreign  corporation  to  test 
its  right  to  exercise  coi'porate  franchises  in 
this  State. 


§  3.  The  secretary  of  State  shall  not  file 
or  record  in  his  ofl[ice  any  certificate  of  paid- 
up  stock,  certificate  of  impression  of  corpo- 
rate seal  or  other  paper  of  anj'  coiiioration 
or  association,  nor  issue  any  certificate  to 
any  corporation  or  association,  unless  the 
articles  of  iucon)oration  of  said  company  are 
already  on  file  in  his  office,  nor  unless  all  fees 
prescribed  by  this  act  shall  have  been  paid. 

§  4.  All  acts  and  parts  of  acts  inconsistent 
with  this  act  are  hereby  repealed. 

§  5.  In  the  opinion  of  the  general  assem- 
bly an  emergency  exists;  therefore,  this  act 
shall  take  effect  and  be  in  force  from  and 
after  its  passage. 

(Approved  April  13,  1897.) 

Act  11. 

AN   ACT   to   prevent  blacklisting  and   boy- 
cotting. 

Be  it  enacted  by  the  general  asseml)ly  of 
the  State  of  Colorado: 

Section  1.  That  any  I'aih'oad  or  telegraph 
company,  or  any  olficer,  agent  or  employe 
of  any  railroad  or  telegraph  company,  or 
any  other  company,  corporation  or  individual 
doing  business  within  the  State  of  Colorado, 
shall  not  issue,  circulate,  or  publish,  or  cause 
to  (be)  issued,  circulated  or  published,  any 
blacklist,  circular,  or  other  statement,  re- 
garding any  person  or  persons  who  may  have 
been  in  the  employ  of  any  of  the  alcove- 
mentioned  railroads,  telegraph,  or  other  com- 
panies, coii)orations,  or  individuals,  which 
will  deprive  said  person  or  persons  of,  or 
in  any  way  prevent  them  from  obtaining  em- 
ployment. 

§  2.  Any  dismissed  employe  shall  on  de- 
mand be  furnished  by  the  aforesaid  employer 
of  said  dismissed  employe  specific  rea.sons  in 
writing  for  said  dismissal;  Provided.  That 
no  person  or  corporation  shall  be  held  liable 
either  civilly  or  criminally  for  any  such 
reasons  so  given  upon  such  reqtiest. 

§  3.  It  shall  be  unlawful  for  any  person  or 
persons,  or  combination  of  persons,  or  society, 
or  tuiion.  to  establish  or  instittite,  or  engage 
in  a  boycott  against  any  individual,  firm  or 
corporation  carrying  on  any  kind  of  trade 
or  Inisiness,  by  agreeing  not  to  patronize, 
trade  or  do  business  Avith  any  such  indi- 
vidual, firm  or  coi-poration,  or  to  induce  oth- 
ers not  to  so  patronize,  trade  or  do  business 
with  any  such  individual,  firm  or  coiiioration. 

§  4.  Any  violation  of  this  act  saall  be  a 
misdemeanor  and  punishable  by  fine  of  not 
less  than  five  hundred  (500)  dollars,  nor  more 
than  one  thousand  (1,000)  dollars,  or  impris- 
onment of  not  less  than  sixty  iCiO)  days,  nor 
more  than  one  year,  or  both  fine  and  im- 
prisonment at  the  discretion  of  the  court. 

(Approved  April  21.  1807.) 


INDEX  TO  COLORADO. 


ACCEl'TANCE:  l-age. 

of  constitution  bj'  railroad 7 

of  provisions  of  corporation  act   22 

ACTIONS: 

against  corporations,  tlie  same  as  individuals   ly 

summons,  how  served  IS,  1!) 

by  corporation  against  its  members   21 

ADMINISTRATOR: 

not  personally  liable  as  stockholder 16 

may  vote  as  stockholders 10 

AMENDMENT: 

of  articles  of  incorporation,  stockholders  metings 27.  28 

proceedings  upon 28 

certificate  of,   to  be  filed    28 

ARBITRATION,  BOARD  OF: 

settlement  of  labor  disputes  by I'.O,  31 

ARTICLES  OF  ASSOCIATION.    (See  Certificate  of  Incorporation.) 
ASSESSMENTS: 

payment  of.    (See  Subscriptions'!    12 

levied  by  directors    15 

ATTACHMENT: 

against  shares  of  stock  owned  by  defendant 24 

shares  held  to  await  judgment 25 

foreign    corporations    25 

BILL  OF  CREDIT: 

not  to  be  emitted 2.3 

BLACKLISTING: 


of  employes  prohibited    0. 


32 


BONDS: 

issued  for  labor,  money  or  property S,  20 

BOOKS: 

of  stockholders'  names,  etc.,  to  be  kept 19 

open  to  inspection    19 

transfers  of  stock  to  be  entered  in 19 

BOOKS  OF  ACCOUNTS: 

directors  to  cause  to  be  kept 1-' 

stockholders   may    examine    15 

BORROW: 

corporation  may  11 

BOYCOTTS: 

not  to  be  established   32 

BY-LAWS: 

to  regulate  transfer  of  stock 12 

sale  of  stock  for  unpaid  installments 12 

time  and  place  of  holding  meetings 13 

stockholders  or  directors  to  adopt 14 

what    to    prescribe    It! 


34  IXDEX  TO  COLOKADO. 

CAPITAL  STOCK:  Paso. 

amount,  cortificato  to  state   1<> 

ceVtificate  showing  amount  paid  in   14 

increase  or  decrease,  how  effected lil 

fee  to  be  paid  according  to  amount 24 

to  bo  paid  by  foreign  corporation   32 

CERTIFICATE  OF  INCOKrORATION: 

contents  of 10.  11 

filing 11 

fee  to  be  paid  upon  filing 24 

secretary  of  state  to  record   11 

copies,   evidence    11 .  18 

of  foreign  corporation,  copy  to  bo  filed   17 

copies   of,   evidence    18 

of  consolidated  corporation   22 

amendment,  meetings  of  stockholders  for   27.  28 

proceedings  and  conduct  of  meetings  28 

certificate  of,  to  be  filed   28 

CHARTERS: 

of  toll  bridges  and  ferries,  legislature  not  to  grant (^ 

existing,  when  invalid    7 

special  laws  not  to  grant   7 

general  assembly  may  alter  or  revoke  7 

foreign  corporation  to  file  copy    17 

CONSOLIDATION: 

of  domestic  with  foreign  corporation   8 

of  corporations,  how  effected   21,  22 

CONSTITUTION: 

acceptance  of,   by  railroad    7 

CONTRACTS: 

laws  impairing  obligation    5 

CONVEYANCES: 

of  real  property  by  corporations   9 

of  real  property,  by  corporation,  how  made 21 

by  agents  and  attorneys   21 

CREDIT: 

of  state  or  municipality  not  to  be  loaned   6 

DIRECTORS:  i 

number,  certificate  to  state    10 

corporate  powers  exercised  by    13 

qualifications 13 

election  of,  notice 13 

to  be  by  ballot  13 

vote  of  stockholders  13 

failure  to  hold  on  regular  day,  effect 1-3,  14 

vacancies  in  office   13 

not  to  mortgage  without  consent  of  stockholders  13 

officers   appointed   by    14 

certificate  of  capital  paid  in  14 

to  cause  books  of  accounts  to  be  kept 1.5 

assessments  or  installments  levied  by   15 

purchase  of  mines,  manufactories,  etc 15 

liability  for  failure  to  make  report  15 

dividends,  when  insolvent    16 

meetings  of,  by-laws  to  regulate   10 

not  to  be  held  out  of  state 16 

to  cause  book  of  stockholders,  names,  etc.,  to  bo  kept 19 

on  dissolution,  trustees  for  creditors 20 


IXDEX  TO  COLORADO.  35 

DIRECTORS  —  (Continued) :  Page. 

call  meetings  for  change  of  name,  etc •  21 

for  consolidation  with  other  corporations 21,  22 

number  of,  meetings  for  change  21 

DISSOLUTION: 

not  to  impair  remedies,  etc 20 

courts  of  equity  may  decree 16 

appointment  of  receivers 16 

board  of  directors  to  act  as  trustees  20 

powers  and   duties   20 

liability  of,  to  creditors   20 

title  to  property  to  vest  in  20 

voluntary,  proceedings  for,  by  stockholders 27 

DIVIDENDS: 

when  insolvent,  liability  of  officers  16 

ELECTION: 

of  directors,  regulated   13 

rights  of  stockholders  to  vote 13 

failure  to  hold,  not  to  dissolve 13,  14 

call  of,  upon  failure  to  hold  at  regular  time 14 

EMINENT  DOMAIN: 

right  of,  not  to  be  abridged 7,  8 

EMPLOYES: 

liability  for  injuries  to,  not  to  be  released 8 

'    blacklisting   prohibited    9f  32 

boycotts  not  to  be  established 32 

wages  not  to  be  paid  in  envelopes  containing  campaign  literature 26 

not  to  be  compelled  to  vote  for  any  person 27 

may  join  labor  organizations  29,  30 

penalty  for  preventing  30 

strikes  and  lockouts,  settlement  by  board  of  arbitration 30,  31 

EMPLOYMENT: 

combinations  to  secure,  not  unlawful  23 

EXISTENCE,  CORPORATE: 

certificate  to  state  duration ^^ 

EXECUTOR: 

not  liable   as   stockholder    ^^ 

may  vote  as  stockholder  ^" 

EXECUTION: 

24 
stock  subject  to  

levy  how  made  on  shares ^'^'    "^ 

sale  of  stock  under 

FALSE: 

report  and  statement,  liability  of  officer  for 

FEES: 

24 

to  be  paid,  upon  filing  certificate  of  incorporation  

by  foreign  corporation,  on  capital 

FOREIGN  CORPORATION:  ^_, 

to  have  place  of  business  within  state * 

consolidation  of  domestic,  with  

under  foreign  government,  not  to  acquire  lands 

certificate  to  be  filed,  designating  place  of  business  and  agent 

subject  to  liabilities,  etc.,  of  domestic  corporations 

execution  of  mortgage  on  property  within  state   

claims  and  debts  to  bo  paid  before   

copy  of  charter  to  be  filed „ 

failure  to  comply,  effect  of  ... 

11 


36  INDEX  TO  COLOEADO. 

FOREIGN   CORrORATION  — (Continued):  Page. 

reconstruction  by  liquidation,  stock  interests  of  residents  to  be  protected 27 

service  of  summons  on 29 

FRAUDULENT: 

certificate  of  stock  or  transfer 23 

sale  or  transfer  of  stock   23 

FRANCHISES; 

corporation  may  pledge  H 

GUARDIAN: 

not  personally  liable  as  stockholder  16 

may  vote  as  stockholder   16 

INJURIES: 

liability  for,  to  employes  not  to  be  released 8 

INSPECTION: 

of  books  and  papers  by  stockholders   15 

INSTALLMENTS: 

payment  of.    (See  Subscriptions)  12 

levied  by  directors 15 

LABOR  ORGANIZATIONS: 

not  unlawful  23 

employes  not  to  be  prevented  from  joining 29,  30 

LANDS.    (See  Real  Property.) 
LIABILITY: 

of  stockholders  for  corporate  debts 14 

actions  to  enforce    14 

when  suit  may  be  brought  to  enforce  16 

of  directors  for  failure  to  make  annual  report 15 

for  dividends  when  insolvent 16 

of  officers  for  false  reports,  statements,  etc 16 

LOCKOUT: 

of  employes,  settlement  by  board  of  arbitration 30,  31 

MEETINGS  OF  STOCKHOLDERS: 

time  and  place,  by-laws  to  prescribe 13 

notice,  how  given   13 

for  change  of  name,  place  of  business,  increase  or  decrease  of  capital 21 

for  consolidation  with  another  corporation  21 

for  voluntary  dissolution   27 

for  amendment  of  certificate  of  incorporation 27,  28 

MORTGAGING: 

property  of  manufacturing  and  mining  companies  13 

of  foreign  corporations,  payment  of  debts,  etc 17 

NAME,  CORPORATE: 

how  to  commence  and  end  10 

certificate  to  state   10 

change  of,  how  effected  21 

OFFICERS: 

appointment  of,  by  directors   14 

liability  for  false  report  or  statement 16 

fraudulent  issue  of  certificates  of  stock  or  transfer 23 

sale  of  stock,  etc 23 

PAY  ENVELOPES: 

not  to  contain  election  literature   26 


IXDEX  TO  COLORADO.  37 

PLACE  OF  BUSINESS:  Page. 

foreign  corporation  to  have,  within  state 8,  17 

change  of,  how  effected  21 

PLEDGEE: 

not  liable  as  stockholder 16 

POWERS,  CORPORATE: 

stated  generally 11 

PRESIDENT    (See  Officers): 

directors  to  elect   14 

PRINCIPAL  OFFICE: 

certificate  to  state  10 

PROPERTY: 

private,  not  to  be  taken  without  compensation 5 

RAILROADS: 

right  to  lay  down,  legislature  not  to  grant 6 

public  highways  7 

between  point  in  state  to  state  line 7 

consolidation  of  competing   7 

discriminations  not  to  be  made 7 

acceptance  of  constitution  by ^ 

street,  consent  of  local  authorities  8>  ^^ 

new  liability  for  benefit  of 8 

REAL  PROPERTY: 

foreign  corporations,  when  not  to  acquire 9 

proceedings   for   forfeiture    9 

conveyances  by  corporations ^ 

power  to  hold  and  convey H 

acquisition  of,  if  owners  do  not  agree 20 

examination  and  survey,  entry  upon   20 

conveyances,  how  made  by  corporation  21 

REPORT: 

annual,  of  capital  and  debts ^^ 

SEAL,  COMMON: 

corporation  to  have H 

STATEMENT: 

of  affairs  of  corporation,  stockholders  may  require 19 

STOCK: 

investment  of  trust  funds,  legislature  not  to  authorize 6 

state  or  municipality  not  to  subscribe  to 6 

issued  for  labor,  property  or  money 8,  20 

shares,  certificate  to  state  number  10 

par  value    ^'^ 

transferable  as  prescribed  by  by-laws ^■^ 

subscriptions,    how   payable    ^^ 

sale  for  unpaid   

corporation  not  to  purchase  its  own    1* 

issued  for  mines,  factories  and  other  property 15 

transfers  to  be  entered  in  stock  book l*^ 

of  consolidated  corporation   2iS 

sale  of  fraudulent  certificates,  a  felony  23 

fraudulent  issue  of  certificates  of,  or  of  transfer 23 

shares  subject  to  execution  and  attachment ■^'* 

certificate  of  number  owned  by  defendant  -^^ 

levy  upon,  how  made   "■*'  _ 

attached,  held  subject  to  judgment   ^^ 

sale  of,  under  execution   

25 
purchaser  deemed  legal  owner   


38  INDEX  TO  COLORADO. 

STOCK  —  (Continued):  Page. 

capital,  amount,  certificate  to  state 10 

certificate  showing  amount  paid  in 14 

increase  or  decrease,  how  effected 21 

fee  to  be  paid  according  to  amount 24 

to  be  paid  by  foreign  corporation  32 

STOCKHOLDERS: 

votes  of,  at  elections  13 

adoption  of  by-laws   14 

liability  of,  for  corporate  debts 14 

action  to  enforce 14 

executor,  administrator,  etc.,  not  subect  to 16 

when  suits  may  be  brought  to  enforce 16 

statement  of  affairs  of  corporations,  may  request 19 

books,  containing  names,  etc.,  to  be  kept i 19 

open  to  inspection   19 

transfers  to  be  entered  on 19 

action  by  corporation  against  21 

STREET  RAILROADS: 

consent  of  local  authorities  8,  18 

new  liability  in  benefit,  not  to  be  imposed,  etc 8 

STRIKES: 

settlement  by  boards  of  arbitration 30,  31 

SUBSCRIPTIONS: 

to  capital  stock,  payable  as  prescribed  in  by-laws 12 

action  to  recover  unpaid 12 

sale  of  stock  for  unpaid  12 

levy  of  installments   15 

SUCCESSION: 

corporation  to  have 11 

SUB  AND  BE  SUED: 

corporation  may ; 11 

SUMMONS: 

how   served  on  corporation   18,  19,  28,  29 

in  courts  of  justices  of  the  peace,  etc 29 

on  railroad  corporation   29 

on  foreign  corporation  29 

TAXATION: 

power,  not  to  be  relinquished 6 

corporations  subject  to 6 

property  listed  by  whom 26 

deduction  of  amount  due  on  subscriptions 26 

statement  of  stock  owned,  officers  to  make 26 

TELEGRAPH  COMPANIES: 

regulations,  general  assembly  to  make  8 

not  to  purchase  competing  line 8 

consolidation  with  foreign  corporation  8 

TRANSFERS: 

of  stock  to  be  entered  in  stock  book 19 

TRUSTEE: 

not  personally  liable  as  stockholder 16 

may  vote  as  stockholder  16 

VACANCIES: 

in  office  of  directors  13 

VOLUNTARY  DISSOLUTION: 

proceedings  for,  by  stockholders   27 


CONNECTICUT. 


TABLE  OF  CONTENTS. 


CONSTITUTIONAL  PROVISIONS. 

Art.     I.  Declaration  of  rights g 

X.  General  provisions   5 

Amendment.     Municipalities  not  to  loan  credit,  or  give  aid,  to  corporations 5 

GENERAL  STATUTES. 

TITLE  I.     CONSTRUCTIOIV  OF  STATUTES. 

TITLE   XIIL     COURTS    OP   PROBATE. 

Oh.  52.  Insolvent  debtors  g 

04.  Probate  of  wills  g 

TITLE  XIV.     JUSTICES  OP  THE  PEACE. 

Oh.  57.  Jurisdiction    q 

TITLE  XVIII.     CIA  IL  ACTIONS. 

Oh.  70.  Service  of  process  7 

71.  Venue   7 

73.  Pleadings  8 

75.  Evidence    8 

76.  Trials    8 

79.  Executions    8 

86.  Foreign  attachment 9 

89.  Mandamus  and  quo  warranto 9 

92.  Receivers   9 

TITLE    XIX.      CRIMES   AND   CRIMINAL  PROSECUTION. 

Ch.  99.  Crimes 10 

TITLE  XXII.     APPRENTICES  AND     EMPLOYES. 

TITLE   XXX.      PRIVATE   CORPORATIONS. 

Ch.  119.  General    provisions    11 

120.  Joint-stocli  corporations   18 

TITLE   L.     LANDS. 

Ch.  176.  Land  titles   24 

TITLE   LXXVI.     TAXATION. 

Ch.  241.  Assessment   25 

244.  Special  taxes  on  corporations 26 

LEGISLATIVE    ACTS   SUBSEQUENT   TO    1888. 


CONNECTICUT, 


CO:N-STITUTIO]Sr  OF  CO]^]S-ECTICUT-  1818 


PROVISIONS  RELATING  TO  CORPORATIONS. 


ARTICLE  I. 
Declaration  of  Rights. 
§  11.  The  property  of  no  person  shall  be 
taken  for  public  use,  without  just  compensa- 
tion therefor. 


Power   of   corporation    to    take    and    hold 
erty.     §  1906. 


prop- 


§  3. 


ARTICLE  X. 
General  Provisions. 
The  rights  and  duties  of  all  corpora- 


tions shall  remain  as  if  this  Constitution  had 
not  been  adopted;  "with  the  exception  of 
such  regulations  and  restrictions  as  are  con- 
tained in  this  Ckjnstitution.     *     *     * 


AMENDMENT,  ARTICLE  XXV. 

No  county,  city,  town,  borough,  or  other 
municipality,  shall  ever  subscribe  to  the 
capital  stocli  of  any  railroad  corporation,  or 
become  a  purchaser  of  the  bonds,  or  make 
donation  to,  or  loan  its  credit,  directly  or 
indirectly,  in  aid  of  any  such  corporation; 
but  nothing  herein  contained  shall  affect  the 
validity  of  any  bonds  or  debts  incun-ed  under 
existing  laws,  nor  be  construed  to  prohibit 
the  general  assembly  from  authorizing  any 
town  or  city  to  protect  by  additional  appro- 
priations of  money  or  credit  any  railroad 
debt  contracted  prior  to  the  adoption  of  this 
amendment. 

(Adopted  October,  1S77.) 


CONNECTICUT. 


Insolvents;  wills;  justices  —  Stat.,  §§  1,  502,  5UG,  555,  667. 


THE  GENERAL  STATUTES   OF  COIN'XECTICUT  -  188T. 


TITLE    I.     CONSTRUCTION    OF    STATUTES. 

Sec.  1.  The  word  "  person  "  Includes  corporations. 

Section  1.  *  *  ♦  The  words  "person" 
and  "  another  "  may  extend  and  be  applied 
to  *  *  *  companies,  corporations,  itublic 
or  private,  and  associations.     *    *     * 


Corporate  name. 


1905,    1944. 


[All  statutes  which  speak  of  persons  cannot  be 
construed  to  Include  corporations,  but  such  a 
construction  ought  to  be  given  In  this  respect  as 
will  effectuate  the  Intentions  of  the  legislature, 
promote  the  object,  and  prevent  the  evil  In  view. 
Knox  V.  Protection  Ins.  Co.,  9  Conn.  435.] 


TITLE   XIII.      COURTS   OF  PROBATE. 

CHAPTER  LII. 

Insolvent  Debtors. 

Sec.  502.  Assigning   debtor   to   deliver  to   probate 
court  list  of  creditors  and  schedule  of 
debts. 
506.  Assignment  of  estate  of  a  corporation, 
how  made. 

§  502.  *  *  ♦  Where  a  corporation  shall 
malie  an  assignment  it  shall  be  the  duty  of 
the  secretary  of  such  corporation,  and  if 
there  be  no  secretary  or  if  he  be  absent  or  in- 
capable, the  president,  to  malie  and  deliver 
such  list  and  schedule  (of  debts,  creditors 
and  property),  and  any  such  officer  failing 
to  comply  with  the  provisions  of  this  section 
shall  forfeit  all  benefits  and  privileges  al- 
lowed to  debtors  by  this  chapter,  shall  not 
be  entitled  to  a  discharge,  and  shall  be 
guilty  of  contempt  and  punishable  therefor 
in  the  discretion  of  the  court  of  probate. 

Receivers  of  Insolvent  corporations.  §§  1321, 
1322.  "Winding  up  corporations.  §§  1942,  1943, 
1965,  1960,  1967.  Dividends  by  insolvent  corpora- 
tion. §  1958.  See  act  of  1895  concerning  re- 
ceivers, at  p.  32;  act  of  1895  concerning  winding 
up  of  corporations,  at  p.  33. 

[Preference  to  director  by  insolvent  corporatioii 
good  In  the  absence  of  fraud.  Smith  v.  Skeary, 
47  Conn.  54.  I'ower  and  status  of  Insolvent  cor- 
poration. See  C'atlin  v.  Bank,  6  id.  241;  Pondville 
Co.  V.  Clark,  25  Id.  101.  If  a  stockholder  of  an 
Insolvent  corporation,  by  whose  charter  he  is 
personally  liable  for  its  debts,  dies,  the  dis- 
tributees of  his  estate  are  not  compelled  to  re- 
ceive such  stock,  though,  if  they  do,  they  subject 
themselves  to  the  same  liability.  Deming  v.  Bull, 
10  Conn.  416.] 

§  506.  When  the  members  of  any  corpora- 


tion shall  be  reduced  to  a  less  number  than 
that  required  by  statute,  or  by  its  charter, 
its  remaining  members  may  in  its  name 
make  an  assignment  of  all  its  estate,  and  it 
may  be  proceeded  against  by  any  of  its  cred- 
itors as  if  such  members  were  not  so  reduced 
in  number,  and  service  of  process  therein 
made  upon  any  remaining  member  of  such 
corporation  shall  be  sufficient.  The  assign- 
ment of  any  corporation  may  be  made  by 
the  directors  in  legal  meeting  called  for  such 
purpose. 

See  §  502,  note. 

CHAPTER  LIV. 

Probate  of  Wills. 

Sec.  555.  Notice  of  devise  or  bequest  to  corpora- 
tion or  voluntary  association. 

§  555.  Within  thirty  days  after  the  admis- 
sion to  probate  of  any  will,  containing  a  de- 
vise or  bequest  to  any  corporation  or  volun- 
tary association,  the  judge  or  clerli  of  the 
court  of  probate  before  which  it  is  proved 
shall  deposit  in  the  post-office,  postage  paid, 
a  written  notice  thereof  directed  to  the 
devisee  or  legatee  at  the  place  where  it  is 
located. 

TITLE    XIV.      JUSTICES    OF    THE    PEACE. 

CHAPTER  LVII. 
Jurisdiction  of  Justices  of  the  Peace. 
Sec.  667.  Actions  by  foreign  corporation. 

§  667.  All  civil  actions  brought  by  any 
corporation  incorporated  by  the  laws  of 
any  other  State,  or  foreign  government, 
against  one  or  more  of  the  inhabitants  of  this 
State,  shall  be  made  returnable  to  a  justice 
of  the  peace,  in  the  town  in  which  the  de- 
fendant or  one  of  the  defendants  I'eside,  if 
such  actions  are  cognizable  by  a  justice  of 
the  peace;  but  any  corporation  or  association 
created  by,  or  existing  under  the  laws  of 
the  United  States  and  located  in  any  town 
in  this  State,  may  sue  before  any  justice  of 
the  peace,  before  whom  a  civil  action  may 
be  brought  by  any  inhabitant  of  such  town. 

Actions  not  within  jurisdiction  of  justice  of  the 
peace.  §  969.  Corporation  may  sue  or  be  sued. 
S  1906  (2),  note. 


CONNECTICUT. 


Service  of  process;  attachment  of  shares;  venue  — Stat.,  §§  908,  909,  919,  935,  969. 


TITLE  XVIII.     CIVIIi  ACTIONS. 

CHAPTER  liXX. 

Service  of  Process  in  Civil  Actions. 

Sec.     908.  Service  against  corporation. 

909.  Against  voluntary  associations. 
919.  Attachment  of  rights  or  shares  in  cor- 
porations. 
935.  Dissolution  of  such  attachment. 

§  90y.  In  actions  against  *  *  ■•■  corpora- 
tions, the  service  of  the  process  by  the 
officer  by  leaving  a  true  and  attested  copy  of 
It,  and  of  the  accompanying  declaration  or 
complaint,  with  or  at  the  usual  place  of 
abode  of  *  *  *  the  secretary,  or  cashier, 
or  in  the  case  of  a  private  corporation  having 
no  secretary  or  cashier,  at  the  principal 
place  in  this  State,  where  such  corporation 
transacts  its  business  or  exercises  its  corpo- 
rate powers,  shall  be  sufficient.  When  a  cor- 
poration doing  business  in  this  State  has  no 
secretary  or  cashier  resident  in  this  State, 
service  of  process  upon  a  resident  director, 
shall  be  good  and  effectual  service. 

See  §  1906  (2),  note.  Service  on  foreign  cor- 
porations. See  Acts  Nos.  14,  19  and  23,  at  pp.  32, 
35  and  36. 

[Service  of  process  on  a  member  of  a  corpora- 
tion Is  not  service  on  the  corporation.  Rand  v. 
The  Proprietors,  etc.,  3  Day  (Sup.  Ct.),  447. 

If  process  be  required  to  be  served  on  secre- 
tary, service  on  director  and  general  agent  Is  in- 
effectual. McCall  V.  Mfg.  Co..  6  Conn.  434.  But 
service  may  be  made  on  a  secretary  de  facto.  Id. 
Fraudulent  resignation  of  secretary  to  avoid  ser- 
vice of  summons  is  void,  and  service  upon  him  is 
effectual.     Evarts  v.  Mfg.  Co.,  20  Conn.  457. 

Whether  if  all  the  stock  should  be  transferred 
to  one  individual,  to  evade  service  of  process 
against  the  corporation,  and  there  were  no  secre- 
tary or  clerk  existing,  a  valid  service  might  not 
be  made  on  such  single  stockholder,  quaere.  Id. 
Service  of  a  writ  against  a  foreign  corporation, 
made  on  its  officers  while  in  this  State,  will  not 
confer  jurisdiction  on  our  courts.  Middlebrooks 
V.  Ins.  Co.,  14  Conn.  3.] 

§  909.  In  actions  against  such  voluntary 
associations  as  are  liable  to  be  sued,  service 
of  process  may  be  made  upon  the  presiding 
officer,  secretary,  or  treasurer.  The  property 
of  any  such  association,  whether  held  by 
such  association  or  in  the  hands  of  trustees 
for  its  benefit,  may  be  attached  and  held  to 
respond  to  any  judgment  that  may  be  re- 
covered against  it;  but  the  individual  prop- 
erty of  its  members  shall  not  be  liable  to 
attachment  or  levy  of  execution  In  such 
actions. 


See  i  1906,  note. 

[Individual     liabilitv  of    members. 
Holden.  55  Conn.  103.] 


Davison  v. 


§  919.  Rights  or  shares  in  the  stock  of  any 
corporation,  together  with  the  dividends  and 
profits,  due  and  growing  due  thereon,  may 
be  attached,  and  taken  on  execution.  Such 
attachment  shall  be  made  by  leaving  a  true 


and  attested  copy  of  the  process,  and  of  the 
accompanying  complaint  or  declaration,  with 
the  proper  endorsement  thereon,  of  the 
officer  serving  the  same,  as  in  other  cases, 
with  the  defendant,  or  at  his  usual  place  of 
abode,  if  within  this  State,  and  with  the 
secretary,  clerk,  or  cashier  of  such  corpora- 
tion, or  if  such  corporation  has  no  .secretary, 
clerk,  or  cashier,  or  if  he  is  absent  from  tiiis 
State,  then  at  the  principal  place,  in  this 
State,  where  such  corporation  transacts  its 
business  or  exercises  its  corporate  powers; 
and  such  rights  or  shares,  together  with  the 
dividends  and  profits,  shall  be  holden  to  re- 
spond to  the  judgment  which  may  be  re- 
covered in  said  action,  for  sixty  days  only 
after  its  rendition;  and  when  an  officer,  with 
a  writ  of  attachment,  shall  apply  to  such 
secretary,  clerk,  or  cashier,  for  the  purpose 
of  attaching  such  rights  or  shares,  the  secre- 
tary, clerk,  or  cashier,  shall  furnish  him  with 
a  certificate,  under  his  hand,  in  his  official 
capacity,  specifying  the  number  of  rights  or 
shares  which  the  defendant  holds  in  the 
stock  of  such  corporation,  with  the  incum- 
brances thereon,  if  any,  and  the  amount  of 
dividends  thereon  due. 

See  §  1171. 

[Where  bank  shares  are  attached,  when  cashier 
is  absent,  if  no  copy  of  writ  be  left  at  bank,  no 
lien  will  be  acquired  on  shares.  Bank  v.  Ferris, 
17  Conn.  259.  Shares  of  stock  not  being  dis- 
tinguishable, a  description  specifying  number  of 
shares  and  owner  is  sufficient.  Id.  An  equitable 
interest  in  shares  of  stock  may  be  attached  and 
sold  the  same  as  a  legal  interest.  Bank  v.  Jar- 
vis,  33  Conn.   372.] 

§  935.  The  defendant,  if  the  attachment 
dissolved  be  of  real  estate,  may  file  with  the 
town  clerk  of  the  town  wliere  it  lies,  a  cer- 
tificate of  such  dissolution  signed  by  the 
authority  making  the  same;  if  the  attach- 
ment be  of  shares  in  any  corporation,  he 
may  leave  a  lilvc  certificate  with  the  officer 
of  the  corporation  with  whom  a  copy  of  the 
attachment  was  left  in  service;  and  if  the 
attachment  be  of  debts,  or  effects,  in 
the  hands  of  a  garnishee,  he  may  leave  a 
like  certificate  with  the  garnishee;  and  no 
such  corporation  shall  be  held  liable  to  the 
defendant  for  refusing  to  transfer  the  shares 
attached,  or  to  pay  the  dividends  due 
thereon,  and  no  such  garnishee  shall  be  held 
liable  to  the  defendant  for  refusing  to  pay 
the  debt,  or  return  the  effects  attached  in 
his  hands,  until  such  certificate  shall  have 
been  so  left. 


CHAPTER  LXXI. 
Venue  of  Civil  Actions. 

Sec.  909.  Actions  by  a  foreign  corporation. 

§  909.  All  actions  not  within  the  Jurlsdic- 
tlion  of  a  justice  of  the  peace,  brought  by 
any  corporation  incorporated  by  the  laws  of 


8 


CONNECTICUT. 


Pleadings;  evidence;  trials;  execution  —  Stat.,  §§  996,  1090,  1093,  1113,  1169,  1171. 


any  other  State  or  a  foreign  government, 
against  one  or  more  of  tlie  inhabitants  of 
this  State,  shall  be  made  returnable  to  the 
superior  court  or  court  of  common  pleas  in 
the  county,  or  the  district  court,  in  the  dis- 
trict, wherein  the  town  is  situated,  in  which 
the  defendant,  or  one  of  the  defendants,  re- 
sides; but  any  corporation  incorporated  im- 
der  the  laws  of  the  United  States  and  located 
in  any  town  in  this  State,  may  sue  before 
the  same  courts  in  which  any  inhabitant  of 
such  town  may  sue. 

Actions  within  jurisdiction  of  justice.  §  667. 
rower  of  corpoiations  to  sue  and  be  sued.  §  1906 
(2),  note. 

CHAPTER  LXXIII. 

Pleadings. 

Sec.  996.  Pleading  charters. 

§  996.  All  acts  of  incorporation  passed  by 
the  general  assembly  may  be  declared  on  or 
pleaded  as  public  acts. 

[Corporation  created  by  a  private  act,  in  order 
to  sustain  a  suit,  must  set  forth  such  parts  of 
the  act  as  are  necessary  to  show  that  It  is  a  cor- 
poration and  has  the  power  to  sue.  Mfg.  Co.  v. 
Hartshorne,  3  Conn.  202.] 


CHAPTER  LXXV. 

Evidence. 

Sec.  1090.  Certified  copy   of  certificate  of  organi- 
zation shall  be  prima  facie  evidence. 
1093.  Files  and   records  of  corporations   may 
be  proved  by  copy. 

§  1090.  A  copy,  certified  by  the  secretary 
of  this  State,  under  its  seal,  of  the  original 
certificate  of  organization  of  any  joint-stock 
corporation,  shall  be  prima  facie  evidence 
of  the  due  formation,  existence,  and  capacity 
of  such  corporation. 

§  1093.  Tlie  files,  records,  votes,  and  pro- 
ceetlings  of  any  *  *  *  corporation, 
*  *  *  having  a  clerk,  may,  when  he  is 
absent,  or  unable  to  perform  the  duties  of 
his  office,  be  proved  in  any  court  by  copies 
examined  and  sworn  to  by  credible  wit- 
nesses. 

Books  must  be  kept  where.     §  1953. 

[Record-book  of  corporation  is  presumptive  evi- 
dence of  facts  recited  therein.  Lane  v.  Brlnard, 
30  Conn.  .570.  In  actions  against  corporation  en- 
tries in  record-book  are  admissible  for  plaintiff 
without  proof  that  the  meetings  were  duly  warned. 
Howard  Ins.  Co.  v.  Hope  Ins.  Co.,  22  Conn.  403. 
Entries  of  proceedings  of  directors,  in  record-book, 
are  legal  evidence  against  it,  but  not  conclusive, 
and  may  be  contradicted  by  parol.  Goodwin  v. 
Ins.  Co.,  24  Conn.  6»il.  And  a  subsequent  vote 
rescinding  the  former  one  might  be  given  in  evi- 
dence to  show  that  it  was  repudiated  by  the  cor- 
poration. Id.  Vote  of  corporation  approving 
minutes  of  last  meeting  amounts  to  a  ratifica- 
tion, whether  meeting  was  held  regularly  or  not. 
Ins.  Co.  V.  Ins.  Co.,  22  Conn.  103.  Corporation 
cannot  Introduce  proof  of  its  own  votes  repudiat- 
ing act  of  agent,   to  rebut  implication  of  ratiflca- 


tion  of  such  act  derived  from  their  previous  votes 
Introduced  by  the  adverse  party.  Id.  Rut  may 
introduce  its  true  record-book  to  prove  that  an- 
other book  is  spurious.  Goodwin  v.  Ins.  Co., 
supra.  Records  may  be  introduced  to  prove  ad- 
mission by  corporation  of  its  liability.  Ins.  Co. 
V.  Ins.  Co.,  supra.  Testimony  by  secretary  that 
no  vote  of  a  certain  character  is  on  the  records 
of  a  corporation  Is  admissible.  Smith  v.  Rich- 
ards. 29  Conn.  243.  Record  of  resignation  may 
be  made  by  the  resigning  officer.  Evarts  v.  Mfg. 
Co.,  20  Conn.  457.] 

CHAPTER  LXXVI. 

Trials  of  Civil  Actions. 

Sec.  1113.  Precedence  of  cases. 

§  1113.  *  *  *  Appeals  from  probate, 
and  from  the  doings  of  commissionei's  ap- 
pointed by  courts  of  probate,  and  actions 
brought  by  receivers  of  insolvent  con^ora- 
tions  by  order  of  the  court  by  which  such  re- 
ceivers were  appointed,  shall  have  prece- 
dence of  all  other  civil  actions  in  respect  to 
the  order  of  trial,  except  as  provided  in  the 
preceding  section. 

CHAPTER  LXXIX. 

Executions. 

Sec.  1169.  Demand  upon  judgment  against  volun- 
tary associations. 
1171.  Levy  on  stock  of  a  corporation. 

§  11G9.  Demand  on  execution,  upon  a  judg- 
ment rendered  against  a  voluntary  associa- 
tion, may  be  made  on  its  presiding  officer, 
secretary,  or  treasurer. 

§  1171.  The  levy  of  an  execution  on  the 
rights  or  shares  which  any  person  owns  in 
the  stock  of  any  corporation,  together  with 
the  interest,  dividends,  and  profits,  due  and 
growing  due  thereon,  shall  be  by  leaving 
a  true  and  attested  copy  thereof  with  the 
secretary,  clerlv.  or  cashier,  with  an  attested 
certificate,  by  the  officer  making  such  levy, 
that  he  levies  upon  such  rights  or  shares 
to  satisfy  such  execution;  and  thereupon 
such  officer  sliall,  as  in  other  cases,  post  and 
sell  the  same,  together  with  such  interest, 
dividends,  and  profits,  or  such  part  thereof 
as  shall  be  sufficient  to  satisfy  such  execu- 
tion; and  shall  give  to  the  purchaser  a  writ- 
ten conveyance  of  such  rights  or  shares;  and 
sliall  also  leave  with  such  secretary,  clerk, 
or  cashier,  a  true  and  attested  copy  of  tlie 
execution  and  of  his  return  thereon;  and  the 
purchaser  shall  thereupon  be  entitled  to  all 
dividends  and  stock,  and  to  the  same  privi- 
leges as  a  member  of  such  corporation  as 
such  debtor  was  entitled  to.  And  when  any 
proper  officer  shall,  with  a  writ  of  execution, 
apply  to  such  secretary,  clerk,  or  cashier, 
for  the  purpose  of  so  levying  upon  such 
rights  or  shares,  the  secretary,  clerk,  or 
cashier  shall  furnish  him  with  a  certificate, 
under  his  hand,  in  his  official  capacity,  stat- 
ing the  numlier  of  rights  or  shares  the  de- 
fendant holds  in  the  stock  of  such  corpora- 
tion, with  the  incumbrances  tl  oreon,  if  any. 


CO^iKECTICUT. 


P'oreign  attaehm.;  mand.  and  quo  war.;  receivers  —  Stat.,  §§  1235,  1296,  130O-2,  1321,  1322. 


and  the  amount  of  dividends  thereon  due; 
but  when  any  bank  incorporated  by  this 
State,  or  any  banliing  association,  located 
and  transacting  business  in  this  State,  has 
no  cashier,  or  the  cashier  is  absent  there- 
from, or  any  other  corporation  incorporated 
by  the  laws  of  this  State  has  no  secretary 
or  clerk  therein,  then  the  rights  or  shares  in 
the  stock  of  any  such  corporation  may  be 
taken  by  execution  by  leaving  the  copy  of 
the  execution  and  the  certificates,  in  this 
section  prescribed,  at  the  principal  house  or 
place  in  this  State  where  such  corporation 
transacts  its  business  or  exercises  its  cor- 
porate powers. 

See  §  919. 

[A  ■written  Instrument  of  conveyance  from  officer 
to  purchaser  la  indispensable;  the  officer's  return 
alone  is  not  sufficient.  Morgan  v.  Banli,  14  Conn. 
99.] 

CHAPTER  LXXXVI. 

Actions  by  Foreign  Attachment. 

Sec.  1235.  When  a  corporation  garnishee  cited  In 
to  disclose  need  not  appear. 

§  1235.  Whenever  any  corporation,  which 
shall  have  been  made  a  garnishee  In  any 
civil  action,  and  cited  in,  to  disclose  in  the 
court  before  which  the  same  Is  returnable, 
was  not  indebted  to,  and  had  no  effects  of, 
the  defendant  in  its  possession  when  the 
complaint  was  served  upon  it,  it  need  not 
appear  before  said  court  to  disclose,  If  It 
shall  cause  the  affidavit  of  Its  treasurer  or 
Its  paymaster  stating  such  fact  to  be  filed  In 
said  court,  on  the  return  day  of  the  com- 
plaint. If  such  affidavit  shall  be  so  filed 
and  the  plaintiff  shall  bring  a  scire  facias 
against  such  corporation  upon  a  judgment 
rendered  against  the  defendant  in  the  com- 
plaint, and  it  shall  be  found  on  the  trial 
that  the  corporation  was  not  indebted  to 
the  defendant  and  that  it  did  not  have  his 
effects  in  Its  possession  at  the  time  of  the 
service  of  the  complaint,  judgment  shall  be 
for  the  corporation  to  recover  its  costs. 

CHAPTER  LXXXIX. 

Mandamus  and  Quo  Warranto. 

Sec.  1296.  Stockholder   of   corporation   may   apply 
for  writ  of  mandamus. 

1300.  Informations  in  nature  of  quo  warranto. 

1301.  Costs. 

1302.  Bond  for  costs. 

§  1296.  Any  stoclvholder  of  a  corporation 
may  apply  for  a  writ  of  mandamus  against 
such  corporation,  to  compel  it  to  obey  the 
statute  laws  of  this  State. 

Corporation  may  be  sued.    §  1906  (2). 

§  1300.  When  any  person  or  corporation 
shall  usurp  the  exercise  of  any  office,  fran- 
chise, or  jurisdiction,  the  superior  court  may 


[  proceed,  by  Information  in  the  nature  of  a 
quo  warranto,  to  punish  such  person  or  cor- 
poration for  such  usurpatioq,  according  to 
the  course  of  the  common  law;  and  may  also 
permit  such  an  information  to  be  filed  in 
the  name  of  the  State's  attorney  in  the 
county  where  the  cause  of  the  action  arises, 
at  the  relation  of  any  person  desiring  to 
prosecute  the  same,  against  any  person 
usurping  any  corporate  franchise  or  office, 
and  may  proceed  therein,  and  render  judg- 
ment, according  to  the  course  of  the  common 
law. 

[See  State  v.  Turnpilie  Co.,  10  COnn.  157;  State 
V.  Bull,  16  id.  179;  Bridge  Co.  v.  State,  18  id.  .".3; 
State  V.  Curtis,  ,35  id.  .374;  State  v.  North,  42  id. 
81;  State  v.  Lewis,  .51  id.  113;  Hincijlcy  v.  Breen, 
55  id.   119;  s.  c,  9  Atl.   Rep.  31.] 

§  1301.  Whenever  an  information  in  the 
nature  of  a  quo  warranto  is  brought  at  the 
relation  of  a  private  individual  in  the  name 
of  the  State  or  its  attorney,  the  court  sliall 
award  costs  to  the  prevailing  party,  whether 
relator  or  respondent,  against  the  other  as  in 
civil  cases. 

§  13C>2.  The  relator  who  prays  out  such 
Information  shall,  in  all  cases,  give  bond  to 
the  other  party  for  costs  as  by  law  required 
In  civil  actions. 

CHAPTER  XCII. 

Receivers. 

Sec.  1321.  Reports    of   receivers   of   insolvent    cor- 
porations. 
1322.  Rights  of  receivers  of  corporations. 

§  1321.  The  receivers,  or  receiver.  If  there 
be  but  one,  of  every  insolvent  cori)oration  in 
tills  State,  not  otherwise  obliged  by  law  to 
make  reports  to  court,  covering  substantially 
the  same  ground  as  hereinafter  mentioned, 
shall  at  least  once  in  every  six  months  make, 
sign,  swear  to,  and  file  with  the  clerk  of  the 
court  by  which  they  were  appointed,  a  full 
and  complete  statement  of  all  their  doings, 
as  such  receivers,  for  the  six  months  next 
prior  to  the  filing  of  said  statement,  which 
statement  shall  contain  a  full  and  itemized 
account  of  all  moneys  received  by  them  dur- 
ing the  aforesaid  period,  the  date  of  its  re- 
ceipt, the  amount,  the  person  from  whom 
received,  and  on  what  account  received;  also 
a  full  and  itemized  account  of  all  monevs 
paid  out  by  them  during  said  period,  the  date 
of  payment,  the  person  to  whom  paid,  and 
the  purpose  for  which  paid. 

Insolvent  corporations.  §§  502,  506.  Winding  up 
corporations.  §§  1942,  1943,  1965,  1966,  1967.  Ac- 
tion by  receiver  talces  precedence.  §  1113.  See  acts 
No.  12,  at  p.  32;  No.  16,  at  p.  33;  No.  23,  at  p.  36. 

§  1322.  Receivers  of  a  corporation,  ap- 
pointed by  judicial  authority,  shall  have  the 
right  to  \he  possession  of  all  its  books, 
papers,   and   property,   and   power  in   their 


10 


CONNECTICUT. 


Frauds  by  officers;  apprentices  and  employes  —  Stat.,  §§  1567,  1579,  1580,  mS-1749. 


own  names,  or  in  its  name,  to  commence  and 
prosecute  suits  for  and  ou  belialf  of  said 
corporation;  to  defend  all  suits  brought 
against  it  or  them;  to  demand  and  receive 
all  evidences  of  debt  and  property  belonging 
to  it,  and  to  do  and  execute  in  its  name,  or 
in  their  names,  as  such  i-eceivers,  all  other 
acts  and  things  which  shall  be  necessary  or 
proper  in  the  execution  of  their  trust;  and 
shall  have  all  the  powers  for  any  of  said 
purposes  possessed  by  said  corporation. 

See  §  1321,  note. 

[See  Bank  v.  Wheeler,  28  Conn.  433;  Bank  v. 
Peck.  29  id.  884. 

Creditors  of  an  Insolvent  corporation  in  the 
hands  of  a  receiver  judicially  appointed,  whose 
claims  have  been  proved  and  allowed  by  the 
court,  arc  entitled  to  be  heard  in  the  receiver's 
suit  upon  any  of  the  doings  of  the  court,  or  of  the 
receiver,  by  which  they  made  claim  to  be  ag- 
grieved, with  the  right  to  appeal  to  this  court 
from  a  final  decree  unfavorable  to  their  interests. 
If  receiver  declines  to  collect  unpaid  stock  sub- 
scriptions and  acts  in  collusion  with  the  delinquent 
stockholders,  the  creditor  may  ask  his  removal; 
but  they  cannot  resort  to  an  independent  suit 
against  such  delinquent  stockholders  for  the  un- 
paid subscriptions,  for  the  appointment  of  a  re- 
ceiver to  administer  the  amounts  thus  collected. 
Links  V.  Bank.  Co.,  66  Conn.  277;  s.  c,  33  Atl. 
Rep.    1003. 

In  the  distribution  of  the  assets  of  an  insolvent 
corporation  in  the  hands  of  a  receiver,  a  creditor 
is  entitled  to  a  dividend  computed  on  the  actual 
amount  of  his  debt  only.  The  fact  that  he  holds 
other  unsecured  obligations  in  corporations  as 
"  collateral  security,"  does  not  entitle  him  to  a 
dividend  computed  upon  his  actual  debt  plus  the 
amount  of  these  obligations;  nor  does  a  sale  of 
such  obligations  by  the  creditor  to  himself  en- 
large his  rights  in  this  respect.  In  re  Waddell- 
Entz  Co.,  67  Conn.  324;  s.  c,  35  Atl.  Rep.  257. 
Such  obligations  might  constitute  a  debt  against 
the  insolvent  corporation  for  their  face  value,  if 
transferred  by  valid  assignment  to  an  innocent 
purchaser;  but  a  sale  by  the  creditor  to  himself 
after  notice  of  the  insolvency  of  the  corporation 
and  the  appointment  of  a  receiver,  does  not  give 
him  the  standing  of  an  innocent  third  party.    Id.] 

TITLE    XIX.     CRIMES    AXD    CRIMINAL 
PROSECUTION. 

CHAPTER  XCIX. 

Crimes. 

IX.    OFFENSES  AGAINST  PUBLIC  POLICY. 

Sec.  1567.  Officers  of  corporations  not  to  take  fee 
or  commissions  as  gratuities. 

§  15G7.  Every  person  *  *  *  being  a 
member  of  the  board  of  management  of  any 
public  or  private  institution,  or  corporation, 
who  shall  receive  for  his  own  use,  directly 
or  indirectly,  from  any  person  with  whom 
he  makes  a  contract,  or  transacts  any  busi- 
ness, *  *  *  or  with  whom  the  board  of 
management  of  which  he  is  a  member, 
makes  a  contract  or  transacts  any  business, 
any  payment,  commission,  or  compensation, 
wliotlier  direct  or  under  the  form  of  some 
protitable  sale,  purcliase,  or  contract,  or  gra- 
tuity of  any  kind,  by  reason  of,  or  in  ac- 
knowUMlgmont  for,  or  in  connection  with, 
the  making  of  suc-h   contract,  or  the  trans- 


acting such  business,  shall  be  imprisoned 
not  less  than  tliirty-one  days,  nor  more  than 
one  year,  or  lined  not  more  than  three  hun- 
dred dollars,  or  both. 

XL      FRAUDS. 

Sec.  1579.  Embezzlement  by  officer  of  corporation. 
1580.  Same. 

§  1579.  Evex'y  officer  or  agent  of  any  public, 
municipal,  or  private  corporation,  *  *  * 
who  shall  wrongfully  appropriate  and  con- 
vert to  his  own  use  the  money,  funds,  or 
property  of  such  corporation,  *  *  *  shall 
be  fined  not  more  than  ten  thousand  dollars, 
or  imprisoned  not  more  than  ten  years,  or 
both. 

See  §§  1567,  1580. 

§  15S0.  (As  amended  May  1,  1895.)  Every 
officer  or  agent  of  any  private  corporation  or 
voluntary  association  of  this  State,  or  of  any 
common  carrier,  or  any  agent  of  any  busi- 
ness house  or  private  individual,  who  shall 
take,  purloin,  secrete,  or  in  any  way  appro- 
priate to  his  own  use,  or  to  the  use  of  others, 
any  of  the  goods,  moneys,  or  choses  in  action, 
in  the  care  or  custody  of,  belonging  to,  or  de- 
posited with,  such  coi-poration,  voluntary 
association,  caiTier,  house,  or  individual, 
with  intent  to  defraud  another,  or  who  shall 
with  like  intent  make  any  false  entries  upon 
any  of  their  books,  or  shall  keep  false  books 
or  entries  of  and  concerning  their  business 
and  affairs  with  like  intent,  shall  be  impris- 
oned not  more  than  ten  years. 

See  §§  1567,  1579. 

[Necessary  allegations  of  indictment.  State  v. 
Fuller,  34  Conn.  280.] 

TITLE     XXII.        APPRENTICES     AND     EM- 
PLOYES. 

CHAPTER  CVI. 

Sec.  1748.  Withholding  wages. 

1749.  Weekly  payments. 

1750.  When  corporation  shall  be  exempt  from 

provisions  of  preceding  section. 

1751.  Penalty  for  violation  of  preceding  sec- 

tion. 

1752.  Wages  paid  before  due  not  to  be  scaled. 

1753.  Employment  of  children. 

§  1748.  Any  person  or  corporation  who 
shall  withhold  any  part  of  the  wages  of  any 
person,  because  of  any  agreement  expressed 
or  implied  requiring  notice  before  leaving 
the  employment,  shall  forfeit  fifty  dollars, 
half  to  him  who  shall  sue  therefor,  and  half 
to  the  State. 

§  1749.  Every  corporation  employing  labor 
shall  pay  to  its  employes  such  compensation 
or  wages  as  may  bo  agreed  upon,  once  a 
week;  and  sucli  payment  sliall  include  all 
wages  earned  and  unpaid  up  to  tlie  oiglith 
day  precotling  tlu'  il;iy  of  payment,  and  no 


COiS^XECTICUT. 


11 


Corporate  name;  general  powers  —  Stat,  §§  1750-1753;  1905,  1906  (1). 


deduction  from  said  wages  sliall  be  made  on 

account  of  sucli  weeldy  payment. 

§  1750.  Every  corporation  which  shall  pay 
weekly  to  such  of  its  employes  as  shall  call 
at  the  usual  place  of  payment  for  the  same 
eighty  per  cent,  of  their  estimated  wages, 
earned  and  impaid  before  the  eighth  day 
preceding  the  day  of  payment,  malving  no 
discount  on  account  of  such  weelily  payment, 
and  shall  pay  in  full  once  in  each  month, 
and  shall  give  notice  of  the  same  in  its 
printed  rules  and  regulations,  shall  be  ex- 
empt fi'om  the  provisions  of  the  preceding 
section. 

§  1751.  Any  corporation  violating  the  pro- 
visions of  the  two  preceding  sections  shall 
forfeit  the  sum  of  fifty  dollars,  half  to  him 
who  shall  sue  therefor,  and  half  to  the  State. 

§  1752.  No  employer  of  labor,  nor  any  per- 
son acting  for  him,  shall  in  any  manner  or 
form  make  a  discount  or  deduction  from  the 
wages  of  any  person  employed  by  him,  when 
the  wages  of  the  emploj^e  or  any  part  thereof 
ai'e  paid  at  an  earlier  time  than  that  at 
which  such  wages  would  regularly  have 
been  paid.  And  any  person  or  corporation 
violating  this  section  shall  forfeit  not  less 
than  ten  nor  more  than  one  hundred  dollars, 
half  to  him  who  shall  sue  therefor  and  half 
to  the  State. 

§  1753.  (As  amended  May  7,  1895.)  No 
child  under  fourteen  years  of  age  shall  be 
employed  in  any  mechanical,  mercantile,  or 
manufacturing  establishment. 

TITLE    XXX.       PRIVATE    CORPORATIOIVS. 

CHAPTER  CXIX. 

General  Provisions. 

Sec.  1905.  Corporate  name. 

1906.  General  powers. 

1907.  Organization    of   voluntary   associations 

without  capital  stock. 

1908.  By-laws,  assessments,  fines,  etc. 

1909.  Charters   subject   to   alteration   anrl    re- 

peal. 

1910.  Corporations  must  organize  within  two 

years  after  approval  of  charter. 

1911.  Amendment  to  charter,  how  accepteil. 
1012.  Fee  to  be  paid  by  foreign  corporations 

upon  application  for  charter. 
191.3.  Additional  fee  before  commencing  busi- 
ness. 

1914.  Fee  when  capital  is  increased. 

1915.  Duty  of  secretary. 

1916.  Fee  to  be  In  lieu  of  taxes,  etc. 

1917.  Regulation  of  investments. 

1918.  Stock   subscriptions   not  made   In   good 

faith. 

1919.  Special  meeting,  how  called,  upon  fail- 

ure to  hold  annual  meeting. 

1920.  Officers  to  hold  over  until  successors  are 

elected. 

1921.  Limitation  of  the  preceding  section. 

1922.  Regulation    of   directorship   of   different 

corporations. 

1923.  Stock  to  be  personal  property  and  trans- 

ferred on  books. 

1924.  Stock,   how  pledged. 

1925.  Stockholders  may  vote,  how. 

1926.  Each  share  entitled  to  one  vote. 

1927.  Proxies. 

1928.  Majority  of  directors,  a  quorum. 

1929.  Capital    stock,   how    called    in,  assess- 

ments, etc. 


Sec.  1930. 
1931. 
1932. 

1933. 

1934. 

19.35. 
1936. 

19.37. 

1938. 

1939. 

1940. 
1941. 

1942. 
1943. 


Taxes  on  the  shares,  how  collected. 

Dividends  restricted. 

Unwarranted  dividends,  penalty  for  vot- 
ing. 

Reduction  of  capital  stock  and  par  value 
of  assets. 

Certificates  may  be  changed  after  re- 
duction. 

Division  of  profits. 

Any  corporation  may  take  advantage  of 
preceding  section. 

Certificates  of  condition  to  be  lodged 
with  town  clerks  annuallv. 

Intentional  neglect  to  coniply  with  pre- 
ceding section. 

Holders  of  stock  books  to  give  Informa- 
tion to  holders  of  stock. 

Reports,  to  whom  and  when  made. 

Banks,  etc.,  not  to  change  location  with- 
out authority. 

Winding  up  corporations  on  petition  of 
stockholders,  and  remedy  of  persons 
aggrieved. 

Winding  up  corporation  by  its  own 
vote. 


§  1905.  The  name  of  every  private  corpora- 
tion hereafter  created  shall  indicate  that  It 
is  a  corporation. 

Change  of  name.  §  1949.  How  name  shall  be- 
gin and  end.  §  1944.  "  Person,"  includes  cor- 
porations.    §  1. 

§  1906.  Every  private  corporation  may, 
when  no  other  provision  is  specially  made, 

(1)  Receive,  purchase,  hold,  sell,' and  con- 
vey real  and  personal  estate,  as  the  purposes 
of  the  corporation  shall  require,  not  exceed- 
ing the  amount  limited  in  its  charter; 

Eminent  domain.  Const.,  art.  I,  §  11.  Regu- 
lation of  Investments.  §  1917.  Conveyances  of 
real  estate,  how  witnessed.  §  2955.  Taxation  of 
corporate  property.  §§  3832-3834.  Corporation  may 
hold  property  needed  in  its  business.     §  1952. 

[By  the  common  law,  corporations  have  a  right 
to  purchase  and  hold  property,  so  far  as  may  be 
necessary  to  carry  into  execution  the  objects  of 
their  creation.  Factory  v.  Warner,  1  Blatch.  (U. 
S.)  277.  But  where  corporation  purchases  prop- 
erty in  order  to  make  a  malicious  use  of  It,  the 
motive  becomes  material  as  afl'ecting  the  question 
as  to  their  power  to  purchase.  Occum  Co.  v. 
Mfg.  Co.,  34  Conn.  540.  Corporation  claiming 
under  a  devise  in  trust  for  others  must  show  that 
it  has  corporate  power  so  to  hold  in  trust,  such 
power  not  being  incidental.  Green  v.  Dennis,  6 
Conn.  304.  Statute  requiring  authority  of  agent 
for  executing  deeds  to  be  evidenced  by  power  of 
attorney,  does  not  apply  to  deeds  by  agent  of  cor- 
poration. Howe  V.  Kerler,  27  Conn.  544.  And, 
semble,  if  agent  of  corporation  should  convey 
without  authority,  the  deed  might  be  made  good 
by  a  vote  of  ratification.     Id. 

Conveyance  signed  by  oflicer  of  corporation  need 
not  recite  his  authority,  as  that  fact  Is  always  to 
be  proved  by  extrinsic  evidence.  Hart  v.  Stone, 
30  Conn.  96.  Such  authority  is  not  necessarily  to 
be  proved  by  formal  vote  of  corporation.     Id. 

In  executing  deed  of  corporation,  agent  must 
affix  the  corporate  seal.  Bank  v.  Davis,  8  '.'onn, 
207. 

Whether  joint-stock  corporation  of  this  State  can 
buy  out  the  property,  etc.,  of  similar  corporation 
of  another  State,  quaere.  Terry  v.  Lock  Co.,  47 
Conn.  160. 

Ikfortgage  of  corporate  property  to  pay  for  stock 
purcliased  of  a  stockholder  In  order  to  get  rid 
of  him,  held  good  as  against  subsequent  creditors. 
Smith  v.   Gcylord,  47  Conn.  382. 


12 


co:n^necticut. 


General  powers  of  corporations  —  Stat.,  §  1906  (2-5). 


New  York  corporation  may  receive  power  from 
Connecticut  legislature  to  mortgage  its  Connecti- 
cut with  its  New  York  property.  Mead  v.  R.  R. 
Co.,  45  Conn.  220.  Power  to  borrow  money  on 
mortgage  does  not  imply  power  to  take  stock  in  a 
b'lilding  association.  Bank  v.  Agency  Co.,  24 
Ccnn.    164.] 

(2)  May  sue  and  be  sued,  complain  and  de- 
fend in  any  court; 

Service  of  process.  J§  908,  909.  Venue  of  ac- 
tions. §§  667,  969.  Pleading  charters.  §  996. 
Evidence.  §§  1090,  1093.  Precedence  of  cases. 
§  1113.  Executions.  §§  1169,  1171.  When  cor- 
Iioration  garnishee  need  not  apear.  §  1235.  Man- 
damus and  quo  warranto.  §§  1296-1302.  Re- 
ceiver of  corporation  may  sue  and  be  sued. 
§  1322.  Ex  parte  injunctions.  Act  of  18S9,  see 
p.  27.  Discovery  in  action  against  a  corporation. 
Act  of  1889.  see  p.  27. 

[Corporation  not  liable  for  services  rendered  be- 
fore organization  was  effected,  in  procuring  Bub- 
scriptions  to  capital  stock.  R.  R.  Co.  v.  Ketchum, 
27  Conn.  179.  Corporation  authorized  to  lend 
money  upon  pledges,  and  with  ordinary  power  to 
sue  and  be  sued,  is  not  restricted  to  sale  of 
pledge  in  case  of  non-payment,  but  may  sue  the 
borrower  directly.  Loan  Co.  v.  Towner,  13  Conn. 
257. 

Equitv  will  enjoin  corporation,  at  the  instance  of 
any  member,  from  wasting  or  misappropriating 
corporate  property.  Scofleld  v.  School  Dist,  27 
Conn.  504.  And  will  interpose  to  protect  a  dis- 
senting minority  of  the  stockholders.  Pratt  v. 
Pratt,  33  Conn.  455.  .    ^, 

A  corporation  is  a  moral  person,  and  may  vindi- 
cate and  preserve  all  its  rights  by  the  common  and 
statute  laws,  as  all  other  persons  may,  except  so 
far  as  restrained  by  law  or  its  charter.  Strat- 
ford V.  Sanford,  9  Conn.  282. 

An  action  on  the  statute  against  vexatious  suits 
lies  against  a  bank  for  such  a  suit  brought  in 
its  name  and  behalf  by  a  vote  of  the  directors, 
never  repudiated  by  the  corporation.  Goodspeed  v. 
Bank.  22  Conn.  536. 

Bill  in  equity,  brought  by  minority  stockholders 
and  directors  "to  prevent  a  fraudulent  combina- 
tion, held  frood.     Sears  v.  Hotchkiss,  25  Conn.  177. 

A  domestic  corporation  may  be  sued  by  a  non- 
resident by  writ  of  summons  in  any  county  in 
this  State  "where  a  stockholder  resides.  Wood  v. 
Ins.  Co.,   13  Conn.  210. 

Corporation  created  by  United  States  is  amen- 
able to  that  sovereignty  only,  except  so  far  as 
jurisdiction  over  suits  against  it  may  be  conferred 
by  congress  on  State  tribunal.  State  v.  Curtis,  35 
Cor.n.  378;   Sill  v.   Bank,  5  id.   105. 

Corporate  character  of  a  plaintiff,  and  its 
capacity  to  sue,  are  admitted  by  a  plea  to  the 
merits,  and  want  of  such  character  or  capacity 
can  be  taken  advantage  of  only  by  a  plea  in 
abatement.  Bank  v.  Ford,  27  Conn.  288;  Bank 
V.  Church,  29  id.  148. 

In  an  action  by  corporation  for  damage  to  Its 
property,  not  necessary  for  plaintiff  to  prove  its 
power  to  hold  such  property.  Trans.  Co.  v.  Van- 
derbilt,   10  Corn.   427. 

Trespass  will  not  lie  against  a  corporation  for 
the  taking  of  land,  if  its  charter  gives  another 
mode  of  obtaining  satisfaction.  Hooker  v.  N.  H. 
&  N.  Co.,  15  Conn.  323.  But  corporation  must 
appear  to  have  taken  the  proper  stops  under  the 
charter  to  give  the  plaintiff  the  satisfaction  there 
provided  for.     Id. 

A  creditor  of  a  corporation  may  file  a  bill  in 
equity  against  a  wrongdoer  to  prevent  an  Injury 
to  it  without  averring  that  the  corporation  has 
refused  to  take  measures  to  protect  itself.  Lo- 
throp  V.   Stedman,  42  Conn.  589. 

Equity  may,  at  the  suit  of  a  stockholder,  re- 
strain corporation  from  willful  misapplication  of 
funds,   and    compel   directors  to   account  for  any 


waste  amounting  to  a  breach  of  trust.    Hardon  v. 
Xewton,   14  Blatchf.   (U.   S.)  379. 

In  a  suit  by  a  foreign  corporation,  defendant's 
plea  of  the  general  issue  admits  plaintiff's  capacity 
to  sue.  Bank  v.  Curtis,  14  Conn.  440.  But  not, 
if  the  action  be  ex  contractu,  that  it  had  power 
to  make  the  contract,  which  must  be  proved  In 
the  same  manner  as  all  foreign  laws  must  be,  to 
entitle  them  to  a  recovery.     Id.] 

(3)  Have  a  common  seal,  which  it  may 
alter  at  pleasure; 

[In  executing  deed  of  corporation,  agent  must 
affix  the  corporate  seal.  Bank  v.  Davis,  8  Conn. 
207.] 


(4)  Elect  in  such  manner  as  it  may  deter- 
mine all  necessary  officers,  fix  their  compen- 
sation, and  define  their  duties  and  obliga- 
tions; 

Appointment  of  officers.  §  1950,  and  note.  Duty 
of  secretary.  §  1915.  Officers  to  hold  over.  §  1920. 
Voting.  §§  1925-1927.  Negligent  officers,  penalty. 
§  1959.  Crimes  by  corporate  officers.  §§  1567, 
1579,  1580.  Discovery  from  officers.  Act  of  1889, 
see  p.  27.  Officers  not  to  borrow  money.  Act  of 
1889,  see  p.  27.  Annual  statement  by  officers. 
S  1937. 

(5)  And  may  make  by-laws  consistent  with 
law  for  its  government,  the  regulation  of 
its  affairs,  and  the  management  of  its  prop- 
erty. 

See  §  1908.  Transfers  of  stock  regulated  by  by- 
laws. §  1960.  And  assessments  upon  subscrip- 
tions. §  1929.  By-laws  adopted  at  first  meeting. 
5  1946. 

[By-laws  to  govern  consolidated  corporation. 
Lane  v.  Brainard,  30  Conn.  576. 

Construction  of  charters  and  corporate  powers.— 
Where  language  of  a  public  grant  admits  equally 
of  two  constructions,  that  most  favorable  to  the 
State  is  to  be  adopted.  Bridge  Co.  v.  Ferry  Co., 
29  Conn.  221;  Turnpike  Co.  v.  Marshall,  11  id. 
190.     See  also  Bradley  v.  R.  R.  Co.,  21  id.  306. 

In  public  grants  nothing  passes  by  implication. 
Hooker  v.  N.  H.  &  N.  Co.,  15  Conn.  321.  A  grant 
of  exclusive  privileges  in  derogation  of  public 
rights  is  to  be  construed  strictly.    Id. 

No  construction  should  be  given  to  charter  of 
private  corporation,  ur'ess  the  rules  of  law  Im- 
periously require  it,  which  will  defeat  the  object 
of  the  grant,  impair  the  public  interest,  ruin  the 
corporation,  or  defraud  third  persons.  R.  R.  Co. 
V.  Kennedy,  12  id.  527. 

The  charter  of  a  corporation  Is  a  contract  be- 
tween it  and  each  of  its  stockholders,  and  neither 
directors  nor  majoi-ity  of  stockholders  can  bind 
a  minority  without  the  assent  of  the  latter,  in 
any  manner  not  expressly  or  impliedly  authorized 
by  the  charter.  Byrne  v.  Mfg.  Co.,  65  Conn.  336; 
s.  c,  31  Atl.  Rep.  833.] 
[General  poTvers  and  liabilities  of  oorpo- 

i-iitions A  corporation  has  only  such  rights  and 

powers  as  are  expressly  granted,  or  as  are  neces- 
sarv  to  carry  into  effect  the  rights  and  powers  so 
gra'nted.  Ins.  Co.  v.  Ely.  5  Conn.  568;  New  Lon- 
don V.  Brainard,  22  id.  5.">5;  Occum  Co.  v.  Mfg.  Co., 
34  id.  541;  Catlin  v.  Bank,  6  id.  230:  Berlin  v.  The 
School,  etc.,  9  id.  ISO:  Ins.  Co.  v.  Weed,  28  id.  63. 
Specific  grant  of  certain  powers  is  an  implied  pro- 
hibition of  other  and  distinct  powers.  Ins.  Co. 
V.  Ely,  supra. 

Corporation  may  exercise  all  powers  within  the 


CONNECTICUT. 


13 


Formation  of  corporations;  by-laws:  pre-existing  charters  —  Stat.,  §§  19^7-1911. 


fair  Intent  and  purpose  of  its  creation  which  are 
reasonablj-  proper  to  pive  effect  to  powore  ex- 
pressly granted;  and  it  must  have  a  choice  of 
means  adapted  to  ends,  and  not  be  confined  to 
any  one  mode  of  operation.  Bridgeport  v.  R.  R. 
Co.,  15  Conn.  5u2.  Corporation  must  not  exorcise 
discretionary  powers  in  such  a  way  as  to  infringe 
on  the  rights  of  others.  Holmes  et  al.  v.  JNIfg. 
Co.,  37  Conn.  293.  Corporation  may  have  power 
to  enter  into  a  copartnership.  Butler  v.  American 
Toy  Co.,  4G  Conn.  14.5.  Corporation  ean  only  con- 
tract by  virtue  of  its  charter,  and  if  the  subject- 
matter  as  to  which  it  can  contract,  and  the  mode, 
are  therein  prescribed,  they  must  be  strictly  pur- 
sued.    Ins.  Co.  V.  Ely,  supra. 

Banks,  and  similar  corporations,  authorized  to 
contract  in  a  particular  mode,  may,  by  a  course 
of  practice,  render  themselves  liable  on  instru- 
ments executed  in  a  different  mode.  Bulkley  v. 
Fishing  Co.,  2  Conn.  252;  Witte  v.  Fishing  Co., 
id.  261;  Kilgore  v.   ISuIkley,   It  id.   384. 

If  charter  prohibits  discounting  of  notes,  cor- 
poration cannot  recover  upon  a  note  which  it  has 
discounted.     Loan  Co.  v.  Towner.  13  Conn.  260. 

Corporation,  as  well  as  an  individual.  Is  bound 
to  so  use  its  rights  as  not  to  injure  others. 
Hooker  v.  N.  H.  &  N.  Co.,  15  Conn.  321.  But 
Injuries  may  be  done  to  private  property  by  a 
private  corporation  in  constructing  public  works, 
so  inseparably  connected  with  their  construction 
as  not  to  found  an  action  against  the  corporation. 
Id. 

Insurance,  canal,  bridge  and  turnpike  companies 
are  not  public  corporations,  nor  are  their  agents 
to  be  ranked  with  public  agents.  Hooker  v.  N.  H. 
&  N.  Co.,  15  Conn.  321. 

As  to  exclusive  right  to  lay  gas  pipes  in  streets, 
see  Gas  Light  Co.  v.  Norwich  Gas  Co.,  25  Conn.  32. 

Powers  of  corporation  incorporated  to  turn  gun- 
stocks.  See  Turning  Factory  v.  Warner,  1  Blitchf. 
277. 

Incidental  powers  of  mutual  insurance  company. 
Ins.  Co.  v.  Weed,  28  Conn.  63.  Of  other  insurance 
company.  Ins.  Co.  v.  Ely,  5  Conn.  568;  Same  v. 
Bennett,   id.   578. 

When  equity  will  not.  upon  the  petition  of  a 
general  creditor,  restrain  corporation  from  con- 
verting assets  into  money.  Barr  v.  Mfg.  Co.,  41 
Conn.  510. 

Transfer  of  entire  assets  of  an  insolvent  cor- 
poration to  another  corporation,  or  receiving  In 
return  certain  shares  of  stock  of  latter  company, 
held  to  be  ultra  vires.  Byrne  v.  Mfg.  Co.,  65 
Conn.  336;  s.  c,  31  Atl.  Rep.  833. 

The  right  of  a  non-assenting  stockholder  tc 
equitable  relief  does  not  depend  In  any  respect 
upon  the  profitableness  or  unprofitableness  of  the 
transaction.  He  has  the  legal  right  to  insist  that 
the  corporation  shall  keep  within  the  powers 
granted  by  its  charter.    Id.] 

§  1907.  Any  number  of  persons  not  less 
than  three  may  associate  for  any  lawful  pur- 
pose, where  no  capital  stocli  is  created;  and, 
being  so  associated,  shall  be  a  body  politic 
and  coi-porate,  and  may  purchase,  hold,  and 
convey  real  and  personal  estate,  the  annual 
income  from  T\hich  shall  not  exceed  five 
thousand  dollars;  but  before  any  such  asso- 
ciation shall  be  entitled  to  the  privileges 
herein  granted,  it  shall  lodge  with  the  secre- 
tary of  the  State  a  copy  of  its  articles  of 
association,  attested  by  its  presiding  officer 
and  secretary,  and  cause  them  to  be  recorded 
in  the  records  of  the  town  where  such  asso- 
ciation is  situated;  and  no  subsequent  alter- 
ation or  amendment  of  its  articles  of 
association  shall  take  effect  until  it  is  so 
attested,  lodged,  and  recorded;  and  the  gen- 
eral assembly  may  at  any  time  rescind  the 

12 


powers  of  any  such  association  and  prescribe 
the  mode  of  settlement  of  its  affairs. 

Organization  with  capital  stocli.    $  1944. 

[Where  charter  of  corporation  provided  that  net 
income  from  propertv  Invested  should  not  exceed 
$10,000,  held,  that  this  did  not  necessarily  pre- 
vent it  from  taking  by  devise  property  v^hlch 
would  increase  the  income  to  exceed  $10,000,  .ind 
that  the  burden  of  proving  Its  capacity  did  not  rest 
on  the  corporation.  White  v.  Howard,  38  Conn. 
362.] 

§  1908.  Any  association  formed  under  the 
provisions  of  the  preceding  section  may 
malie  by-laws  imposing  fines  and  penalties, 
and  lay  assessments  to  further  the  objects 
of  such  association,  but  such  by-laws  and 
assessments  shall  be  adopted  by  two-thirds 
of  the  members  of  the  association,  and  no 
assessment  or  fine  shall  exceed  the  sum  of 
twenty-five  dollars,  and  such  association 
may  sue  for  and  collect  such  fines  and  as- 
sessments. 

By-laws.     §  1906  (5). 

§  1909.  All  acts  creating  or  authorizing  the 
organization  of  corporations,  or  altering  the 
charters  of  corporations  previously  existing, 
which  have  been  or  shall  be  passed  by  the 
general  assembly,  and  the  charters  of  all 
corporations  heretofore  granted,  and  under 
which  no  corporations  have  been  organized, 
shall  be  subject  to  alteration,  amendment, 
and  repeal  at  the  pleasure  of  the  general 
assembly,  unless  otherwise  expressly  pro- 
vided in  such  acts. 

See  §  1911, 

[Charter  of  a  corporation  may  be  affected  by 
subsequent  legislation  in  three  ways.  See  R.  R. 
Co.  V.  Chapman,  38  Conn.  71.  Application  to 
legislature  by  directors  for  amendment  of  charter. 
See  Mfg.  Co.  v.  Smith,  2  Conn.  .583.  . 

Legislature,  on  repealing  a  charter,  may  appoint 
a  trustee  for  the  benefit  of  creditors  and  siock- 
holders;  and,  failing  such  an  appointment,  eQi'it/ 
might  appoint  such  a  trustee.  Lothrop  v.  btea- 
man,  42  Conn.  590.  ^  ,     n.        „ 

When  legislature  has  power  to  repeal,  It  can 
repeal  conditionally,  and  divest  the  directors  of 
the  custody  of  the  assets  in  favor  of  a  public 
officer,  pending  an  investigation  into  the  solvency 
of  the  corporation.     Id.] 

§  1910.  The  charter  of  any  private  corpora- 
tion hereafter  granted  shall  be  and  become 
void,  unless  said  corporation  shall  be  organ- 
ized, and  a  certificate  of  such  organization 
sworn  to  by  the  president  or  secretary,  or, 
if  there  be  no  such  officers,  by  an  officer 
having  custody  of  the  records  of  such  cor- 
poration, shall  be  filed  in  the  oflice  of  the 
secretary  of  the  state  within  two  years  from 
the  date  of  the  approval  of  its  charter. 

§  1911.  When  any  amendment  or  alteration 
of  the  charter  of  any  corporation  shall  be 
made,  if  it  be  not  otlierwise  specially  pro- 
vided in  the  resolution  malcing  such  altera- 
tion   or   amendment,    it    shall    not   become 


14 


CONNECTICUT. 


Charter  fees;  subscription  to  stock;  meetings  —  Stat.,  §§  1912-1920. 


operative,  unless  within  six  months  after  its 
passage  it  shall  be  accepted  at  a  meeting  of 
said  corporation,  legally  Avarncd  for  that 
purpose,  nor  unless  an  attested  copy  of  said 
acceptance  sliall  be  lodged  on  file  in  the 
office  of  tlie  secretary  of  state,  to  be  recorded 
by  him  in  a  booli  Ivept  for  tliat  purpose;  and 
such  acceptance  shall  operate  to  make  the 
original  cliarter,  and  all  resolutions  amend- 
ing and  altering  the  same,  subject  to  amend- 
ment, alteration,  and  repeal,  at  the  pleasure 
of  the  general  assembly. 

See  i  1909. 

[But  legislature  may  amend  charter  and  Impose 
duties  on  a  corporation  without  acceptance.  State 
V.  N.  H.  &  N.  Co..  43  Conn.  370.] 

§  1912.  No  application  for  a  charter  for  any 
business  corporation  authorized  to  do  and 
perform  its  principal  business  outside  the 
limits  of  this  State  having  a  capital  stock, 
all  or  any  part  of  which  is  to  be  divided  into 
shares  and  held  by  shareholders,  shall  be 
heard  by  tlie  general  assembly  or  any  com- 
mittee thereof  until  the  parties  applying  for 
the  same  liave  paid  to  the  treasurer  of  the 
State  one  hundi-ed  dollars. 

§  1913.  No  such  business  corporation 
liaving  a  capital  stock,  hereafter  incorpo- 
rated, sliall  commence  to  do  business  until  it 
shall  have  paid  to  the  treasurer  of  the  state 
not  less  than  one  hundred  dollars,  and  not 
more  than  five  thousand  dollars,  as  the  same 
may  be  assessed  and  determined  by  the 
state  board  of  equalization. 

§  1914.  Every  such  business  corporation 
which  sliall  hereafter  increase  its  capital 
stock  shall,  within  thirty  days  after  the  new 
stock  is  subscribed  for,  or  issued,  pay  to  the 
treasurer  of  the  State  not  less  than  one 
hundred  dollars,  and  not  more  than  five 
thousand  dollars,  as  the  same  may  be  as- 
sessed and  determined  by  the  state  iDoard  of 
equalization. 

Above  section  Is  repealed  by  act  of  1889.  See 
p.  27. 

§  1915.  No  certified  copy  of  any  charter 
or  organization  certificate  of  any  such  cor- 
poration shall  be  issued  by  the  secretary  of 
the  State  until  the  payments  required  by 
sections  1912  and  1913  liave  been  duly  made. 

§  1916.  All  sums  paid  to  the  treasurer 
under  the  provisions  of  tlie  four  preceding 
sections  shall  be  in  lieu  of  all  other  tax  upon 
the  franchise  of  such  corporation,  but  it 
shall  not  be  in  lieu  of  any  taxes  imposed 
by  law  upon  the  property  of  such  corpora- 
tion, or  upon  tlie  shares  of  stock  lield  by 
individual  stockholders  residing  in  this 
State.  In  assessing  the  valuation  of  a 
franchise  under  the  provisions  of  sections 
1913  and  1914,  the  State  board  of  equaliza- 
tion shall  consider  as  one  of  the  elements 
determining  the  value  of  the  franchise,  the 
amount  of  the  capital  stock  of  such  corpo- 


ration, unless  upon  proper  investigation  such 
board  shall  find  that  a  part  of  such  capital 
stock  has  been  issued  in  payment  for  patent 
•rights  owned  by  such  corporation,  or  unles8 
such  corporation  is  organized  for  the  pur- 
pose of  doing  a  fire  or  life  insurance  busi- 
ness; Provided,  That  nothing  contained  in 
this  and  the  four  preceding  sections  shall  ap- 
ply to  life  insurance  corporations  doing  busi- 
ness in  Avliole  or  in  part  upon  a  mutual  plan. 

§  1917.  Whenever  the  board  of  directors 
of  any  corporation  organized  under  the  laws 
of  this  State  for  the  purpose  of  lending 
money  on  real  estate  security,  and  issuing, 
negotiating,  guarantying,  and  dealing  in 
bonds  and  mortgage  securities,  shall  have 
voted  that  said  corporation  shall  never  issue 
and  have  outstanding  at  any  one  time  bonds 
exceeding  a  certain  amount  specified  in  such 
vote,  and  said  vote  shall  be  ratified  and  ap- 
proved by  said  corporation  at  a  meeting  of 
the  stockholders,  a  copy  of  such  votes  of 
the  directors  and  of  the  corporation,  certified 
by  its  secretary  and  attested  by  the  presi- 
dent and  a  majority  of  the  directors,  may 
be  filed  for  record  in  the  office  of  the  secre- 
tary of  the  State,  and  thereupon  said  votes 
shall  be  effectual  to  bind  said  corporation, 
and  shall  operate  as  a  perpetual  limitation 
of  its  corporate  powers. 

§  1918.  When  any  commissioners  or  cor- 
porators to  receive  subscriptions  to  the  capi- 
tal stock  of  a  corporation  shall  be  satisfied 
that  any  subscription  is  not  made  in  good 
faith,  they  shall  disallow  it,  and  return  to 
the  person  subscribing  such  installment  as 
may  have  been  paid  by  him. 

§  1919.  Whenever  any  corporation,  public 
or  private,  except  corporations  having  a 
capital  stock,  or  associated  proprietors  of 
common  fields,  or  whenever  any  association 
organized  under  the  laws  of  this  State  shall 
have  failed  to  hold  their  annual  meeting, 
or  to  legally  elect  officers  thereat,  and  no 
provision  shall  be  contained  in  its  charter, 
articles  of  association,  or  by-laws,  or  pro- 
vided hj  law  for  such  contingency,  a  special 
meeting  for  that  purpose  may  be  called  by 
the  persons  whose  duty  it  is  to  call  the 
annual  meeting,  and  shall  be  called  by  such 
persons  whenever  requested  so  to  do  by  not 
less  than  ten,  or  a  majority  of  the  members 
of  such  ('o^-poration,  or  association,  in  writ- 
ing, and  such  notice  shall  l)e  given  of  such 
special  meeting  as  is  required  in  calling  an 
annual  meeting,  and  at  such  meeting  the 
necessary  officers  may  be  elected. 

First  meeting.     §  1945. 

§  1920.  When  any  corporation  having  a 
capital  stock,  or  any  associated  proprietors 
of  common  fields,  shall  have  failed  to  hold 
their  annual  meeting  or  to  elect  officers 
tliereat,  and  no  provision  shall  be  contained 
in  its  charter,  or  articles  of  association  or 
by-laws  for  such  contingency,  the  officers  of 
such   corporation   or  association   shall   hold 


CONNECTICUT. 


15 


Capital  stock;  meetings  of  stockliolders  —  Stat.,  §§  1921-1929. 


their  ofliees  until  others  shall  be  appointed 
in  their  stead;  and  in  such  case  a  special 
or  annual  meeting  may  be  called  by  its  presi- 
dent or  vice-president,  or  a  majority  of  its 
directors;  and  on  their  refusal,  by  one-fourth 
of  the  associated  proprietors,  or  the  holders 
of  one-third  of  the  capital  stoclc  if  not  less 
than  one-fourth  in  number  of  the  stock- 
holders, by  a  writing  designating  the  time 
and  place,  and  giving  such  notice  as  is  re- 
qiiired  in  calling  an  annual  meeting;  and  at 
such  meeting  the  necessary  officers  may  be 
elected;  and  in  such  case,  such  failure  shall 
not  impair  the  rights  of  said  corporation  or 
association. 

[Failure  to  hold  new  election,  officers  hold  over. 
Spencer  v.   Champion,  9  Conn.  542.] 

§  1921.  Nothing  in  the  preceding  section 
shall  at  any  time  revive  any  corporation 
whose  powers  may  have  expired  for  any 
other  cause  than  that  hereinbefore  named, 
nor  any  corporation  which  shall  have  in 
fact  abandoned  and  ceased  to  exercise  the 
powers  and  franchises  granted  by  its 
charter. 

§  1922.  Any  one  of  the  directors  or  execu- 
tive officers  of  any  corporation,  incorporated 
by  the  laws  of  this  State,  owning  stock  in 
any  of  the  banks  or  other  corporations  of 
the  State,  shall  be  eligible  to  be  elected  as 
a  director  of  such  banlcs  or  other  corpora- 
tions, at  any  meeting  of  stockholders  of 
such  banks  or  other  corporations,  legally 
convened  for  the  election  of  directors,  and 
upon  such  election  may  act  as  director  of 
such  banlv  or  other  corporation;  Provided, 
That  not  more  than  one  single  person  of 
such  dii'ectors  or  executive  officers  shall  be 
eligible  to  serve  as  such  director  at  the  same 
time. 

Appointment  of  directors.     §  1950. 

[Admissions  of  president  and  directors  of  a  hunk 
are  inadmissible  In  defense  to  a  suit  bv  the  bank. 
Bank  v.  Hart,  3  Day  (Sup.  Ct.),  495.  Declaration 
of  directors  of  a  corporation  Inadmissible,  when. 
Bridge  Co.  v.  Granger,  4  Conn.  147.  Bankraptcy 
of  stockholder  does  not  make  him  ineligible  as  a 
director.     42  Conn.  569.] 

§  1923.  When  not  othei'wise  provided  in 
its  charter,  the  stock  of  every  corporation 
shall  be  personal  property,  and"  be  trans- 
ferred only  on  its  boolvs,  in  such  form  as  tlie 
directors  shall  prescribe;  and  sucli  corpora- 
tion shall  at  all  times  have  a  lien  upon  all 
tlie  stock  owned  by  any  person  tlierein,  for 
all  debts  due  to  it  from  him. 

Transfer  to  avoid  taxation,  penalty.  §  3S39. 
Attachment  of  shares  of  stock.  §§  919,  9:35.  Levy 
of  execution  against  stock.  §  1171.  Stock,  how 
pledged.  §  1924.  Transfer  of  stock,  and  lien  of 
corporation.  §§  1960,  1961.  Taxation  of  stock. 
§§  383G-3838.  Special  taxes.  §§  3916  et  seq.  Pre- 
ferred stock.     Act  of  1893,  see  p.  30. 

[Assignment  of  stock  on  sprret  trust  for  benefit 
of  the  corporation  was  fraudulent.     Mann  v.  Cook, 


20  Conn.  186.  This  section,  ipso  facto,  gave  a 
corporation  whoso  stock  had  been  pledged  a  lien 
upon  it  for  both  the  then  existing  and  the  future 
Indebtedness  of  the  stockholder,  which  was  su- 
perior to  the  unperfccted  lien  of  the  pledgee. 
Bank  v.   Ins.   Co.,  45  Conn.  35.] 

§  1924.  Shares  of  stock  in  any  corporation 
organized  in  this  State  under  the  laws  of  this 
State,  or  of  tlie  United  States,  may  be 
pledged  by  executing  and  delivering  a  power 
of  attorney  for  its  transfer,  with  the  certifi- 
cate of  stoclv  therein  mentioned,  to  the  party 
to  whom  the  pledge  is  made;  but  no  such 
pledge,  unless  consummated  by  an  actual 
transfer  of  the  stoclc  to  tlie  name  of  such 
party,  shall  be  effectual  to  hold  such  stock 
against  any  ]ierson  but  tlie  pledgor,  and  his 
executors  and  administrators,  until  a  copy  of 
said  power  of  attorney  shall  be  filed  with 
the  cashier,  treasurer,  or  secretary  of  said 
corporation. 

See  §  1923,  and  note. 

[See  Bank  v.  Ins.  Co.,  45  Conn.  22;  Winslow  v. 
Fletcher,  53  id.  390;  s.   c,  4  Atl.   Rep.  250.] 

§  1925.  At  all  meetings  of  corporations 
having  a  capital  stock,  stockholders  may 
vote  in  person,  or  by  an  attorney  duly  au- 
thorized thereto. 

Ex  parte  injunctions  to  restrain  voting  pro- 
hibited.   Act  of  1889,   see     p.  27. 

[The  books  and  records  of  a  corporation  deter- 
mine who  are  its  stockhohlers,  and  who  have  the 
right  to  vote  on  the  stock.  State  v.  Ferris,  42 
Conn.  568.  The  bankruptcy  of  a  stockholder  does 
not  preclude  him  from  voting  on  his  stock.  Id. 
Vote  fraudulently  procured  is  vitiated.  Goodwin 
V.  Ins.  Co.,  24  Conn.  602.] 

§  1926.  At  all  meetings  of  stockholders 
each  share  shall  entitle  the  holder  thereof  to 
one  vote. 

[Person  in  whose  name  stock  stands  upon  the 
books  has  the  right  to  vote  it.  \Yhite  v.  Ferris, 
42  Conn.  560.  And  person  having  right  to  vote 
as  a  stockholder  is  eligible  to  any  office  to  which 
a  stockholder  is  eligible.    Id.] 

§  1927.  No  person  shall  vote  at  any  meet- 
ing of  the  stockholders  of  any  bank  or  rail- 
road company,  by  virtue  of  any  power  of 
attorney  not  executed  within  one  year  next 
preceding  such  meeting;  and  no  such  power 
shall  be  used  at  more  tlian  one  annual  meet- 
ing of  such  corporation. 

§  192S.  A  majority  of  the  directors  of  every 
corporation,  convened  according  to  the  by- 
laws, shall  constitute  a  quorum  for  the  trans- 
action of  business. 

[Whatever  is  lawful  for  a  corporation  to  do, 
may  be  done  bv  a  majority  vote.  Eggleston  v. 
Doollttle,  33  Conn.  402.  Bankruptcy  of  stock- 
holder does  not  preclude  his  acting  as  a  director. 
42  Conn.  569.] 

§  1929.  The  directors  of  every  corporation 
may  call  in  the  subscriptions  to  its  capital 


16 


CONNECTICUT. 


Rights  and  liabilities  of  stockholders;  dividends  —  Stat.,  §§  1930-1931. 


stock  by  installments,  in  such  proportion  and 
at  such  times  and  places  as  they  shall  think 
proper,  by  gfiving  such  notice  thereof  as  the 
by-laws  shall  prescribe;  or.  in  the  absence 
of  such  by-laws,  on  such  notice  as  they  deem 
reasonable;  and  if  any  stockholder  shall  fail 
to  pay  any  such  installment  for  sixty  days 
after  it  shkw  have  become  payable,  and  after 
he  shall  have  been  notilied  thereof,  said  cor- 
poration may  sell  his  stock  at  public  auction, 
giving  at  least  thirty  days'  notice  thereof 
and  of  the  time  and  place  of  sale,  by  adver- 
tisement in  some  newspaper  published  in  the 
county  where  such  coi-poration  is  located; 
and  the  proceeds  thereof  shall  be  first  ap- 
plied in  payment  of  the  installment  called 
for  and  the  expenses  of  the  sale;  and  the 
residue  shall  be  refunded  to  the  owner. 

Lien  of  corporation  for  unpaid  subscriptions. 
§i  1900,  1961. 

[Action  against  subscriber  for  assessment,  what 
Is  a  defense.  Nortlirup  v.  Bushnell.  38  Conn.  510; 
R.  R.  Co.  V.  Brush,  43  id.  95.  After  corporation 
is  organized,  the  right  to  control  future  sub- 
scriptions passes  from  corporator  to  directors. 
Id.  First  payment  on  subscription  being  made 
on  faith  of  incorrect  information  does  not  operate 
as  a  waiver  or  estoppel.  Id.  Irregular  election 
of  directors  not  a  defense  to  action  to  enforce 
payment  of  installment  on  subscription,  when  ma- 
jority of  board  who  voted  the  assessment  were 
regularly  elected.  Turnpike  Co.  v.  Thrope,  13 
Conn.  183.  Whether,  in  such  an  action,  It  is  not 
enough  to  prove  a  vote  by  a  de  facto  board, 
Quaere.     Id. 

Fraudulent  withdrawal  of  stock:  fictitious  pay- 
ments.    See  Stebbins  v.  Cowles,  10  Conn.  405. 

When  power  of  assessment  could  not  be  exer- 
cised by  directors  without  authority  of  company. 
Man.   Co.  v.  Smith,  2  Conn.  584. 

Assessments  are  payable  to  the  treasurer  of  the 
corporation.       R.  R.  Co.  v.  Wilson,  22  Conn.  454. 

Delinquent  stockholder  is  liable  for  interest  on 
assessments.      Mann    v.    Cooke,    20   Conn.    190. 

There  are  cases  where  the  ofiScers  of  a  corpora- 
tion   may    be    compelled    to    make   calls    upon    the 
stockholders  for  stock  assessments,   by  a  writ  of  i 
mandamus.     Ward   v.   Mfg.   Co.,   IG  Conn.  601. 

Where  stock  is  liable  to  assessment,  the  assess- 
ment falls  upon  the  stockholder  of  record.  Davis 
V.  Essex  Society,  44  Conn.  585. 

Director  not  estopped  from  denying  his  sub- 
scription, when.  R.  R.  Co.  v.  Reynolds,  46  Conn. 
379. 

As  to  a  set-off,  in  an  action  for  calls,  on  the  In- 
solvency of  the  corporation,  of  a  collateral  debt. 
See  Ins.  Co.  v.  Weed.  28  Conn.  68. 

Subscription  to  capital  stock  creates  a  contract, 
and  if  a  power  to  amend  or  repeal  the  charter  be 
reserved  to  the  legislature,  though  absolute  in 
terms,  it  cannot  be  so  exercised  as  to  impair  the 
obligation  of  such  contract  or  to  destroy  vested 
rights.     R,   R.   Co.   v.   Chapman,   38   Conn.   70. 

From  subscription  to  stock,  the  law  implies  q 
promise  to  pay  installments  as  ordered  by  di- 
rectors. R.  R.  Co.  V.  Wilson,  22  Conn.  452.  And 
it  is  no  defense  to  action  for  installments  that 
corporation  was  not  organized  until  after  the 
subscription  was  made.  Id.  The  title  which 
subscriber  acquires  to  the  shares  subscribed  for 
Is  a  good  consideration  for  a  promise  by  him  to 
pay  assessments.     Id. 

Irregularities  in  proceedings  by  corporation  no 
defense  to  action  for  assessments.  Id.;  see  also 
E.  R.  Co.  v.  Kennedy,  12  Conn.  507. 

Construction  of  charter  as  to  the  implied  right 
to  sue  stockholders  for  subscriptions.  Id.;  Mann 
V.  Cooke,  20  Conn.  187. 

If  there  is  no  provision  fixing  the  notice  to  be 
given  to  stockholders  on  the  calling  in  of  install- 


ments   upon    subscription,    reasonable    notice    Is 
suflicient.     Turnpike  Co.  v.  Thorp,  13  Conn.  184. 

A  bill  in  equity  was  maintainable  by  a  judg- 
ment creditor  to  compel  the  payment  to  the  dl 
rectors  or  to  a  receiver  of  unpaid  installments  on 
stock.  Ward  v.  Mfg.  Co.,  16  Conn.  5!t7.  Writ  of 
mandamus  to  compel  directors  to  call  in  unpaid 
installments  would  be  a  less  adequate  remedy. 
Id.  GOl. 

Purchaser  of  stock  not  paid  up,  liable  for  In- 
stallments.    R.  R.  Co.  V.  Boorman.  12  Conn.  531. 

In  a  suit  to  recover  the  nnp.iid  assessment  on 
capital  stock  of  a  joint-stock  company,  defendant, 
who  was  promoter  of  the  concern  and  assisted 
in  its  organization,  is  estopped  to  defend  upon 
ground  that  the  required  twenty  per  cent,  of  its 
capital  stock  has  not,  in  fact,  been  paid  in  in  cash. 
Canfield  v.  Gregory,  66  Conn.  9;  s.  c,  33  Atl.  Rep. 
536.] 

[Rijsrlit^i  and  liabilities  of  members.— Per- 
sonal liability  of  stockholders  of  insolvent  cor- 
poration was  that  of  joint  debtors,  and  could  be 
enforced  by  a  creditor  in  an  action  at  law  brought 
against  all.  Deming  v.  Bull,  10  Conn.  414.  In 
such  a  case  equity  will  compel  the  stockholders, 
as  between  themselves,  to  a  pro  rata  contribution. 
Id. 

Where  charter  provided  that  the  persons  and 
property  of  its  members  should  be  liable  for  all 
debts  due  by  the  corporation,  held,  that  as  soon 
as  any  debt  was  contracted,  it  was  enforcible 
against  the  members  as  original  debtors,  as  if 
there  had  been  no  incorporation.  Southmayd  v. 
Russ,  3  Conn.  55. 

Where  statute  imposes  on  stockholders  an  abso- 
lute individual  liability  proportioned  to  the  amount 
of  their  stock,  such  liability  is  an  independent  and 
original  one,  and  the  stockholders  may  be  severally 
sued.     Paine  v.  Stewart,  33  Conn.  529. 

Charter  provided  that  the  persons  and  property 
of  members  should  at  all  times  be  liable  for  all 
debts  due  from  corporation.  Held,  that  this  lia- 
bility attached  only  to  those  who  were  members 
when  a  legal  demand  was  made  for  the  payment 
of  such  a  debt.  Bank  v.  Magill,  5  Conn.  63.  But 
if  a  transfer  of  stock  be  made  to  an  irresponsible 
party,  with  Intent  to  avoid  this  liability,  it  would 
be  fraudulent,  and  void  as  against  the  company's 
creditors.     Id.] 

§  1930.  When  any  corporation  shall  im- 
pose a  tax  on  the  shares  of  its  stock,  it  may 
appoint  a  collector  thereof,  who  shall  re- 
ceive from  its  treasurer  a  tax  bill  and  war- 
rant, to  be  signed  by  any  justice  of  the 
peace,  directing  such  collector  to  collect  the 
sums  specified  in  such  tax  bill;  and  on  neg- 
lect of  any  stockholder  to  pay  the  same 
within  the  time  limited  by  such  corporation, 
the  collector  may  levy  said  warrant  on  such 
shares,  or  such  part  thereof  as  may  be  nec- 
essary to  satisfy  said  tax  and  costs,  and  shall 
proceed  therein  in  the  manner  provided  by 
law  for  the  collection  of  executions  when 
levied  on  the  shares  of  the  capital  stock  of 
such  corporation;  and  the  fees  of  said  col- 
lector shall  be  the  same  as  are  allowed  to 
officers  on  executions. 

§  1931.  No  dividend  exceeding  the  rate  of 
ten  per  cent,  a  year,  shall  be  declared  by  any 
corporation,  tintil  it  sliall  have  a  surplus 
fund  of  twenty  per  cent. 

Oflicers  liable  for  illegal  dividends.  §  19.32. 
Dividend  by  insolvent  corporation,  penalty.  §  1958. 
Uncalled  for  dividends,  disposition  of.  §  1964. 
Division  of  profits  among  employes.  §§  1935,  1936. 
Dividends  on  preferred  stock.  Act  of  1893,  see 
p.  30.     See  act  concerning  trust  estates,  at  p.  27. 


COXNECTICUT. 


17 


Dividends;  reduction  of  stock;  annual  reports  —  Stat.,  §§  1932-1942. 


§  1932.  No  corporation  shall  declare  any 

dividend  while  its  capital  is  impaired;  and 
all  officers  wlio  sliall  vote  in  favor  of  declar- 
ing such  dividend,  in  case  such  dividend  is 
declared,  knowinjr  or  having  the  means  of 
knov\'ing  that  such  capital  is  impaired,  shall 
be  jointly  and  severally  liable,  in  an  action 
on  this  statute,  for  all  losses  resulting  from 
said  declaration  of  dividend,  and  be  guilty 
of  a  misdemeanor. 

See  i  1931,  note. 

§  1933.  When  the  capital  stock  of  any 
specially  chartered  corporation,  whose  stock 
has  been  fully  paid  in  shall  have  become 
impaired,  it  may  reduce  it,  and  the  par  value 
of  its  shares,  to  such  amount  as  sliall  be 
justified  by  its  assets;  but  no  part  of  its 
assets  shall  be  distributed  to  its  stockhold- 
ers before  such  reduction,  and  no  reduction 
shall  be  made  except  upon  the  vote  of  the 
stockholders,  approved  by  at  least  two-thirds 
of  the  board  of  directors,  and  certified  under 
the  corporate  seal  by  the  secretaiT.  a  copy  of 
which  shall  be  filed  in  the  ofl3ce  of  the  secre- 
tary of  the  State. 

Capital,  Low  reduced  or  increased.    §§  1954,  1955. 

§  1934.  The  directors,  after  such  reduction 
of  oapual,  may  require  each  shareholder 
to  return  his  old  certificate,  and  in  lieu 
thereof  may  issue  a  new  certificate  certi- 
fying the  number  of  shares  to  which  he  is 
entitled  under  the  reduction,  and  such  com- 
pany after  such  reduction  may  increase  its 
capital  stock  to  any  amount  not  exceeding 
the  amount  authorized  in  its  charter. 

See  §  1933. 

§  1935.  Any  corporation  organized  after 
May  31,  ISSfi,  under  general  or  special  law, 
may,  by  its  board  of  directors,  distribute  to 
the  persons  employed  in  its  service,  or  to  any 
of  them,  such  portion  of  tlie  profits  of  the 
business  of  the  corporation  as  the  board  of 
directors  may  deem  just  and  proper. 

See  §  1931  and  cross-references. 

§  1930.  Any  cori^oration  organized  on  or 
prior  to  May  31,  1SS6,  may  give  to  its  boai'd 
of  directors  the  power  to  distribute  to  the 
persons  employed  in  its  service,  or  to  any  of 
them,  such  portion  of  the  profits  of  the  busi- 
ness of  the  corporation  as  said  board  may 
deem  just  and  proper;  provided,  such  power 
is  given  by  a  major  vote  of  all  the  share- 
holders, at  a  meeting  warned  for  the  pur- 
pose. 

§  1937.  The  president  and  secretary  of 
every  coi-poration.  having  a  capital  stock  and 
not  required  by  law  to  make  other  annual 
returns  of  a  similar  character  to  some  State 
officer,  sliall  annually,  on  or  before  the 
fifteenth    day    of    February    or    of    August 


lodge  with  the  town  clerk  of  the  town  in 
which  said  corporation  is  located  a  certifi- 
cate, signed  and  sworn  to  by  them,  showing 
the  condition  of  its  affairs  as  nearly  as  the 
same  can  be  ascertained,  on  the  first  day  of 
December  or  January  or  on  the  first  day  of 
June  or  July  next  preceding  the  time  of  mak- 
ing such  certificate,  in  the  following  par- 
ticulars, to- wit:  the  amount  of  capital  stock 
actually  paid  in.  showing  the  amount  paid 
in  in  cash  and  in  other  property,  separately; 
the  cash  value  of  its  real  estate;  the  name, 
residence,  and  number  of  shares  of  each 
stockholder;  the  amount  of  its  debts;  the 
cash  value  of  its  personal  estate;  and  the 
cash  value  of  its  credits;  wliicli  certificate 
the  town  clerk  shall  record  at  length  in  a 
book  to  be  kept  by  him  for  that  purpose. 

Corporate  officers  and  their  duties.  §  190G  and 
cross-references.     See  following  sections. 

[Above  statute  is  penal,  and  the  liability  Imposed 
by  following  sections  is  in  nature  of  pe'naitv  and 
not  of  a  debt.     Mitchell  v.  Ilotclikiss,  48  Conn.  9.] 

§  1938.  Any  president  or  secretary  of  such 
a  corporation,  who  shall  intentionally  neg- 
lect, or  refuse  to  comply  with  the  provisions 
of  the  preceding  section,  shall  be  liable  for 
all  the  debts  of  said  coi^poration  contracted 
during  the  period  of  such  neglect.  But  no 
action  for  any  liability  so  incurred  shall  be 
brought  except  within  three  years  after  the 
debt  contracted  shall  become  due  and  pay- 
able. 

See  §  193  (. 

§  1939.  The  secretary  and  every  person 
having  charge  of  the  stoclc  boolcs  of  every 
conioration  shall  give  upon  the  application 
of  any  person  claiming  to  be,  or  to  be  the 
attorney  of,  a  creditor  of  any  stockholder,  in- 
formation as  to  the  names  of  the  stockhold- 
ers and  number  of  shares  owned  by  them 
respectively;  and  any  secretaiy  refusing  to 
give  sucli  information  shall  forfeit  one  hun- 
dred dollars  to  him  who  shall  prosecute 
therefor. 

See  §  1937. 

§  1940.  Corporations  required  to  make  re- 
ports to  the  general  assembly,  shall  make 
them  during  the  first  Aveek  of  each  regular 
session. 

§  1941.  No  bank,  savings  bank,  insurance 
comiiany.  or  trust  company,  heretofore  in- 
corporated, shall  change  its  location  from 
one  town  to  another,  except  by  act  of  the 
general  assembly. 

See  §  1957. 

§  1942.  The  superior  court  in  the  county  in 
which  any  corporation,  organized  under  the 
laws  of  this  State,  has  its  princijial  place  of 
business,  may,  as  a  court  of  equity,  on  the 


18 


COXNECTICUT. 


Dissolution;  joint-stock  corporations  —  Stat.,  §§  1943-1944. 


application  of  any  of  its  stockholders,  wind 
up  its  affairs  and  dissolve  it.  if  said  court 
shall  find  that  said  corporation  has  voted  to 
wind  up  its  affairs,  or  al>andoned  tlie  busi- 
ness for  which  it  was  organized,  and  has 
thereafter  neglected  within  a  reasonable 
time  or  in  a  in-opor  manner  to  wind  up  its 
affairs  and  distribute  its  effects  among  its 
stockliolders;  and  for  this  purpose  may,  if  it 
deem  it  necessaiy,  appoint  one  or  more  re- 
ceivers of  the  estate  of  said  corporation,  and 
limit  a  time  for  its  creditors  to  present  their 
claims  to  such  receivers,  and  direct  pulilic 
notice  thereof  to  be  given;  and  all  claims  not 
presented  within  such  time  shall  be  barred. 
Said  receivers  shall  allow  all  just  claims 
against  said  corporation,  collect  its  debts, 
sell  its  property,  and  convert  the  same  into 
money,  and  report  their  doings  to  said  court 
as  it  may  direct.  Said  court  may,  on  com- 
plaint of  any  person  aggrieved  by  such 
doings,  grant  such  relief  as  the  nature  of  the 
case  may  require;  and  it  may  make  such 
orders  as  to  the  doings  of  the  receivers,  their 
compensation,  and  other  expenses,  and  as  to 
the  payment  of  debts  and  distribution  of  the 
effects'  of  said  corporation,  as  may  be  just 
and  conformable  to  law. 

Insolvent  corporations.  §§  502,  506.  Receivers 
of.  §§  1321,  1322.  Winding  up  corporations. 
§§   10G5-1967.     See   §   1943. 

[Corporation  may  be  dissolved  by  a  surrender  of 
record,  but  the  surrender  must  be  accepted  by  the 
State.    Bridge   Co.   v.   River  Co.,  7   Conn.   45. 

The  neglect  of  a  corporation  to  perform  some 
duty  required  bv  their  charter,  although  sufficient 
to  produce  a  forfeiture  of  corporate  rights,  cannot 
be  taken  advantage  of  collnterally  before  such  for- 
feiture is  judicially  determined.  Pearce  v.  Olney, 
20  Conn.  557:  Kellogg  v.  Union  Co.,  12  id.  20; 
Bridtre  Co.  v.  River  Co.,  7  id.  46. 

Joint-stock  association  docs  not  become  extinct 
bv  the  resignation  of  all  its  officers,  and  an  omis- 
sion to  elect  others,  and  a  transfer  of  all  the 
capital  stock  to  a  single  Individual.  Evarts  v. 
Manuf.  Co.,  20  Conn.  458. 

Where  a  power  is  reserved  in  the  charter  or  by 
statute  to  repeal  charter  at  pleasure,  legislature 
can  repeal  it  summarily  and  at  discretion,  aijd 
courts  cannot  review  such  action,  unless  the 
principles  of  natural  justice  have  been  dearly 
violated.  Lothrop  v.  Stedman,  42  Conn.  590.  Such 
a  itpeal  does  not  impair  the  obligation  of  any 
pre-existing  contract  of  the  corporation.    Td. 

Above  section  applied.  Links  v.  Banking  Co.,  66 
Conn.  277;  s.  c,  33  Atl.  Rep.  1003;  In  re  Waddell- 
Entz.  Co.,  67  Conn.  ,S24;  s.  c,  35  Atl.  Rep.  257. 

Dissolution  of  corporation  by  forfeiture  can  be 
effected  only  after  an  opportunity  for  a  hearing 
on  proper  proceedings.  Bank  v.  Bank,  36  Conn. 
334;    8.    c,    14    Wall.    383. 

No  dissolution  otherwise  than  by  repeal  of  char- 
ter or  a  judicial  decree  can  affect  the  rights  of  its 
creditors.     Id. 

A  court  of  equity  cannot  wind  up  or  dissolve  a 
corporation,  unless  specially  authorized  by  statute. 
Harden  v.  Newton,  14  Blatchf.   (U.  S.)  378. 

Suit  in  equity  to  wind  up  a  corporation  will  not 
be  barred  because  a  previous  suit  of  the  same 
character,  and  setting  up  similar  grounds,  has  been 
heard  on  the  merits  and  dismissed.  Neville  v. 
Carriage  Co.,  47  Conn.  172. 

A  corporation  abandoned  its  business  because  it 
had  been  thrown  into  bankruptcy.  Held,  that  such 
abandonment.  folk)wed  by  long  neglect  to  wind  up 
Its  affairs,  brought  the  case  within  this  section. 
Hart  V.  R.  R.  Co.,  40  Conn.  540.] 


§  1943.  When  the  stockholders  of  any  cor- 
poration constituted  under  the  laws  of  this 
State,  shall  have  voted  to  discontinue  its 
business  and  distribute  its  capital  stock 
among  its  stoclcliolders;  it  may  appl.v  to  the 
superior  covn't  in  tlie  county  wliere  it  is 
located,  or  to  any  judge  of  said  court  in 
vacation,  for  an  order  limiting  a  time  for 
tlie  creditors  of  said  corporation  to  present 
their  claims  against  it  to  its  directors,  and 
said  court  or  judge  may  make  sucli  order, 
limiting  not  less  than  two  months  from  its 
date,  and  shall  prescribe  tlie  notice  that 
shall  be  given  thereof  to  said  creditors;  and 
all  claims  not  presented  in  pursuance  of  said 
order  sliall  be  barred  of  a  recovery.  And 
any  claim  presented,  wliicli  shall  be  rejected 
by  the  directors,  shall  be  barred  unless  tlie 
owner  thereof  shall  commence  an  action  to 
enforce  the  same  within  four  months  after 
he  shall  receive  written  notice  of  its  rejec- 
tion. 

See  §  1942  and  cross-references. 


CHAPTER  CXX. 

Joint-Stock  Corporations. 

Sec.  1944.  Organization,  name,  etc. 

1945.  First    and    subsequent    meetings,    how 

called. 

1946.  Organization  of  first  meeting,  by-laws, 

etc. 

1947.  Stock    must   all   be    subscribed   for   and 

twenty  per  cent,  paid  in  before  busi- 
ness can  be  commenced. 

1948.  Articles  of  association   to  be  published 

and  filed  ■with  secretary  of  the  State. 

1949.  Change  of  name,   how  secured. 

1950.  Appointment  of  directors,  management, 

secretary,  treasurer,  etc. 

1951.  Change  of  business,  when  allowed. 

1952.  May  hold  property  needed  for  its  busi- 

ness. 

1953.  Books  must  be  kept  In  town  where  cor- 

poration is  located. 

1954.  Capital,  how  reduced  or  Increased,  and 

liability  of  stockholders. 

1955.  Twenty  per  cent,  of  amount  added  must 

be  paid  in. 

1956.  Annual    report,    character   of   and    time 

of  making. 

1957.  Removal  to  another  town. 

1958.  Declaration    of    dividend    by    Insolvent 

corporation. 

1959.  Negligent  officers. 

1960.  Transfer  of  stock  and  Hen  of  corpora- 

tion on  same. 

1961.  Stock  may  be  sold  by  corporation  hav- 

ing lien  on  same. 

1962.  New    certificates    to    be   Issued    to    pur- 

chaser. 

1963.  Equity  in  stock  pledged  may  be  held  by 

corporation. 

1964.  Disposition  of  uncalled  for  dividends. 
19G5.  Winding  up  affairs  of  corporation,   and 

limitation  of  claims  against. 

1966.  Superior  court  may  order  sale  of  prop- 

erty of  such  corporations. 

1967.  Petition  for  dissolution  upon  failure  to 

file  statement  of  condition. 

1968.  Fee  for  recording  certificates. 

§  1944.  Any  three  or  more  persons  who 
shall  associate  by  written  articles  which 
shall  express  their  agreement  to  constitute 
a  corporation,  the  name  by  which  it  sliall  be 
known,    the    purpose    for    which    it  is  con- 


COXIs^ECTICUT. 


19 


Joint-stock  corporations;  consolidated  corporations  —  Stat.,  §§  1945-1 94G. 


stituted,  the  town  in  this  State  in  which  it  is 
to  be  located,  the  amount  of  its  capital  stock, 
and  the  nnniher  of  shares  each  person  is  to 
take,  which  shares  sliall  eacli  be  of  the  par 
value  of  one  hundred  dollars,  fifty  dollars, 
or  twenty-five  dollars,  as  may  be  prescribed 
in  said  articles,  under  any  name  commenc- 
ing with  "  The "  and  endinsr  with  "  com- 
pany "  or  "  corpoi'ation,"  which  name  is  not 
then  in  use  by  any  existing  corporation  in 
this  State,  for  the  i)ur])ose  of  carrying  on  any 
lawful  business  in  this  State,  and  out  of  this 
State,  wliatever  lawful  business  may  be  in- 
cidental to  the  business  within  it.  such  busi- 
ness not  to  be  either  trust,  insurance,  buying 
and  selling  real  estate,  banking,  or  trading 
in  bonds,  notes,  or  other  evidences  of  in- 
debtedness, or  trafficking  in  letters  patent  or 
patent  rights,  sliall.  when  so  associated,  and 
when  a  certificate  shall  have  been  filed  with 
tlie  secretary  of  state  as  hereinafter  pro- 
vided, become  and  remain  a  joint-stock  cor- 
poration und(  r  this  chapter;  and  corporations 
may  in  like  manner  be  formed  under  this 
chai)ter  for  the  purpose  of  carrying  on,  out 
of  tills  State,  any  lawful  business  not  hei'ein 
forbidden;  provided,  that  in  such  case  the 
secretary  and  treasurer  and  a  majoiity  of 
the  directors  shall  always  be  residents  of 
this  State. 

Certified  copy  of  certificate  evitlonce.  §  1000. 
Usurpation  of  franchises.  §§  1300-1302.  Corporate 
name.  §  1905.  Change  of.  §  1949.  Changing  pur- 
pose of  corporation.  §  1951.  Capital,  how  reduced 
or  increased.  §  1954.  Removal  of  place  of  busi- 
ness. §§  1941,  1957.  Articles  to  be  published. 
§  1948.  See  act  of  1893,  validating  certain  irregu- 
larities and  omissions,  at    p.  31. 

[Existence  of  charter  may  be  presumed  from 
long-continued  acts.  Green  v.  Dennis,  6  Conn. 
302. 

No  legal  difliculty  in  the  way  of  creating  single 
corporation  by  concurrent  action  of  two  or  more 
States;  nor  of  creating  new  corporation  out  of 
two  or  more  already  existing,  though  one  of  them 
is  a  foreign  one.  Bishop  v.  Brainerd,  28  Conn. 
299.  As  to  by-laws  of  the  new  corporation,  see 
Lane  v.   Krainerd.  30  Conn.   576. 

Corporation  organized  to  take  a  man's  property 
and  pay  his  debts.  Waterman's  Appeal,  26  Conn. 
108. 

Prior  to  act  of  1876,  nothing  fraudulent  in  adop- 
tion for  joint-stoclc  corporation  of  names  of  some 
of  its  stockholders,  arranged  as  in  a  partnership. 
Holmes  et  al.  v.  Holmes,  etc.,  Co.,  .37  Conn.  296. 
Such  name  does  not  import  that  corporation  will 
enjoy  the  services  of  such  stockholders.  Id.  But 
being  adopted  by  consent  of  such  stockholders, 
they  are  estopped  from  forbidding  its  use  by  the 
corporation,  and  from  giving  the  same  or  similar 
names  to  a  rival  corporation.    Id. 

Above  section  construed.  Canfield  v.  Gregory, 
66  Conn.  23:  s.  c.  33  Atl.  Rep.  536. 

In  a  suit  between  a  private  corporation  and  an 
Individual,  cliarter  is  to  be  construed  by  same 
rules  as  any  other  instrument,  the  question  being 
as  to  intent  of  legislature,  to  be  collected  from 
the  whole  instnnnent.  Kellogg  v.  Union  Co.,  12 
Conn.  18.  • 

Irregularity  in  organization;  stockholders  liable 
as  partners.     Bank  v.  Palmer.  47  Conn.  447. 

Proof  tl'.at  company  existed  de  facto  is  suIHcient 
on  information  for  burning  building  with  intent  to 
defraud  insurance  company.  State  v.  Byrne,  45 
Conn.  280. 


One  having  assisted  In  organizing  and  carrving 
on  affairs  of  a  corporation  is  estopped  from  d'env- 
ing  the  corporate  existence.  Bldg.  As-sn.  v.  Ford, 
27  Conn.  289;  Same  v.  Uice,  id.  293.  And  a 
stranger,  who  has  purchased  an  equity  of  re- 
demption of  a  mortgage  from  such  person,  is 
equally  estopped.     Bank  v.  Collins,  27  Conn.  14.5. 

\\  here  a  special  charter  is  followed  by  general 

legislation    on    same    subject,    which    does    not    in 

t(  rms,    or    by    necessary    construction    repeal    the 

particular   grrnt,    the    two   are    deemed    to    stand 

together;  one  as  the  general  law  of  the  land,  the 

other  as  the  law  of  the  partirnlar  cas".    R.  R.  Co 

r.'-..  n™'^'*'''"  ^'•'•-   ^5  Conn.  411;   s.   c,  32  Atl.   Rep 
9o.i.] 

[Consolidated  eorporntions.—  Consolidation 
does  not  necessarily  extinguish  original  corpora- 
tions for  all  purpo-ses.  Bishop  v.  Brainerd  ^'8 
Conn.   298.     .Aferger  of  corporations.     See   Piatt    v. 

i;.    r    *-oo'  .^".J.'""°-    ^'^'^'    Society,    etc.    v.    New 
London,  23  id.  195. 

Consolidated   corporation  may  borrow,   on  mort- 
gage, to  pay  off  mortgage  bonds,  previously  issued 
by  either  original  corporation.    Mead  v.  R.  R    Co 
4o  Conn.  222. 

Act  of  legislature  expressly  recognizing  existence 
of  new  consolidated  corporation  operated  as  a  full 
ratihcation  of  the  consolidation.    Id.] 

§  194.'').  Any  two  of  the  persons  associated 
may  call  the  fir.st  meeting  of  the  corporation 
at  such  time  and  place  as  they  may  appoint 
by  notice  in  any  newsiiaper  published  in  the 
county  in  which  such  corporation  is  to  be 
established,  at  least  fifteen  days  before  the 
time  appointed;  but  said  notice  mav  be 
waived  by  a  writing  signed  by  all  the'  sub- 
scribers to  the  capital  stock,  specifying  the 
time  and  place  for  said  meeting, 'and  re- 
corded at  length  upon  the  records  of  the  cor- 
poration. A  written  or  printed  notice  of  each 
subsecjuent  meeting  of  such  corporation, 
specifying  the  place,  day,  and  hour  of  such 
meeting,  shall  be  given  by  the  president  or 
secretary  to  each  stockholder,  by  leaving  it 
with  hiin.  or  at  his  residence  or  usual  place 
of  business,  or  by  depositing  it  in  some  post- 
office  for  transmission  by  mail,  postage  paid, 
addressed  to  him  at  his  last  known  place  of 
residence,  at  least  five  days  before  said 
meeting. 

Corporation  must  organize  within  two  years. 
§  1910.    Special  meeting,  how  called.    §  1919. 

[Proceedings  of  meeting  are  void  unless  all  mem- 
bers are  notified  of  such  meeting.  Stowe  v.  Wise, 
7  Conn.  219. 

Above  section  makes  it  the  imperative  duty  of 
president  or  secretary  to  give  the  prescribed  no- 
tice whenever  it  is  properlj'  required.  Ba.-isett  v. 
Atwater,  65  Conn.  355;  s.  c,  32  Atl.  Rep.  <«7. 
Each  corporation  may  determine  for  itself  under 
what  circumstances  a  special  meeting  shall  he 
held,  and  if.  a  by-law  which  gives  to  the  holders 
of  a  certain  proportion  of  the  stock  the  right  to 
demand  such  meeting,  is  duly  complied  with,  it 
thereupon  becomes  the  legal  duty  of  the  president 
or  secretary  to  issue  the  notice  or  call  for  the 
meeting,  and  this  duty,  in  case  of  neglect  or  re- 
fusal, is  enforclble  by  mandamus.    Id.] 

§  1946.  At  the  first  meeting,  including  ad- 
journments thereof,  an  organization  shall  be 
effected  by  the  choice  by  ballot  of  a  tem- 
porary clerk,  and  by  the  election  by  ballot 
of  three  or  more  directors,  who  are  sub- 
scribers for  the  stock;  and  by-laws  for  the 
regulation  of  the  affairs  of  the  corporation 


20 


COisiSEOTiCUT. 


Articles  to  be  published;  change  of  name;  directors  —  Stat.,  §§  1947-1950. 


may  be  adopted.  At  any  subsequent  meet- 
ing of  the  stockholders  specially  called  for 
that  purpose,  by-laws  may  be  adopted,  or  the 
by-laws  previously  adopted  may  be  altered 
or  repealed. 

By-laws.    §  1906(5). 

[One  having  acted  as  director  of  corporation  is 
deemed  to  liave  waived  ali  objections  to  the 
reffularity  of  bis  subscription.  Lane  v.  Rrainard, 
30  Conu.  577.  And  all  conditions  to  a  subscription. 
Id. 

Above  section  construed.  Cnnfield  v.  Gregory,  CG 
Cuun.  23;  s.  c,  33  Atl.  Rep.  536.] 

§  1947.  No  association  of  persons,  under 
this  chapter,  hereafter  organized,  shall  com- 
mence business  until  all  its  capital  stock 
shall  be  subscribed  for  by  bona  fide  sub- 
scribers, and  at  least  twenty  per  cent, 
thereof  paid  for  in  cash,  nor  until  the  re- 
quirements of  the  succeeding  section  shall 
have  been  complied  with;  and  in  case  any 
portion  of  the  balance  of  said  stock  shall 
be  paid  for  in  property,  real  or  personal, 
such  property  shall  be  estimated  for  such 
purpose  at  the  actual  value  thereof. 

[Certificate  of  commissioners  conclusive  upon 
subscribers  as  to  validity  of  subscriptions.  Bank 
V.  Church,  29  Conn.  148.  "Commissioners  appointed 
by  general  assembly  to  receive  subscriptions  to 
stocii  of  bridge  company,  and  to  proceed  to  or- 
ganize "  whenever  the  stock  necessary  for  the 
construction  of  the  bridge  "  was  subscribed.  Held, 
that  their  determination  as  to  what  amount  was 
•'  necessary  "  was  conclusive  upon  the  courts. 
Bridge  Co.  v.  Westport,  39  Conn.  .348.  Comniis-  1 
sioners  appointed  to  receive  subscriptions  to  capi- 
tal of  proposed  corporation  may  leave  subscription 
books  in  charge  of  an  agent.  Bridge  Co.  v.  West- 
port.    39    Conn.    340. 

Commissioners  functi  officio.  State  v.  Bull,  16 
Conn.  190. 

Effect  of  subscription  paper  cannot  be  con- 
trolled by  evidence  of  parol  agreement.  Turnpike 
Co.  V.  Thorp,  13  Conn.  182. 

Defendant  having,  without  objection,  acted  as 
stockholder  at  meetings  of  corporation,  held,  that 
formal  assignment  to  him  of  his  shares  was  un- 
necessary.   R.   R.   Co.  V.   AVilson,  22  Conn.  4.")3. 

Whether  capital  stock  of  joint-stock  corporation 
may  not  be  paid  in,  not  in  cash,  but  in  propertv 
necessary  for  their  business,  quaere.  Brown  v. 
Illir.ois,  27  Conn.  91. 

Power  of  attorney  to  subscribe  for  stock,  author- 
izes what.     Bank  v.  Church.  29  Conn.  l.")l. 

Defendant  induced  to  subscribe  to  stock  of  fraud- 
ulently-organized bank  by  false  representations 
that  he  would  not  have  to  pay  for  it.  Held,  to  be 
no  defense,  and  that,  by  his  "participation  in  get- 
ting up  the  bank,  he  is  estopped  to  deny  its  ex- 
istence. Bank  v.  Church,  29  Conn.  150.  But  see 
Bank  v.  Peck.  id.  38.5. 

Stock  may  be  paid  for  in  notes  of  a  third  party. 
Stoddard   v.   Foundry  Co.,  34  Conn.  545. 

Stipulation  in  charter  that  companv  might  be  or- 
ganized when  one-fifth  of  capital  s"hould  be  sub- 
scribed. Held,  that  such  stipulation  authorized 
commeneement  of  work  without  attempting  to 
raise  balance  of  capital.  R.  R.  Co.  v.  (Jhapman,  38 
Conn.  65. 

Subscription,  part  of  which  to  be  paid  in  labor 
and  material,  sustained.  R.  R.  Co.  v.  Brush  43 
Conn.  95. 

Above  section  applied.  Canfield  v.  Gregory,  66 
Conn.  23;  s.  c,  33  Atl.  Rep.  536.]  " 

§  1948.  The  directors  shall  cause  the  ar- 
ticles of  association  to  be  published  <at  full 
length    in    a    newspaper    published    in    the 


coimty  where  the  corporation  is  located;  and 
a  majority  of  the  directors  shall  make,  sign, 
and  swear  to  a  certificate  setting  forth  a 
true  copy  of  the  articles  of  association, 
which  certificate  shall  .state  that  such  publi- 
cation has  been  made,  and  also  the  name 
of  the  newspaper  containing  such  publica- 
tion, with  the  date  thereof,  and  shall  also 
state  the  names  and  residences  of  lite  sub- 
scribers thereto,  the  amount  of  the  stock 
taken  by  each,  the  amount  actually  paid  for 
in  cash,  and  the  amount  paid  for  in  property, 
specifying  the  .same  and  givin.g  the  actual 
value  thoreof.andinca.se  any  portion  of  said 
property  consists  of  letters  patent  or  rights 
under  the  same,  the  number  and  date  of  the 
patents  and  the  nature  of  the  invention  shall 
be  given;  which  certificate  shall  be  deposited 
in  the  office  of  the  secretary  of  the  State, 
who  shall  cause  the  same  to  be  recorded, 
and  a  duplicate  thereof  shall  be  x'ecorded  in 
the  town  clerk's  office  of  the  town  where 
said  corporation  is  located.  No  such  cer- 
tificate shall  be  received  or  recorded  by  the 
secretary  of  the  State,  or  by  any  town  clerk, 
whicli  siiall  fail  to  state  that  twenty  per 
cent,  or  more,  as  the  case  may  be.  of  the 
stock  has  been  paid  for  in  cash  as  required 
b3^  this  chapter. 

See  §   1944  and  cross-references. 

§  1949.  (As  amended  March  28,  189.5.)  Any 
joint-stock  or  private  cori)oration  having 
voted  to  change  its  corporate  name,  may 
apply  to  the  superior  court  for  the  county 
in  which  it  is  located  to  have  such  change 
made,  first  giving  notice  of  such  intended 
application  by  advertisement  for  two  Aveeks 
consecutively,  in  a  newspaper  published  in 
Hartford  or  New  Haven,  and  in  a  news- 
paper, if  there  be  one,  published  in  the  town 
in  which  the  corporation  is  located;  and  said 
court  may  change  said  name  as  prayed  for, 
and  upon  filing  in  the  otfice  of  the  secretary 
of  the  State  a  certified  copy  of  the  order  of 
the  court,  and  a  like  copy  with  the  town 
clerk  of  the  town  in  which  the  corporation 
is  located,  which  shall  be  recorded  by  said 
secretary  and  said  town  clerk,  the  name  of 
such  corporation  shall  thereafter  be  as  de- 
creed by  said  court;  but  no  right  existing 
at  the  time  of  such  change  in  favor  of  or 
against  such  corporation  shall  be  affected 
thereby. 

Corporate  name.    See  §§  1905,  1944. 

§  1950.  The  property  and  affairs  of  every 
joint-stock  corporation  shall  be  managed  by 
three  or  more  directors,  who  shall  be  chosen 
annually  by  the  stockholders,  at  such  time 
and  place  as  may  be  provided  by  its  by- 
laws, who  shall  be  stockholders  in  the  cor- 
poration, and  such  directors  may  fill  any 
vacancy  which  may  happen  in  their  board 
for  the  current  year.  The  directors  shall 
choose  one  of  their  number  to  be  president, 


cox:n^ecticut. 


21 


Corporate  officers;  change  of  business  —  Stat.,  §  19ol. 


and  shall  also  choose  a  secretary  and  a 
treasurer,  -n-ho  shall  reside  in  this  State,  and 
such  other  ofiicers  as  tlie  by-laws  of  the  cor- 
poration shall  prescribe,  who  shall  hold  their 
offices  until  others  are  chosen  in  their  stead; 
Provided,  That  tlie  treasurer  of  any  joint- 
stock  corporation  carrying  on  any  lawful 
business  in  this  State  not  forbidden  by  this 
chapter,  and  out  of  this  State  whatever  law- 
ful business  may  be  incidental  to  the  busi- 
ness within  it,  may  reside  out  of  this  State, 
in  Avhich  case  an  assistant  treasurer  shall 
be  appointed,  who  sliall  reside  within  this 
State;  Provided,  also,  That  the  secretary  and 
treasurer  of  any  joint-stoclc  corporation  or- 
ganized and  doing  business  prior  to  March 
twenty-fifth,  eighteen  hundred  and  eighty, 
and  the  property  of  which  is  equal  in  value 
to  one-half  the  amount  of  its  capital  stoclj 
as  shown  by  its  last  annual  return  to  the 
town  clerk  of  the  town  in  which  such  corpo- 
ration is  located,  may  reside  out  of  the  State, 
in  which  case  an  assistant  treasurer  shall  be 
appointed,  who  shall  reside  within  this 
State;  and  the  assistant  treasurer  so  ap- 
pointed in  either  case,  shall  be  the  person  on 
whom  notices  in  all  legal  proceedings 
against  the  corporation  may  be  served,  and 
who  instead  of  the  treasurer  may  sign  the 
certificate  required  by  section  1956. 

Offenses  by  officers,  penalty.  §§  1567,  1579, 
1580.  Duties  of  secretary.  §  1915.  Personal  lia- 
bility of  officers.  §§  1938,  1959.  Process  to  be 
served  on  officers.  §§  908,  909.  Officers  to  hold 
over.  §  1920.  Regulation  of  directorship.  §  1922. 
Voting.  §§  1925-1927.  Quorum,  what  is.  §  1928. 
Return  by  officers  for  taxation.  §§  3837,  3838. 
Officers  not  to  borrow  monev.  Act  of  1889,  see  p. 
27. 

[Secretary  of  a  Connecticut  corporation  may  re- 
side and  remain  In  another  State.  McCall  v. 
Maun,  0  Conn.  437.  Directors  of  Connecticut  corpo- 
ration mav  lawfully  hold  meetings  in  another 
State.  McCall  v.  Manuf.  Co.,  6  Conn.  436.  Un- 
der contract  to  repair  rf)ad,  it  is  enough  to  show 
that  work  was  done  to  the  acceptance  of  majority 
of  directors.  Wadhams  v.  Turnpike  Co.,  10  Conn. 
421. 

Not  necessary  to  validity  of  votes  of  directors 
that  they  be  recorded,  unless  when  it  is  required 
bv  charter  or  by-laws.  Goodwin  v.  Ins.  Co.,  24 
Conn.  001. 

Special  meeting  of  directors  of  bank  called,  but 
no  notice  given  of  occasion  for  calling  it.  Held, 
that  vote  at  such  meeting  authorizing  execution 
of  mortgage  was  valid.  Bank  v.  Davis,  8  Conn. 
200. 

Fraudulent  misrepresentations  by  directors  of  in- 
solvent insurance  company  rendered  them  person- 
ally liable  for  loss.  Salmon  v.  Richardson,  30  Conn. 
373. 

Innocent  misrepresentations  by  director  may  be 
explained.     Calhoun  v.  Richardson,  30  Conn.  226. 

Corporation  cannot  be  afl'ected  ijy  knowledge  of 
a  director,  unless  he  had  it  while  acting  officially 
or  while  exercising  some  special  authority.  Foun- 
dry  v.    Dart,   2G   Conn.   382. 

Directors  not  entitled  to  compensation  for  ser- 
vices, unless  they  are  most  unquestionably  beyond 
the  range  of  his  official  duties.  R.  R.  Co.  v. 
Ketchum,  27  Conn.  181.  Nor  for  signing  a  guar- 
anty on  the  faith  of  which  the  corporation  was 
enabled  to  obtain  large  loans.  Butler  v.  Iron  Co., 
22  Conn.  .^^S. 

An  individual  stockholder  cannot  maintain  an 
action  at  law  against  directors  of  corporation  for 


mismanaging  its  affairs  or  defrauding  the  corpora- 
tion. Allen  V.  Curtis,  26  Conn.  460.  Such  directors 
are  the  agents  of  the  corporation,  and  liable  only 
to  it  for  their  acts.  Id.  But  such  stockholder  mav 
maintain  petition  In  equity  against  directors  for 
misconduct  in  office,  where  corporation  is  unable, 
or  through   fraud  neglects,   to  seek  redress.    Id. 

Neither  the  acts  nor  the  knowledge  of  officer  will 
bind  corporation  in  a  matter  in  which  he  acts  for 
himself,  and  deals  with  corporation  as  if  he  had  no 
official  relations  with  it.  Piatt  v.  Axle  Co.,  41 
Conn.  265. 

The  president  has  no  power,  as  such,  to  bind 
corporation  by  any  act  outside  of  his  official  duty; 
he  may  be  its  agent  also,  but  such  agencv  must  be 
proved.    Perry  v.  Manuf.  Co.,  37  Conn.  534. 

Corporation  estopped  to  deny  contract  signed  by 
Its  president,  with  knowledge  of  directors  and 
managing  officers,  even  though  he  had,  in  fact,  no 
authority.     Perry  v.  Manuf.  Co.,  37  Conn.  534. 

Corporation  bound  by  acts  of  de  facto  secretary, 
such  acts  being  authorized  by  practice  of  the 
company.    Peck  v.  Ins.  Co.,  22  Conn.  586. 

Corporation  not  bound  by  unauthorized  contract 
of  secretary  and  treasurer,  made  without  knowl 
edge  or  consent  of  president  and  directors.  Faw- 
cett   V.    Organ   Co.,  47  Conn.   226. 

Quo  warranto  proceedings  against  person  claim- 
ing to  be  director.  Judgment  for  defendant.  New 
trial  could  not  be  granted  after  expiration  of  term 
for  which  he  claimed  to  have  been  legally  elected. 
State  V.  Tudor,  5  Day    (Sup.  Ct.),  335. 

Secretary  elected  "for  the  ensuing  year"  con- 
tinues secretary  de  jure  until  successor  is  ap- 
pointed.    McCall  V.  Manuf.  Co.,  6  Conn.  438. 

Authority  of  agents  of  corporation  need  not  be 
proved  by  corporate  vote  or  seal.  Manuf.  Co.  v. 
Pitkin,  14  Conn.  187.  oCrporation  bound  by  acts 
of  its  representative  in  court  in  same  manner  as 
any  individual  would  be.    Id. 

Commissioners  appointed  by  legislature  to  super- 
intend building  of  bridge  are  not  agents  of  bridge 
company.     Bridge  Co.  v.  Granger,  4  Conn.  460. 

Agent  of  corporation  appointed  for  one  year,  not 
authorized  to  convey  by  deed  its  real  estate.  Stow 
V.  Wyse,  7  Conn.  219. 

Agent,  appointed  by  vote  of  directors,  entered 
on  record-book,  to  execute  mortgage  deed  of  real 
estate.  Held,  that  appointment  was  valid,  and 
that  it  was  unnecessary  to  record  vote  with  mort- 
gage. Bank  v.  Davis,  8  Conn.  201;  Beckwith  v. 
Manuf.  Co.,  14  id.  603. 

Acts  of  turnpike  gate-keeper  admissible  in  evi- 
dence to  prove  contract  of  company.  Wadhams  v. 
Turnpike  Co.,  10  Conn.  421.  Also  of  draw-tenders 
to  prove  license  by  drawbridge  company.  Toll 
Bridge  Co.   v.   Betsworth,  30  Conn.   390. 

Declarations  of  insurance  agent  to  vary  a  writ- 
ten contract.  Ins.  Co.  v.  Jarvis,  22  Conn.  148. 
Ilatiflcation  by  corporation  as  affecting  personal 
liability  of  agent  to  third  parties.  Hewitt  v. 
ANheeler,  22  Conn.  564. 

Power  given  to  committee  to  execute  writings, 
extent  of.    Reservoir  Co.  v.  Chase,  14  Conn.  130. 

Railroad  company  not  estopped  by  declarations 
of  its  chief  engineer.  AVilliams  v.  R.  li.  Co.,  39 
Conn.   521. 

Ratification  of  acts  of  agent  of  corporation  In 
making  contract  in  its  behalf,  may  be  implied  by 
its  acts.    Howe  v.  Keeler,  27  Conn.  554. 

Authority  of  general  manager  of  business  corpo- 
ration to  agree  to  pay  for  medical  attendance  upon 
person  injured  by  fault  of  the  corporation.  Swa- 
z«y  v.  Union  M.  Co.,  42  Conn.  559.] 

§  1951.  The  purpose  for  which  any  such 
corporation  may  be  esUiblished  may  be 
changed  by  the  stockholders,  so  as  to  specify 
any  other  lawful  business  in  this  State  al- 
lowed by  the  provisions  of  section  1944;  but 
before  it  shall  commence  business  under 
amended  articles,  they  shall  be  subscribed 
by  stookliohlers,  holding  at  least  two-thirds 
of  the  whole  stock,  certitied  to,  published 
and  recorded  as  provided  for  the  original 
articles. 


22 


CONNECTICUT. 


Property;  report  of  officers,  etc. —  Stat.,  §§   1952-1957. 


§  1952.  Every  such  corporation  may  bold 
any  property,  ueces.sary  or  convenient  for 
Its  purposes,  including  real  estate  and  patent 
rights,  and  such  other  property  as  may  be 
taken  in  payment  of  or  as  security  for  debts 
due  to  it. 

Conveyances,  how  attested.    §  2955. 

See  Powers,  §  1906  (1),  and  cross-references. 

§  1953.  The  statements  and  books  of  every 
such  corporation  shall  be  kept  in  the  town 
where  it  is  located,  and  shall  at  all  reason- 
able times  be  open  for  the  inspection  of  any 
of  its  stockholders,  and  as  often  as  once  in 
each  year  a  true  statement  of  the  accounts 
shall  be  made  and  exhibited  to  the  stock- 
holders. 

Records  may  be  proved  by  copy.    §  1093. 

[When  mandamus  will  be  issued  to  compel  corpo- 
ration to  keep  all  its  books  in  the  place  where  it 
is  located.  Pratt  v.  Cutlery  Co.,  35  Conn.  41;  s.  c, 
3  Am.  Corp.  Cas.  1G3.  The  intention  of  the  corpo- 
ration can  only  be  learned  by  the  language  of  its 
recorded  acts.    Bartlett  v.  Kingsley,  15  Conn.  334.] 

§  1954.  Every  such  corporation  may  in- 
crease or  reduce  its  capital  and  the  number 
and  par  value  of  the  shares  therein,  at  any 
meeting  of  the  stockholders  specially 
warned  for  that  purpose,  by  a  vote  of  stock- 
holders holding  at  least  two-thirds  of  the 
whole  stock;  and  certificates  of  the  increase 
or  reduction  of  said  capital  or  the  number 
or  value  of  said  shares  shall  be  made,  filed, 
and  recorded  as  provided  in  this  chapter  for 
original  stock.  Provided.  That  within  thirty 
days  after  such  reduction  a  certificate 
thereof,  signed  by  a  majority  of  the  di- 
rectors, shall  be  publishetl  two  weeks  suc- 
cessively in  a  newspaper  published  in  the 
county  where  such  corporation  is  located; 
and.  Provided  further.  That  in  ease  of  the 
reduction  of  the  capital  stock  of  any  corpora- 
tion by  any  mode  which  shall  render  such 
corporation  insolvent,  the  stockholders  as- 
senting thereto  sliall  be  jointly  and  severally 
liable  for  all  debts  of  the  corporation  exist- 
ing at  the  time  of  such  reduction,  after  judg- 
ment obtained  against  the  latter  and  a  return 
of  execution  unsatisfied;  and  in  order  to  the 
validity  of  any  vote  reducing  the  stock,  the 
record  sliall  show  the  names  of  tlie  stock- 
holders voting  such  reduction. 

Reduction  of  capital  stock.  §§  1933,  1934.  Ex- 
ecutors, trustees,  etc.,  may  snbs^cribe  for  increase 
In  stock.  Act  of  1889,  see  p.  20.  Issue  of  preferred 
stock.    Act  of  1893;  see  p.  30. 

§  1955.  (As  amended,  L.  ISSO,  chap.  64.1 
In  case  the  capital  stoclc  of  any  joint-stock 
corporation  shall  be  increased  as  provided  in 
the  preceding  section,  at  least  twenty  per 
cent,  of  the  amount  added  shall  be  paid  to 
the  corporation  either  in  cash  or  in  actual 
surplus  earnings  of  the  corporation,  and  the 
certificate  of  the  increase  hereinbefore  re- 


quired shall  state  the  amount  so  paid,  and 
the  manner  of  payment,  and  shall  not  be 
rt'ceived  or  recorded  by  the  secretary  of  the 
State  or  any  town  clerk  unless  it  contains 
such  statement. 

See   §   1954,   cross-references. 

§  1950.  The  president  and  secretary*  of 
every  joint-stock  corporation  shall  annually, 
on  or  before  the  fifteenth  day  of  February 
or  August,  lodge  with  the  town  clerk  of  the 
town  in  which  such  coi-poration  is  located  a 
certificate,  signed  and  sworn  to  by  them, 
showing  the  condition  of  its  affairs  as  nearly 
as  the  same  can  be  ascertained  on  the  first 
day  of  December  or  January,  or  on  the  first 
day  of  June  or  July  next  preceding  the  time 
of  making  such  certificate,  in  the  following 
particulars,  to-wit: 

1.  The  amount  of  capital  stock  actually 
paid  in. 

2.  The  cash  value  of  its  real  estate. 

3.  The  cash  value  of  its  personal  estate, 
exclusive  of  patents. 

4.  The  amount  of  its  debts. 

5.  The  amount  of  its  credits. 

6.  The  name,  residence,  and  number  of 
shares  of  each  stockholder. 

And  said  town  clerk  shall  record  said  cer- 
tificate at  length  in  a  book  to  be  kept  by  him 
for  that  purpose.  And  a  duplicate  of  said 
certificate  except  the  name,  residence,  and 
number  of  shares  of  each  stockholder,  shall 
also  be  made,  sworn  to,  and  lodged  by  them 
as  aforesaid  with  the  secretary  of  the  State, 
which  certificate  shall  be  recorded  at  length 
by  him  in  a  book  to  be  kept  for  that  purpose. 

[As  to  kiiowlodfie  as  to  financial  condition  of  a 
corporation  and  of  entries  on  its  books,  charice- 
able  to  a  directoi  or  oflicer.  see  Xorthrup  v.  Hush- 
nell.  38  Conn.  510;  Bartholomew  v.  Farwell,  41 
id.  107.] 

§  1957.  Any  joint-stock  corporation  may 
remove  its  place  of  business  from  one  town 
to  another  town  in  this  State  by  a  two-thirds 
vote  in  number  and  interest  of  the  stock- 
holders; but  its  president  and  secretary  shall 
l)rocure  from  the  town  clerk  of  tlie  town 
from  Avhich  it  shall  remove  a  certified  copy 
of  tlie  record  in  said  town  of  its  articles  of 
association,  and  all  other  records  showing 
the  state  of  its  affairs,  attach  thereto  their 
certificate  that  such  corporation  has  thus  re- 
moved, and  immediately  on  such  removal 
leave  such  copy  and  certificate  in  the  office 
of  the  town  clerk  of  the  town  to  which  said 
corporation  is  removed,  which  shall  be  re- 
corded by  him  at  full  length;  and  said  presi- 
dent and  secretary  sliall  cause  a  like  cer- 
tificate to  be  deposited  with  the  secretary  of 
the  State.  Avhieli  sliall  be  recorded  by  him: 
and  within  ten  days  after  such  removal,  shall 
cause  a  copy  of  such  certificate  to  be  pub- 
lished   in    a    newspaper    published    in    the 

♦Treasurer.    Acts  of  1S89,  chap.  G5. 


COXXECTICUT. 


23 


Improper  dividends;  officers'  liability;  transfers  —  Stat.,  §§  1958-19G1. 


county  in  "which  such  corporation  shall  be 
located;  and  in  case  of  removal  from  one 
county  to  another,  said  copy  shall  be  pub- 
lished in  one  newspaper  in  each  of  said 
counties. 

Banks,  etc.,  not  to  change  location,  when.    §  1941. 

[Corporation  not  confined  by  cliartor  to  a  par- 
ticular location,  may  change  its  location  unless, 
perhaps,  when  done  to  avoid  taxation.  Ferry  Co. 
V.  Midtlletown,  40  Conn.  71.  Residence  of  corpora- 
tion. See  Wood  v.  Ins.  Co..  13  Conn.  210.  Con- 
structive residence  snfticient  to  give  the  courts 
Jurisdiction.  Mfg.  Co.  v.  Ins.  Co.,  2  Faine  (U.  S.) 
51G.] 

§  1958.  If  the  directors  of  any  such  cor- 
poration shall  declare  or  pay  a  dividend 
•when  it  is  insolvent,  or  any  dividend  the  pay- 
ment of  which  ■would  render  it  insolvent, 
knowing  such  corporation  to  be  insolvent,  or  j 
that  such  dividend  would  render  it  so,  the  i 
directors  assenting  thereto  shall  be  jointly 
and  severally  liable  for  its  debts  due  at  the 
time  of  the  declaration  or  payment  as  the 
case  may  be,  of  such  dividend. 

See  §   1931,   cross-references. 

[Declaration  of  dividend  creates  a  debt  due  from 
the  corporation,  to  be  paid  within  a  reasonable 
time,  which  the  directors  cannot  avoid  or  recall 
by  a  subsequent  vote  or  by  investing  the  profits 
in  property  for  the  use  of  the  corporation.  Be?rs 
V.  Spring  Co.,  42  Conn.  25.  Equity  will  order  the 
corporation    to    pay    such   dividend.    Id. 

Powers  and  status  of  insolvent  corporation.  See 
Catlin  V.  Bank,  6  Conn.  241;  Pondville  Co.  v. 
Clark,  25  id.  101. 

Where  a  corporation  is  sued  by  a  stockholder 
for  a  dividend  declared  by  the  directors,  and  all 
the  other  stockholders  have  received  and  retained 
their  dividends,  it  cannot  be  shown  in  defense 
that  the  dividend  was  not  earned,  and  that  its 
payment  would  withdraw  a  part  of  the  capital. 
Stoddard  v.  Foundry  Co.,  34  Conn.  543. 

A  corporation  and  its  directors  are  trustees,  and 
as  such  may  be  called  into  a  court  of  chancery, 
either  for  an  account  or  to  restrain  mismanage- 
ment, or  to  compel  the  declaration  of  dividends. 
Pratt  V.  Pratt,  33  Conn.  455.  How  such  dividends 
shall  be  ascertained.    Id.] 

§  1959.  All  officers  of  such  corporation,  who 
shall  intentionally  fail  to  perform  any  of  the 
duties  by  law  required  of  them,  shall  be 
jointly  and  severally  liable  for  all  its  debts 
contracted  during  the  period  of  such  failure. 

[The  "  debts  contracted  "  must  be  debts  of  the 
corporation  in  favor  of  some  one  who  gave  it 
credit.  Armstrong  v.  Cowles,  44  Conn.  48.  Judg- 
ment against,  obtained  by  a  factorizing  creditor 
on  a  scire  facias,  not  such  a  debt.  Id.  Obligation 
of  an  otHcer's  bond  whose  office  is  an  annual  one, 
does  not  extend  beyond  the  year  for  which  he  was 
appointed,  even  though  he  hold  over.  Welch  v. 
Seamore,    28   Conn.    390. 

Rights  and  remedy  lost  'by  stockholder  through  ' 
laches.    Terry  v.  Lock  Co.,  47  Conn.  Kil. 

Whether    if    the    officers    of   corporation    fail    to 
conduct   its   business   in   conformity    with   law,    it 
does  not  become,  as  respects  debts  due  from  it  to  \ 
Its  stockholders,  a  mere  partnership,  so  that  such  , 
stockholders  must  be  postponed  to  outside  credit-  ' 
ors,  quaere.    Kellogg  v.  Rockwell,  19  Conn.  459.] 

§  1960.  The  stock  of  every  joint-stock  cor- 
poration shall  be  transferred    only    on    its 


books  in  such  form  as  the  by-laws  shall  pre- 
scribe, and  the  corporation  shall  have  a  lien 
upon  all  the  stock  owned  by  any  person  or 
estate  therein  for  all  individual,  joint,  and 
partnership  debts  due  it  from  him  or  such 
estate,  and  for  any  contingent  liability  to  it 
as  indorser,  acceptor,  guarantor,  or  surety 
upon  any  negotiable  or  commercial  paper; 
and  any  corporation  desiring  to  enforce  such 
lien  may  give  notice  to  such  stockholder,  his 
executor  or  administrator,  and  if  there  be 
none,  his  heir-at-law,  that  unless  he  shall 
pay  his  indebtedness  to  said  corporation 
within  three  months  it  will  sell  said  stock; 
and  such  corporation  may  prescribe  by  its 
bj'-laws  the  manner  of  giving  notice  re- 
quired by  this  section,  but  the  notice  of  sale 
shall  in  no  ease  be  given  until  the  liability 
has  become  fixed. 

See  §  1923  and  cross-references. 

[Joint-stock  company  may  claim  a  lien  on  the 
stock  of  one  of  its  members,  under  this  section, 
for  money  lent  on  interest,  though  lending  monej- 
be  no  part  of  its  ordinary  and  legitimate  business. 
Piatt  V.  Axle  Co.,  41  Conn.  267.  And  equity  will 
protect  such  lien  as  against  third  party  to  whom 
such  stock  has  been  pledged.    Id. 

Profits  and  surplus  funds  of  a  bank  are  a  part 
of  the  stock  itself  until  a  dividend  is  declared,  and 
will  pass  under  that  name  in  a  transfer  or  be- 
quest.   Phelps  V.    Bank,   26   Conn.   272. 

Uncollected  interest  and  undeclared  profit  on 
stock  are  accessory  to  the  principal,  and  pass  by 
a  general  conveyance  of  it.  Spencer  v.  Higgins,  22 
Conn.   529. 

A  general  assignment  for  the  benefit  of  creditors 
does  not,  of  itself,  transfer  the  legal  title  to  cor- 
porate stocks,  which  by  the  rules  of  the  corpora- 
tion are  to  be  transferred  in  a  different  manner. 
Button  V.  Bank,  13  Conn.  497. 

Delivery  of  stock  certificate  must  be  followed  by 
a  transfer  on  the  books  of  the  corporation,  in  or- 
der to  protect  the  stock  from  attachment  by  the 
grantor's  creditors.  Shipman  v.  Ins.  Co.,  29  Conn. 
253. 

Whether,  where  by-laws  require  transfers  of 
stock  to  be  made  on  the  company  books,  a  sepa- 
rate written  assignment  of  stock  conveys  the  legal 
title  or  only  an  equitable  one,  quaere.  Colt  v. 
Ives,  31  Conn.  36. 

Rights  of  pledgee  of  stock  lost  through  laches. 
Shipman  v.  Ins.  Co.,  supra. 

Construction  of  charter  and  by-laws  as  to  trans- 
fers; actual  record  of  transfers  required.  Northrop 
V.  Turnpike  Co.,  3  Conn.  549;  Turnpike  Co.  v. 
Bunnel,  6  id.  508;  Manuf.  Co.  v.  Smiih,  2  id.  583; 
Manuf.  Co.  V.  Pratt,  9  id.  492;  Northrop  v.  Cur- 
tis, 5  id.  250;  Colt  v.  Ives,  supra;  Van  Sands  v. 
Bank,  26  Conn.  155. 

An  executory  contract  to  transfer  stock  creates 
no  lien  upon  it  as  against  the  attaching  creditor 
or  a  trustee  in  insolvency.  Shipman  v.  ins.  Co., 
supra. 

Overissue  of  stock  by  fraud  of  transfer  agent. 
Bank  v.  R.  R.  Co.,  30  Conn.  267. 

Mistake  in  transfer  of  stock  on  books  of  corpo- 
ration will  not  affect  title  of  bona  fide  purchaser, 
in  good  faith  and  for  value,  of  such  stock.  Keeuey 
V.    Mill    Co.,   39   Conn.    149. 

A  trustee  under  a  voluntary  assignment  in  in- 
solvency takes  only  an  equitable  interest  in  stock 
held  by  the  assignor.    Van  Sands  v.  Bank,  supra.] 

§  19G1.  Such  corporation  may,  at  any  time 
within  three  months  after  the  time  limited 
in  such  notice  shall  have  expired,  advertise, 
in  a  newspaper  published  in  the  county 
where  such  corporation  is  located,  its  in- 
tention  to  sell   such   stock,   giving  at   least 


24 


CONNECTICUT. 


Sale  of  stock;  voluntary  dissolution;  conveyances  —  Stat.,  §§  1962-1968,  2955. 


three  weeks'  notice  of  the  time  and  place  of 
such  sale:  and  at  such  time  and  place  may 
sell  at  public  auction  so  much  of  said  stock 
as  shall  pay  such  indebtedness  together  with 
the  necessary  costs  of  sale. 

Sale  of  stock  for  unpaid  assessments.    §  1929. 

§  1962.  When  the  purchasers  of  said  stock 
shall  have  complied  with  the  conditions  of 
said  sale,  the  corporation  shall  issue  new 
certificates  of  stock  to  them;  and  it  shall  be 
the  duty  of  such  delinquent  stockholder  to 
surrender  so  much  of  his  stock  as  corre- 
sponds with  such  ncM"  issue. 

§  ior.3.  When  any  such  stockholder  shall 
have  made  a  transfer  of  his  stock  as  security 
for  his  indebtedness  to  a  third  party  and 
afterwards  shall  become  a  debtor  to  such 
corporation,  it  may  sell  tlie  equity  of  redemp- 
tion of  such  stock  in  the  same  manner  as  is 
pi-ovided  for  the  sale  of  stock  on  which  it 
has  a  lien,  and  may  require  the  party  hold- 
ing a  transfer  or  assignment  of  such  stock 
to  give  a  sworn  statement  to  its  treasurer  of 
the  amount  for  which  such  stock  was 
pledged;  and  if  he  shall  not  give  such  a 
statement  at  or  before  the  time  such  sale 
is  to  take  place,  he  shall  forfeit  his  lien. 

§  1904.  Whenever  any  joint-stock  corpora- 
tion shall  declare  a  dividend,  it  shall  be  the 
duty  of  the  treasurer  of  such  corporation, 
witiiin  ninety  days  after  such  dividend  shall 
become  due  and  payable,  to  give  notice  to 
any  stockholder  then  entitled  to.  but  who 
has  not  called  for  the  same,  by  depositing  in 
the  post-office  in  the  town  wliore  such  cor- 
poration is  located  a  written  or  printed  no- 
tice, postage  paid,  addressed  to  him  at  his 
last  known  place  of  residence,  that  such 
dividend  remains  due  and  payable. 

See  §  1931,  cross-references. 

§  1965.  (As  amended  May  18,  189.3.)  The 
superior  court  in  any  county  where  any  such 
coiToration  is  located  may  wind  up  its  af- 
fairs and  decree  its  dissolution  on  the  peti- 
tion of  its  stockholders  representing  one- 
third  of  its  stock,  upon  sufficient  cause  being 
shown,  and  may  proceed  in  the  manner  pro- 
vided in  respect  to  the  dissolution  of  cor- 
porations; Provided,  Tliat  no  limitation  for 
the  presenting  of  claims  of  creditors  shall  be 
less  than  four  months,  and  the  person  or 
persons  acting  as  receiver  or  receivers  shall 
be  required  to  send  a  copy  of  the  notice  of 
limitation  to  every  known  creditor  of  such 
corporation.  And  said  court  may.  in  its  dis- 
cretion, in  lieu  of  decreeing  the  dissohition 
of  said  corporation,  order  the  receiver  to  sell 
its  property  and  franchises,  and  tlie  pur- 
chasers thereof  shall  succeed  to  all  the  rights 
and  ]>rivileges  of  said  corporation,  and  may 
reorganize  the  same  under  the  direction  of 
said  coiu't. 

Insolvent  corpor.itions.  §§  502.  .50G.  Koooivors 
of.     §§  1321,  1322.    Winding  up.    §§  1942,  1943. 

[Proferenco  to  directors  by  insolvent  corporation. 


good  in  the  absence  of  fraud.  Smith  v.  Skeary, 
47  Conn.  54.  Necessary  allegations  of  petition. 
Neville  v.  Carriage  Co.,  47  Conn.  1G7.  Above  sec- 
tion construed.  Links  v.  Banking  Co.,  G6  Conn. 
277;  s.  c,  33  Atl.  Hep.  1003.] 

§  1966.  Whenever  any  joint-stock  corpora- 
tion shall  vote  to  wind  up  its  affairs  and  dis- 
pose of  its  property,  the  superior  court  in  the 
county  where  such  corporation  is  located 
may  order  the  propertj"  to  be  sold  at  public 
auction  upon  the  petition  of  the  owners  of 
one-sixth  of  its  stock,  and  notice  of  such 
public  sale  shall  be  given  in  such  manner  as 
said  court  shall  order. 

See'§  19G5. 

[Corporation  having  sold  out  its  property  and 
franchise,  remained  in  existence  for  the  purpose 
of  suing  for  the  recovery  of  the  purchase  price. 
Bridge  Co.   v.   West  Port,  39  Conn.  350.] 

§  1967.  When  any  joint-stock  corporation 
shall  have  failed  for  two  successive  years  to 
malce  the  annual  statement  required  by  this 
chapter,  or  any  act  in  amendment  thereof, 
it  shall  be  the  duty  of  the  attorney  for  the 
State  in  the  county  where  such  corporation 
is  located,  upon  the  request  of  any  stock- 
holder or  creditor,  or  upon  his  own  motion, 
whenever  he  shall  be  of  opinion  that  the 
public  good  requires  such  action,  to  apply  to 
the  superior  court  in  said  county  for  a  dis- 
solution thereof,  which  coiu-t,  after  due  no- 
tice to  all  parties  interested,  may  proceed  to 
hear  the  matter,  and  for  reasonable  cause 
decree  a  dissolution  of  the  corporation,  and 
proceed  in  tlie  manner  pi'ovided  in  section 
1965.  But  if  it  shall  appear  upon  the  hearing 
that  the  corporation  is  solvent,  the  court  may 
limit  a  time  within  which  such  corporation 
shall  file  a  statement  of  its  condition,  as  pre- 
scribed by  this  chapter,  and  said  order  hav- 
ing been  complied  with,  the  court  may 
dismiss  such  application  and  tax  the  costs 
thereof  against  such  corporation. 

[Forfeiture  of  franchise  by  non-user:  waiver  by 
legislature.    Bridge  Co.  v.  River  Co.,  7  Conn.  43.] 

§  1968.  Every  joint-stock  corporation  shall 
pay  to  the  secretary  of  the  State,  for  tlie  use 
of  "the  State,  the  sum  of  one  dollar  for  filing 
and  recording  each  of  the  several  certificates 
required  by  this  chapter. 

TITLE    I..    LANDS. 

CHAPTER  CLXXVI. 

Land  Title. 

Sec.  2955.   Deeds  to  or  by  corporations,   how   wit- 
nessed. 

§  2955.  Conveyances  of  real  estate  made  to 
or  by  any  cori^oration  may  be  attested  by 
witnesses  interested  therein,  and  may  be 
acknoAvledged  before  properly  authorized 
persons  who  are  so  interested. 

See    §    1906    (1). 

[See  Foundry  v.  Dart,  2G  Conn.  37G.] 


COX  ^"^CTICUT. 


25 


Taxation  —  Stat.,  §§  3832-3839. 


TITLE    liXXVI.     TAXATION. 

CHAPTER  CCXLI. 

Assessment  of  Taxes. 

Sec.  3S32.  Property  of  corporations,  how  assessed. 
3833.  Real    estate    of    corporations,    how    as- 
sessed. 
3S.34.  Where  taxed. 

3836.  Shares  of  stoclj  of  certain  corporations, 

where  taxed. 

3837.  Cashiers  or  secretaries  of  corporations, 

returns  by. 

3838.  Same;    return   of   property    held    as   se- 

curity. 

3839.  Evasive  transfer  of  stock,  penalty  for. 

3840.  Stockholders    giving    untrue    residence, 

penalty. 

§  3832.  The  whole  property  of  evei-y  cor- 
poration in  tliis  State,  whose  stock  iis  not  by 
law  liable  to  taxation,  and  whicli  is  not  re- 
quired to  pay  a  direct  tax  to  the  State  in 
lieu  of  other  taxes,  and  whose  property  is 
not  by  law  expressly  exempt  from  taxation, 
shall  be  set  in  its  list  and  liable  to  taxation 
in  the  same  manner  as  the  property  of  in- 
dividuals. 

Taxation  of  franchises.  Act  of  1889,  see  p.  27. 
Tax  on  investment  companies.    Act  of  1889;  see  p. 

28. 

[Corporation  existing  under  a  special  charter  can- 
not acquire  an  immunity  from  taxation  by  pre- 
scription.   Toll  Rridge  Co.  v.  Osborn,  35  Conn.  21. 

Bank  stock,  where  taxable.  Bank  v.  Xew  Lon- 
don. 20  Conn.  111.  See  Osborn  v.  R.  R.  Co.,  40 
Id.  498.] 

§  3833.  Real  estate  owned  by  any  corpora- 
tion not  required  for  the  transaction  of  its 
approjiriate  business,  shall  he  taxable  as 
provided  in  the  preceding  section,  unless 
the  same  shall  be  specially  exempted  by  law. 

[Property  of  a  corporation  whose  name  had 
been  duly  changed  was  listed  for  taxation  to  it 
under  its  former  name,  in  which  name  the  legal 
title  stood  upon  the  land  records.  Held,  that  such 
course  was  proper.  Hartford  v.  Seminary,  66 
Conn.  475;  s.   c,  .'54  Atl.   Rep.  483.] 

§  3834.  The  real  estate  of  any  such  corpo- 
ration shall  be  set  in  the  list  of  the  town  in 
which  it  is  situated,  and  the  personal  estate 
shall  be  set  in  the  list  of  the  town  in  which 
it  has  its  principal  place  of  business,  or  ex- 
ercises its  corporate  powers;  and  when  it 
shall  have  two  or  more  establishments  for 
transacting  its  business  in  different  towns, 
school  districts,  or  other  municipal  divisions, 
it  shall  be  assessed  and  taxed  for  every  such 
establishment,  and  for  the  personal  property 
attached  thereto,  or  connected  therewith,  in 
the  town,  school  district,  or  other  municipal 
division  having  tlie  power  of  taxation  in 
which  such  establisliment  is;  and  the  stoclv- 
holders  of  any  corporation,  the  whole  prop- 
erty of  which  is  assessed  and  taxed  in  its 
name,  shall  be  exempt  from  assessment  or 
taxation  for  their  stoclc  therein. 

[A  foreign  corporation  owning  real  estate  and 
transacting  business  in  this  State,  is  not  a  resi- 
dent  of    the   town    where   such     real     estate     lies, 


within  meaning  of  statutes  as  to  taxation.    Jone.s 
V.  Bridgeport,  36  Conn.  286.] 

§  3S3G.  (As  amended  June  29,  1889.)  Sliares 
of  the  capital  stoclc  of  any  banlc.  national 
banlcing  association,  trust,  insurance,  invest- 
ment, turnpike,  bridge,  or  plank-road  com- 
pany, oAvned  by  any  resident  in  this  State, 
shall  be  set  in  his  list,  at  its  market  value  in 
tlie  town  in  Avliicli  lie  may  reside;  but  so 
much  of  the  capital  stock  of  any  such  com- 
pany as  may  be  invested  in  real  estate,  on 
which  it  is  assessed  and  pays  a  tax,  shall  be 
deducted  from  the  market  value  of  its  stock, 
in  its  returns  to  the  assessors. 

See  Act  of  1889,  at  p.  35. 

[The  sum  to  be  deducted,  upon  each  share,  in 
the  tax-list  of  a  shareholder,  should  bear  the  same 
proportion  to  the  market  value  that  the  entire 
investment  in  taxable  real  estate  bears  to  the 
entire  surplus  of  assets  above  liabilities.  Batter- 
son  V.  Hartford,  50  Conn.  559.] 

§  3837.  The  cashiers  or  secretaries  of  all 
corporations,  whose  stock  is  Ikible  to  taxa- 
tion, shall,  on  or  before  the  twelfth  day  of 
October,  annually,  inform  the  assessors  of 
each  town  of  the  names  of  the  stockliolders 
residing  therein,  and  tlie  amount  of  stock 
owned  by  each,  as  exhibited  by  the  books  of 
said  eorporations.  on  tlie  first  day  of  said  Oc- 
tober, so  far  as  the  residence  of  such  stock- 
holders sliall  be  known  to  such  cashiers  or 
secretaries,  and  its  market  value  during  the 
month  of  September  next  preceding;  and  any 
such  cashier  or  secretary,  who  sliall  neglect 
to  furnish  such  information  to  the  assessors 
of  any  town  where  said  stock  is  liable  to 
be  taxed,  shall  forfeit  fifty  dollars  to  such 
town;  but  putting  a  letter  into  the  post- 
office  containing  such  information,  postage 
paid,  addressed  to  the  assessors  of  any  town 
where  such  owner  resides,  sliall  be  a  com- 
pliance with  the  provisions  of  this  section. 

§  3&38.  (As  amended  March  17,  1897.) 
The  cashier  of  each  bank  and  national 
banking  association,  the  treasurer  of  each 
savings  bank,  and  the  secretary  of  each 
corporation  incorporated  by  the  laws  of 
this  State,  shall,  upon  the  request  of  the  as- 
sessors of  any  town,  or  of  any  city,  or  any 
borough,  inform  tliem  of  the  name  of  any 
person  therein  who  owns  stock  or  lx)nds  held 
by  such  corporation  as  collateral  security 
for  any  indebtetlness  or  liability,  and  the 
amount  and  description  of  such  stock  or 
bonds;  and  any  such  cashier,  treasurer  or 
secretarv,  who  shall  neglect  to  furnish  such 
information  to  the  assessors  of  any  town, 
where  said  stock  or  bonds  are  liable  to  be 
taxtMl,  shall  forfeit  one  hundred  dollars  to 
said  town,  or  to  said  citj',  or  to  said  borough, 
as  the  case  may  be. 

§  3839.  The  owner  of  any  share  of  the 
capital  stock  of  any  corporation,  who  shall 
transfer  sucli  share  to  another,  with  the 
intent  of  evading  the  provisions  of  this  title, 
shall  forfeit  to  the  town  in  whicli  he  resides 


26 


COI^KECTICUT. 


Taxation  —  Stat.,  §§  3SiO,  3916,  3917,  3932,  3942. 


one  per  cent,  of  the  value  of  the  stock  so 
transferred. 

§  3840.  When  any  owner  or  holder  of  any 
stock  in  an.v  corporation,  liable  to  taxation, 
sliall  represent,  or  cause  to  be  represented, 
to  its  cnsliler  or  secretary  that  he  is  a  resi- 
dent of  any  otlier  town  tluni  tliat  in  which 
lie  actually  resides,  and  thereby  causes  said 
cashier  or  secretary  to  give  information,  as 
aforesaid,  to  the  assessors  of  such  other 
town,  sucli  assessors  shall  return  the  same 
to  the  comptroller  -witliin  thirty  days  there- 
after, and  sliall  certify  in  sucli  return  tliat 
no  such  person  is  known  to  reside  in  said 
town;  and  the  comptroller  sliall  thereupon 
notify  said  cashier  or  secretary  of  the  in- 
formation piven  him  by  said  assessors;  and 
sucli  stoekiiolders  shall  forfeit  to  the  St^ite 
one  per  cent,  of  the  value  of  such  stock;  and 
said  cashier  or  secretary  shall  thereupon  pay 
said  forfeiture  to  the  treasurer;  and  such 
corporation  shall  have  a  lien  upon  such  stock 
for  the  amount  so  paid. 

CHAPTER  CCXLIV. 

Special  Taxes  on  Corporations. 

Sec.  3916.  Stock  of  non-residents  in  other  corpora- 
tions, how  taxed. 

3917.  Coriiorations  to  have  lien  for  tax  paid 
on  stock  of  non-residents. 

3932.  Penalty  for  failure  to  make  returns. 

3942.  Suits  for  taxes  and  penalty  not  barred, 
when. 

§  3916.  (As  amended  :May  13,  1897.)  The 
cashier  or  secretary  of  each  corporation 
whose  stock  is  liable  to  taxation,  and  not 
otherwise  taxed  by  the  provisimis  of  tliis 
title,  shall  on  the  first  day  of  October,  an- 
nually, or  witliin  ten  days  tliereafter.  de- 
liver to  the  comptroller  a  sworn  list  of  all  its 
stockholders,  residing  without  this  State  on 


said  day.  and  the  number  and  market  value 
of  the  shares  of  stock  therein,  then  belong- 
ing to  each;  and  sliall  on  or  before  the 
twentieth  day  of  October,  annually,  pay  to 
tlie  State  one  and  one-half  per  cent,  of  such 
value;  and  if  any  sucli  casliier  or  secretary 
sliail  neji'lect  to  comply  with  the  provisions 
of  lliis  section  he  shall  forfeit  to  the  State 
one  huiKlred  dollars,  in  addition  to  said  one 
and  one-half  per  cent,  so  required  to  be  paid. 

[By  an  net  of  June  6,  1893,  above  section  does 
not  apply  to  stock  in  investment  companies.] 

§  3917.  The  corporations,  mentioned  in  the 
two  preceding  sections,  shall  have  a  lien 
ui)on  tlio  stoclc  of  each  non-resident  stock- 
liolder,  from  the  reimbursement  of  tlie  sums 
so  required  to  be  paid  by  tliem,  to  the  extent 
of  one  per  cent,  of  the  value  of  his  stock  as 
contained  in  said  list. 

§  3932.  Every  person  who  shall  fail  to  re- 
turn to  the  comptroller,  as  prescribed  in  any 
of  the  preceding  sections  of  this  cliapter,  any 
statement  required  to  be  returned,  shall  for- 
feit five  hundred  dollars  to  the  State;  and 
every  person  or  corporation,  required  by  any 
section  of  this  chapter  to  make  any  payment 
to  the  State,  who  shall  fail  to  make  it  within 
the  time  therein  limited,  shall  forfeit  to  the 
State  twice  the  amount  required  for  such 
payment. 

§  3942.  No  action,  commenced  by  the  State 
against  any  person  or  corporation  for  the 
recovery  of  any  sum,  in  tlie  nature  of  a  ta;x, 
which  he  or  it  is  required  to  pay  by  the  pro- 
visions of  this  chapter,  or  for  the  recovery 
of  the  penalty  for  the  non-payment  thereof, 
shall  be  barred  or  defeated  by  reason  of  the 
omission  or  failure  of  the  board  of  equaliza- 
tion to  perform  the  duties  required  of  them 
by  this  chapter. 


LEGISLATIVE  ACTS  RELATING  TO  CORPORATIONS    ENACTED 
SUBSEQUENTLY  TO  1888. 


1.  Authorizing  executors,  trustees,  and  others  to 

subscribe    for    shares    of    increased    capital 
stock. 

2.  Concerning   discovery   by   parties   in   civil   ac 

tloa^ 

3.  Concerning  ex  parte  Injunctions  against  stock- 

holders. 

4.  Concerning  trust  estates. 

5.  Concerning   borrowing   of    corporate    funds   of 

manufacturing    corporations    by    officers    or 
directors. 
G.  In  relation  to  taxation  of  franchises  of  certain 
corporations. 

7.  Imposing  a  tax  on  Investment  companies. 

8.  Authorizing  the  issue  of  preferred  stock. 

9.  Conceniing  the  manufacture  and  sale  of  elec- 

tricity. 

10.  Validating  certain  omissions  and  Irregularities. 

11.  Concerning  the  dissolution  of  corporations. 

12.  Concerning  receivers. 

13.  Enabling    corporations    to    purchase    stock    of 

other  corporations. 

14.  Concerning  service  of  process  on   foreign   cor- 

porations 

l.").   For  tlie  preservation  of  health  of  employes. 

16.  Concerning  the  winding  up  of  afl'airs  of  corpo- 
ration'?. 


17.  Creating  a  board  of  arbitration  and  mediation. 

18.  Concerning  sei'vice   of  process   on   foreign   cor- 

porations. 

19.  Validating  certain  omissions  and  irregularities. 

20.  Concerning   blacklisting. 

21.  Kelating  to  assessment  of  taxes. 

22.  Concerning   fees   for   creating   coi"porations. 

23.  Conceniing  service  of  piocess  on  corporations. 

24.  Validating  certain   irregularities. 

25.  Concerning   claims   for   labor   against    corpora- 

tions. 

Act  1. 

AN  ACT  concerning  the  powers  of  executors, 
trustees,  and  others. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

Section  1.  "Wlienever  any  executor,  ad- 
ministrator, trustee,  conservator,  or  guardian 
holds  shares  of  the  stock  of  any  corporation 
as  assets  of  tlie  estate   in   iiis  cliarge,  and 


CONNECTICUT. 


27 


Miscellaneous  acts  of  1889. 


tlicro  Khali  be  an  increase  of  the  capital 
stock  of  any  such  corporation,  such  executor, 
administrator,  trustee,  conservator,  or 
guardian  may,  with  the  consent  of  the  pro- 
bate court  havinf?  jurisdiction  of  such  estate, 
subscribe  for  and  take  the  shares  of  the  in- 
creased capital  stock  to  -wliich  such  estate 
may  be  entitled,  or  may  sell  and  transfer  to 
others  the  rij?bt  to  subscribe  for  such  shares. 
(Approved  March  14,  1889.) 

Increase  of  capital  stock.     Statutes,  §§  1954,  1955. 
Act  2. 

AN   ACT    concerning   discovery   by   parties 
in  civil  actions. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

Section  1.  In  any  civil  action  in  the 
superior  court,  court  of  common  pleas,  dis- 
trict court,  or  city  court,  the  plaintiff  at  any 
time  after  enti-y  of  action,  and  the  defendant 
at  any  time  after  ansv\'er,  may  file  a  motion 
praying  for  a  disclosure  of  facts,  or  pro- 
duction of  papers,  books,  or  documents  ma- 
terial to  the  support  or  defense  of  the  suit, 
"Within  the  knowledge,  possession,  or  power 
of  tlie  adverse  party,  and  such  facts,  papers, 
books,  or  documents,  being  disclosed  or  pro- 
duced, may  be  given  in  evidence  by  the  party 
filing  such  motion. 

§  3.  If  the  party  to  an  action  is  a  corpora- 
tion, the  opposite  party  may  examine  the 
president,  treasurer,  secretary,  clerk,  or  any 
director  or  other  officer  thereof,  in  the  same 
manner  as  if  he  were  a  partv  to  the  suit. 

(Approved  March  20,  1SS9.) 

Act  3. 

AN   ACT   concerning   ex    parte    injunctions 
against   stockholders   of   coiiiorations. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

No  ex  parte  injunction  shall  be  granted 
within  ten  days  of  the  day  for  a  stockholders' 
meeting  of  any  private  corporation,  to  re- 
strain voting  upon  any  shares  of  stock  in 
such  corporation,  excepting  that  injunctions 
may  be  granted  upon  proper  bond,  as  now 
required  by  law,  to  restrain  votiiag  upon  such 
shares  upon  any  matters  excepting  the  or- 
ganization of  the  meeting  and  its  adjourn- 
ment. 

(Approved    March  20,  1889.) 

Method  of  voting.    Statutes,  §§  1925-1927. 

Act  4. 
AN  ACT  conceraing  trust  estates. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

Section  1.  When  any  executor,  administra- 
tor, or  trustee  holds  or  shall  hold  shares  of 


stock  in  a  private  corporation,  whose  use  or 
income  belongs  to  one  or  more  persons,  and 
in  which  there  is  a  remainder  interest  in 
another  person  or  persons,  all  stock  divi- 
dends made  by  such  corporation  shall  be- 
long to  the  trust  fund,  and  shall  not  be 
deemed  to  be  included  in  such  use  or  income, 
unless  the  corporation  making  the  stock 
dividend  shall  exjiressly  declare  the  same  to 
be  divided  from  undivided  earnings  made 
since  the  formation  of  the  trust. 

§  2.  The  right  to  suliscribe  for  now  stock 
in  any  private  corporation  held  by  any  such 
executor,  administrator,  or  trustee,  as  afore- 
said, shall  belong  to  the  fund,  and  shall 
not  be  deemed  to  be  a  part  of  the  use  and 
income  of  the  stock. 

§  3.  This  act  shall  not  apply  to  such  ex- 
press trusts  as  explicitly  require  that  such 
stock  dividends  and  such  yights  to  sul)scribe 
be  treated  as  part  of  the  income  of  the 
stock. 

(Approved    ISIarch  29,  1889.) 

See  Statutes,  §  1931,  and  cross-references. 

Act  5. 

AN   ACT   relating   to   private    corporations. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

No  officer  or  director  of  any  manufactur- 
ing corporation  shall  borrow  any  of  the  funds 
of  the  corporation,  or  use  the  same  for  any 
purpose  other  than  the  business  of  the  cor- 
poration, without  paying  interest  to  such 
corporation  for  the  use  of  such  money  and 
without  a  majority  vote  of  all  the  directors 
of  such  corporation,  and  without  furnish- 
ing adequate  collateral  or  other  securitj'  for 
such  loan. 
(Approved  June  11,  1889.) 
See  Statutes,   §  190G  (4),  and  cross-references. 

Act  6. 

AN  ACT  in  relation  to  the  taxation  of  the 
franchises  of  certain  corporations. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

Section  1.  Every  business  corporation, 
having  a  special  charter  from  the  general 
assembly  of  this  State,  and  authorized  to  do 
and  perform  its  principal  business  outside 
the  limits  of  this  State,  and  having  a  capital 
stock  divided  into  sliares,  which  shall  here- 
after receive  authority  from  the  general 
assembly  to  increase  its  capital  stock,  shall 
within  six  months  after  such  authority  has 
been  given  and  before  it  shall  have  increased 
its  capital  stock,  either  in  fiill  or  in  part  as 
thus  authorized,  i>ay  to  the  treasurer  of  this 
State  not  li>ss  tliau  one  Inindred  dollars,  and 
not  more  tlian  five  thousand  dollars,  as  the 
same  may  be  assessed  and  determined  by 
the   State"  board   of  equalization,    upon   the 


28 


C01\KECTICUT. 


Tax  on  investment  companies  —  Act  of  1889. 


basis  of  the  full  amount  of  increase  of  capi- 
tal thus  authorized. 

§  2.  No  certified  copy  of  any  amendments 
to  the  charter  of  such  business  corporation 
shall  be  issued  by  the  secret.ary  of  state 
until  the  payment  required  by  section  one 
of  this  act  has  been  duly  made. 

§  3.  The  provisions  of  this  act  shall  apply 
to  any  such  business  corporation  which  has 
received  authority  to  increase  its  capital  at 
this  session  of  the  general  assembly. 

§  4.  Section  1914  of  the  general  statutes 
is  hereby  repealed. 

(Approved    June  11,  1SS9.) 

Taxation   of   corporate    property.      See  Statutes, 
§§  3832  et  seq. 

Act  7. 

AN    ACT    imposing    a    tax    on    investment 
companies. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

Section  1.  Section  thirty-eight  hundred 
and  thirty-six  of  the  general  statutes  is 
hereby  amended  by  inserting  after  the  word 
"  insurance,"  in  the  second  line  thereof,  the 
word  ■'  investment."  so  that  said  section  as 
amended  shall  read  as  follows:  Shares  of 
the  capital  stoclc  of  any  banlc,  national 
banking  association,  trust,  insurance,  invest- 
ment, turnpilve,  bridge,  or  plank-road  com- 
pany, owned  by  any  resident  in  this  State, 
shall  be  set  in  his  list,  at  its  market  value 
in  the  town  in  which  he  may  reside;  but  so 
much  of  the  capital  of  any  such  company  as 
may  be  invested  in  real  estate,  on  which  it 
is  assessed  and  pays  a  tax,  shall  be  de- 
ducted from  the  market  value  of  its  stock, 
in  its  returns  to  the  assessors. 

§  2.  The  term  investment  company  as 
used  in  this  act  shall  include  all  corpora- 
tions described  in  section  eighteen  hundred 
and  fifty-tliree  of  the  general  statutes. 

§  3.  AH  debentures  or  other  choses  in  ac- 
tion hitherto  issued  by  any  such  investment 
company  shall  continue  to  be  taxable  or  non- 
taxable according  to  the  law  at  the  time 
when  same  were  issued,  xmless  the  same 
shall  be  made  exempt  from  taxation  as  here- 
inafter provided;  but  all  debentures  or  other 
choses  in  action  hei'eafter  issued  by  any  such 
company  shall  be  taxable  in  the  hands  of 
the  holder,  any  provision  in  the  charter  of 
the  company  to  the  contrary  notwithstand- 
ing, imless  the  same  ai"e  made  exempt  from 
taxation  as  hereinafter  provided;  and  no 
such  company  shall  hereafter  issue  any  of 
its  own  debentures  which  purport  upon 
their  face  to  be  non-taxable  unless  they  are 
made  so  under  the  provision  of  this  act. 

§  4.  No  corporation  organized  under  any 
special  or  general  law  of  this  or  any  other 
State  or  territory  shall  by  its  agents  or  other- 
wise engage  or  aid  in  any  manner  in  this 
State  in  selling  or  negotiating  any   choses 


in  action  made,  issued,  or  guaranteed  by  any 
person  or  investment  company  chartered  by 
or  organized  under  the  laws  of  this  or  any 
other  State  or  territory  and  payment  of 
wliich  is  secured  by  mortgages  on  real  estate 
situated  in  any  otlier  State  or  territory,  or 
secured  by  pledges  of  such  mortgages,  until 
it  has  procured  from  the  State  treasurer  a 
certificate  of  authority  so  to  act.  Such  cer- 
tificates shall  contain  the  names  of  the  per- 
sons who  are  to  be  authorized  to  act  in  this 
State  as  the  agents  of  said  corporation,  and 
shall  continue  in  force  for  one  year  and 
shall  authorize  the  persons  named  therein  to 
sell  or  negotiate  such  choses  in  action,  pay- 
ment of  whicli  is  secured  by  mortgage  on 
real  estate  situated  in  any  other  State  or 
territory,  or  secured  by  a  pledge  of  such 
mortgages,  or  both,  during  said  period  of 
one  year;  Provided,  however.  That  no  such 
certificate  shall  be  so  issued  to  any  such  cor- 
poration whose  stock  is  not  taxed  under  the 
laws  of  this  State  until  such  corporation 
shall  have  executed  and  filed  with  the  treas- 
urer of  the  State,  a  bond  with  satisfactoi^y 
surety  in  a  sum  of  not  less  than  five  hundred 
dollars  nor  more  than  five  thousand  dollars, 
as  said  treasurer  shall  decide  and  approve, 
conditioned  that  said  corporation  shall  make 
the  returns  and  pay  the  taxes  required  by 
the  provisions  of  this  act. 

§  5.  The  treasurer,  or  if  there  be  no  treas- 
urer then  tlie  secretary,  of  every  corpora- 
tion, unless  its  stock  is  taxed  under  the  laws 
of  this  State,  which  shall  be  authorized  to 
tran.sact  such  business  as  provided  in  the 
preceding  section,  shall  annually,  within  the 
first  ten  daj's  of  January,  make  a  return  to 
the  comptroller  of  the  State,  under  oath, 
showing  the  aggregate  amount  of  all  such 
choses  in  action  as  defined  in  section  four 
of  this  act  sold  or  negotiated  by  such  corpo- 
ration in  this  State  during  the  year  pre- 
ceding the  first  day  of  January,  and  which 
were  secured  by  mortgages  on  real  estate 
situated  in  any  other  State  or  territory,  or 
secured  by  pledges  of  such  mortgages,  and 
the  amount  of  said  bonds  which  before  said 
sale  or  negotiation  had  been  made  exempt 
from  taxation  under  the  provisions  of  this 
act.  And  every  such  corporation  shall  an- 
nually, on  or  before  the  twentieth  day  of 
January,  pay  to  the  State  a  sum  equal  to  one 
per  centum  on  the  aggregate  amount  of  all 
such  choses  in  action  so  sold  or  negotiated 
in  tliis  State  during  said  year  preceding  the 
first  day  of  January,  deducting  therefrom 
the  amount  of  said  bonds  which  before  the 
sale  thereof  by  said  corporation  had  been 
made  exempt  from  taxation  imder  the  pro- 
visions of  this  act.  And  said  sum  wlien  so 
paid  sliall  be  in  lieu  of  all  other  taxes  in 
this  State  on  the  personal  property  of  said 
coi'poration  wliich  is  used  exclusively  in  its 
said  business  in  tliis  State. 

§  0.  Every  person  wlio  is  or  may  be  here- 
after engaged  in  the  business  of  selling  or 
negotiating  choses  in  action,  made,  issued. 


C;0N]^;ECTICUT. 


29 


Tax  ou  investment  companies  —  Act  of  1889. 


or  guaranteed  by  any  person  or  investment 
company  chartered  by  or  organized  under 
the  laws  of  this  or  any  other  State  or  ter- 
ritory, and  payment  of  which  is  secured  l)y 
mortgages  on  real  estate  situated  in  any 
otlier  Stxite  or  territory,  or  secured  by 
pledges  of  such  mortgages,  shall  be  deemed 
an  investment  brolver. 

§  7.  No  person  shall  act  as  an  investment 
broker,  until  he  has  procured  from  the  State 
treasurer  a  certificate  of  authority  so  to  act, 
unless  he  Is  named  in  a  certificate  procured 
by  a  corporation  under  the  provisions  of 
section  four  of  this  act,  and  acts  solely  in 
his  business  as  an  officer  or  agent  of  said 
corporation.  Sach  certificate  shall  be  in  sub- 
stantially the  same  foi*m,  and  continue  for  a 
similar  period  of  time,  as  provided  in  said 
section  four  for  certificates  for  the  agents 
of  corporations;  but  no  such  certificate 
shall  be  so  issued  until  such  broker  shall 
have  executed  and  filed  witli  the  treasurer 
of  the  State  a  bond  with  satisfactory  suretj' 
In  the  sum  of  not  less  than  five  hundred  dol- 
lars nor  more  than  five  thousand  dollars,  as 
said  treasurer  shall  decide  and  approve,  con- 
ditioned that  said  broker  shall  make  the  re- 
turns and  pay  the  taxes  required  by  the 
provisions  of  this  act. 

§  8.  (As  amended  June  14,  1893.)  Every 
such  investment  brolier  shall  annually, 
within  tlie  month  of  January,  malce  a  return 
to  the  comptroller  of  the  State,  under  oatli, 
showing  the  aggregate  amount  of  all  choses 
in  action  as  defined  in  section  six  of  this 
act,  sold  or  negotiated  by  him  in  this  State 
during  the  year  preceding  the  first  day  of 
said  January,  and  which  were  secured  by 
mortgage  on  real  estate  situated  in  any  other 
State  or  territoiy,  or  secured  by  pledges  of 
such  mortgages,  and  the  amount  of  said 
bonds  which  before  said  sale  or  negotiation 
had  been  made  exempt  from  taxation  under 
the  provisions  of  this  act.  And  such  broker 
shall  annually,  on  or  before  the  twentieth 
day  of  February,  pay  to  the  State  a  sum 
equal  to  one  per  centum  on  the  aggregate 
amount  of  all  such  choses  in  action  so  sold 
or  negotiated  by  him  in  this  State  during 
said  j'ear  preceding  the  first  day  of  January, 
deducting  therefrom  the  amount  of  said 
bonds  which,  before  the  sale  thereof  by  said 
broker,  had  been  made  exempt  from  taxa- 
tion under  tlie  provisions  of  this  act;  but 
said  broker  shall  not  be  required  to  include 
in  his  return,  nor  to  i)ay  any  tiix  upon,  any 
such  choses  in  action  which  during  said 
year  he  has  sold  while  acting  as  an  officer 
or  agent  of  any  corporation  which  has  com- 
plied with  the  provisions  of  sections  four 
and  five  of  this  act. 

§  9.  (As  amended  June  14,  1893.)  Any 
person  may  take  or  send  to  the  office  of  the 
treasurer  of  this  State,  any  bond,  note,  or 
other  chose  in  action,  except  bonds  and 
notes  secured  by  mortgage  on  real  estate 
situated  in  this  State,  and  may  pay  to  the 

13 


State  a  tax  of  one  per  centum  on  the  face 
amount  thereof  for  five  years,  or  at  the  op- 
tion of  such  person  for  a  greater  or  less  num- 
ber of  years  at  tlie  same  rate,  and  the 
treasurer  shall  thereupon  endorse  upon  said 
bond,  note,  or  other  cliose  in  action  that 
the  same  is  exempted  from  all  taxation  for 
the  period  of  five  years,  or  for  such  longer 
or  shorter  period  as  a  proportionate  tax 
tlierefor  has  been  paid,  which  endorsement 
shall  be  duly  dated  and  signed  in  the  name 
and  with  the  seal  of  the  treasurer  affixed. 
Said  treasvu'er  shall  Iceep  a  record  of  such 
endorsements,  with  a  description  of  such 
bonds,  notes,  or  other  choses  in  action,  to- 
gether with  the  name  and  address  of  the 
party  presenting  the  same,  and  date  of  reg- 
istration; and  all  bonds,  notes,  or  other 
choses  in  action  so  endorsed  shall  be  exempt 
from  all  taxation  in  this  State  during  the 
period  for  which  said  tax  is  so  paid;  and 
the  treasurer  may,  under  such  limitations 
and  conditions  as  he  may  deem  proper,  au- 
thorize any  person  or  corporation  in  any  city 
or  town  in  this  State  to  receive  the  tax  and 
make  the  endorsement  provided  for  in  this 
section;  or  any  person  may  send  to  the  office 
of  the  treasurer  an  attested  copy  of,  or  a 
description  of,  any  bond,  note,  or  other 
chose  in  action,  except  bonds  and  notes  se- 
cured by  mortgage  on  real  estate  situated 
in  this  State,  in  such  form  as  the  treasurer 
may  prescribe,  and  may  pay  to  the  State 
treasurer  a  tax  of  one  per  centum  on  the 
face  amount  of  any  such  bond,  note,  or  chose 
in  action,  for  five  years,  or  at  the  option  of 
such  person  for  a  greater  or  less  number  of 
years  at  the  same  rate;  and  the  treasurer 
shall  thereupon  give  such  person  paying 
such  tax  as  aforesaid  a  receipt  therefor  de- 
scribing such  bond,  note,  or  other  chose  in 
action,  in  such  manner  as  shall  in  his  judg- 
ment best  identify  the  same,  and  certifying 
that  the  tax  thereon  at  the  aforesaid  rate 
has  been  paid  to  the  State  for  one  or  more 
years,  as  the  case  may  be;  and  the  bond, 
note,  or  other  chose  in  action  in  said  re- 
ceipt described,  shall  thereupon  become  ex- 
empted from  all  taxation  in  this  State  for 
the  period  for  which  said  tax  has  been  paid 
as  stated  in  said  receipt,  and  tlie  treasurer 
shall  keep  a  record  thereof  as  hereinbefore 
provided. 

§  10.  Any  investment  broker,  who  without 
being  first' authorized  by  the  State  treasurer 
as  provided  in  this  act  shall  sell  or  negotiate 
any  such  chose  in  action  as  is  described  in 
sections  four  and  six,  and  which  have  not 
been  previously  made  exempt  from  taxation 
as  pi-ovided  in  section  nine,  shall  be  fined 
not  more  than  two  thousand  dollars,  or  im- 
prisoned in  the  county  jail  not  more  than 
one  year,  or  both.  And  the  sale  or  attempt 
to  sell  by  any  such  investment  broker  of 
every  sinirle  bond  or  other  chose  in  action 
shall  be  a  separate  offense  under  this  act. 

§  11.  (As  amended.  June  14,  1893.)  The 
board    of    equalization    shall    meet    at    the 


30 


co:n^]^ecticut. 


Preferred  stock  —  Act  of  1893. 


treasurer's  oflSce  at  the  capitol,  annually,  on 
the  first  secular  day  of  February,  at  ten 
o'clock  in  the  forenoon,  to  examine  and  cor- 
rect the  returns  and  valuations  required  by 
the  provisions  of  this  act,  and  to  hoar  any 
party  making  such  return  in  regard  to  such 
valuations;  and  said  board  maj' adjourn  from 
time  to  time  within  eight  days  next  succeed- 
ing the  first  day  of  said  meeting;  and  if  any 
person  shall  not  make  such  return  as  pre- 
scribed, or  shall  make  any  erroneous  return, 
said  board  shall,  at  said  meeting  hereinbe- 
fore fixed,  or  at  some  adjournment  thereof 
as  aforesaid,  make  out,  upon  the  best  infor- 
mation which  they  can  obtain,  tlie  statement 
required  to  be  made  and  returned  by  such 
person;  and  a  true  copy  of  such  statement 
as  corrected  or  made  out  by  said  board  shall 
be  returned  to  each  respective  corporation 
or  person;  and  the  valuation,  amount,  and 
numbers  contained  in  such  statement  shall 
be  final,  and  the  sums  required  by  the  pro- 
visions of  this  act  shall  be  paid  according 
to  it. 

§  12.  Every  person  who  shall  fail  to  re- 
turn to  the  comptroller  any  statement  re- 
quired to  be  returned,  as  prescribed  in  any 
of  the  preceding  sections  of  this  act,  shall 
forfeit  five  hundred  dollars  to  the  State;  and 
every  corporation  or  person  required  by  this 
act  to  malce  any  payment  to  tlie  State,  who 
shall  fail  to  make  it  within  the  time  herein- 
before limited,  shall  forfeit  to  the  State 
twice  the  amount  required  for  such  paj'^- 
raent. 

§  13.  It  shall  be  the  duty  of  the  assessors 
in  every  town  to  require  all  persons  giving 
in  tax-lists  to  sign,  date,  and  deliver  to  them 
a  sworn  statement  upon  said  list  of  the 
following  form: 

"  I  do  hereby  declare  under  oath  that  the 
foregoing  list,  according  to  the  best  of  my 
knowledge,  remembrance,  and  belief,  is  a 
true  statement  of  all  my  property  liable  to 
taxation,  and  that  I  have  included  in  said 
tax-list  all  bonds,  notes,  and  other  evidences 
of  indebtedness,  except  such  as  are  by  stat- 
ute exempted  from  taxation  or  are  endorsed 
by  the  State  treasurer  as  not  at  present 
liable  to  taxation  in  Connecticut,  and  which 
are  now  owned  by  me  or  held  by  me  in  trust, 
or  which  I  am  required  by  law  to  put  into 
my  said  tax-list;  and  also  all  bonds,  notes, 
or  other  evidences  of  indebtoflness,  and  all 
shares  of  the  capital  stock  of  any  corpora- 
tion, the  stock  of  which  is  taxable,  which  I 
have  transferred  as  collateral  security  to  any 
corporation.  I  also  declare  under  oath  that 
I  have  not  conveyed  or  temporarily  disposed 
of  any  estate  for  the  purpose  of  evading  the 
laws  relating  to  the  assessment  and  collec- 
tion of  taxes.     Dated  at this day 

of ,  IS  ."  Any  person  signing  and  de- 
livering to  the  as.sessors  a  false  statement 
of  the  foregoing  form,  shall  be  guilty  of  the 
crime  of  perjury,  and  subject  to  the  punish- 
ment by  law  provided  for  said  crime.    Any 


assessor  falling  to  comply  with  the  pro- 
visions of  this  section  shall  forfeit  fifty  dol- 
lars to  any  person  suing  therefor  for  each 
such  act  of  neglect. 

§  14.  Any  provision  of  the  law  providing 
for  different  taxation  or  for  an  exemption 
from  taxation  and  inconsistent  herewith, 
whether  contained  in  the  general  statutes 
or  in  the  charter  of  any  investment  compnny 
incorporated  by  this  State,  is  hereby  re- 
pealed, and  to  that  extent  this  act  shall  be 
an  amendment  to  the  charter  of  each  of  said 
companies;  but  it  shall  not  be  necessary  for 
said  companies,  or  any  of  them,  to  accept 
said  amendment. 

(Approved  June  22,  1889.) 

Act  8. 

AN  ACT  authorizing  corporations  to  issue 
preferred  stock. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

Section  1.  Any  corporation  in  this  State, 
not  engaged  in  the  business  of  either  trust, 
insurance,  buying  or  selling  real  estate,  or 
banking  or  trading  in  bonds,  notes,  or  other 
evidences  of  indebtedness,  which  has  by 
law  power  to  increase  its  capital  stock,  may 
so  increase  it  by  the  issueof  preferred  stock, 
which  shall  be  entitled  to  dividends  of  an 
agreed  amount  before  any  dividends  are  de- 
clared upon  the  stock  already  issued;  and 
such  dividends,  if  not  paid  in  any  one  year, 
may  be  paid  out  of  the  earnings  of  subse- 
quent years,  if  it  be  so  provided  in  the  vote 
authorizing  such  increase. 

§  2.  No  such  issue  of  preferred  stock  shall 
be  made  unless  authorized  at  a  meeting  of 
the  stockholders  duly  warned  for  the  pur- 
pose by  a  vote  of  stockholders  holding  not 
less  than  two-thirds  of  the  stock  of  said 
corporation,  and  duly  represented  at  such 
meeting;  which  vote  shall  determine  the 
amount  of  preferred  stock  so  to  be  issued, 
the  number  and  value  of  the  shares  thereof, 
the  dividends  to  be  made  thereon,  and 
whether  the  same  shall  be  cumulative  or 
not. 

§  3.  No  certificates  of  such  stock  shall  be 
issued  until  a  majority  of  the  directors  shall 
have  signed  and  swora  to  a  certificate  of 
the  increase  of  such  capital  stock,  and  the 
number  and  value  of  such  shares,  and  the 
amount  of  the  dividend  which  the  same  are 
entitled  to  receive,  and  whether  cumulative 
or  not,  which  certificate  shall  be  in  addition 
to  those  now  required  by  law  in  relation  to 
the  increase  of  capital  stock,  nor  until  such 
certficate  shall  have  been  filed  in  the  office 
of  the  secretary  of  state,  who  shall  cause  the 
same  to  be  recorded,  and  a  duplicate  thereof 


CONXECTICUT. 


31 


Miscellaneous  acts  of  1893  and  1895. 


shall  have  been  filed  for  record  in  the  town 
clerk's  office  of  the  town  where  said  corpo- 
ration is  located. 

§  4.  Any  joint-stock  corporation,  at  the 
time  it  is  organized,  may  provide  for  the 
issue  of  preferred  stock  in  the  articles  of 
association,  and  tlie  certificates  of  organiza- 
tion shall  show  the  amount  of  preferred 
stock  so  issued;  and  any  issue  of  preferred 
stock  heretofoi-e  made  by  any  joint-stock  cor- 
poration is  hereby  ratified'  and  confirmed. 

§  5.  Any  joint-stock  corporation  uniting 
with  any  other  corporation  may  change  the 
whole  or  any  part  of  its  stock  into  preferred 
stock  by  a  two-thirds  vote,  as  aforesaid,  and 
increase  its  capital  by  the  issue  of  common 
stock,  upon  filing  the  certificate  thereof  re- 
quired by  law. 

(Approved  ]May  5,  1893.) 

Act  9. 

AN   ACT  concerning  the  manufacture  and 
sale  of  electricity. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

Section  1.  No  person  or  corporation  unless 
acting  under  the  authority  of  the  general  as- 
sembly of  this  State,  shall,  in  any  city  or 
town  of  this  State,  manufacture  for  sale  any 
electricity  for  purposes  of  ligliting  or  power; 
but  this  section  shall  not  prevent  such  manu- 
facture for  the  purposes  of  the  business,  or 
for  the  use  of  the  manufacturer,  or  for  the 
sale  thereof  to  his  tenants  in  the  same  prem- 
ises wliere  it  is  manufactured. 

§  2.  This  act  shall  not  apply  to  any  city 
or  town  wliose  population  is  less  than  fifteen 
thousand. 

(Approved  June  29,  1893.) 

Act  10. 

AN  ACT  validating  certain  omissions  and 
irregularities. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened : 

§  6.  In  any  case  in  which  a  private  corpo- 
ration, chartered  or  incoi-porated  imder  the 
laws  of  this  State,  has,  within  two  years 
after  being  chartered,  organized  under  its 
charter,  and  which  prior  to  the  approval  of 
this  act  has  filed  a  certificate  of  organization 
in  the  oflice  of  the  secretary  of  this  State  as 
required  by  law,  but  not  within  two  years 
from  the  date  of  the  approval  of  its  charter 
as  required  by  statute,  the  charter  of  such 
corporation  shall  not  for  that  cause  be 
deemed  to  be  void,  but  is  hereby  ratified, 
validated,  and  confirmed,  and  all  acts  of 
such  corporation  done  under,  and  in  pursu- 
ance of,  or  by  authority  of  such  charter  are 


hereby  validated  and  confirmed,  and  de- 
clared to  be  as  binding  as  if  said  certificate 
of  organization  had  been  filed  within  the 
time  prescribed. 
j  §  19.  Private  corporations  which  have  been 
j  organized  and  are  acting  under  charters 
granted  by  the  general  asseml)ly  of  this 
State,  or  which  have  accepted  amendments 
to  their  charters,  or  private  corporations 
heretofore  chartered  which  have  failed  to 
perfect  their  organization  and  have  failed  to 
file  a  certificate  of  organization  or  of  accept- 
ance of  such  amendments  within  the  time 
prescriljed  by  law.  or  have  failed  to  accept 
amendments  to  its  charter,  and  have  failed 
to  file  an  attested  copy  of  sucli  acceptance 
as  required  by  section  1119  of  tlie  general 
statutes,  may  perfect  such  organization  and 
file  such  certificate  on  or  before  October  1, 
1893,  and  the  charters  of  such  coi-poration 
shall  not  for  the  reason  that  such  organiza- 
tion has  not  been  perfected  or  such  cer- 
tificate has  not  been  filed  be  deemed  void, 
but  are  hereby  ratified,  validated,  and  con- 
firmed, and  all  acts  of  said  corporation  done 
under  and  in  pursuance  of  or  liy  authority 
of  such  charters  are  hereby  validated  and 
confirmed  and  declared  to  be  as  binding  as 
if  the  organization  had  been  perfected  and 
certificates  of  organization  had  been  filed 
within  the  time  prescribed. 
(Approved  June  29,  1893.) 


Act  11. 

AN  ACT  concerning  corporations. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

Section  1.  The  provisions  of  chapter  CXII 
of  the  Public  Acts  of  1893,  concerning  the 
dissolution  of  corporations,  the  sale  of  their 
property  and  franchises,  or  their  reorgani- 
zation, shall  apply  to  any  coi-poration  ex- 
isting under  the  laws  of  the  State  of 
Connecticut,  whether  the  same  be  organized 
under  the  General  Laws  of  the  State,  or 
under  a  special  charter  granted  by  the  gen- 
eral assembly;  Provided,  however.  That  the 
superior  court  shall  not  have  power  in 
directing  the  reorganization  of  any  cori>ora- 
tion  to  add  to  or  alter  the  provisions  of  the 
charter  or  articles  of  association  of  any  such 
coi-poration,  and  any  corporation  originally 
organized  under  a  special  charter  granted 
by  the  general  assembly  and  reorganized 
under  the  provisions  of  this  act,  or  the  pro- 
visions of  chapter  CXII  of  the  Public  Acts 
of  1893,  shall  have  such  powers  and  only 
such  powers  as  may  be  given  by  the  terms 
of  the  special  charter  of  the  corporation. 

§  2.  This  act  shall  take  effect  from  its 
passage. 

(Approved  April  3,  1895.) 


32 


CONNECTICUT. 


Miscellaneous  acts  of  1895. 


Act  18. 

AN   ACT   concernlujr  receivers   of  corpora- 
tions aud  copartnerships. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con 
vened: 

The  commencement  of  proceedings  for  the 
appointment  of  a  receiver  of  a  corporation 
or  a  copartnership  shall  dissolve  all  attach- 
ments and  all  levies  of  executions,  not 
completed,  made  within  sixty  days  next  pre- 
ceding, on  the  property  of  such  corporation 
or  copartnership;  but  if  the  property  is  sub- 
sequently talvcn  from  the  receivei',  so  that 
it  cannot  be  used  for  the  benefit  of  the 
creditors  of  said  corporation  or  said  copart- 
nerships, nor  made  subject  to  the  orders  of 
the  court  in  the  settlement  of  the  affairs 
of  said  corpoi-ation  or  copartnership,  or  if 
the  receivership  shall  be  terminated  by  order 
of  the  court,  pending  the  settlement  of  the 
affairs  of  the  corporation  or  copartnership, 
said  attachments  and  levies  of  execution 
shall  revive,  and  the  time  from  the  com- 
mencement of  such  proceedings  to  the  time 
when  the  receiver  shall  be  dispossessed  of 
the  property,  or  the  finding  of  the  court  that 
said  property  is  not  subject  to  the  orders  of 
said  court,  or  when  said  trust  shall  be  ter 
minated,  shall  be  excluded  from  the  compu- 
tation in  determining  the  continuance  of  the 
lien  created  by  such  attachment;  but  the 
attaching  or  levying  creditors  shall  be  al- 
lowed the  amount  of  their  legal  costs,  ac- 
cruing before  the  time  of  the  appointment 
of  a  receiver,  as  a  preferred  claim  against 
the  estate  of  said  coiijoration  or  copartner- 
ship, if  their  respective  claims  upon  which 
the  attachments  are  founded  shall,  in  whole 
or  in  part,  be  allowed. 

(Approved  April  25,  1S95.) 

See  §  502,  and  cross-references.  Receivers. 
§  1.S21.  Winding  up.  Act  No.  16,  at  p.  33.  See  Act 
No.  23. 

Act  13. 

AN  ACT  concerning  corporations. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

Section  1.  Any  corporation  iucoi'porated  in 
this  State,  and  not  prohibited  by  any  pro- 
vision in  its  own  charter  or  by  the  general 
statutes  of  this  State,  may  acquii'e.  pur- 
chase, and  hold  the  stock  or  securities  of 
any  other  corporation  incorporated  by  or 
doing  business  imder  the  laws  of  this  State; 
and  it  may  acquire,  purchase,  and  hold  its 
own  stoclc;  Provided,  That  no  rights  of  any 
stoclvhokler  of  a  corporation  that  may  have 
been  passed  upon  by  any  court  of  tl>is  State 
shall  be  affected  by  this  act,  nor  shall  this 


act  affect  the  right  of  any  party  to  any  ac- 
tion now  pending. 

^  2.  The  provisions  of  this  act  shall  not 
apply  to  any  savings  banlv.  trust  company, 
or  life  insurance  company;  and  any  corpora- 
tion acquiring  its  own  stock  under  the  pro- 
visions of  this  act  shall,  witliin  six  months 
thereafter,  file  in  the  oftice  of  the  town  clerk 
where  it  is  located,  and  in  the  office  of  the 
secretai'y  of  state,  a  certificate  signed  by 
its  president  and  treasurer,  stating  the  num- 
ber of  shares  of  its  own  stock  so  acquired. 

§  3.  No  corporation,  under  the  provisions 
of  this  act.  shall  acquire  and  hold  its  own 
stock  except  with  the  approval  of  stocli- 
holders  owning  three-fourths  of  the  whole 
capital  stock,  given  at  a  stockholders'  meet- 
ing warned  and  lield  for  the  purpose;  and 
while  so  held,  said  company  shall  not  vote 
upon  such  shares  of  its  own  stock,  and  no 
corporation  shall  purchase  any  shares  of  its 
own  stoclv  when  it  is  insolvent;  aud  the  di- 
rectors of  every  corporation  purchasing  its 
own  stock  when  it  is  insolvent,  and  assenting 
to  such  purchase,  shall  be  personally  liable 
for  any  debts  of  such  corporation  existing 
at  the  time  of  such  purchase. 

§  4.  This  act  shall  take  effect  from  its 
passage. 

(Approved  May  17,  1895.) 


Act  14. 

AN  ACT  concerning  service  of  process  upon 
foreign  corporations. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives    in    general    assembly    con 
vened: 

Section  1.  In  actions  against  foreign  cor- 
porations, service  of  process  may  be  made 
upon  the  president,  secretary,  or  any  direc- 
tor or  managing  or  general  agent  of  such 
corporation:  Provided,  That  this  act  shall 
not  apply  to  any  foreign  corporation  which 
shall  have  an  agent  or  attorney,  upon  whom 
service  of  process  may  be  made,  duly  ap- 
pointed in  conformity  with  the  laws  of  this 
State. 

§  2.  This  act  shall  take  effect  from  its 
passage. 

(Approved  June  1,  1895.) 

See  Act  of  1895,  at  p.  35.  Service  of  process. 
§§  908  et  seq. 

Act  15. 

AN  ACT  for  the  preservation  of  the  healtJi 
of  factory  employes. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

Section  1.  Wlienever  the  inspector  of  fac- 
tories, on  complaint  of  any  person,  after  due 


COXXECTICUT. 


33 


Winding  up  corporations  —  Act  of  1895. 


investigation,  shall  find  it  necessaiy  for  tlie 
preservation  of  the  health  of  the  employes 
in  any  nianufactiiring  establishment,  fac- 
tory, or  mill  in  wliich  is  cai'ried  on  the  busi- 
ness of  butfing,  polishing,  or  grinding  metals, 
or  any  operations  in  which  an  excessive 
amount  of  dust  is  generated,  that  the  ex- 
cessive dust  resulting  from  operations 
should  be  removed  from  the  atmosphere  of 
the  rooms  or  apartments  used  for  tliat  pur- 
pose, he  shall,  in  writing,  direct  the  person 
or  persons  or  corporation  owning  or  occupy- 
ing said  premises,  or  canning  on  business  in 
such  premises,  within  three  montlis  from 
the  date  of  said  order,  to  introduce  and  oper- 
ate such  appliances  or  devices  as  may  be 
necessary  to  remove,  so  far  as  the  nature  of 
the  business  will  permit,  such  excessive  dust 
or  foreign  matter  from  the  atmosphere  of 
such  mill,  factory  or  apartment  used  for 
the  purposes  aforesaid;  Provided,  such  ap- 
pliances or  devices  do  not  restrifct  or  inter- 
fere with  the  aforesaid  business  or  opera- 
tions. 

§  2.  Any  violation  of  any  proper  order 
made  or  given  by  tlie  inspector  of  factories, 
under  the  provisions  of  the  preceding  section, 
shall  be  punished  in  the  manner  provided  in 
section  2269  of  the  general  statutes. 

(Approved   June  14,  1S93.) 


Act  16. 

AN  ACT  concerning  the  winding  up  of  the 
affairs  of  corporations. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

Section  1.  The  superior  court  in  the 
county  in  which  any  corporation  organized 
under  or  chartered  by  the  laws  of  this  State 
has  its  principal  place  of  business,  may,  as 
a  court  of  equity,  on  tlie  complaint  of  any 
one  or  more  of  the  stockholders  owning  or 
representing  one-tenth  or  more  in  amount 
of  the  capital  stock  of  such  corporation, 
wind  up  its  affairs,  and  dissolve  it  if  said 
court  shall  find  that  the  interests  of  such 
stockholders  will  be  best  protected  by  such 
action,  or  that  such  corporation  for  a  period 
of  ten  years  prior  to  the  date  of  such  appli- 
cation, has  not  both  eax-ned  and  paid  divi- 
dends aggregating  in  the  whole  five  per  cen- 
tum upon  its  capital  stock,  or  has  engaged 
in  business  unauthorized  by  its  charter  or 
articles  of  association,  or  that  there  has  been 
any  fraud  or  collusion  or  gross  mismanage- 
ment in  the  conduct  or  control  of  such  cor- 
poration which  has  resulted  to  the  detriment 
of  the  other  stockholders  of  said  corporation; 
Provided,  That  in  any  action  brought  for 
such  dissolution,  said  corporation  or  any 
stockholder  or  stockholders,  other  than  the 
plaintiff  or  plaintiffs,  whether  original  de- 
fendants or  upon  entering  as  defendants  for 


this  purpose,  may,  upon  written  motion  to 
the  court,  obtain  a  valuation  of  the  whole 
capital  stock  of  such  corporation  to  be  made 
by  the  court  or  by  a  committee  appointed 
by  the  court,  and  upon  such  valuation  such 
defendant  corporation  or  stockholder  or 
stockholders  may,  at  their  option,  buy  the 
plaintiffs'  stock,  as  hereinafter  provided,  and 
pay  therefor  such  proportion  of  such  valua- 
tion as  the  par  value  of  the  plaintiffs'  stock 
bears  to  the  par  value  of  the  whole  capital 
stock  of  such  corporation.  Within  ten  days 
after  said  valuation  is  made  by  the  court 
or  the  report  of  the  committee  making  such 
valuation  is  accepted  by  the  court,  the  de- 
fendant or  defendants  who  have  applied  for 
such  valuation  shall  fde  with  the  clerk  of 
the  court  a  written  notice  whether  they  ac- 
cept said  valuation  and  elect  to  buy  the 
plaintiffs'  stock  thereat,  and,  in  case  of  ac- 
ceptance, shall  at  the  same  time  deposit  with 
the  clerk  of  the  court  the  price  of  the  plain- 
tiffs' stock  at  such  valuation.  The  plaintiff 
or  plaintiffs  shall  thereupon,  within  ten  days, 
file  with  the  clerk  of  the  court  a  written 
notice  stating  whether  he  or  they  accept  said 
price,  and  in  case  of  acceptance  shall  there- 
upon cease  to  have  any  interest  in  their 
said  stock,  and  shall  at  the  same  time  deliver 
to  said  clerk,  their  stock  certificate  or  cer- 
tificates with  proper  endorsements  of  trans- 
fer, and  shall  receive  from  said  clerk  the 
price  of  said  stock  so  deposited  with  him. 
Upon  the  plaintiff  or  plaintiffs  accepting  said 
price  and  delivering  their  stock  certificates, 
or  refusing  so  to  accept  and  deliver,  said 
proceedings  for  dissolution  shall  be  ter- 
minable at  the  motion  of  such  defendant 
or  defendants,  and  judgment  may  be 
entered  in  accordance  with  the  foregoing 
provisions.  In  case  of  a  failure  on  the  part 
of  all  the  defendants  to  accept  said  valuation 
or  to  make  payment  in  accordance  there- 
with within  said  time,  said  action  shall  pro- 
ceed to  final  judgment,  and  all  the  expenses 
of  such  valuation,  being  taxed  by  the  court, 
shall,  if  such  valuation  be  accepted  and  such 
dissolution  proceedings  terminated,  be  paid 
by  such  coi-poration,  but  if  such  valuation 
be  rejected  by  the  defendant  or  defendants 
applying  therefor,  they  shall  pay  the  ex- 
pense thereof  taxed  as  aforesaid. 

§  2.  For  the  purposes  of  this  act,  said 
court  shall  have  jurisdiction  of  such  com- 
plaint of  any  stockholder  or  stockholders 
owning  or  representing  one-tenth  or  more 
in  amount  of  the  capital  stock  of  such  cor- 
poration, and  of  all  questions  arising  in  the 
proceedings  thereon,  and  may,  if  it  deem  it 
necessary,  appoint  one  or  more  receivers  of 
the  estate  of  said  corporation  and  limit  a 
time  for  its  creditors  to  present  their  claims 
to  such  receivers,  which  time  so  limited  shall 
not  be  less  than  three  months  from  the  date 
of  such  order,  and  direct  public  notice 
thereof  to  be  given,  and  may  make  such  or- 
ders and  decrees  in  such  proceedings  as 
justice  and  equity  require.     All  claims  not 


34 


CONNECTICUT. 


Mediation  and  arbitration  —  Act  of  1895. 


presented  within  the  time  limited  by  said 
court  shall  be  barred.  Said  receivers  shall 
allow  all  just  claims  against  said  corpora- 
tion, collect  its  debts,  sell  its  property,  and 
convert  the  same  into  money,  and  report 
their  doings  to  said  court  as  It  may  direct. 

§  3.  Said  coui't  may,  on  complaint  of  any 
person  aggi'ieved  by  such  doings,  grant  such 
relief  as  the  nature  of  the  ease  may  require, 
and  may  malie  such  orders  as  to  the  doings  of 
the  receivers,  their  compensation  and  other 
expenses,  and  as  to  the  payment  of  debts, 
and  distribution  of  the  effects  of  said  cor- 
poration, as  may  be  just  and  conformable 
to  law. 

§  4.  This  act  shall  take  effect  from  its 
passage. 

(Approved    June  26,  1S95.) 

Receivers.    §  1321,  cross-references. 


Act   17. 

AN  ACT  creating  a  State  board  of  media- 
tion and  arbitration. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

Section  1.  During  each  biennial  session  of 
the  general  assembly,  the  governor  shall, 
with  the  advice  and  consent  of  the  Senate, 
appoint  a  State  board  of  mediation  and  ar- 
bitration, to  consist  of  three  competent  per- 
sons, each  of  whom  shall  hold  his  office  for 
the  term  of  two  years.  One  of  said  persons 
shall  be  selected  from  the  party  which  at 
the  last  general  election  cast  the  greatest 
number  of  votes  for  governor  of  this  State, 
and  one  of  said  persons  shall  be  selected 
from  the  party  which  at  the  last  general 
election  cast  the  next  greatest  number  of 
votes  for  governor  of  this  State,  and  the 
other  of  said  persons  shall  be  selected  from 
a  bona  fide  labor  organization  of  this  State. 
Said  board  shall  select  one  of  its  number  to 
act  as  clerk  or  secretary,  whose  duty  it  shall 
be  to  keep  a  full  and  faithful  record  of  the 
proceedings  of  the  board,  and  also  to  keep 
and  preserve  all  docimients  and  testimony 
submitted  to  said  board;  he  snail  have 
power,  under  the  direction  of  the  board,  to 
issue  subpoenas,  and  to  administer  oaths  in 
all  cases  before  said  board,  and  to  call  for 
and  examine  the  books,  papers,  and  docu- 
ments of  the  parties  to  such  cases.  Said 
arbitrators  shall  take  and  subscribe  to  the 
constitutional  oath  of  office  before  entering 
upon  the  discharge  of  their  duties. 

§  2.  Whenever  any  grievance  or  dispute  of 
any  nature  shall  arise  l)etwe€'n  any  employer 
and  his  employes.  It  shall  be  lawful  for  the 
parties  to  submit  the  same  directly  to  the 
State  board  of  mediation  and  arbitration. 
In  case  such  parties  elect  to  do  so,  and  shall 
notify  said  board,  or  its  clerk,  in  writing, 
of  such  election.      "Whenever  such  notifica- 


tion to  said  board  or  clerk  is  given,  it  shall 
be  the  duty  of  said  board  to  proceed,  with 
as  little  delay  as  possible,  to  the  locality  of 
such  grievance  or  dispute,  and  inquire  into 
the  cause  or  causes  of  the  grievance  or  dis- 
pute. The  parties  to  the  grievance  or 
dispute  shall  thereupon  submit  to  said  board. 
In  writing,  succinctly,  clearly,  and  in  detail, 
their  grievances  and  complaints,  and  the 
cause  or  causes  thereof,  and  severally 
promise  and  agree  to  continue  in  business, 
or  at  work,  without  a  strike  or  lockout  until 
the  decision  of  said  board  is  rendered;  Pro- 
vlde<l.  It  shall  be  rendered  within  ten  days 
after  the  completion  of  the  investigation. 
The  board  shall  thereupon  proceed  fully  to 
investigate  and  inquire  into  the  matter  in 
controversy,  and  to  t-ake  testimony  under 
oath  in  relation  thereto,  and  shall  have 
power  by  its  chairman  or  clerk  to  administer 
oaths,  to  issue  subpoenas  for  the  attendance 
of  witnesses,  and  the  production  of  books 
and  papers. 

§  3.  After  a  matter  has  been  fully  heard, 
the  said  board,  or  a  majoi-ity  of  its  members, 
shall  within  ten  days  render  a  decision 
thereon  in  writing,  signed  by  the  members 
of  the  board,  or  a  majority  of  them,  stating 
such  details  as  will  clearly  show  the  nature 
of  the  decision  and  the  points  disposed  of  by 
said  board.  The  decision  shall  be  in  trip- 
licate, one  copy  of  which  shall  be  filed  by 
the  clerk  of  the  board  in  the  office  of  the 
town  clerk  or  city  clex'k  in  the  town  or  city 
where  the  controver.sy  arose,  and  one  copy 
shall  be  served  on  each  of  the  parties  to  the 
controversy. 

§  4.  Whenever  a  strike  or  lockout  shall  oc- 
cur, or  is  seriously  threatened  in  any  part  of 
the  State,  and  shall  come  to  the  knowledge 
of  the  board,  it  shall  be  its  duty,  and  it  is 
hereby  directed  to  proceed,  as  soon  as  prac- 
ticable, to  the  locality  of  such  strike  or  lock- 
out, and  put  itself  in  communication  with 
the  parties  to  the  controversy,  and  endeavor 
by  mediation  to  effect  an  aiuicable  settle- 
ment of  such  strike  or  lockout;  and  if,  in  the 
judgment  of  said  board,  it  is  best,  it  shall  in- 
quire into  the  cause  or  causes  of  the  con- 
troversy, and  to  that  end  the  board  is  hereby 
authorized  to  subpoena  witnesses  and  send 
for  persons  and  papers. 

§  5.  Said  board  shall,  on  or  before  the  first 
day  of  December  in  each  year,  make  a  re- 
port to  the  governor,  and  shall  include 
therein  such  statements,  facts,  and  explana- 
tions as  will  disclose  the  actual  working  of 
the  board,  and  such  suggestions  as  to  legis- 
lation as  may  soem  to  it  conducive  to 
harmony  in  the  relations  between  employers 
and  employed,  and  to  the  improvement  of 
the  present  system  of  production. 

§  6.  Whenever  the  term  of  employer  or  em- 
ployers is  used  in  this  act,  it  shall  be  held 
to  include  firm,  joint-stock  association,  com- 
pany, or  corporation,  as  fully  as  if  each  of 


coknt:cticut. 


35 


Foreign  corporations;  blacklisting  —  Acts  of  1895. 


the  last-named  terms  vras  expressed  in  each 
place. 

§  7.  The  members  of  the  board  shall  re- 
ceive, as  compensation  for  actual  services 
rendered  under  this  act,  the  sum  of  five  dol- 
lars per  day  and  expenses,  upon  presenta- 
tion of  their  vouchers  to  the  comptroller,  ap- 
proved by  the  governor. 

§  8.  This  act  shall  take  effect  from  its 
passage. 

(Approved  June  28,  1895.) 


Act  18. 

AN  ACT  concerning  service  of  process  upon 
foreign  corporations. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

Section  1.  Every  foreign  coqioration  trans- 
acting business  in  this  State,  having  no 
secretary,  cashier,  or  director  resident 
in  this  State  shall,  Avithin  thirty  days 
after  the  passage  of  this  act,  appoint 
by  written  power  some  competent  person 
resident  in  this  State  as  its  attorney,  upon 
whom  all  process  against  said  coriwration 
in  this  State,  including  the  process  of 
foreign  attachment,  may  be  sei^ved;  and 
such  attorney,  in  case  of  foreign  attachment, 
when  the  fees  therefor  shall  have  been  paid 
or  tendered,  shall  have  the  right  to  make  the 
affidavit  required  by  law  in  such  cases;  and 
service  of  process  made  within  this  State 
upon  such  attorney  shall  have  the  same  ef- 
fect as  if  such  corporation  had  existed  and 
been  duly  served  with  process  within  this 
State. 

§  2.  Such  power  of  attorney,  duly  executed 
by  such  foreign  corporation,  shall  be  filed 
with  the  secretary  of  this  State;  and  copies 
thereof,  duly  certified,  maj-  be  received  in 
evidence  in  all  courts  of  this  State;  and  said 
corporation  shall  pay  a  fee  of  five  dollars  to 
the  secretary  of  this  State  at  the  time  of 
filing  such  power  of  attorney,  which  fee 
shall  be  for  the  benefit  of  the  State. 

§  3.  In  case  of  the  death,  resignation,  or 
removal  of  said  attorney,  said  corporation 
sliall,  within  thirty  days  thereafter  appoint 
another  attorney  in  the  place  of  the  one  so 
dying,  resigning,  or  removed;  and  in  the  case 
of  such  death,  resignation,  or  removal,  a 
certificate  of  said  fact  shall  be  filed  and  re- 
corded in  the  office  of  the  secretarv  of  this 
State. 

§  4.  Every  person  who  shall  act  within 
this  State  as  the  agent,  officer,  or  employe 
of  any  foreign  corporation  which  has  failed 
to  comply  with  the  provisions  of  this  act 
shall  be  fined  not  more  than  five  hundred 
dollars  nor  less  than  fifty  dollars. 

§  5.  This  act  shall  not  apply  to  corpora- 


tions described  in  sections  2905  and  3791  of 
the  general  statutes. 

§  6.  This  act  shall  take  effect  from  its 
passage. 

(Approved    July  1.  1895.) 

See  Act  of  1895,  at  p.  32.  Service  of  process 
§§  908    et  seq. 

Act    19. 

AN  ACT  validating  certain   omissions   and 
irregularities. 

Re  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened : 

§  10.  Private  corporations  which  have  been 
organized  and  are  acting  under  charters 
granted  by  the  general  assembly  of  this 
State,  or  which  have  accepted  am'endments 
to  their  charters,  or  private  corporations 
chartered  by  the  general  assembly  of  1893, 
or  whose  charters  were  amended  at  said  ses- 
sion, which  have  failed  to  perfect  their  or- 
ganization and  have  failed  to  file  a  cer- 
tificate of  organization  or  accept  such 
amendments  and  file  an  attested  copy  of 
such  acceptance,  as  required  by  section  1911 
of  the  general  statutes,  may  perfect  such  or- 
ganization or  accept  such  amendments  and 
file  such  certificates  on  or  before  October 
first,  eighteen  hundred  and  ninety-five,  and 
the  charters  of  such  corporations,  or  such 
amendments,  shall  not  for  the  reason  that 
such  organization  has  not  been  perfected,  or 
such  certificate  has  not  been  filed,  be  deemed 
void,  but  are  hereby  ratified,  validated,  and 
confirmed,  and  all  acts  of  said  corporations 
done  under  and  in  pursuance  of  or  by  au- 
thority of  such  charters  or  amendments  are 
hereby  validated  and  confirmed  and  de- 
clared to  be  as  binding  as  if  organization  had 
been  perfected  and  certificates  filed  within 
the  time  prescribed. 

(Approved  July  9,  1895.) 

Act  20. 

AN  ACT  concerning  blacklisting. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

Every  employer  who  shall  blacklist  an  em- 
ploye with  intent  to  prevent  such  employe 
from  procuring  other  employment  shall,  upon 
conviction,  be  fined  not  more  than  two  hun- 
dred  dollars. 

(Approved  :May  25,  1897.) 

Act  21. 

AN  ACT  relating  to  the  assessment  of  taxes. 

Be  it  enacted  by  the  Senate  and  House 
of  Representatives  in  general  assembly  con- 
vened : 

The  cashiers  or  secretaries  of  all  corpora- 
tions whose  stock  is  liable  to  taxation  shall, 


36 


CONNECTICUT. 


Fcts;  inoccss;  validating  irregularities  —  Acts  of  1897. 


on  or  before  the  twelfth  day  of  October,  an- 
nually, inform  the  assessors  of  each  city 
and  borough  of  the  names  of  the  stockhold- 
ers residing  therein,  and  the  amount  of  stock 
owned  by.  each,  as  exhibited  by  the  books 
of  said  corporation  on  the  first  day  of  said 
October,  so  far  as  the  residence  of  such 
stockholders  shall  be  known  to  such  cashiers 
or  secretaries,  and  its  market  value  dur- 
ing the  mouth  of  September  next  preceding; 
and  any  such  cashier  or  secretary  who  shall 
neglect  to  furnish  such  information  to  the 
ass(>ssors  of  such  city  or  borough  where  said 
stock  is  liable  to  be  taxed  shall  forfeit  fifty 
dollars  to  such  town;  but,  putting  a  letter 
into  the  post-otTice  containing  such  informa- 
tion, postage  paid,  addressed  to  the  assessors 
of  such  city  or  borougli  where  such  owner 
resides,  shall  be  a  compliance  with  the  pro- 
visions of  this  section. 
(Approved  June  2,  1897.) 

Act  22. 

AN  ACT  concerning  fees  to  be  paid  to  the 
State  for  the  creation  of  private  corpora- 
tions. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

No  bill  or  resolution  affecting  private  inter- 
ests only,  other  than  appropriation  bills  or 
resolittions,  shall  be  introduced  in  either 
branch  of  the  general  assembly  until  there 
shall  have  been  paid  to  the  treasurer  of  this 
State  a  fee  of  five  dollars  for  each  legal  page 
or  fractional  part  of  a  legal  page  of  such 
bill  or  resolution  for  the  use  of  the  State,  if 
the  same  becomes  a  law,  otherwise  such  fee 
shall  be  returned  to  the  person  paying  the 
same,  which  payment  shall  be  endoi"sed  upon 
the  resolution  by  the  treasurer  and  before 
the  same  is  transmitted  to  the  governor  for 
his  signature,  and  in  the  case  of  the  ap- 
plication of  a  corporation  having  capital 
stock,  before  the  governor  approves  thereof, 
there  shall  be  paid  an  axlditioual  fee  to  the 
treasurer  of  this  State  equal  to  one  dollar 
for  each  one  thousand  dollars  of  capital  stock 
permitted  by  its  charter,  and  upon  any 
amendment  increasing  its  capital  stoclv  a  fee 
to  the  treasurer  of  a  proportionate  amount. 

(Approved  June  2,  1897.) 

Act  23. 

AN  ACT  concerning  service  of  process  on 
corporations  and  concerning  receivers. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  in  general  assembly  con- 
vened: 

Section  1.  If  any  corporation  organized  un- 
der the  laws  of  this  State  shall  have  no  sec- 


retary or  director  resident  in  this  State,  any 
judge,  clerk,  or  assistant  clerk  of  the  superior 
court,  court  of  common  pleas,  or  district 
court  to  which  is  brought  any  action  against 
said  corporation,  may  authorize  service  of 
process  in  said  action  upon  said  corporation 
by  advertisement,  or  may  make  such  other 
or  further  order  concerning  such  service  of 
process  as  may  be  deemed  reasonable,  and 
service  made  in  accordance  with  such  order 
shall  be  deemed  sufficient  service  of  process 
upon  said  corporation. 

§  2.  If  any  court  of  this  State  shall  ap- 
point a  receiver  of  any  corporation  organized 
under  the  laws  of  this  State,  such  receiver 
sliall,  under  the  order  of  the  court,  have  the 
same  power  as  the  directors  of  such  corpora- 
tion, to  call  in  the  subscriptions  to  its  capi- 
tal stock  in  such  proportions  and  at  such 
times  and  places  as  he  shall  think  necessary 
for  the  piu'pose  of  paying  all  the  debts  of 
said  corporation  and  all  the  expenses  of  the 
receivership. 

(Approved  June  10,  1897.) 
I 

Receivers.  §  1321  and  Act  No.  12.  Service  of 
process.     §§  90S  et  seq. 

Act  24. 

AN  ACT  validating  certain  irregularities  and 
omissions. 

Be  it  enacted  by  the  Senate  and  House 
of  Representatives  in  general  assembly  con- 
vened: 
******** 

§  7.  rrivate  coiijorations  which  have  been 
organized  and  are  acting  under  charters 
granted  by  the  general  assembly  of  this 
State,  and  which  have  filed  cexlificates  of 
their  organization  after  the  time  limited  by 
their  charter,  or  as  required  by  sections  1910 
and  1911  of  the  general  statutes,  or  which 
have  accepted  amendments  to  their  charters, 
or  private  corporations  chartered  by  the  gen- 
eral assembly  of  1895,  or  whose  charters 
were  amended  at  said  session,  which  have 
failed  to  i^erfect  their  organization,  and  have 
failed  to  file  a  certificate  of  organization,  or 
accept  such  charters  or  amendments  and 
file  an  attested  copy  of  such  acceptance,  as 
required  bj^  section  1911  of  the  general  stat- 
utes, may  perfect  such  organization  or  ac- 
cept such  amendments  and  file  such  cer- 
tificates on  or  before  October  1,  1897,  and 
the  charters  of  such  corporations,  or  such 
amendments,  shall  not,  for  tlie  reason  that 
such  organization  has  not  been  perfected, 
or  such  certificate  has  not  been  filed,  be 
deemed  void,  but  are  hereby  ratified,  vali- 
dated, and  confirmed,  and  all  acts  of  said 
corporations  done  under  and  in  pursiiance  of 
or  by  authority  of  such  charters  or  amend- 
ments are   herebv  validated   and    confirmed 


CONNECTICUT. 


37 


Labor  claims  —  Acts  of  1897. 


and  declared  tS  be  as  binding  as  if  organi- 
zation had  been  perfected  and  certificates 
filed  within  the  time  prescribed. 

§  18.  This  act  shall  take  effect  from  its 
passage. 

(Approved  June  12,  1897.) 

See  Acts  10  and  19. 

Act  25. 

AN  ACT  concerning  claims  for  labor  against 
.  coi*porations  and  copartnerships. 

Be  it  enacted  by  the  Senate  and  House 
of  Representatives  in  general  assembly 
convened: 

Section  1.  All  debts  due  to  anj'  laborer  or 


mechanic  for  personal  wages,  from  any  cor- 
poration or  copartnership  for  which  a  re- 
ceiver shall  be  appointed,  for  any  labor  per- 
formed for  such  corporation  or  copartnership 
within  three  months  next  preceding  the 
service  of  the  application  for  the  appoint- 
ment of  a  receiver,  shall  be  paid  in  full  by 
the  receiver,  to  the  amount  of  one  hundred 
dollars,  before  the  general  liabilities  of  such 
corporation  or  copartnership  are  paid. 

§  2.  Chapter  CCXLII  of  the  public  acts  of 
1895  and  all  other  acts  or  parts  of  acts  incon- 
sistent herewith  are  hereby  repealed. 

§  3.  This  act  shall  talce  effect  from  its 
passage. 

(Approved  March  17,  1897.) 


mDEX  TO  COKtTECTICUT. 


ACCEPTANCE:  PaRf. 

of  amendment  or  alteration  of  charter  by  stockholders i:\ 

ACTIONS: 

in  justices'  courts  against  corporations G 

service  of  process  against  corporations 7 

against  voluntary  associations   7 

venue,  place  of,  when  brought  by  foreign  corporation 7 

receivers',  to  be  preferred  8 

corporations  may  bring  or  defend  11 

upon  claims  presented  when  rejected  after  discontinuance 18 

examination  of  officers  for  discovery  in   U7 

ACTS  OF  INCORPORATION: 

how  pleaded    8 

ADMINISTRATOR: 

may  subscribe  to  increase  of  capital  stock 27 

dividends  payable  to  27 

AGENT: 

embezzlement  by,  of  property  of  corporation 10 

AMENDMENT: 

corporate  charters  subject  to,  by  assembly 13 

of  charter,  not  operative  unless  accepted  by  stockholders 13 

ANOTHER: 

corporations  included  in  meaning  of  word  6 

APPLICATION: 

for  charter,  not  to  be  heard  until  payment  of  fee 1-i 

ARTICLES  OF  ASSOCIATION: 

of  joint  stock  companies,  contents 18,  19 

publication  in  newspaper 20 

filing  in  office  of  secretary  of  state -0 

certificate  accompany  articles  of  association 20 

amendment   of    21 

certificate  and  record,  upon  removal  of  place  of  business 22 

preferred  stock,  may  provide  for 31 

ASSESSORS: 

returns  of  stock  to   -"^ 

by  cashiers  of  banks 25 

false  statements  to,  as  to  residence  of  stockholders 26 

cashier  and  secretary  to  return  names  of  stockholders 35,  36 

ASSETS: 

not  to  be  distributed  if  capital  stock  is  impaired 17 

ASSIGNMENT: 

for  benefit  of  creditors,  by  corporation ^ 

may  be  made  by  members  of  corporation 6 

ASSOCIATIONS.    (SeeYoluntary  Associations.) 
ATTACHMENT: 

shares  of  stock,  subject  to * 

how  made   ' 

certificate  of  dissolution  of ' 

foreign,  proceedings  where  corporation  had  no  effects ^ 

dissolved  by  proceedings  for  appointment  of  receiver 3- 


40  IXDEX  TO  COKN-ECTICUT. 


Pas 


BANKS: 

directors,  officers  or  directors  of  corporation  owning  stock  in  may  be 15 

power  of  attorney  to  vote  at  meetings 15 

location  of,  bow  changed 17 

taxation  of  •^"^ 

stock  subject  to  taxation 25 

deduction  from  taxation  on  account  of  real  estate 25 

cashier  to  return  to  assessors  amount  of  stock,  etc 25 

penalty  for  neglect   25 

BEQUEST: 

notice  of.  to  corporation 6 

BLACKLISTING: 

of  employes,  prohibited   35 

BONDS: 

municipalities  not  to  purchase  corporate  5 

limitation  of  issue  of,  by  real  estate  corporations 14 

votes  of  directors  and  stockholders  to  be  filed 14 

BOOKS: 

of  joint  stock  associations,  where  kept 22 

to  be  open  to  inspection 22 

BOROUGH: 

stock  or  bonds  of  corporations,  not  to  purchase 5 

BRIDGE  COMPANIES: 

taxation  of    25 

BY-LAWS: 

power  of  corporation  to  make 12 

voluntary  associations  may  make   13 

CAPITAL  STOCK: 

subscriptions  to,  when  may  be  refused r. . .  14 

subscriptions  to,  directors  may  call  in 15 

notice  to  pay   16 

impaired,  may  be  reduced 17 

dividends  not  to  be  declared  17 

amount  of,  to  be  stated  in  annual  report 22 

reduction  or  increase  by  stockholders 22 

certificate  of  reduction  to  be  filed 22 

increase  of,  executors,  etc.,  may  subscribe  to 27 

subscriptions  may  be  called  in  by  receivers 36 

CASHIER.    (See  Banks.) 

CERTIFICATE: 

officer  of  corporation  to  furnish,  showing  shares  of  stock  held  by  stockholder  ....   7,  8 

of  dissolution  of  attachment 7 

of  condition,  to  be  rendered  annually 17 

contents  of    17 

refusal  or  neglect  to  render 17 

accompanying  articles  of  association,  what  to  contain 20 

CERTIFICATE  OF  ORGANIZATION: 

copy  of,  when  may  be  admitted  in  evidence 8 

filed  in  office  of  secretary  of  state 13 

CHANGE: 

of  name  of  corporation,  proceedings  for 20 

CHARTER: 

amendment  not  operative  unless  accepted  by  stockholders  and  filed 13 

may  be  altered  or  repealed 13 

void,  unless  certificate  of  incorporation  is  filed 13 

omissions  and  irregularities  validated 31,  35,  36 

failure  to  perfect  organization  under,  validating 31,  35,  36 


IXDEX  TO  COXXECTICUT.  41 

CHILDREN:                                                                                                                                                Pago, 
under  fourteen,  not  to  be  employed 11 

CITY: 

stock  or  bonds  of  corporations,  not  to  subscribe  for 5 

COLLECTOR: 

to  collect  tax  imposed  on  stock   by  corporation 16 

COMPENSATION: 

of  officers,  corporation  may  fix 11 

CONSTITUTION: 

effect  of,  upon  corporations  5 

CONVEYANCES: 

of  real  estate,  how  attested   24 

CORPORATIONS: 

rights  and  duties  of,  as  affected  by  constitution 5 

bonds,  municipalities  not  to  purchase  5 

stock,  municipalities  not  to  subscribe  to 5 

assignment  for  benefit  of  creditors,  how  made tj 

person,  included  by  definition   6 

COUNTY: 

stock  or  bonds  of  corporations,  not  to  subscribe  for 5 

DEVISE: 

notice  of,  to  corporation   6 

DIRECTORS: 

service  of  process  against  7 

not  to  take  fees  or  commissions  as  gratuities 10 

misappropriation  of  moneys   10 

banks,  officers  or  directors  of  corporations  owning  stock  may  be 15 

may  be  directors  of  other  corporations 15 

majority  of,  a  quorum   15 

subscriptions,  may  call  in    15 

notice  to  pay  16 

dividends,  illegal,  liability  for 17 

profits,  distribution  of,  to  employes 17 

reduction  of  capital  stock,  approval  of 17 

of  joint  stock  corporations,  how  first  elected 19,  20 

articles  of  association  to  be  published  and  filed  by 20 

certificate  of  publication  of 20 

election  of,  annually   20 

number  of 20 

vacancies,  how  filled  20 

president,  to  choose 20 

to  be  resident  of  state 21 

secretary,  to  choose 20 

to  be  resident  of  state 21 

treasurer,  to  choose  20 

to  bo  resident  of  state 21 

liability  of,  for  declaring  dividends  when  corporation  is  insolvent 23 

loans  to,  prohibited   27 

preferred  stock,  to  sign  and  verify  certificate  as  to 30 

liability  of,  for  acquiring  stock  of  corporation  when  insolvent 32 

DISCONTINUANCE: 

stockholders  may  vote  for  1^ 

notice  to  creditors  upon   1^ 

actions  upon  claims  presented l'^ 

DISCOVERY: 

of  papers,  etc.,  examination  of  officers  for 27 


42  ES^DEX  TO  CONNECTICUT. 

DISSOLUTION:  Pa&e- 

of  joiut  stock  corporations,  proceedings  for -4 

for  failure  to  make  annual  statement iJ-t 

of  corporation,  on  petition  of  stockholders 33 

purchase  of  stock  of  petitioning  stockholders 33 

proceedings  terminated  upon  purchase   33 

receivers  appointed  in  proceedings   33 

DIVIDENDS: 

amount  which  may  be  declared   16 

when  not  to  be  declared  1 ' 

liability  of  officers    for  illegal 1'? 

liability  of  directors  for  declaration  of,  when  corporation  is  insolvent 23 

notice  of,  to  stockholders -4 

ELECTRIO  CORPORATIONS: 

organization  of   31 

EMPLOYE: 

wages  of,  not  to  be  withheld 10 

to  be  paid  weekly  10 

when  corporation  need  not  pay  weekly 11 

deductions,  when  not  to  be  made 11 

profits,  distribution  of,  to 17 

stockholders  to  consent  to  17 

health  of,  in  factories   32,  33 

blacklisting   prohibited    35 

EQUALIZATION: 

state  board  of,  to  determine  valuation  of  franchise  of  foreign  corporation 14 

EQUITY: 

of  redemption,  by  joint  stock  corporation  upon  stock  pledged 24 

EVIDENCE: 

certificate  of  organization  of  stock  corporations 8 

files,  records,  etc.,  of  corporations  may  be  introduced 8 

EXECUTION: 

shares  of  stock  and  profits  thereon  subject  to 7 

voluntary  association,  demand  made  on  presiding  officer 8 

levy  of,  on  shares  of  stock,  how  made 8 

levy  of,  dissolved  by  proceedings  for  appointment  of  receiver 32 

EXECUTORS.    (See  Administrator.) 

EXEMPTIONS  FROM  TAXATION: 

shares  of  stock,  when  entitled  to 25 

FACTORIES: 

preservation  of  health  of  employes  in 32,  33 

FEES: 

upon  application  by  foreign  corporation  for  charter 14 

payable  by  foreign  corporation  before  commencing  business 14 

to  be   in  lieu  of  taxes 14 

for  filing  certificates  of  joint  stock  corporation  in  office  of  secretary  of  state 24 

upon  introduction  of  bills  in  general  assembly  concerning  corporations 36 

FOREIGN  CORPORATIONS: 

actions  in  courts  of  justices  of  the  peace  against 6 

place  of  venue  of,  when  not  brought  in  justice's  court 7 

certificate  not  to  be  issued  before  payment  of  fees 14 

fees  paid  by,  in  lieu  of  taxes 14 

fee  upon  application  for  charter 14 

before  commencing  business  14 

franchise,  valuation  of,  how  determined  for  purpose  of  taxation 14 


mDEX  TO  CONNECTICUT.  43 

FOREIGN  CORPORATIONS— (Continued):  Page. 

taxation  of,  upon  increase  of  capital  stocli 27,  2H 

service  of  process  upon   32 

designation  of  person,  upon  whom  process  may  be  served 35 

to  be  filed  with  secretary  of  state 35 

FRANCHISE: 

usurpation  of,  by  corporation,  punishment  for,  by  quo  warranto 9 

of  foreign  corporation,  valuation  for  taxation 14 

of  foreign  corporations,  taxation  of,  upon  increase  of  capital  stock 27,  28 

GARNISHEE: 

corporation  as,  cited  to  disclose,  when  need  not  appear 9 

GENERAL  ASSEMBLY: 

reports  to,  when  made  17 

change  of  location  of  bank,  savings  bank,  trust  company  and  insurance  company  ....  17 

to  charter  electric  corporations 31 

fees  upon  introduction  of  bills  and  resolutions  concerning  corporations 36 

GUARDIAN: 

increase  of  capital  stock,  may  subscribe  for 27 

HEALTH: 

of  employes  in  factories   32,  33 

INCREASE: 

of  capital  stock  of  joint  stock  association 22 

twenty  per  cent,  to  be  paid  in 22 

certificate  of,  to  be  filed  22 

executors,  trustees,  etc.,  may  subscribe  for  stock 27 

INJUNCTION: 

ex  parte,  when  not  to  be  granted  against  stockholders 27 

INSOLVENT  CORPORATIONS: 

receivers  of,  to  file  statement  of  transactions 9 

rights,  powers  and  duties  of 9,  10 

dividends  by,  liability  of  directors  23 

INSURANCE  COMPANY: 

location  of  office  of,  how  changed 17 

taxation  of   25 

INVESTMENT  BROKER: 

certificate  of  authority   29 

tax  imposed  on  29 

INVESTMENT  COMPANIES: 

taxation  of   28,  30 

IRREGULARITIES: 

validating  certain,  by  corporation  31,  35,  36 

JOINT  STOCK  CORPORATIONS: 

articles  of  incorporation  1^ 

contents   of    IS'  ^^ 

shares  of,  amount   l'*^ 

name  1^ 

organized  for  what  purpose 1^ 

secretary  and  treasurer  to  be  residents 1^ 

majority  of  directors  to  be  residents 1^ 

first  meeting  of  ^^ 

stock,  must  be  all  subscribed  for -^ 

twenty  per  cent,  paid  in -^ 

property,  real  and  personal,  may  hold 22 

books  and  statements,  where  kept 22 

winding  up,  proceedings  for ~^ 


44  INDEX  TO  CONNECTICUT. 

JUSTICES  OF  THE  PEACE:  Tage. 

actions  against  corporations,  in  courts  of ^ 

LABORERS    (See  Employes): 

claims  preferred  5" 

LIABILITY: 

of  directors   for  declaring  dividends  Tvhen  corporation  is  insolvent 23 

of  officers,  for  failure  to  perform  duty 23 

of  directors  for  acquiring  stock  of  corporation  when  insolvent 32 

LIABILITIES  OF  CORPORATIONS: 

generally 12 

LIEN: 

upon  stock  of  stockholders  of  joint  stock  corporation 23 

sale  of  stock  under   23 

LIMITATION: 

of  real  estate  corporation's  right  to  issue  bonds 14 

LOANS: 

to  officers  and  directors  prohibited 27 

LOCK  OUTS: 

duties  of  state  board  of  mediation  and  arbitration  as  to 34 

MANDAMUS,  WRIT  OF: 

stockholder  may  apply  for,  against  corporation 9 

MECHANICS    (See  Employes): 

claims  preferred  37 

MEDIATION  AND  ARBITRATION,  STATE  BOARD  OF: 

appointment  of   34 

powers  and  duties  of,  in  strikes  and  lock  outs 34 

proceedings  before  34 

MEETINGS: 

special,  when  to  be  called  for  election  of  officers 14 

not  to  apply  to  abandoned  corporations 15 

stockholders  may  vote  at 15 

of  joint  stock  corporations,  first,  when  and  how  held 15 

notice  of  first,  to  be  published 19 

of  subsequent,  to  be  served  19 

organization  at  first  19,  20 

increase  or  reduction  of  capital  stock 22* 

of  stockholders,  for  acceptance  of  amendments  of  charter 13 

injunction  ex  parte,  against  stockholders,  not  to  be  granted  within  ten  days  before. .  .  27 

NAME:  , 

of  corporation  to  indicate  that  it  is  a  corporation 11 

of  joint  stock  corporation,  in  articles 19 

change  of,  proceedings  for 20 

OFFICERS: 

not  to  take  fees,  etc 10 

misappropriation  of  funds  by  10 

election  of,  power  to  determine  manner  of 11 

compensation  of,  power  to  fix 11 

special  meetings  for  election  of 14 

to  hold  until  successors  are  elected  14 

not  to  apply  to  abandoned  corporations 15 

illegal  dividends,  liability  for   17 

directors  to   elect    20  21 

liability  of,  for  failure  to  perform  duty 23 

examination  of,  for  discovery  of  papers,  etc 27 

loans  to,  prohibited o-r 


IXDEX  TO  COXXECTICUT.  45 

OMISSIONS:  Page, 

in  charters,   validating   31,  35,    36 

PATENT  RIGHTS: 

joint  stock  associations  may  hold 22 

PERSON: 

includes    corporation    6 

PERSONAL  ESTATE: 

annual  report  to  state  value  of 22 

PERSONAL  PROPERTY: 

corporation  may  receive,  purchase,  hold,  sell  and  convey 11 

amount  held  by  corporation  limited  by  charter 11 

voluntary  associations  may  hold,  etc 13 

PLACE  OF  BUSINESS: 

removal  of,  proceedings  for 22 

PLANK-ROAD  COMPANIES: 

taxation  of 25 

PLEADINGS: 

in  civil  actions,  charters   8 

PLEDGE: 

of  stock,  how  made  15 

of  stock,  upon  which  joint  stock  corporation  has  a  lien 24 

POWER  OF  ATTORNEY: 

for  transfer  of  stock 15 

for  voting  at  meetings   15 

bank  or  railroad  company  must  be  executed  within  year 15 

POWERS: 

of  corporations,  generally   11,     12 

PREFERENCE: 

of  claims  due  employes 37 

PREFERRED  STOCK: 

issue  of,  by  certain  corporations 30 

stockholders  to  authorize   30 

certificates  to  be  sworn  to  by  directors • 30 

articles  of  association  may  provide  for 31 

of  consolidated  corporations   31 

PRESIDENT: 

certificate  of  condition  to  be  rendered  annually 17 

refusal  or  neglect  to  render   17 

removal  of  place  of  business,  duties  as  to 22 

PROCESS: 

service  of,  against  corporations   7 

against  voluntary  associations   7 

PROFITS: 

distribution  of,  to  employes 17 

stockholders  to  consent  to 17 

PROPERTY: 

not  to  bo  taken  without  compensation 5 

PUBLIC  USE: 

property  not  to  be  taken  for,  without  compensation 5 

QUORUM: 

of  directors    15 

QUO  WARRANTO: 

corporation,  proceedings  against,  in  nature  of 9 

costs  in  proceedings    *• 

relator  to  give  bond '^ 

RAILROAD  COMPANY: 

power  of  attorney  to  vote  at  meetings ^^> 

14 


46  INDEX  TO  CONNECTICUT. 

REAL  ESTATE:  ^agp. 

corporation  may  receive,  purchase,  hold,  sell  and  convey 11 

amount  held  by  corporation  limited  by  charter 11 

voluntary  associations,  power  to  hold,  etc 13 

corporations  engaged  in  loaning  money  on,  limitation  of  right  to  issue  bonds 14 

annual  report  to  state  value  of 22 

conveyances  of,  by  corporations,  how  attested 24 

taxation  of,  belonging  to  corporations 25 

deductions  on  account  of 25 

joint  stock  associations  may  hold 22 

RECEIVERS: 

of  insolvent  corporations,  to  file  statement  of  transactions,  etc 9 

books,  papers  and  property 9 

may  sue  and  be  sued 9,  10 

demand  payment  of  debts 10 

powers  of  corporation,  to  possess 10 

winding  up  proceedings,  may  be  appointed 18 

in  proceedings  for  winding  up  joint  stock  corporation 24 

proceedings  for  appointment  of,  to  vacate  attachments,  etc 32 

appointment  of,  in  proceedings  for  dissolution  upon  complaint  of  stockholders 33 

subscriptions  to  capital  stock,  may  call  in 36 

claims  of  laborers  to  be  preferred 37 

REDUCTION: 

of  capital  stock,  when  impaired   17 

directors  to  require  return  of  certificates 17 

of  capital  stock  of  joint  stock  association 22 

certificate  of,  to  be  published  and  filed 22 

REMOVAL: 

of  place  of  business,  proceedings  for 22 

REPEAL: 

corporate  charters  subject  to,  by  assembly 13 

REPORTS: 

to  general  assembly,  when  made   17 

annual,  of  joint  stock  corporation  22 

to  be  filed 22 

contents  of   22 

dissolution  upon  failure  to  make  for  two  years 24 

SAVINGS  BANK    (See  Banks): 

location  of,  how  changed  17 

SEAL: 

corporation  may  have  a  common  11 

SECRETARY: 

of  corporation,  lists  of  creditors  and  schedule  of  debtors 6 

certificate  of  condition,  to  be  signed  by 17 

refusal  or  neglect  to  render 17 

stock  books,  to  permit  inspection  of 17 

election  of   20 

to  be  a  resident  of  state 21 

removal  of  place  of  business,  duties  as  to 22 

list  of  stockholders,  etc.,  to  be  returned  to  assessors 25 

of  persons  holding  stock  or  bonds  as  security 25i 

list  of  stockholders  residing  out  of  state  to  be  returned  to  comptroller 26 

penalty  for  failure  to  return 26 

payment  of  tax  on  account  of  foreign  stockholders 26 

lien  on  stock  for  26 


INDEX  TO  C0:N^KECTICUT.  47 

SERVICE:  ■  Page. 

of  process  against  corporations   7 

against  voluntary  associations   7 

upon  foreign  corporation  32 

person  designated  by  foreign  corporation  35 

by  advertisement,  upon  corporations 36 

STATEMENTS: 

of  joint  stoclv  association,  where  liept 22 

open  to  inspection  22 

STOCK: 

preferred    (See  Preferred  Stock): 

municipalities  not  to  subscribe  for 5 

attachment,  writ  of,  bow  executed 7 

dissolution  of   7 

execution  against  shares  of,  how  made 8 

sale  of,  under  levy  of  execution S 

capital  subscriptions  to,  when  refused ]4 

may  be  called  in    by  directors 15 

may  be  reduced  when  impaired 17 

must  all  be  subscribed  for 20 

twenty  per  cent,  paid  in   20 

increase  or  reduction  22 

twenty  per  cent,  of  increase  to  be  paid  in 22 

subscriptions  to,  may  be  called  in  by  receivers 36 

personal  property  15 

transfer  of,  on  books  of  company 15 

corporations,  lien  upon   15 

shares  of,  how  pledged  15 

tax  on  shares  of,  how  collected 16 

books,  to  be  open  to  inspection IT 

transfer  on  books  of  joint  corporation 23 

lien  upon,  for  stockholders'  debts 23 

sale  of  stock  under  23 

issue  of  new  certificates  to  purchasers 24 

when  stock  has  been  pledged  24 

taxation  of,  in  certain  corporations 25 

when  exempt   25 

deductions  on  account  of  real  estate 25 

amount  held  by  stockholders,  to  be  returned  to  assessors 25 

of  another  corporation  may  be  held 32 

corporation  may  acquire  its  own   32 

approval  of  stockholders  necessary  32 

STOCKHOLDER: 

writ  of  mandamus  by,  against  corporation 9 

acceptance  of  amendment  of  charter  by 13 

vote  of,  at  meetings   15 

by  power  of  attorney   15 

meetings  for  election  of  ofljcers,  when  may  call 15 

not  to  apply  to  abandoned  corporations 15 

subscriptions,  notice  to  pay 16 

stock  to  be  sold,  if  not  paid  for 16 

rights  and  liabilities  of   16 

reduction  of  capital  stock,  to  vote  upon  17 

winding  up,  application  for IS 

discontinuance  of  business,  vote  for 18 

application  to  court  upon 18 

directors,  election  of,  by   20 


48  INDEX  TO  COKNTECTICUT. 

STOCKHOLDERS— (Continued):  Page. 

amendiuc'ut  of  articles  by 21 

reduction  or  increase  of  capital  by 22 

liability  of,  if  insolvency  caused  by  reduction  of  stock 22 

annual  report  to  contain  names  of 22 

lien  upon  stock,  for  debts  due  joint  stock  company 23 

sale  of  stock,  for 23 

issue  of  new  certificates  to  purchaser  at  sale 24 

when  stock  has  been  pledged 24 

dividends,  notice  of,  to  24 

winding  up  joint  stock  corporation,  proceedings  for 24 

stock  exempt  from  taxation   25 

evasion  of  taxation  by   2o.  26 

false  statements  as  to  residence 26 

foreign,  names  of,  to  be  returned  to  comptroller 26 

tax  on  stock  of,  to  be  paid  26 

lien  on  stock,  for  payment  of  tax 26 

injunction  ex  parte,  when  not  to  be  granted 27 

preferred  stock,  to  authorize  issue  of 30 

approval  of,  for  corporation  to  acquire  its  own  stock 32 

dissolution  upon  complaint  of 33 

purchase  of  stock  of  complainants 33 

proceedings  terminated  by  purchase 33 

STRIKES: 

duties  of  state  board  of  mediation  and  arbitration  as  to 34 

SUBSCRIPTION: 

to  capital  stock,  when  may  be  refused 14 

directors  may  call  in   15 

notice  to  pay    16 

receivers  may  call  in   36 

TAX: 

on  shares  of  stock,  imposed  by  corporation  16 

TAXATION: 

transfer  of  stock  for  evading 25 

property  of  corporation  liable  to 25 

real  estate   liable  to 25 

where  assessed   25 

deductions  on  account  of,  owned  by  banking,  etc.,  corporations 25 

stock,  when  exempt 25 

of  stock  of  foreign  stockholders  26 

lien  on  stock  on  account  of 26 

upon  increase  of  capital  stock  of  foreign  corporation 27,  28 

of  investment  companies,  regulated  28,  30 

of  investment  brokers 29 

names  of  stockholders,  etc.,  to  be  returned  to  assessors 35,  36 

TAXES: 

fees  paid  by  foreign  corporation  in  lieu  of 1-i 

TOWN: 

stock  or  bonds  of  corporations,  not  to  purchase 5 

TOWN  CLERK: 

certificates  of  condition  to  be  lodged  with 17 

annual  report  of  joint  stock  corporation  to  be  filed  with 22 

TRANSFER: 

of  stock,  on  books  of  company  15 

when   pledged    15 

of  stock  of  joint  stock  corporations 23 

of  stock  for  evading  taxation   25 


LN^DEX  TO  C0KNT:CTICUT.  49 

TREASURER:  '  '  Page. 

election  of 21 

to  be  a  resident  of  state 21 

of  joint  stock  corporation  to  ^ive  notice  of  dividends 24 

TRUST  COMPANY: 

location  of,  how  changed   17 

taxation  of    25 

TRUSTEE: 

increase  of  capital  stock,  may  subscribe  for 27 

dividends  payable  to    -7 

TURNPIKE  COMPANIES: 

taxation   of    25 

VOLUNTARY  ASSOCIATION: 

service  of  process  against 7 

property  of,  may  be  attached  7 

demand  on  execution,  how  made 8 

organization    of    13 

real  and  personal  property,  may  hold,  etc 13 

by-laws,  adoption  of  13 

WAGES: 

not  to  be  withheld  because  of  agreement  to  give  notice 10 

to  be  paid  weekly   10,  11 

when  corporation  need  not  pay  weekly 11 

deduction  not  to  be  made,  for  earlier  payment 11 

WILL: 

notice  of  devise  or  bequest  in,  to  corporation 6 

WINDING  UP: 

of  corporations,  stockholders  may  apply  for 17,  18 

proceedings  therefor   1^ 

receivers  may  be  appointed IS 

powers  of  court   18 

of  joint  stock  corporations,  proceedings  for  24 

of  corporation,  on  petition  of  stockholders 3^^ 

termination  of  proceedings  by  purchase  of  stock 33 


DELAWARE 


TABLE  OF  CONTENTS. 


CONSTITUTIONAL  PROVISIONS.  Page. 

Art.  I.   Rill   of  rights -> 

^■III.   Revenue  and   taxation    5 

IX.  Corporations  5 

GENERAL  LAWS. 

TITLE  X.     OF   CORPORATIONS. 

Ch.  70.  General  provisions  7 

TITLE   XVI.     OF   CIVlIi  ACTIONS. 

Ch.    lOG.   Pleading  and  practice 2.3 

LEGISLATIVE  ACTS  ENACTED    SUBSEQUENTLY  TO   1893. 


DELAWARE. 


00]>fSTITUTTO]^  OF  DELAWAEE  -  1897. 


PROVISIONS  RELATING  TO  CORPORATIONS. 


ARTICLE  I. 

Bill   of   Rights. 

§  S.  No  persons  shall  etc.,  *  *  *  nor 
shall  :iny  man's  property  be  taken  or  applied 
to  public  use  without  the  consent  of  his 
representatives,  and  without  compensation 
being  made. 

ARTICLE  VIII. 

Revenue  and  Taxation. 

Section  1.  All  taxes  shall  be  uniform  upon 
the  same  class  of  subjects  within  the  terri- 
torial limits  of  the  authority  levying  the  tax, 
and  shall  be  levied  and  collected  under  gen- 
eral laws,  but  the  general  assembly  may  by 
general  laws  exempt  from  taxation  sxich 
property  as  in  the  opinion  of  the  general 
assembly  will  best  promote  the  piiblic  wel- 
fare. 

§  8.  No  county,  city,  town  or  other  mu- 
nicipality shall  lend  its  credit  or  appro- 
priate money  to,  or  assume  the  debt  of,  or 
become  a  shareholder  or  joint  owner  in  or 
with  any  private  corporation  or  any  person 
or  company  whatever. 

ARTICLE  IX. 

Corporations. 

Section  1.  No  corporation  shall  hereafter 
be  created,  amended,  renewed  or  revived  by 
special  act,  but  only  by  or  under  general 
law,  nor  shall  any  existing  corporate  char- 
ter be  amended,  renewed,  or  revived  by 
special  act.  but  only  by  or  under  general 
law;  but  the  foregoing  provisions  shall  not 
apply  to  municipal  corporations,  banks  or 
corporations  for  charitable,  penal,  reforma- 
tory, or  educational  purposes,  sustained  in 
whole  or  in  part  by  the  State.  The  general 
assembly  shall,  by  general  law,  provide  for 
the  revocation  or  forfeitures  of  the  charters 
of  all  coi-porations  for  the  abuse,  misuse  or 
non-user  of  their  corporate  powers,  privileges 
or  franchises.  Any  proceeding  for  such  re- 
vocation or  forfeiture  shall  be  taken  by  the 


attorney-general,  as  may  be  provided  by  law. 
No  general  incorporation  law,  nor  any  speeial 
act  of  incorporation,  sliall  be  enacted  with- 
out the  concurrence  of  two-thirds  of  all  the 
members  elected  to  each  house  of  the  gen- 
eral assembly. 

Orjjiinization  of  corporations.  Gen.  L.,  cli.  70, 
§  ."{.    General  powers.    Id.,  §  1. 

Corporation  continued  three  years  for  closing. 
Ch.  70,  §  4.  See  cli.  1.52,  vol.  14,  at  p.  9;  ch.  702, 
vol.  19,  at  p.  20;  General  Laws,  chs.  70  and  147. 

[How  far  the  legislature  is  restricted  from  pass- 
ing any  law  impairing  vested  rights,  or  altering 
the  charter  of  a  corporation.  See  Bailey  v.  U.  H. 
Co..  4  Harr.  .38!),  399-401.  410. 

The  right  of  the  legislature  to  bestow  on  cor- 
porations the  power  of  internal  regulation,  and 
the  power  of  corporations  to  receive  and  exercise 
such  power,  even  though  it  involve  legislative 
power  within  the  cori)orato  limits,  exists  at 
common  law,  and  are  recognized  by  the  Con- 
stitution.    Rice  V.  Foster,  4  Harr.  479i  50."?. 

The  power  of  the  legislature  to  revoke  cor- 
porate charters  is  reserved  by  the  Constitution 
and  need  not  be  expressed  in  the  charter.  U.  R. 
Co.  V.  Tharp,  5  Harr.  454.  45(i.  But  this  is  not 
an  arbitrary  power  in  the  legislature  to  re- 
voke charters  for  mere  whim  or  caprice,  but  only 
upon  cause.  Id.  Therefore  n  reservation,  ex- 
pressed in  a  charter,  of  the  power  of  revocation, 
"  on  conviction  of  misuse  or  abuse  of  privileges," 
is  a  constitutional  reservation.     Id. 

The  police  power  of  the  State  gives  the  legisla- 
ture power  to  regulate  the  exercise  of  the  cor- 
porate franchise  by  general  laws,  the  purpose  of 
which  is  to  secure  the  peace,  good  order,  health, 
welfare  and  comfort  of  society;  but  it  cannot,  un- 
der color  of  such  law,  destroy  or  impair  the  fran- 
chise itself,  nor  any  of  those  rights  and  powers 
which  are  essential  to  its  beneficial  exercise,  such 
as  restricting  the  right  of  a  railroad  to  adjust  Its 
tariff  or  charges.  R.  R.  Co.  v.  Bowers,  4  Houst. 
50G. 

Charters  of  corporations,  excepting  only  those 
which  are  strictly  civil  or  municipal,  are  within 
the  clause  of  the  United  States  Constitution 
which  declares  that  no  State  shall  pass  any  "  law 
impairing  the  obligation  of  contracts."  There- 
fore, any  act  of  the  legislature  which  abridges 
any  power  or  privilege  vested  by  the  charter 
wliich  is  material  to  the  beneficial  exercise  of  the 
franchise  granted,  without  the  reser\-ation  of  the 
right  to  pass  such  an  act.  and  without  the  con- 
sent of  the  corporation,  is  invalid  as  impairing 
the  obligation  of  contracts.  Id.;  Rice  v.  Foster. 
4  Harr.  479,  401,  492;  Bailey  v.  R.  R.  Co..  id. 
389,  399  et  seq.] 


DELAAVAEE. 


Corporations  —  Const.,  Art.  ix,  §§  2-6. 


§  2.  No  corporatiou  in  existence  at  the 
adoption  of  this  Con.stitution  shall  have  its 
charter  amended  or  renewed  without  first 
filing,  under  the  corporate  seal  of  said  corpo- 
ration, and  duly  attested,  in  the  otfice  of  the 
secretary  of  State,  an  acceptance  of  the  pro- 
visions of  this  Constitution. 

§  3.  No  corporation  shall  issue  stock,  ex- 
cept for  money  paid,  labor  done  or  personal 
property,  or  real  estate  or  leases  thereof  ac- 
tually acquired  by  such  corporation;  and 
neither  labor  nor  property  shall  be  received 
in  payment  of  stock  at  a  greater  price  than 
the  actual  value  at  the  time  the  said  labor 
was  done  or  pi-operty  delivered,  or  title  ac- 
quired. 

§  4.  The  rights,  privileges,  immunities  and 
estates  of  religions  societies  and  corporate 


bodies,  except  as  herein  otherwise  provided, 
shall  remain  as  if  the  Constitution  of  this 
State  had  not  been  altered. 

§  5.  No  foreign  corporation  shall  do  any 
business  in  this  State  through  or  by  branch 
offices,  agents  or  representatives  located  in 
this  State,  without  having  an  authorized 
agent  or  agents  in  the  State  upon  whom  le- 
gal process  may  be  served. 

See  Act  of  1897.   at   p.   25. 


§  G.  In  all  elections  for  directors  or  man- 
agers of  stock  corporations  each  shareholder 
shall  be  entitled  to  one  vote  for  each  share 
of  stock  he  may  hold. 


DELAWARE. 


Corporations;  suits  —  Gen.  LaAvs,  ch.  Ixx.   SS  1-G. 


GENERAL  LAWS-  1893. 


TITLE  X.     OP  CORPORATIOXS. 

CHAPTER  LXX. 

General    Provisions    Respecting    Corpora- 
tions. 

See.     1.  General  corporate  powers. 

2.  Powers  continued. 

3.  Mode  of  organizinjr. 

4.  All    charters    extended    three    years    for 

closing. 

5.  Bonds   of  corporate  officers  to   be   taken 

every  six  years. 

6.  Mode   of   suing  corporations.     Service   of 

process;  and  of  rule. 

7.  Service  of  process  on  officers  out  of  the 

State. 

8.  Notice  of  motions,  rules,  etc.,  service. 

9.  Franchise  of  toll   may  be  sold  for  debt. 

Notice  of  sale. 

10.  Mode  of  sale:   return;  title;  proviso. 

11.  May  be  attached  on  mesne  process. 

12.  Distress  for  damages  recovered. 

13.  Stock   held    in   a   corporation   may   be   at- 

tached for  debt.  Notice  of  sale  of 
such  stock. 

14.  Copy   of  the  process  to  be  left  with   the 

company.  Company  shall  certify  the 
shares  held. 

15.  Transfers    after    attachment    void.     Copy 

of  return  of  sale  transfers  the  title. 
No  order  of  sale  shall  be  made  before 
judgment. 

16.  Application  of  proceeds  of  sale. 

17.  "Where   proceedings    may    be    had.    Addi- 

tional acts. 

Section  1.  All  corporations  shall,  where  no 
other  provision  is  specially  made,  be  capable 
in  their  coriiorate  name  to  sue  and  be  sued, 
appear,  prosecute  and  defend  to  final  judg- 
ment and  execution,  in  all  courts,  or  else- 
where; to  have  a  common  seal  which  they 
may  alter  at  pleasure;  to  elect  necessary 
officers  and  define  their  duty  and  compensa- 
tion; to  make  by-laws,  consistent  with  the 
laws  of  this  State,  for  their  own  jjoverument 
and  the  management  of  their  property,  to 
hold  property,  real  and  personal,  for  the  pur- 
poses of  their  incorporation,  and  to  convey 
the  same. 

By-laws  may  provide  for  what.  §  2.  Bonds  of 
officers.  §  r>.  Mode  of  suing  corporations.  §  6. 
Service  of  process.  §§  6,  7.  Attachment  of  stock. 
§§  13-17.  Corporate  powers  enumerated.  See  ch. 
147,  vol.  17,  at  p.  9. 

§  2.  They  may,  if  no  other  provision  is 
specially  uiade.  determino  by  tlieir  by-laws, 
how  meetings  sliall  bo  called  and  conducted; 
how  many  shall  be  a  quorum;  tlie  number 
of  shares  tluit  shall  entitle  the  members  to 


one  or  more  votes;  the  mode  of  voting  bv 
proxy;  when  and  liow  shares  shall  be  sold 
for  non-payment  of  assessments,  and  may 
annex  suitable  penaUies  to  such  by-laws, 
liot  exceeding,  in  any  case,  twenty-five  dol- 
lars, for  any  offense. 

Meetings  of  corporations.  Ch.  147,  vol.  17,  §§  27^ 
28.     Elections,  how  conducted.     Id.,  §§  23-2G. 

§  3.  If  not  otherwise  provided,  the  first 
meeting  shall  be  called  by  one  or  more  of 
the  persons  named  in  the  act  of  incorpora- 
tion, of  the  time,  place  and  purposes  of 
which  meeting  ten  days'  notice  shall  be  given 
iu  a  newspaper  of  the  State;  or  in  case  of 
religious  societies,  by  advertisement  at  the 
front  door  of  their  usual  place  of  worship. 

Meetings.      See    ch.    147,    vol.    17,    §§    27,    28. 

§  4.  All  corporations  whose  charters  shall 
expire,  or  be  annulled,  shall  nevertheless 
continue  for  three  years  thereafter,  to  en- 
able them  to  close  their  concerns,  and  for 
all  other  purposes,  e.xcept  the  continuance 
of  the  business,  or  purpose  for  which  they 
were  created. 

Existence  limited  to  twenty  years.  Const.,  art. 
II,  §  17. 

§  5.  The  directors,  or  managers,  of  any 
bank,  or  corporation,  are  required  to  take 
from  each  officer  thereof  who,  by  the  charter, 
or  by-laws,  is  required  to  give  bond,  a  new 
bond  at  least  every  six  years,  so  that  the 
date  of  the  new  l)ond  shall  not  be  more 
than  six  years  after  the  date  of  the  bond 
immediately  preceding. 


Suits. 

§  6.  Suits  may  be  brought  against  any  cor- 
poration, at  law  by  summons,  and  by  sub- 
poena in  chancery.  Process  may  be  served 
on  the  president  or  head  officer,  if  residini: 
in  the  State,  and  if  not,  on  any  officer,  di- 
rector, or  manager  of  the  corporation;  and 
if  such  corporation  shall  appear,  the  suit 
shall  proceed  as  in  other  cases,  and  if  it 
shall  not  appear,  the  plaintiff  shall  have 
judgment  by  default,  or  pro  confesso  decree, 
service  of  the  process  being  first  proved.  In 
a  suit  upon  the  note  of  a  bank,  payable  at 
one  of  its  branches,  service  of  process  upon 


8 


DELAAVARE. 


Sale  of  frauehise;  attachment  —  Gen.  Laws,  cb.  Ixx,  §§  7-15. 


tbe  presideut,  or  cashier,  of  that  branch, 
shall  be  sufficient.  Copies  of  any  rules  of 
court,  notice,  proceeding,  or  order,  may  be 
served  in  tbe  same  way  as  original  process, 
or  upon  tbe  attorney  of  record. 

A  corporation  may  be  sued.  §  1,  ante;  ch.  147, 
vol.  17,  §  1  (II),  and  note.  Actions  not  to  abate. 
Id.,  §  40.  rieadings  and  practice.  Cb.  loO,  at  p. 
•J3.    Fraucbise  may  be  sold.    §  9,  post. 

§  7.  In  any  suit  against  a  corporation  whose 
otiicers  reside  out  of  the  State,  process  may 
be  served  by  publishing  tbe  substance 
thereof  in  a  newspaper  of  this  State,  and  of 
the  State  where  the  head  officer  resides, 
twenty  days  before  the  return  thereof,  and 
such  service  shall  be  sufficient. 

§  8.  In  respect  to  such  corporation,  ten  ! 
days'  notice  of  any  motion,  rule,  order,  or 
other  matter,  or  proceeding,  shall  be  suffi- 
cient. And  such  notice  may  be  served  per- 
sonally on  the  president,  or  any  director,  or 
manager,  or  on  the  attorney  of  said  corpora- 
tion, or  by  copy  of  the  rule,  or  other  matter, 
sent  by  mail  to  the  president,  or  head  officer, 
at  his  usual  place  of  abode,  or  by  publishing 
the  same  in  a  newspaper  near  thereto. 

Rules  of  practice.     See  cb.  106,  p.  23. 

Sale  of  Franchise. 

§  9.  AVhen  a  judgment  shall  be  recovered 
against  any  corporation  authorized  to  re- 
ceive toll,  the  franchise  of  such  corporation, 
with  all  the  rights  and  privileges  thereof,  so 
far  as  relates  to  the  receiving  of  toll,  as 
well  as  all  the  corporate  property,  real  and 
personal,  may  be  taken  in  execution  of  such 
judgment,  and  sold  at  public  vendue,  on  due 
notice  by  advertisement,  and  also  by  pub- 
lication in  a  newspaper  of  the  State.  Such 
sale  may  be  adjourned  from  time  to  time, 
not  exceeding  ten  days  at  any  one  time. 

Francbise  may  be  attached.     §  11,  post. 

§  10.  At  such  sale,  the  person  who  will  pay 
said  execution  and  all  legal  costs  and  ex- 
penses thereon,  and  take  the  said  franchise 
for  the  shortest  time,  shall  be  considered 
the  highest  bidder;  and  the  officer's  return 
to  the  execution,  shall  transfer  to  such  pur- 
chaser all  the  privileges  and  powers  which 
belonged  to  said  corporation,  so  far  as  re- 
lates to  the  right  of  taking  toll;  and  the  offi- 
cer selling  shall,  forthwith,  put  the  pur- 
chaser in  possession  of  all  toll-houses,  or 
gates,  belonging  to  the  corporation,  in  any 
county  of  the  State;  and  such  purchaser 
shall  be  entitled  to  demand  and  receive  all 
tolls  that  may  accrue  during  the  term  of  his 
purchase,  in  the  same  manner  as  the  cor- 
poration was  authorized  to  have  the  same; 
Provided,  That  the  corporation  shall,  in  all 
other  respects,  retain  the  powers  and  be  lia- 


ble to  tbe  duties  conferred,  or  imposed,  by 
their  ciiarter;  And  Provided  also.  That  said 
corporation  may,  within  three  months  from 
the  sale,  redeem  the  said  franchise  by  pay- 
ing to  the  purchaser  the  amount  paid  by 
him,  with  twelve  per  cent,  interest  thereon. 

Attached  on  Mesne  Process. 

S  11.  The  said  franchise  of  toll,  with  all  its 
rights  and  incidents,  shall  also  be  liable  to 
be  attached  on  mesne  process;  and  such  pro- 
cess shall  be  served  by  an  attested  copy, 
witli  the  officer's  return  thereon  being  left 
with  the  treasurer,  clerk,  or  some  director 
of  the  company,  thirty  days  before  the  re- 
turn day  thereof. 

§  12.  When  any  damages  shall  have  been 
assessed  against  a  corporation,  by  verdict, 
inquest,  or  otherwise,  for  injury  done  to 
property,  if  such  damages  shall  remain  un- 
paid for  one  mouth  after  the  final  accept- 
ance of  such  report,  or  verdict,  the  party  to 
whom  such  damages  are  assessed  shall,  on 
application,  be  entitled  to  a  warrant  of  dis- 
tress against  said  corporation  for  said  dam- 
ages, and  interest  thereon,  and  costs;  which 
warrant  may  be  executed  in  the  same  man- 
ner as  hereinbefore  provided  for  the  levying 
and  satisfaction  of  executions. 


Attachment  of  Stock. 

§  13.  The  shares  of  any  person  in  any  in- 
corporated company,  with  all  the  rights 
thereto  belonging,  may  be  attached  for  debt, 
or  other  demands;  and  so  many  of  said 
shares  may  be  sold  at  public  vendue,  to  the 
highest  bidder,  as  shall  be  sufficient  to 
satisfy  the  debt,  or  other  demand,  interest 
and  costs,  upon  an  order  issued  therefor  by 
the  court  from  Avhich  the  attachment  pro- 
cess issued,  and  after  such  notice  as  is  re- 
quired for  sales  upon  execution  process.  If 
the  debtor  lives  out  of  the  county,  a  copy 
of  the  advertisement  shall  also  be  forwarded 
by  mail  to  his  address  ten  days  before  the 
sale,  and  shall  be  published  in  a  newspaper 
printed  in  the  county  of  his  residence,  if 
there  be  anj\ 

See  §§  14-17,  and  ch.  90.  vol.  14,  at  p.  9.  Cor- 
poration subject  to  attachment  and  garnishment. 
See  ch.  182,  vol.  15,  at  p.  23. 

§  14.  When  stock  shall  be  so  attached,  a 
certified  copy  of  the  process  shall  be  left  by 
the  officer  with  the  president,  cashier,  or 
treasurer  of  the  company,  who  shall  give 
such  officer  a  certificate  of  the  number  of 
shares  held,  or  owned,  by  the  debtor  in  such 
company,  with  the  number,  or  other  marks, 
distinguishing  the  same,  anything  in  the 
charter,  or  by-laws  of  said  company,  to  the 
contrary  notwithstanding. 

§  15.  If  the  shares  of  stock,  or  any  of  them, 
be   sold    as   aforesaid,    any    assignment,    or 


DELAWARE. 


Attachment;  canuing  companies  —  Laws,  ch.  90,  v.  14,  ch.  152,  v.  14. 


trausfer  thereof,  by  the  debtor,  after  attach- 
ment so  laid,  shall  be  void;  and  if,  after  sale 
made  and  confirmed,  a  certified  copy  of  the 
order  of  sale  and  return  be  left  Avith  such 
president,  cashier,  or  treasurer,  the  purchaser 
shall  be  thereby  entitled  to  the  shares  so 
purchased,  and  all  income,  or  dividends. 
Avhich  may  have  been  declared,  or  become 
payable  thereon  since  the  attachment  laid; 
and  such  sale,  returned  and  confirmed,  shall 
transfer  the  shares  sold  to  the  purchaser,  as 
fully  as  if  the  debtor,  or  defendant,  had 
transferred  the  same  to  him  according  to  the 
charter  and  liy-laws  of  the  company;  any- 
thing in  said  charter,  or  by-laws,  to  the  con- 
trary notwithstanding;  Provided,  That  no 
order  of  sale  shall  be  issued  until  after  final 
judgment  shall  be  rendered  in  any  case. 

§  IG.  The  money  arising  from  the  sale  of 
such  shares  shall  be  supplied  and  paid,  by 
the  officer  receiving  the  same,  as  by  law'  is 
directed  as  to  the  sale  of  personal  property 
in  cases  of  attachment. 

§  17.  Any  proceedings  under  this  chapter 
may  be  had  in  any  county  in  which  eithe' 
the  creditor,  or  the  president,  cashier,  treas- 
urer, or  any  director  of  such  corporatiou 
may  reside,  or  in  which  there  mav  be  a  toll- 
house, or  gate,  of  such  company. 


ADDlTIONAIi   ACTS. 

To  decl.ire  certain  corporations  subject  to  at- 

tachmont  laws. 
Authorizing   incorporation   of    companies    for 

canning  purposes. 


Chapter  90,  Vol.   14. 

AN  ACT  concerning  corporations. 

Section  1.  That  all  corporations  (doing  busi- 
ness in)  this  State,  except  banks,  saving  in 
stitutions  and  loan  associations,  shall  be  and 
they  hereby  are  declared  subject  to  the 
State  of  Delaware,  as  already  provided  in 
the  case  of  individuals;  (but  insurance  com- 
panies shall  not  be  liable  to  attachment  ex- 
cept only  as  to  moneys  due  in  consequence 
of  the  happening  of  the  rislv  provided  for  in 
the  policy  of  insurance.^  and  said  corpora- 
tions shall  be  summoned  as  garnishee,  for 
which  purpose  service  of  the  summons  upon 
the  president,  treasurer,  cashier,  or  paying 
clerk,  as  provided  in  othe*:  attachment  cases, 
shall  be  sufl3cient  to  render  said  officers  and 
the  corporation  subject  to  all  the  liabilities 
provided  by  the  aforesaid  laws,  and  the  an- 
swer of  the  officers  so  served  with  attach- 
ment process  shall  be  enforced  in  the  same 
manner  as  is  now  provided  by  law  in  cases 
where  an  individual  was  summoned  as 
garnishee. 

(Passed  at  Dover,  March  23,  1S71.) 

See  ch.  70,  §§  13-17;  ch.  182.  vol.  15,  at  p.  23. 


Chapter  152,  Vol.  14. 

AN  ACT  authorizing  the  incorporation  of 
companies  for  canning,  manufacturing 
and  preparing  fruits  and  other  products  of 
the  State  for  sale. 

Section  1.  That  any  five  or  more  persons 
may  become  incorporated  for  the  purpose 
of  drying,  canning,  manufacturing  and  pre- 
paring fruits  and  other  products  of  the  State 
for  sale,  by  stating  their  corporate  name, 
amount  of  capital,  (which  shall  not  be  less 
than  ten  thousand  dollars,  nor  more  than 
one  hundred  thousand  dollars),  and  their 
principal  place  of  business,  and  certifying 
the  same  to  the  recorder  of  deeds  of  the 
county  where  such  place  of  business  is 
established. 

§  2.  That  all  corporations  thus  formed 
shall  be  subject  at  all  times  to  the  general 
provisions  of  the  laws  of  the  State,  appli- 
cable to  such  corporations. 

(Passed  at  Dover,  March  21,  1871.) 

Chapter  147,  Vol.   17,  Laws  of  Delaware. 
AN  ACT  concerning  private  corporations. 


Sec.    1. 
2 

3,'. 

4. 
5. 


10. 
11. 
12. 
13. 
14. 
15. 

16. 

17. 

18. 

19. 
20. 

21. 
22. 
23. 
24. 
25. 
26. 
27. 
28. 
29. 
30. 
31. 

32. 
33. 
34. 

35. 
36. 
37. 
38. 

39. 


Corporate  powers  enumerated. 

Applicable  to  all  future  corporations. 

Powers  not  conferred. 

Liability  of  stockholders. 

Additional  powers  to  corporations  organ- 
ized  to  reclaim   low   lands. 

Building  and  loan  association  may  sell 
accumulated  funds  at  a  premium. 

Certain  powers  withheld. 

This  act  applicable  to  all   corporations. 

Applicable  to  any  corporation  organized 
under  any  general   law. 

Who  may  become  incorporated. 

Certificate;  contents,  how  executed,  etc. 

Publication  and  filing  of  certificate. 

Certificate  as  evidence. 

When  incorporated;  proviso. 

Subsequent  corporations  may  exercise 
powers  herein  granted. 

Place  of  business  out  of  the  State;  pro- 
viso. 

Business,  how  and  by  whom  conducted. 
Oflicers,   how  chosen,  etc. 

Proxies;  notice  of  lirst  meeting;  increase 
of  stock. 

Assessments.     How  enforced. 

Certificate  of  olBcers  of  stock  paid  in; 
liability  of  oflicers. 

Dissolution;  duty  of  directors,  etc. 

List  of  stockholders,   how  kept. 

Elections,   how  conducted. 

Jurisdiction   of   superior   court. 

New  election  may  be  held. 

When   by-laws   regulating  elections  valid.  , 

Meetings.     Where  held. 

Meetings  other  than  legal,  how  called. 

What  constitutes  payment  of  stock. 

What  directors  may  purchase. 

Officers  liable  for  Issuing  false  certifi- 
cates or  notices. 

In  case  of  dissolution,  trustees'  powers. 

Trustees'   liabilities. 

Corporate  existence  continued  for  certain 
objects. 

Jurisdiction  of  the  chancellor. 

Same. 

Debts.     How  adjusted.     Distribution. 

Lien  for  wages.  "  Laborers,"  what  to 
include. 

Title  to  real  and  personal  estate.  In 
whom  vested. 


10 


DELAWARE. 


Corporate  powers  —  Laws,  ch.  147,  v,  17,  §  1. 


Sec.  40.  Civil  action  not  to  abate. 

41.  When  action  on  the  case  will  lie. 

42.  When  couiiiany  liable. 

43.  When    provisions    of    this    act    applicable 

to  existiufT  corporations. 

44.  How  time  of  charter  may  be  extended. 

45.  I'rovisions     relating    to     stockholders    in- 

clude members. 

46.  Secretary  of  State  to  collect  State  tax. 

Sectiou  1.  That  every  corporation,  as  such, 
shall  be  deemed  to  have  power: 

I.  To  have  succession,  by  its  corporate 
uaiue,  for  the  period  limited  in  its  charter 
or  certfficate  of  incorporation,  not  exceeding 
twenty  years,  and  when  no  period  is  limited, 
for  twenty  years,  except  corporations  created 
by  act  of  assembly  for  public  improvement; 

See  ch.  70.  §§  1,  2. 


II.  To  sue  and  be  sued,  complain  and  de- 
fend in  any  court  of  law  or  equity; 

Franchise   may    be    sold   on  execution.  Ch.    70, 

§§  9,   10.     And   attached.     §  11.     Mode  of  suing 

corporation.     Ch.  70,   §§  6-8.  See  §§  40,  41,  post, 
and  ch.  106,  p.  23. 

[Corporations  are  entitled  to  the  same  protection 
to  their  property  as  are  individuals.  Smyrna, 
etc.,  Co.  V.  Whilldin,  4  Harr.  228. 

Civil  corporations,  whether  public  or  private,  are 
subject  to  the  general  law  of  the  land,  and 
amenable  to  the  judicial  tribunal  for  the  proper 
exercise  of  their  powers.  State  v.  Citv,  3  Harr. 
294,  299. 

Assumpsit  will  He  against  a  corporation.  Wilson 
V.  Mfg.   Co.,  2  Harr.  67,  70. 

A  corporation  can  make  contracts  in  other 
States,  and  may  be  sued  by  service  on  its  agen- 
cies in  other  jurisdictions.  Derringer's  Admr.  v. 
Derringer's  Admr.,  5  Houst.  416,  431. 

Where  the  pi-esident  of  a  corporation  which 
has  no  seal,  executes  articles  of  agreement  as 
president,  under  his  hand,  and  a  common  scroll 
for  a  seal,  covenant  will  lie  neither  against  him 
personally  nor  against  the  company.  McCaulley 
v.  Jenney,  5  Houst.  32.  But  if  it  was  done  with 
the  sanction  and  consent  of  the  company,  the 
company  might  be  liable  in  another  form  of  ac- 
tion.    Id. 

Trover  will  He  for  a  corporate  certificate  of 
stock  in  an  incorporated  company.  Stewart  v. 
Bright,   6  Houst.  344  et  seq. 

No  action  will  lie  on  a  stock  subscription,  where 
the  terms  of  the  subscription  contain  no  promise 
to  pay,  and  the  charter  only  authorizes  a  for- 
feiture of  stock  for  non-paj-ment.  Odd  Fellows, 
etc.  V.   Glazier,   o  Harr.   172  et  seq. 

A  corporation  cannot  be  summoned  as  a  gar- 
nishee. Holland  v.  Leslie,  2  Harr.  306.  When 
a  corporation  holds  money  belonging  to  an  indi- 
vidual, a  creditor  of  the  latter  might,  perhaps. 
«  go  into  equity  and  stop  the  money  in  the  hands 
of  the  corporation,  if  there  is  insolvency  and  dan- 
ger of  losing  the  money.     Id. 

Corporation  books  are  evidence  in  a  suit  be- 
tween the  company  and  a  corporator.  Jefferson 
V.  Stewart,  4  Harr.  82. 

The  by-laws  of  a  corporation  are  evidence  to 
show  the  liability  of  its  officers,  though  they  be 
not  members  of  the  corporation.  Bank  v.  Wol- 
laston,  3  Harr.  90. 

The  court  cannot  presume  a  by-law  of  a  cor- 
poration, although  ujion  an  issue  of  fact  depend- 
ing before  them  they  may  instruct  the  jury  to 
find  one,  upon  evidence  of  long  and  ancient  usage. 
State  v.    City.   3  Harr.   294   (3001. 

A  corporation  created  by  statute  in  another 
State  to  administer  on  the  estate  of  deceased 
persons   in   that   State,   having  done   so,   may   sue 


as  such  administrator  in  the  courts  of  this  State 
for  a  debt  due  the  decedent  in  this  State.  Der- 
ringer's Admr.  v.  Derringer's  Admr.,  5  Houst.  416 
(423). 

In  an  indictment  for  larceny,  where  the  owner- 
ship of  the  property  is  in  an  incorporated  com- 
pany, it  need  not  be  averred  that  such  company 
was  a  corporation  in  this  State,  nor  proof  made 
by  the  production  of  its  charter  or  a  legal  cop3' 
thereof  that  it  was  such  at  the  time  the  offense 
was  alleged  to  have  been  committed.  State  v. 
Fitzpatrick,  9  Del.  385;  s.  c,  32  Atl.  Rep.  1072.] 


III.  To  make  and  use  a  common  seal,  and 
alter  the  same  at  pleasure; 

[A  seal  is  no  more  necessary  to  render  valid  the 
act  and  contract  of  a  corporation,  than  it  would  be 
in  the  case  of  an  individual;  and  where  the  latter 
would  be  bound  without  a  seal,  so  will  the  cor- 
poration. Derringer's  Admr.  v.  Derringer's  Admr., 
5  Houst.  410  (427);  Bancroft  v.  Wil.  Conf.  Acad., 
id.  577  (579  et  seq.);  Vandergrift  v.  R.  R.  Co.,  2 
id.   287  (298). 

No  words  of  intestimonium,  nor  any  words  re- 
ferring to  the  seal  at  all,  are  necessary  to  the 
validitv  of  an  instrument  under  seal  of  a  cor- 
poration.    Conine  v.  R.  R.  Co.,  3  Houst.  288  (298). 

When  the  common  seal  of  a  corporation  ap- 
pears to  be  aflixed  to  an  instrument,  and  the 
signature  of  a  proper  officer  is  proved  or  admitted, 
tins  is  prima  facie  evidence  that  the  seal  was 
affixed  with  proper  authority;  and,  although  it 
may  be  controverted,  the  burden  of  proof  rests 
on  the  partv  objecting  to  it.  Conine  v.  R.  R. 
Co.,  3  Houst.  288  (290,  297). 

In  an  action  of  covenant  against  a  corporation 
a  contract  made  and  executed  by  a  committee  of 
the  board  of  directors,  but  not  under  the  cor- 
porate seal,  is  not  evidence,  although  the  con- 
tract was  actuallv  recognized  and  acted  upon  b.v 
the  company.  Randel  v.  Canal  Co.,  1  Harr.  2.33 
(285).] 

IV.  To  hold,  purchase  and  convey  such 
real  and  personal  estate  as  the  puiijoses  of 
the  corporation  shall  require,  not  exceeding 
the  amount  limited  in  its  charter,  and  all 
other  real  estate  Avhich  shall  have  been  bona 
fide  mortgaged  to  the  said  company  by  way 
of  security,  or  conveyed  to  them  in  satis- 
faction of  debts  previously  contracted  in  the 
course  of  dealings,  or  purchased  at  sales 
upon  judgments  or  decree  which  shall  be 
obtained  for  such  debts;  and  to  mortgage 
any  sucli  real  or  personal  estate  with  tlieir 
franchises;  the  power  to  hold  real  and  per- 
sonal estate  shall  include  the  power  to  take 
the  same  by  devise  or  beqtiest,  excepting 
when  the  same  is  forliidden  by  law  in  certain 
cases;  Provided,  however,  That  nothing 
herein  contained  shall  prohibit  manufactur- 
ing or  trading  corporations  from  accom- 
modating their  customers  by  making  pay- 
ments or  disbursements  out  of  any  sum  of 
nionej'  received  from  such  customers; 

V.  To  appoint  such  subordinate  officers 
and  agents  as  the  business  of  the  corpora- 
tion shall  require,  and  to  allow  them  a 
suitable  compensation; 

[Notice  to,  or  knowledge  of,  the  authorized 
officer  or  agent  of  a  corporation,  binds  the  prin- 
cipal.     Bank   v.   Tweed,    4    Houst.    225   (2.32). 

A  corporation  is  bound  by  the  acts  of  its  agents 
within  scope  of  his  autliority.  Richardson  v. 
Lonn  Assn..  9  Del.  .3.54;  s.  c,  .32  Atl.  Rep.  9.80. 
And    also   by   acts   without   the   scope   of   this   au- 


DELAWARE. 


11 


Corporate  power;  drainage  —  Id.,  §§  2-5. 


thority,    if  such   acts  be   in   any   way   recognized 
by  the  corporation  as  valid.    Id.] 


VI.  To  make  by-laws  not  inconsistent  with 
the  Constitution  or  laws  of  the  United  States 
or  of  this  State,  fixing  and  altering  the  num- 
ber of  its  directors  for  the  management  of 
its  property,  the  regulation  and  government 
of  its  affairs,  and  for  the  certification  and 
transfer  of  its  stock,  with  penalties  for  the 
breach  thereof  not  exceeding  twenty  doUai's; 

See  §  26,  post. 

[Tlie  by-laws  of  a  corporation  are  evidence  to 
show  liability  of  its  ofHcprs,  though  they  be  not 
members  of  the  corporation.  Bank  v.  Wollaston, 
3  Harr.  90.  The  court  cannot  prosume  a  by-law 
of  a  corporation,  although  upon  an  issue  of  fact 
depending  before  them  they  may  instruct  the 
jury  to  find  one,  upon  evidence  of  long  and  an- 
cient usage.     State  v.  City.  3  Harr.  204  (300).] 


YII.  To  wind  up  and  dissolve  itself,  or  be 
•\round  up  and  dissolved  in  the  manner  here- 
after mentioned. 

See  §§  21    and  32  et  seq.,  of  this  act. 

[Upon  thp  expiration  of  the  period  of  its  charter, 
a  corporation  becomes  absolutely  dissolved,  and 
not  merely  dormant:  its  real  estate  reverts  to  the 
grantor,  its  personal  estate  vests  in  the  people, 
and  the  debts  to  and  from  the  corporation  be- 
come extinguished;  nor  will  those  debts  be  re- 
vived by  a  legislative  enactment  reviving  the  ex- 
tinct corporation.  Bank  v.  Lockwood's  Admr.,  2 
Harr.  8.] 


§  2.  The  powers  enumerated  in  the  pre- 
ceding section  shall  vest  in  every  corpora- 
tion that  shall  hereafter  be  created,  although 
they  may  not  be  specified  in  its  charter,  or 
in  the  act  or  certificate  under  which  it  shall 
be  incorporated.  In  addition  to  the  powers 
enumerated  in  the  first  section  of  this  act, 
and  to  those  expressly  given  in  its  charter, 
no  corporation  shall  possess  or  exercise  any 
corporate  powers  except  such  as  shall  be 
necessary  to  the  exercise  of  the  powers  so 
enumerated  and  given. 


See  ch.  VO.  S§  1, 


See  §§  5-7,  post. 


[A  corporation  cannot,  in  general,  make  any 
contract  which  is  not  necessar.v,  directly  or  in- 
cidentally, for  the  objects  of  Its  corporation;  but 
\1  may  make  any  contract,  either  as  principal  or 
surety,  proper  to  the  ordinary  means  of  carry- 
ing on  its  business.  Derringer's  Admr.  v.  Der- 
ringer's Admr.,  5  Houst.  410  (428).] 


§  3.  No  corporation  created  imder  this  act 
shall,  by  any  implication  or  construction,  be 
deemed  to  possess  the  power  of  discounting 
bills,  notes,  or  other  evidences  of  debt,  or 
receiving  deposits,  of  buying  gold  or  silver 
bullion,  or  foreign  coins,  of  buying  and 
selling  bills  of  exchange,  or  of  issuing  bills, 
notes,  or  other  evidences  of  debt  upon  loan 
for  circulation  as  money. 

§  4.  "When  the  whole  capital  stock  of  a 
corporation  shall  not  have  been  paid  in,  and 

15 


the  capital  paid  shall  be  insufBcient  to  satisfy 
the  claims  of  fts  creditors,  each  stockholder 
shall  be  bound  to  pay  on  each  share  held  by 
him  the  sum  necessary  to  complete  the 
amount  of  such  share,  as  fixed  by  the  charter 
of  the  company  or  its  certificate  of  incorpo- 
ration, or  such  proportion  of  that  sum  as 
shall  be  required  to  satisfy  the  debts  of  the 
companj-. 

Stork  may  be  attached  and  sold.  Ch.  70, 
§§  13-17.     Dividends.     S  7,  post. 

[An  action  of  indebitatus  assumpsit  will  lie  at 
the  suit  of  a  subscriber  to  the  capital  stock  of  a 
corporation,  when.  Taylor  v.  Jackson,  5  TInimt. 
224  (230  et  seq.).] 


§  .5.  Any  companj'  created  under  this  act 
for  the  drainage  of  low  lands  shall,  in  ad- 
dition to  other  powers  conferred  by  this  act, 
have  power,  for  the  purpose  of  the  reclama- 
tion of  low  lands  by  ditching,  draining  and 
bringing  them  into  cultivation,  to  enter  upon 
any  lauds  that,  in  the  opinion  of  the  directors 
or  mana.jrers,  will  be  benefited  by  the  opera- 
tions to  be  iierformed  by  the  company,  and 
with  their  worlcmen,  laborers,  teams,  etc.,  to 
cut  and  malce,  and  when  made,  from  time 
to   time,    to   clear  out   and   scour   all   such 
ditches  or  drains  as  in  the  opinion  of  such 
directors  or  managers  shall  be  necessary  for 
effectually  draining  and  reclaiming  the  said 
lands.     Before  taking  any  steps,  however,  to 
accomplish  the  ends  of  its  incorporation,  the 
said    company   shall    apply   to    the   superior 
court  for  the  appointment  of  commissioners 
to  go  upon  the  land  through,  along  or  across 
which  the  ditches  of  the  said  company  are 
proposed  to  be  cut,  and  view  the  same  and 
determine  whether  any  or  which   of  them 
will  be  benefited  by  the  same,  and  to  make 
a  return  of  their  proceedings  in  the  premises 
to  the  recorder,  with  a   survey  of  the  pro- 
posed ditches,  showing  their  course,  and  the 
lands,  by  cener.il  designation  through,  along 
or  across   which    they   will   run   and   to   be 
benefited  thereby,  and  the  probable  cost  of 
making  the  improvements.    They  shall  also 
relurn  a  valuation  of  the  several  parcels  of 
land  to  be  benefited  b.v  such  improvements. 
Should  there  be  upon  the  lines  of  the  com- 
pany's  works  any  lands  through,  along  or 
across   which   the   ditches   are   to   be   made 
that  will  be  injured  by  the  making  of  them, 
they  shall  estimate  such  damage  in  money, 
and  the  same  shall  be  paid  to  the  owner,  or, 
in  case  of  his  refusal  to  receive  it,  or  ab- 
.sence  from  the  State,  or  inability  by  reason 
of  legal  disability,   it  shall  be  deposited  to 
his   credit   in    the   Farmers'    Bank,    or   that 
branch  thereof  at  the  county  seat,  before  the 
company  shall  have  any  right  to  construct 
or  make  their  works  through  such  land.   The 
return   of  tlie   commissioners   shall   be   final 
and  conclusive  upon  all  parties,  and  shall  be 
the  basis  upon  which  tlie  taxes  of  the  coiu- 
I)any  are  to  be  laid.     It  shall  continue  until 
a  majority  of  the  taxables  demand  a  new 


12 


DELAAVARE. 


Drainage;  dividends  —  Id.,  §§  6,  7. 


one,  proceedings  for  which  sliall  be  lalvcu  in 
the  said  court  by  petition,  and  the  prayer  of 
the  petition  frranted  if  in  tlie  opinion  of  the 
court   such    new   valuation    is   proper  to  be 
made  at  the  time.    Before  any  commissions 
appointed  under  this  .section  proceed  to  act 
they   shall   be   sworn   or  attirmed.   before  a 
justice  of  the  peace,  to  perform  the  duties 
of  their  appointment    with    fidelity,    w-hich 
qualification  must  be  certified  upon  their  re- 
turn.   When  record  is  made  of  the  return, 
the  original  shall  be  delivered  over  to  the 
company,  and  it,  or  the  records,  or  any  office 
copy  of  the  latter,  shall  be  evidence.     The 
commissioners    shall    be    each    paid    by    the 
company  two  dollars  for  each  day  employed 
by  them'  under  this  a<'t.  and  the  surveyor  for 
his   survey    and    plot    (Including   fee   of   one 
<lollar  and  fifty  cents  each  per  day  to  the 
chain-carriers)  such  sura  as  the  commission- 
frs  may  deem  just;  and  this  money  shall  be 
paid  before  tlie  commissioners  shall  be  re- 
quired to  make  any  return.    The  recorder's 
fee  shall  also  be  paid  to  him  at  the  time  of 
the  delivery  over  by  him  of  the  said  return. 
Whatever  money  the  company  may  find  it 
necessary   to   raise    for    cutting:   the    ditches 
(including  the  expenses  in  this  section  pro- 
vided for.")  and  for  keeping:  the  same  open 
and  in  repair,  shall,  from  time  to  time,  as 
the  exigency   may  require,  be  collected  by 
taxation  of  the  owners,    accordinsr    to    the 
nature  of  their  property  to  be  benefited;  to 
provide  for  which  the  managers  shall  make 
an  estimate  of  the  money  to  be  raised  and  I 
apportion    it    among   the   said    owners;   and 
they  shall  at  once  give  notice,  under  their  i 
haiids.  of  a  meeting  of  said  owners,  to  be 
held  at  some  convenient  place,  to  consider 
the  said  apportionment.       At   said  meeting 
any  oAvner  shall  have  the  right  to  be  present 
and  object  to  the  justice  of  the  same  in  his 
case.    The  managers  shall,   at  the  close  of 
the  nie<:»ting  (which  shall  be  kept  open  three 
hours),   reconsider  their  apportionment  and 
alter  the  same  if  they  deem  It  expedient  so 
to  do.     Such  reconsideration  shall  be  final, 
and  then  they  shall  make  a  copy  of  the  ap- 
portionment "under  their  hands,  and  deliver 
the   same  to   the   treasurer;    and   when  the 
company  orders  money  to  be  collected  for 
its  necessary  purposes,  the  treasurer  shall, 
upon  receiving  their  warrant  in  writing,  pro- 
ceed to  collect  the  same  from  the  respective 
owners,    according    to    such    apportionment, 
and  for  that  purpose  shall  have  all  the  pow- 
ers of  a  collector  of  county  taxes.    The  ap- 
portionment shall  have  duration  for  the  same 
time  as  the  valuation  by  the  commissioners, 
and    taxes    may,    from    time    to    time,    be 
collected  according  to  it,  as  the  needs  of  the 
company  may  reqiiire.     Orders  for  collection 
however  only  to  be  valid  when  made  by  the 
company  at  an  annual  meeting.     In  case  of 
private    oAvners  of   a  ditch   or  ditches    not 
within  the  company's  limits,  but  the  waters 
collected   in   which   can   be  discharged    into 
the  ditches  of  the    company,    such    private 


OAvners  may  bo  allowed  to  connect  with  the 
works  of  the  company  on  such  terms  as  the 
hitter  may  prescribe,  and  may  thenceforth 
become  constituent  members  of  said  com- 
pany, with  the  rights  of  such  members,  and 
subject  as  to  themselves  and  their  lands 
drained  by  such  private  ditch  or  ditches,  to 
all  tlie  burdens  and  responsibilities  of  otlier 
memliers  or  owners;  and  the  members  shall, 
at  once,  add  their  lands  to  the  other  lands 
within  the  conq)any"s  operations,  and  ap- 
IHMtion  their  shares  of  the  taxes  among  them 
as  above  ]u-ovided  with  respect  to  original 
oAvners.  The  managers  shall  take  account 
of  all  changes  of  oAvuership  of  lauds  Avithin 
the  company's  limits  from  whatever  cause, 
and  substitute  the  names  of  the  new  owners 
in  lieu  of  the  old  ones  upon  their  original 
iipportionment,  from  Avhich  they  shall  be 
transferred  to  the  copy  in  the  hands  of  the 
treasurer,  and  when  transferred  the  new 
owners  shall  stand  in  the  place  of  the  old, 
in  all  respects  as  if  they  had  been  original 
owners.  Such  companies  as  are  provided  for 
in  this  section  shall  set  forth  the  name  of  the 
hundred  or  hundreds  in  AAhich  their  opera- 
tions are  to  extend  in  the  certificate  of  their 
incorporation. 

§  r>.  Any  building  or  building  and  loan  as- 
sociation   created    under    this  act  shall,   in 
addition  to  the  other  powers  herein  granted, 
have  power  to  sell  its  accumulated  funds  to 
and  among  its  stockholders  at  any  premium 
which  may  be  obtained  for  the  same,   and 
I  when  such  funds  cannot  be  loaned  to  any 
1  stockholder  at  par  they  may  be  loaned  to 
I  any  pei'son  not  a  stockholder  at  any  rate  of 
interest  not  exceeding  six  per  cent. 

See  Act  of  April   11,   1S0.3.   at  p.  20. 


§  7.  It  shall  not  be  lawful  for  the  directors 
of  any  liank  or  moneyed  or  manufacturing 
corporation  in  this  State,  or  any  corporation 
created  under  this  act,  to  make  dividends, 
except  from  the  surjilus  or  net  profits  arising 
from  the  business  of  the  corporation,  nor  to 
divide,  withdraw,  or  in  any  way  pay  to  the 
stoclvholders,  or  any  of  them,  any  part  of 
the  capital  stock  of  the  said  corporation,  or 
to  reduce  the  said  capital  stock,  except  ac- 
cording to  this  act,  without  the  consent  of 
the  legislature;  and.  in  case  of  any  violation 
of  the  proA'isions  of  this  section,  the  di- 
rectors, under  whose  administration  the 
same  may  happen,  shall,  in  their  individual 
capacities,  jointly  and  severally,  be  liable  at 
any  time  within  the  period  of  six  years  after 
paying  any  such  dividends  to  the  said  cor- 
poration, and  to  the  creditors  thereof  in  the 
event  of  its  dissolution  or  insoh'ency,  to  the 
full  amount  of  the  dJAideud  made  or  capital 
stock  so  divided.  Avithdrawn.  paid  out  or  re- 
duced, with  legal  interest  on  the  same  from 
tho.  time  such  liability  accrued;  Provided, 
That  any  of  the  said  directors  who  may 
have  been  absent  when  the  same  was  done, 
or  who  may  have  dissented  from  the  act  or 


DELAWAEE. 


13 


Corporate  powers;  certificate  of  iucorporation  —  Id.,  §§  8-11. 


resoluTiiiu  by  which  the  same  was  clone,  may 
respectively  exonerate  tliemselves  from  such 
liability  by  causing  their  dissent  to  be  en- 
tered at  large  on  the  minutes  of  the  said 
directors  at  the  time  the  same  is  done,  or 
fortliwith  after  they  shall  have  notice  of  the 
same,  and  by  causing  a  true  copy  of  the  dis- 
sent so  entered  on  the  minutes  to  be  pub- 
lished within  two  weelcs  after  the  same  shall 
have  been  entered  on  said  mintites,  in  some 
public  newspaper  published  in  tlie  county 
where  the  said  corporation  has  its  principal 
office  or  place  of  business,  and  if  none  be 
published  in  said  county,  then  in  a  news- 
paper printed  in  an  adjoining  county  and 
circidating  in  the  neighborliood  of  such 
office  or  i)lace  of  business  of  said  corporation; 
And  Provided,  also,  That  this  section  shall 
not  be  construed  to  prevent  a  division  and 
distribution  of  the  capital  stock  of  the  cor- 
poration which  shall  remain  after  the  pay- 
ment of  all  its  debts  upon  the  dissolution  of 
the  corporation  or  the  expiration  of  its 
charter. 

§  S.  If  any  act  shall  hereafter  be  passed  by 
the  legislature  of  this  State  which  shall 
create  any  corporation,  such  corporation 
shall  Immediately  l>e  vested  with  and  pos- 
sessed of  all  powers  in  this  act  specified  and 
set  forth,  subject  to  all  provisions  therein 
contained,  unless  such  special  act  incorpo- 
rating the  same  shall  otherwise,  in  whole  or 
in  part,  direct  to  the  contrary. 

See  Const.,  art.   II,   5   17,   note. 

[A  mere  act  of  Inoorpor.ation  cannot  of  itself 
create  an  existing  corporation;  it  must  afterward 
be  orsr.anized  and  established,  in  order  to  give  it 
any  life  as  a  corporation.  R.  R.  Co.  v.  R.  R.  Co., 
5  Houst.  127  (132.  133). 

An  express  acceptance  of  an  act  of  incorpora- 
tion is  not  essential  to  the  corporate  existence  un- 
less reciuired  by  the  act  itself.  An  acceptance  or 
concurrence  must  exist,  but  it  will  be  implied 
from  the  fact  of  seeking  corporate  existence  and 
the  exercise  of  corporate  jiowers.  Logan  v.  Mc- 
Allister, 2  Del.   Ch.   176  (180).] 


§  9.  Any  corporation  organized  under  any 
general  law  of  the  legislature,  now  or  here- 
after to  be  passed,  shall,  in  addition  to  the 
powers  and  restrictions  tliereon  to  which  it 
may  become  subject,  or  of  which  it  shall  be 
possessed  by  virtue  of  its  organization  and 
tlie  act  authorizing  the  same,  be  additionally 
possessed  of  all  the  powers,  and  be  suliject 
to  all  restrictions  thereon  in  this  act  con- 
tained, so  far  as  the  same  are  consistent 
with  the  act  under  which  it  may  as  afore- 
said be  organized. 

§  10.  It  shall  be  lawful  for  three  or  more 
persons  to  becoiue  incon:>orated  under  the 
provisions  of  this  act  for  purpose  of  carry- 
ing on  any  manufacturing  l)uslness,  for  the 
business  of  preserving  animal  and  vegetable 
food,  for  draining  low  lauds,  for  l)uildiug 
and  loan  associations,  (for  homestead  com- 
panies  to  be  operated  under  the   Caldwell 


system),    or    for    religious,    charitable    and 
literarj'  purposes. 

See  Const.,  art.  II,  §  17;  and  ch.  70,  §  4.  Mode 
of  incorporating.     §§  11  et  seq.,  of  this  chapter. 

§  11.  The  certificate  of  incorporation  shall 
set  fortli: 

I.  Tlie  corporate  name; 

II.  The  oljject  of  the  incorporation  and  the 
location  of  the  principal  place  of  business, 
if  it  be  for  business  purposes; 

j  III.  The  amount  of  capital  stock,  the  nura- 
'  ber  and  par  value  of  shares,  and  the  amount 
to  be  paid  in  before  commencing  business, 
which  shall  not  be  less  than  ten  per  cent,  of 
tlie  whole  capital.  This  shall  not  apply  to 
religious,  cliaritable  and  literary  corpora- 
tions, unless  it  be  desired  to  have  a  capital 
stock.  In  case  of  such  corporations  the  elec- 
tion not  to  have  a  capital  stock  shall  be 
stated  in  lieu  of  the  amount  thereof,  and  the 
conditions  of  membership  shall  also  be 
stated: 

IV.  The  name  and  residence  of  the  original 
subscribers  to  the  capital  stock,  or,  if  there 
be  no  stock,  of  tlie  original  corporators; 

V.  The  periods  at  which  the  corporation 
shall  coiumence  and  terminate,  not  exceed- 
ing twenty  years; 

VI.  The  value  of  real  and  personal  estate 
of  which  the  corporation  may  become  seized 
and  possessed. 

The  certificate  may  also  contain  any  limi- 
tation upon  the  powers  of  the  corporation, 
the  directors,  and  the  stockholders,  which 
luay  be  desired  by  the  parties  signing  the 
same;  Provided  such  limitation  does  not  at- 
tempt to  exempt  the  corporation,  the  di- 
rectors, or  the  stockholders  from  the  per- 
formance of  any  duty  imposed  by  this  act 
or  any  law  of  this  State. 

The  certificate  shall  be  signed  by  the 
original  coiiwrators,  or  a  majority  of  them, 
and  shall  be  aclcnowledged,  before  any  offi- 
cer authorized  by  the  laws  of  this  State  to 
take  acknowledgments  of  deeds,  to  be  the 
act  and  deed  of  the  signers,  respectively, 
and  that  the  facts  therein  stated  are  truly 
set  forth. 

Amendments  and  alterations  of  the  original 
certificate  may  be  made  by  a  supplemental 
ccrtlfi(•atc^  presented,  aiiproved,  filed  and  re- 
corded In  tiie  same  manner  in  every  respect 
as  is  i^rovided  in  reference  to  the  original 
certificate. 

Powers.     Ch.  70,  §  1;  ch.  147.  §  1. 

[An  amendment  or  supplement  to  the  charter  of 
a  compan.v  is  not  an  act  of  incorporation,  and 
hence  does  not  require  the  concurrence  of  both 
branches  of  the  legislature,  unless  the  act  con- 
fers additional  rights  and  franchises  of  a  cor- 
porate nature,  or  confirms  rights  already  existing 
in  the  company.     I'.ailey  v.  R.   R.  Co..  4  Ilarr.  .^St). 

It  is  well  settled  that  tlie  legislature  can  bind 
the  State  by  a  provision  in  the  charter  of  a  cor- 
poration,   not   to   tax   for  a   given    time   the   fran- 


14 


DELAWAKE. 


Certilitato  of  iuroriiuiation;  directors;  ofliccrs  —  Id.,  §§  12-17. 


ohises  or  property  of  such  corporation,  further 
than  Is  agreed  in  tlie  charter.  State  v.  Banls,  2 
Hoiist.  99  (IIG  et  seq.).  But  such  a  i)rovisiou  will 
not  be  implied,  but  must  be  clearly  expressed. 
Id.J 

§  12.  The  said  certificate  shall  be  presented 
to  the  associate  judge  of  the  couuty  in  which 
the  principal  place  of  business  of  the  pro- 
posed corporation  is  located.  Notice  of  the 
intention  to  apply  for  incorporation  shall  be 
published  daily  (if  there  be  a  daily  paper 
published  in  the  county)  in  two  newspapers 
of  the  county  for  at  least  ten  days  im- 
mediately prior  to  the  application.  If  there- 
be  no  daily  paper  in  the  county,  then  foi 
three  successive  issues.  Satisfactory  proof 
of  the  publication  shall  be  made  to  the  judge, 
who  may,  in  any  case,  require  any  further 
publication  which  he  may  deem  necessary. 
It  shall  be  the  duty  of  the  judge  to  peruse 
and  examine  the  said  certificate,  and  if,  after 
such  perusal  and  examination,  it  still  appear 
to  the  said  judge  that  the  purposes  of  the 
proposed  incorporation  are  lawful  and  in- 
volve nothing  detrimental  to  the  public 
interest  and  welfare,  that  the  certificate  is 
in  proper  form,  tliat  the  proposed  amount  of 
the  capital  stock  and  value  of  real  and  per 
sonal  estate  Avhich  the  corporation  may  ac- 
quire are  proper  with  respect  to  the  purpose 
of  the  incorporation,  and  that  a  majority  of 
the  corporators  named  in  the  certificate  are 
then  bona  fide  residents  of  this  State,  it 
shall  be  his  duty  to  indorse  thereon  his  ap- 
proval and  to  transmit  the  said  certificate 
so  indorsed  to  the  secretary  of  State  to  be 
filed  in  his  office,  and  a  copy  of  the  same, 
furnished  and  certified  by  the  said  secretai-y, 
under  his  hand  and  the  seal  of  his  oflice, 
shall  be  recoi-ded  in  the  recorder's  office  of 
the  county  in  which  the  application  afore- 
said is  made. 

§  13.  The  original  copy  of  said  certificate 
fm-nished  by  the  secretary  of  State,  when 
the  same  has  been  certified  by  the  recorder 
to  have  been  recorded,  or  the  record  thereof, 
or  a  duly  certified  copy  of  such  record,  shall 
be  evidence  in  any  court  of  law  or  equity. 

§  14.  Upon  the  making  of  the  said  certifi- 
cate, and  its  approval,  filing  and  recording 
as  aforesaid,  the  persons  therein  named  as 
original  subscribers  or  corporators,  their 
successors  and  assigns,  shall  be,  from  the 
time  of  commencement  mentioned  in  said 
certificate  and  until  the  time  limited  therein 
for  the  termination  thereof,  a  body  corporate 
and  politic  in  law  and  in  fact,  by  the  name 
mentioned  in  said  certificate;  Provided, 
That  the  legislature  may  at  pleasure  dissolve 
any  corporation  created  by  virtue  of  this  act. 
or  alter  and  amend  its  charter. 

Corporations  created  by  legislative  enactment. 
§§  8,  9.  Legislative  power.  See  Const.,  art.  II 
S  17. 

§  15.  All  companies  that  may  be  hereafter 
established  within  this  State,  under  the  pro- 
visions hereinbefore  contained,  or  under  any 


law  of  this  State,  and  also  the  officers  of 
every  such  company,  and  the  stockholders 
tlieroin,  may  exercise  the  powers  and  shall 
be  governed  by  tlie  provisions  and  be  sub- 
ject to  the  liabilities  hereinbefore  and  here- 
inafter provided. 

§  10.  Any  company  organized  as  aforesaid 
n.<ay  carry  on  a  part  of  its  business  out  of 
this  State,  and  have  one  or  more  offices  or 
places  of  business  out  of  this  State,  and  may 
liold,  purchase  and  convey  real  and  personal 
estate  out  of  this  State  as  if  the  same  were 
within  this  State;  Trovided,  That  the  cer- 
tificate of  the  organization  of  such  company 
shall  state  as  near  as  conveniently  can  be, 
at  the  time  of  making  said  certificate,  what 
portion  of  its  business  is  to  be  carried  on 
out  of  this  State,  and  in  what  place  or  places 
it  is  to  be  so  carried  on;  and  shall  also  state 
the  name  of  the  town  or  city  and  county  m 
which  the  principal  part  of  the  business  of 
said  compauj'  within  this  State  is  to  be 
tiansacted,  and  such  town,  place  and  coxmty 
within  this  State  shall  be  deemed  the  prin- 
cipal place  of  business  of  said  corporation 
within  this  State  within  the  provisions  of 
this  act. 

§  17.  The  business  of  everj'  corporation 
created  under  this  act  shall  be  managed  and 
conducted  by  the  directors  thereof,  who 
shall,  respectively,  be  shareholders  therein, 
and  such  other  officers,  agents  and  factors 
as  the  company  shall  tliink  proper  to  author- 
ize for  that  purpose;  and  every  such  com- 
pany shall  have  a  secretary  and  treasurer, 
who  may  or  may  not  be  the  same  person. 

The  directors  shall  not  be  less  than  three 
in  number,  and  they  shall  be  chosen  annu- 
ally by  the  stockholders,  at  such  time  and 
place  as  shall  be  provided  by  the  by-laws, 
and  shall  hold  their  offices  for  one  year,  and 
until  others  are  chosen  and  qualified  in  their 
stead;  and  one  of  the  directors  shall  be 
cliosen  president,  either  by  the  directors  or 
.stockholders,  as  shall  be  directed  by  the  by- 
laws. 

The  secretary  and  treasurer  shall  also  be 
chosen  annuallj',  either  by  the  directors  or 
the  stockholders,  as  the  by-laws  may  direct, 
and  shall  hold  their  offices  until  others  are 
chosen  and  qualified  in  their  stead;  the  sec- 
retary shall  record  all  proceedings  of  the 
conioration  and  directors,  in  a  book  to  be 
kept  for  that  purpose,  and  perform  such 
other  duties  as  shall  be  assigned  to  him. 

The  directors  shall  have  power  to  choose 
such  other  officers  and  agents  as  may  be 
deemed  necessary,  and  may  secure  the 
fidelity  of  any  or  all  of  the  officers  of  the 
corporation  by  bond  or  otherwise;  and  they 
may  also  provide  by  the  by-laws  for  the 
qualification  of  any  or  all  of  the  officers  be- 
fore any  person  authorized  by  law  to  ad- 
minister an  oath. 

A  failure  to  elect  annually  shall  not  dis- 
solve a  corporation. 

Any  vacancy  among  the  directors  or  offi- 
cers,  occurring    by    death,    resignation,  re- 


DELAWARE. 


15 


Meetings  of  stockholders;  assessments  —  Id.,  §§  18,  19. 


moval.  or  otherwise,  may  be  filled  for  the 
remainder  of  the  year  in  such  manner  as 
shall  be  provided  for  by  the  by-laws  of  the 
company. 

Li.ibility  of  officers.  S§  20,  31.  Elections,  how 
conducted.     §§   23,  25,  26. 

[Where  tliere  is  simply  a  direction  in  the 
oh.irter  for  tho  annual  cloction  of  an  ofTicor.  his 
original  term  continues,  though  after  the  vear, 
until  a  successor  is  dulv  eicctod  and  qualified. 
Sparlcs  T.    Ran]<,   3  Del.    Ch.   274   (200). 

A  corporate  officer  may  bring  a  suit  in  his  own 
name  as  officer  on  a  contract  made  with  him  as 
such  officei'.  Norton  v.  .Tanvier.  .'5  Harr.  346.  The 
fact  that  a  person  acts  as  a  corporate  officer  is 
sufficient  evidence  that  he  boars  that  character,  at 
least  in  reference  to  the  contract  of  third  per- 
sons with  him  in  tiiat  character.  I(J.  Notice  to. 
or  Isuowledgo  of,  tlie  authorized  officer  or  agent 
of  a  corporation,  binds  the  principal.  Banlj  v. 
Tweed,   4   Houst.  225  (232).] 


§  IS.  At  all  moetinps  of  the  company  ab- 
sent stookholdois  may  vote  by  proxy,  author- 
ized in  writin.ir;  and  every  company  may 
determine  by  its  by-laws  the  manner  of 
oallinjE:  and  eonductin.cr  all  meetincs,  what 
TJimber  of  shares  shall  entitle  the  stock- 
holders to  one  or  more  votes,  what  number 
of  stockholders  shall  attend,  either  in  per- 
son or  l\v  iiroxy,  or  what  number  of  shares 
or  amount  of  interest  shall  be  necessarily 
represented  at  any  meelinff  in  order  to  con- 
stitute a  quorum;  and  if  the  quorum  shall 
not  be  so  determined  l\v  the  company,  a 
majority  of  the  stockholders  in  interest,  rep- 
resented either  in  person  or  by  proxy,  shall 
constitute  a  quorum.  In  the  absence  of  any 
other  provision  by  tlie  by-laws  each  share  of 
stock  shall  be  entitled  to  one  vote. 

The  first  meetin.a:  of  every  such  company 
shall  be  called  by  a  notice,  signed  by  a  ma- 
.icrit.v  of  the  persons  named  in  the  before- 
mentioned  certificate,  and  desi.srnatin.s;  the 
time,  place  and  purposes  of  the  meetin.c;  and 
such  notice  shall,  at  least  two  weeks  before 
the  time  of  any  such  meetinjr,  be  published 
in  some  newspaper  of  the  county  where  the 
corporation  may  be  established,  oi-,  if  there 
be  none,  then  in  one  of  an  adjoinin.ir  county; 
or  said  first  meeting  may  be  called  without 
such  notice  or  publication  if  two  days'  notice 
be  personally  served  on  all  parties  named  in 
the  certificate,  or  if  all  the  parties  named  in 
the  certificate  waive  such  notice  and  fix  a 
time  of  meetin.g,  then  no  notice  or  publica- 
tion whatever  shall  be  required  of  such  first 
meetinc:. 

Every  such  company  may,  at  any  meeting 
called  for  that  purpose,  increase  its  capital 
stock  and  the  number  of  shares  therein  un- 
til it  shall  reach  the  amoimt  named  in  the 
original  certificate,  and  every  stockholder 
shall  have  a  certificate,  under  the  seal  of  the 
company  and  signed  by  the  treasurer,  of  the 
number  of  shares  owned  by  said  stockholder 
in  said  company.  The  shares  of  stock  in 
CAery  corporation  in  this  State  shall  be 
deemed    personal    property,    and    shall    be 


transferrable  on  the  books  of  the  corporation 
in  such  manner  as  the  by-laws  may  provide; 
and  whenever  any  transfer  of  shares  shall 
be  made  for  collateral  securitv,  and  not  ab- 
solutely, the  same  shall  be  so  expres.sed  in 
the  entry  of  said  transfer. 

In  case  more  capital  stock  is  necessary,  an 
additional  certificate  mav  be  filed  under  the 
hands  and  seals  of  two-thirds  in  interest  of 
the  stockholders,  or  their  legal  rejiresenta- 
tives,  stating  the  amount  of  such  additional 
capital  reciuired,  which  shall  be  acknowl- 
edged, and  if  approved  by  the  judge  shall  be 
filed  and  recorded  in  a  manner  heretofore 
provided  for  in  this  act  with  respect  to  the 
original  certificate;  Provided,  That  for  all 
stock  issued  under  sucli  supplemental  cer- 
tificates, such  company,  its  directors  and 
stockholders,  shall  be  entitled  to  all  the  bene- 
fits and  subject  to  all  the  liabilities  con- 
tained in  this  act. 

[A  purchaser  of  stock  need  only  look  to  the 
title  of  his  vendor  as  shown  on  the  books  of 
tlie  company,  and  is  not  affected  bv  previous  ir- 
regularity in  the  transfers.  Tnrnpilie  Co.  v.  l'.ush, 
1  Harr.  44.  But  it  seems  that  a  purchaser  of 
Steele  from  a  person  to  whom  the  stock  was  not 
regularly  transferred  on  the  i)ooks  of  the  com- 
pany, is  bound  to  look  into  the  title  of  his  ven- 
dor.    Id. 

Stock  in  corporations  with  ali  the  rights  thereto 
belonging,  is  liable  to  execution,  and  hence  trans- 
fers of  such  stock  may  be  void  for  fraud  as  against 
creditors.     Colbert  v.  Sutton,  5  Del.  Ch.  204  (.300). 

Subscriber  to  stock  is  bound  by  the  action  of 
a  majority  of  the  corporation;  and  if  the  legis- 
lature amends  the  charter,  he  will  not  thereby 
be  discharged  from  his  liability,  made  previous  to 
the  change,  unless  such  change  would  increase 
the  amount  which  he  was  originallv  bound  to 
pay.  R.  R.  Co.  V.  Tharp,  1  Houst.  "149  (174  et 
seq.). 

A  by-law  made  by  directors  that  no  stockholder 
should  have  the  right  to  transfer  his  stock  while 
he  was  a  debtor  to  the  coriioration  is  valid  and 
gives  the  corporation  a  lien  on  the  stock  for  the 
debts  of  the  holder.  McDowell  v.  Bank,  1  Ilarr. 
27   (31,   32).] 


§  19.  The  directors  of  every  corporation 
created  under  this  act  may,  from  time  to 
time,  assess  upon  each  share  of  stock  such 
sum  of  money  as  two-thirds  of  the  stock- 
liolders  in  interest  shall  direct,  not  exceeding 
in  tlie  whole  the  amount  at  which  each 
share  shall  be  originally  limited  under  the 
third  article  of  the  eleventh  section  of  this 
act;  and  such  sums  so  assessed  shall  be  paid 
to  the  treasurer  at  such  times  and  by  such 
inst.allmenls  as  the  directors  shall  direct,  the 
said  directors  having  given  thirty  days' 
notice  of  the  time  and  place  of  such  pay- 
ments in  a  newspaper  of  the  county  where 
such  a  company  is  established,  and  if  there 
be  none,  tlien  in  a  newspaper  circulating  in 
the  county. 

In  default  of  the  payment  of  such  assess- 
ments, they  may  be  collected  by  suit,  or, 
after  thirty  days  from  the  time  appointed  for 
the  payment  thereof,  the  treasurer  of  the 
companj'  may  sell  at  public  auction  such 
number  of  the  shares  of  such  delinquent 
owner  or  owners  as  will  pay  all  assessments 


16 


DELxUVAEE. 


Cfititicate  of  capital;  dissolution  —  Id.,  §§  20-22. 


then  clue  from  him  or  them,  with  Interest,  and 
all  ncci'ssary  iiu-ldfiital  oharijos;  I'rovided, 
t\vo-tlilrds  of  the  stockholders  in  interest 
f-liall  so  direct.  Notice  of  the  time  and  place 
of  such  sales  and  of  the  sum  due  on  each 
share  shall  be  given  by  advertisements  for 
three  weeks  successively  before  the  sale,  in 
a  newspaper  of  the  county,  or,  if  there  be 
none,  in  a  newspaper  circulating  in  the 
coimt}'  where  such  companj'  is  established; 
and  further  notice  shall  be  mailed  to  such 
delinquent  stockholder,  if  his  post-office  ad- 
dress is  known.  The  shares  so  sold  shall  be 
transferred  to  the  purchaser,  who  shall  be 
entitled  to  a  certificate  therefor. 

Personal    liability    of    stookholdors.      §    4,    ante. 
What  constitutes  pajmont  of  stock.     §  29,  post. 


§  20.  The  president  and  dii'ectors,  with  the 
secretary  and  treasurer  of  sucli  company, 
after  the  payment  of  the  last  installment  of 
the  capital  stock  so  fixed  and  limited  by 
the  company,  shall  malce  a  certificate,  stat- 
ing the  amount  of  capital  so  fixed  and  paid 
in  in  cash,  which  certificate  shall  be  signed 
and  sworn,  or  affirmed  to,  by  the  president, 
secretary  and  treasiu'cr,  and  a  majority  of 
the  directors,  who  shall,  within  thirty  days 
after  making  the  same,  cause  it  to  be  re- 
corded in  the  office  of  the  recorder  of  deeds 
of  the  county  wherein  the  business  is  con- 
ducted, or  wliere  their  principal  place  of 
business  is  located. 

If  any  such  corporation  shall  increase  its 
capital  stock,  as  before  provided  in  this  act, 
a  similar  certificate  shall  be  made,  signed, 
sworn  or  affirmed  to,  and  recorded  after  the 
payment  of  the  last  installment  of  such  ad- 
ditional stock.  If  any  of  the  said  officers 
shall  neglect  or  refuse  to  perform  the  duties 
reqtiired  of  them  in  this  section  for  tliirty 
days  after  written  request  so  to  do  by  a 
creditor  or  stockholder  of  said  company,  they 
shall  be  jointly  and  severally  liable  for  all 
debts  of  the  company  contracted  before  such 
certificate  shall  be  recorded  as  aforesaid. 

fSpecific  performance  of  contract  for  sale  of 
stock,  flenio.1.  Iron  Co.  v.  Todd,  6  Del.  Ch.  163; 
s.    c,    14   Atl.   Rep.  27.] 

§  21.  Whenever,  in  the  judgment  of  the 
board  of  directors  of  any  corporation  organ- 
ized under  this  act,  or  incorporated  under 
any  law  of  this  State,  it  shall  be  deemed 
advisable  and  most  for  the  benefit  of  such 
corporation  that  the  same  sliall  be  dissolved 
before  tlie  expiration  f)f  the  time  limited  in 
Its  certificate  of  incorporation  or  in  its  char- 
ter, it  shall  and  may  be  lawful  for  such 
board  of  directors,  within  ten  days  after  the 
adoption  of  a  resolution  to  that  effect,  by  a 
majority  of  the  whole  board,  at  any  meeting 
called  for  that  purpose^,  and  of  wliich  meet- 
ing every  director  shall  have  received  at 
least  three  days'  notice,  to  cause  Avritten  or 
printed  notices  of  the  adoption  of  such  reso- 


lutions to  be  mailed  to  each  and  every  stock- 
holder of  such  company  residing  in  the 
I'nited  States,  and  also  williin  said  ten  days 
to  cause  a  like  notice  to  be  publislied  in  one 
or  more  ncAvspapers  of  the  county  wherein 
said  corporation  sliall  have  its  principal  place 
of  business,  or,  if  there  be  none,  in  a  news- 
paper circulating  in  said  county,  at  least 
four  weeks  successively,  once  a  week,  next 
preceding  the  time  appointed  for  the  same, 
of  a  meeting  of  sucli  stockholders,  to  be  held 
at  the  office  of  such  company,  in  such  county, 
to  take  action  upon  such  resolutions  so 
adopted  by  the  board  of  directors,  and  which 
meeting  shall  be  held  between  the  hours  of 
ten  o'clock  in  the  forenoon  and  three  o'clock 
in  the  afrernoou  of  the  day  so  named,  and 
which  meeting  may,  on  the  day  so  appointed, 
by  consent  of  a  majority  in  interest  of  the 
stcclvholders  present,  be  adjom'iied,  from 
time  to  time,  for  not  less  than  eight  days  at 
any  one  time,  of  which  adjourned  meeting 
notice,  by  advertisement,  in  such  paper, 
shall  l)e  given;  and  if,  at  any  such  meeting, 
two-thirds  in  interest  of  all  the  stockholders 
shall  consent  that  such  dissolution  shall  take 
l)lace  and  signify  such  their  consent  in  writ- 
ing, then,  and  in  such  case,  such  companies 
shall,  ui)on  filing  such  consent,  duly  attested 
by  their  secretary  signing  the  same  together 
with  a  list  of  the  names  and  residences  of 
the  then  existing  directors  and  officers,  which 
list  shall  be  duly  verified  by  the  secretary  or 
president  of  said  board  in  the  office  of  the 
secretary  of  State,  and  receiving  from  him 
a  certificate  that  such  consent  has  been  filed, 
be  dissolved;  and  the  board  of  directors  of 
that  company  shall  cause  such  certificate  to 
be  published  four  weeks  successively,  at 
least  once  a  week,  in  one  or  more  newspapers 
circulating  in  the  count}'  in  which  such  com- 
pany lias  been  located  and  conducting  its 
business;  at  the  expiration  of  such  time  the 
said  board  shall  proceed  to  settle  uji  and  ad- 
just the  business  and  affairs  of  such  com- 
pany in  the  same  manner  as  thougli  the  same 
had  been  dissolved  by  the  expiration  of  the 
time  mentioned  in  their  charter  or  certificate 
of  incorporation;  Provided,  That  the  secre- 
tary of  State  shall  not  issue  the  certificate 
of  dissolution  hereinbefore  mentioned  until 
satisfied  by  due  proof  that  the  requirements 
aforesaid  have  been  fully  complied  with  by 
such  corpoi'ation. 

The  provisions  contained  in  this  act  may 
be  amended  or  repealed  at  the  pleasure  of 
the  legislature,  and  every  company  created 
by  this  act  shall  be  bound  by  such  amend- 
ment; but  such  amendment  or  repeal  shall 
not  take  away  or  impair  any  remedy  against 
any  such  corporation  or  its  officers  for  any 
liability  Avhich  shall  have  been  previously 
incurred. 

See  §§  32-37,   post. 

§  22.  After  the  first  election  of  directors  no 
stock  shall  be  voted  on  at  any  election  which 
shall  have  hoen  transferred  on  the  books  of 


DELAWAEE. 


17 


Elections;  by-laws  —  Id.,  §§  23-26. 


tlie  company  withiu  twenty  clays  next  pre- 
ceding such  election;  and  it  shall  be  the  duty 
of  the  officer  who  shall  have  charge  of  the 
transfer  books  to  prepare  and  make,  at  least 
ten  days  before  every  election,  a  complete 
list  of  the  stockholders  entitled  to  vote,  ar- 
ranged in  alphabetical  oi"der.  Such  list  shall 
be  oi)en  to  the  examination  of  any  stock- 
hidder.  and  shall  be  produced  and  kept  at  the 
time  and  place  f)f  election  during  the  whole 
time  thereof,  and  subject  to  the  inspection 
of  any  stockholder  who  may  be  present. 
Upon  the  neirlect  or  refusal  of  said  directors 
to  produce  such  list  at  any  election  they 
shall  be  inelitrible  to  any  office  at  such 
election. 

The  stock  ledgers,  or,  if  there  be  none,  then 
the  transfer  books  of  the  company,  shall  be 
the  only  evidence  as  to  who  are  the  stock- 
lidlders  entitled  to  examine  such  list  or  the 
bioks  of  the  company,  or  to  vote,  in  person 
or  by  proxy,  at  any  election. 

[Corporation  books  are  evidence  in  a  suit  be- 
tween the  tumpnny  and  a  corporator.  Jefferson 
V.  Stewart,  4  Ilarr.  82.] 

§  '2'.i.  All  elections  for  managers  or  directors 
of  every  incorjiorated  company  of  this  State 
shall  be  held  by  ballot  (unless  otherwise  ex- 
pressly provided  in  their  respective  charters^, 
and  every  such  election  shall  be  held  upon 
the  day  for  the  aimual  election  specified  in 
the  certiticate  of  incorporation,  and  between 
such  hours  as  may  be  provided  in  the  by- 
laws. 

Every  person  holding  stock  in  any  com- 
pany as  executor,  administrator,  guardian, 
or  trustee,  shall  represent  the  share  or  stock 
in  his  hands  at  all  meetings  of  the  company, 
and  may  vote  accordingly  as  a  stockholder 
in  person  or  by  proxy. 

If  any  incorporated  company  in  this  State 
shall  purchase  auj-  of  the  stock  of  such  com- 
pany, or  take  the  same  in  payment  or  satis- 
faction of  any  debt  due  to  them,  such  stock 
shall  not  be  voted,  either  directly  or  indi- 
rectly, at  any  election  for  directors  of  said 
company. 

No  person  Avho  is  a  candidate  for  the  office 
of  director  in  any  incorporated  company  in 
this  State  shall  act  as  judge,  inspector,  or 
clerk,  or  in  any  other  character  as  the  con- 
ductor of  any  election  for  directors  for  such 
company,  unless  there  be  an  insufficient 
number  of  other  stockholders  present,  and 
any  violation  of  this  provision  shall  make 
void  the  election  of  any  such  person  as  a 
director,  and  he  shall  be  ineligible  to  the 
office  of  director  of  such  company  for  twelve 
months  next  succeeding  such  election;  Pro- 
vided, That  this  election  shall  not  apply  to 
the  first  election  of  directors  in  any  corpo- 
lationl 


New  election. 


2.5.  post. 


§  24.  It  shall  be  the  duty  of  the  superior 
cr.urt,  upon  the  application  of  any  person  or 


persons  or  a  body  corporate,  who  may  b© 
a;;grieved  by  or  may  complain  of  any  elec- 
tion, or  any  proceedings,  act.  or  matter  in  or 
touching  the  same,  reasonable  notice  having 
been  given  to  the  adverse  party  or  to  those 
who  are  to  be  affected  thereby  as  (to»  such 
intended  application,  to  proceed  forthwith, 
and  in  a  summary  manner,  to  hear  the  affi- 
davits, proofs  and  allegations  of  the  parties, 
or  otherwise  inipiiro  into  the  matter  or 
causes  of  complaint,  and  thereupon  to  estab- 
lish the  election  so  complained  of.  or  to 
Older  a  new  election,  or  make  such  order, 
and  give  such  relief  in  the  pren)ises  as  right 
and  ju.stice  may  appear  to  the  said  superior 
court  to  require;  Provided,  That  the  said 
superior  court  may,  if  the  case  shall  appear 
to  require  it,  either  order  an  issue  or  issuer 
!o  be  made  up  in  such  manner  and  form  as 
the  said  court  may  direct,  in  order  to  try  the 
respective  rights  of  the  parties  who  may 
claim  the  same  to  the  office  or  offices,  or 
franchi.se,  in  question,  or  may  give  leave  to 
exhibit,  or  direct  the  attorney-general  to  ex- 
hibit, one  or  more  information  or  informa- 
tions in  the  nature  of  a  quo  warranto  in  the 
premises. 

§  25.  If  at  any  time  hereafter  the  election 
for  directors  of  any  bank  or  other  incor- 
porated company  of  this  State  shall  not  l>e 
duly  held  on  the  day  designated  and  ap- 
pointed by  the  act  incorporating  such  bank 
or  other  incorporated  company,  or  the  cer- 
tificate of  incorporation,  or  by  the  by-laws 
of  any  such  corporation,  it  shall  be  the  duty 
of  the  president  and  directors  of  such  bank, 
or  <jther  incorporated  company,  to  notify  and 
cause  an  election  for  directors  to  be  held 
thereafter  as  soon  as  conveniently  may  be; 
and  in  all  cases  no  share  or  shares  shall  be 
voted  upon  except  bj'  such  person  or  per'^ons 
as  may  have  appeared  on  the  stock  ledger  tir 
tifjusfer  book  of  said  company  to  have  had 
the  right  to  vote  thereon  on  the  daj'  when, 
by  the  act  of  incorporation  of  such  company, 
or  by  said  by-laws,  the  said  election  ought 
to  have  been  held. 

The  associate  judge  of  the  superior  court 
resident  in  the  county  where  the  proper 
place  of  business  of  any  cori)oration  is  lo- 
cated, may  summarily  order  such  election  to 
be  held  upon  the  application  of  any  stock- 
holder, and  may  punish  the  directors  as  for 
a  contempt  of  court  for  any  neglect  or  fail- 
ure to  obey  the  order  of  such  judge  in 
reference  to  such  election. 

§  26.  No  by-laws  of  the  directors  or  man- 
agers of  any  incorporated  company,  regu- 
lating the  election  of  directors  or  officers  of 
such  company,  shall  be  valid  unless  the  same 
shall  have  been  made  thirty  days  previous 
to  any  election  of  such  company  and  subject 
to  the  inspection  of  any  stockholder;  and  in 
all  cases  where  the  right  of  voting  upon  any 
share  or  shares  of  stock  of  any  incorporated 
company  of  this  State  shall  be  questioned,  it 
shall  be  the  duty  of  the  insi)ectors  of  the 
election   to   require   the    transfer  book   and 


18 


DELAWARE. 


Meetings  of  stockholders;  trustees  for  creditors  —  Id.,  §§  27-33. 


stock  ledger  of  said  company,  if  both  be 
kept,  otherwise  Avhichover  is  kept,  as  evi- 
dence of  stock  held  in  the  said  company,  and 
all  such  shares  as  may  appear  standing 
thereon  in  the  name  of  any  person  or  persons 
shall  and  may  be  voted  on  by  siicli  person  or 
persons,  dii*ectly  by  themselves  or  by  proxy, 
subject  to  the  provisions  of  the  act  of  incor- 
poration. 

§  27.  In  all  cases  wliere  it  is  not  otherwise 
provided  by  law,  the  meeting  of  the  stock- 
holders of  all  corporations  of  this  State  shall 
be  held  at  tlie  principal  office  or  place  of 
business  of  the  company  in  this  State;  tlie 
directors  may  hold  their  meetings,  and  have 
an  office,  and  keep  the  books  of  the  com- 
pany (except  the  stock  and  transfer  books), 
outside  of  this  State  if  the  by-laws  of  the 
company  so  provide;  Provided,  however, 
That  said  company  shall  always  maintain  a 
pi'incipal  office  or  place  of  business  in  this 
State,  and  have  an  agent  of  the  company  in 
charge  thereof,  wliei-ein  shall  be  kept  the 
stock  and  transfer  books  of  tlie  company  for 
the  inspection  of  all  who  are  authorized  to 
see  the  same,  and  for  the  transfer  of  the 
stock;  And  provided  further,  That  the 
chancellor,  or  the  superior  court,  or  any 
judge  thereof,  may,  upon  proper  cause 
shown,  summarily  order  any  or  all  of  the 
books  of  said  com])any  to  be  fortliwith 
brought  within  this  State  and  kept  therein 
at  such  place  as  may  be  designated,  for  such 
time  as  such  chancellor,  court,  or  judge  may 
deem  proper;  and  upon  failure  of  any  com- 
pany to  comply  with  such  order  its  charter 
may  be  declared  forfeited  by  the  chancellor 
or  said  court,  and  it  shall  therefrom  cease 
to  be  a  corporation,  and  all  the  directors  and 
officers  of  said  company  sliall  be  liable  to  be 
punished  as  for  contempt  of  court  for  dis- 
obedience. 


See  ch.  70,  S  3. 


§  28.  Whenever,  for  want  of  sufficient  by- 
laws or  officers  duly  authorized,  or  from 
other  legal  impediment,  a  legal  meeting  of 
any  kind  of  the  stockholders  of  any  corpora- 
tion cannot  be  othen\'ise  called,  three  or 
more  stockholders  thereof  may  call  a  meet- 
ing of  the  company  by  giving  ten  days'  no- 
tice in  a  newspaper  circulating  in  tlie  county 
wherein  the  business  is  conducted,  or  where 
their  principal  place  of  business  or  office  in 
this  State  is  located;  and  such  meeting  so 
called  shall  be  a  legal  meeting  of  tlie  com- 
pany; and  if  there  be  no  officers  of  the  com- 
pany present  whose  duty  it  is  to  preside  at 
meetings,  the  stockholders  present  may  elect 
officers  for  the  meeting;  and  it  shall  be  the 
duty  of  the  secretary  of  the  company  to  re- 
cord the  proceedings  of  such  meeting  in  the 
book  of  minutes  of  the  company. 


See  ch.   70,   §  3. 


§  29.  Nothing  but  money  shall  be  con- 
sidered as  payment  of  any  part  of  the  capital 
stock  of  any  company  organized  under  this 
act,  except  as  hereinafter  provided  fur  the 
purchase  of  property;  and  no  loan  of  money 
sliall  lie  made  to  a  stockholder  or  officer 
therein;  and  if  any  such  loan  shall  be  made 
10  a  stockholder  or  officer  of  the  comiiany, 
tlie  officers  who  shall  make  it,  or  who  shall 
assent  thereto,  shall  be  jointly  and  severally 
liable,  to  the  extent  of  such  loan  and  interest, 
for  all  the  debts  of  the  company  contracted 
before  the  repayment  of  the  sum  so  loaned. 

Assessments  on  stock.     §  1!). 

§  oO.  Tlie  directors  of  any  company  incor- 
porated under  this  act  may  purchase  mines, 
manufactories,  or  other  property  necessary 
for  their  business,  and  issue  stock  to  amount 
of  the  value  thereof  in  payment  therefor; 
and  the  stock  so  issued  shall  be  declared  and 
taken  to  be  full  paid  stock,  and  not  liable  to 
any  further  call,  neither  shall  the  holder 
thereof  be  liable  for  any  further  payments 
under  any  of  the  provisions  of  this  act. 

See  §  17. 

§  31.  If  any  certifieate  made,  or  any  public 
notice  given  by  the  officers  of  any  company 
in  pursuance  of  the  provisions  of  this  act 
sliall  be  false  in  any  material  representation, 
all  the  officers  who  shall  have  signed  the 
same  shall  be  jointly  and  severally  liable  for 
all  the  debts  of  the  company  contracted 
while  they  were  stockholders  or  officers 
thereof. 

Liability  of  onicers.      §   20. 

§  32.  Upon  the  dissolution  in  any  manner  of 
any  corporation  already  created,  or  wliich 
may  hereafter  be  created  by  or  under  any 
law  of  this  State,  the  president  and  directors, 
or  the  managers  of  the  affairs  of  tiie  said 
corporation  at  the  time  of  its  dissolution,  by 
whatever  name  they  may  be  known  in  law, 
sliall  be  trustees  of  such  coii^oration,  with 
full  power  to  settle  the  affairs,  collect  the 
outstanding  debts,  and  divide  the  moneys 
and  other  property  among  the  stockholders, 
after  paying  the  debts  due  and  owing  by 
such  corporation  at  the  time  of  its  dissolu- 
tion, as  far  as  such  moneys  and  property 
shall  enable  them. 

Sec  §  1  (VII)  and  §  21  of  this  net. 

§  .33.  The  persons  constituted  trustees  as 
aforesaid  shall  have  authority  to  sue  for  and 
recover  the  aforesaid  debts  and  property  by 
the  name  of  the  trustees  of  such  coii^oratickn, 
describing  it  by  its  corporate  name,  and 
shall  (be)  suable  by  the  same  name,  or  in 
their  own  names  or  individual  capacities,  for 


DELAWARE. 


19 


Receivers  or  trustees;  liability  for  debts  —  Id.,  §§  34-43. 


the  debts  owing  by  such  corporation  at  the 
time  of  its  dissolution,  and  shall  be  jointly 
and  severally  responsible  for  such  debts  to 
the  amount  of  the  moneys  and  property  of 
such  corporation  at  the  time  of  its  dissolu- 
tion, and  which  shall  come  to  their  hands  or 
possession. 

§  34.  All  siich  corporations,  whether  they 
expire  by  their  own  limitation  or  shall  be 
annulled  by  the  legislature,  or  otherwise  dis- 
solved, shall  nevertheless  be  contiuutxl  bodies 
corporate  for  the  purpose  of  prosecuting 
and  defending  suits  by  or  against  them, 
and  of  enabling  them  gradually  to  settle  and 
close  their  concerns,  to  dispose  of  and  convey 
their  property,  and  to  divide  their  capital 
stock,  but  not  for  the  purpose  of  continuing 
the  business  for  which  such  corporation  may 
be  establislied. 

§  35.  When  any  corporation  shall  be  dis- 
solved in  any  manner  whatever,  the  chan- 
cellor, on  application  of  any  creditor  or 
stockholder  of  such  corporation,  at  any  time, 
may  either  continue  such  directors  trustees 
as  aforesaid,  or  appoint  one  or  more  persons 
to  be  receivers  of  and  for  such  corporation, 
to  take  charge  of  the  estates  and  effects 
thereof,  and  to  collect  the  debts  and  property 
due  and  belonging  to  the  company,  with 
power  to  prosecute  and  defend,  in  the  name 
of  the  coi-poration,  or  otherwise,  all  such 
suits  as  may  be  necessai-y  or  proper  for  the 
purpose  aforesaid,  and  to  appoint  an  agent 
or  agents  under  them,  and  to  do  all  other 
acts  which  might  be  done  by  such  corpora- 
tion if  in  being  that  may  be  necessary  for 
the  final  settlement  of  the  unfinished  busi- 
ness of  the  corporation:  and  the  powers  of 
such  trustees  or  receivers  may  be  continued 
as  long  as  the  chancellor  shall  think  neces- 
sary for  the  purpose  aforesaid. 

§  36.  The  chancellor  shall  have  jurisdic- 
tion of  said  application  and  of  all  questions 
arising  in  the  proceedings  thereon,  and  may 
make  such  orders,  injunctions  and  decrees 
therein  as  justice  and  equity  shall  require. 

§  37.  The  said  tnistees  or  receivers  shall 
pay  all  debts  due  from  the  corporation  if  the 
funds  in  their  hands  shall  be  sufficient  there- 
for, and  if  not,  they  shall  distribute  the 
same  ratably  among  all  the  creditors  who 
shall  prove  their  debts  in  the  manner  that 
shall  be  directed  by  an  order  or  decree  of 
the  court  for  that  purpose;  and  if  there  shall 
be  any  balance  remaining  after  the  payment 
of  such  debts  and  necessary  expenses,  they 
shall  distribute  and  pay  the  same  to  and 
among  those  who  shall  be  justly  entitled 
thereto,  as  having  been  stockholders  of  the 
corporation,  or  their  legal  representatives. 

§  38.  In  case  of  the  insolvency  of  any 
corporation,  the  laborers  in  the  employ 
thereof  shall  have  a  lien  upon  the  assets 
thereof  for  the  amount  of  the  wages  due 
to  them,  not  exceeding  one  month's  wages 
respectively,  which  shall  be  paid  prior  to 
any  other  debt  or  debts  of  said  company; 


and  the  word  "  laborers  "  shall  be  construed 
to  include  all  persons  doing  labor  or  service 
of  whatever  character  for,  or  as  workmen 
or  employees  in  the  regular  employ  of  such 
corporations. 

§  39.  On  the  final  dissolution  of  any  cor- 
poration created  under  this  act,  all  its  real 
and  personal  estate,  not  legally  disposed  of, 
shall  be  vested  in  the  individuals  who  may 
be  stockholders  at  the  time  of  such  dis.solu- 
tion.  in  their  respective  proportions,  and  they 
shall  hold  the  same  as  tenants  or  owners 
in  common. 

§  40.  In  any  action  now  pending  or  to  be 
commenced  in  any  court  of  record  of  this 
State  against  any  corporation  now  or  here- 
tofore existing,  or  that  may  be  created  here- 
after, if  said  coi-poration  becomes  dissolved 
by  the  expiration  of  its  charter  or  otherwise 
before  final  judgment  obtained  therein,  the 
said  action  shall  not  abate  by  reason  thereof, 
but  the  dissolution  of  said  corporation  being 
suggested  and  the  names  of  the  trustees  of 
said  corporation  being  entered  upon  the 
record,  the  said  action  shall  proceed  to  final 
judgment  against  the  said  tnistees  by  the 
name  of  the  corporation. 


Power  to  sue  and  be  sued. 
147.  §  1  (2). 


Ch.  70,  §§  2,  6;  ch. 


§  41.  When  any  of  the  officers  or  directors 
of  any  company,  or  stockholders  thereof, 
shall  be  liable  by  the  provisions  of  this  act 
to  pay  the  debts  of  such  company,  to  any 
part  thereof,  any  person  to  whom  they  shall 
be  so  liable  may  have  an  action  on  the  case 
against  any  one  or  more  of  the  said  officers, 
!  directors  or  stoclcholdors;  and  the  declara- 
tion in  such  action  shall  state  the  claim 
against  the  company  and  the  ground  on 
which  the  plaintiff  expects  to  charge  the  de- 
fendants personally. 

§  42.  Any  officer,  director  or  stockholder 
of  a  company  who  shall  pay  any  debt  of 
the  company  for  which  he  is  made  liable 
by  the  provisions  of  this  act,  may  recover 
the  amount  so  paid  in  an  action  against  the 
company,  for  money  paid  for  their  use,  in 
which  action  the  property  of  the  company 
only  shall  be  liable  to  be  taken. 

§  43.  Any  corporation  now  existing  under 
any  law  of  this  State,  either  general  or 
special,  may  come  under  and  be  subject  to 
the  provisions  and  liabilities  of  this  act  in 
the  same  manner  as  if  created  under  the 
same,  if  such  company  make  a  certificate 
under  the  hands  of  the  president  and  direc- 
tors of  the  company  that  said  company 
desires  to  come  under  the  .said  provisions 
and  liabilities,  which  certificate  shall  be  ac- 
knowledged, recorded  and  filed  in  the  same 
manner  as  the  certificate  required  by  this 
act;  Provided,  That  nothing  in  this  section 
contained  shall  be  held  to  affect  any  trans- 
action, liabilities  or  debts  of  any  such  com- 
pany heretofore  done,  accrued  or  contracted. 


20 


DELAWARE. 


Certificates;  foreign  corporations  —  Ch.  702.  r.  19;  cb.  703,  v.  19. 


§  44.  It  shall  be  lawful  for  any  corporation 
heretofore  or  hereafter  created  under  or  by 
virtue  of  this  act,  or  by  any  law  of  this  State, 
at  any  time  before  the  expiration  of  its 
charter,  or  the  period  named  in  its  certifi- 
cate of  organization,  to  tile  in  the  ottice  of 
the  secretaiy  of  state  a  certitieate  under  its 
common  seal,  attested  by  the  signature  of 
its  presiding  officer,  declaring  its  desire  that 
the  period  of  its  existence  as  such  corpora- 
tion shall  be  extended  for  any  time  therein 
mentioned,  not  exceeding  twenty  years.  A 
duly  authenticated  copy  of  said  certificate 
shall  thereupon  be  recorded  in  lilie  manner 
as  the  original  certificate  under  this  act,  and 
upon  the  making  and  filing  and  recording  of 
said  certificate  the  period  of  existence  of 
such  corporation  shall  be  extended  .  as  de- 
clared in  such  certificate  as  fully  as  if  the 
said  period  had  been  named  in  the  original 
charter  or  certificate  of  organization  of  such 
corporation.  And  nothing  herein  contained 
sliall  be  construed  to  interfere  with  the 
riglit  of  the  State  to  abolish  or  repeal,  alter 
or  amend  the  charter  of  any  such  corpora- 
tion, nor  shall  this  act  be  construed  to  con- 
tain any  irrevocable  or  otlier  contract  with 
the  State  contained  in  any  charter  beyond 
the  time  originally  fixed  for  its  expiration. 

§  45.  The  provisions  of  this  act  relating  to 
stockholders  shall  include  members  when- 
ever api)lieable. 

§  40.  That  the  secretaiy  of  state  is  hereby 
authorized  and  directed  to  demand,  for  the 
use  of  the  State,  on  certifying  any  charter 
of  incorporation  or  renewal  tliereof.  author- 
ized bv  tliis  act,  the  sum  of  twenty  dollars 
when  the  capital  stock  of  siich  corporation 
shall  exceed  fifty  thousand  dollars,  and  ten 
dollars  when  the  capital  stock  shall  not  ex- 
cee<l  fifty  thousand  dollars;  Provided,  That 
in  the  case  of  corporations  for  religious, 
charitable,  or  literary  purposes,  the  said  tax 
shall  not  be  charged  or  collected.  The  fees 
of  the  secretary  of  state  and  of  the  recorder 
sliall  be  as  heretofore. 

(Passed  at  Dover,  March  14,  1883.) 

Chapter  702,  Vol.  19. 

A  supplement  to  the  act  entitled  "  An  Act 
concerning  private  corporations,"  passed  at 
r>over,  March  14,  1883. 

Section  1.  That  the  certificate  of  incorpora- 
tion of  building,  or  building  and  loan  asso- 
ciations to  be  created  under  the  act  entitled 
"  An  Act  concerning  private  corporations," 
passed  at  Dover,  Marcli  14,  1S8.S,  shall  not 
be  required  to  state  an  amount  of  the  capital 
stock  to  be  paid  in  before  commencing  busi- 
ness, and  no  percentage  of  said  stock  shall 
be  required  to  be  paid  in  before  the  associa- 
tion shall  be  organized  and  commence 
business. 

§  2.  Tliat  whenever  any  one  of  the  cor- 
porators named  in  the  certificate  of  incor- 
poration, to  be  filed  under  the  act  of  which 


this  is  a  supplement,  or  any  corporator 
named  in  any  act  of  incorporation  liereio- 
fore  or  hereafter  passed  in  this  State,  or  any 
commissioner  appointed  in  any  such  act  of 
incorporation  to  take  subscriptions  for  capi- 
tal stock,  shall  have  died  before  the  organi- 
zation of  sucli  corporation,  tlieii,  and  in  such 
case,  the  powers  vested  in  such  corporators 
or  commissioners  shall  thereafter  be  vested 
in  tlie  survivor  or  survivors  of  sucli  cor- 
porator or  commissioner. 

(Passed  at  Dover,  April  11,  1893.) 


Chapter  703,  Vol.  19. 

AX  ACT  in  relation  to  foreign  corporations 
doing  business  in  this  State. 

Section  1.  (As  amended  April  19,  189.").) 
That  it  shall  not  be  lawful  for  any  corpora- 
tion created  by  the  laws  of  any  other  State, 
or  the  laws  of  the  United  States,  to  do  any 
business  in  this  State  through  or  by  branch 
offices,  agents  or  representatives  located  in 
this  State,  until  it  shall  have  filed  in  the 
office  of  the  secretary  of  state  of  this  State 
a  certified  copy  of  its  charter  and  the  name 
or  names  of  its  authorized  agent  or  agents 
in  this  State,  together  witli  a  sworn  state- 
ment of  the  assets  and  liabilities  of  such 
company  or  corporation,  and  paid  the  secre- 
tary of  state,  for  the  use  of  the  State,  fifty 
dollars  ($50);  and  the  certificate  of  the  sec- 
retary of  state  under  his  seal  of  office,  of 
the  filing  of  sucli  cliarter,  shall  be  delivered 
to  such  agent  or  agents  upon  the  payment 
to  said  secretary  of  state  of  the  usual  fees 
for  making  certified  copies,  shall  be  prima 
facie  evidence  of  such  company's  right  to 
do  business  in  this  State. 

"  Provided,  however.  That  no  such  corpo- 
i-ation  as  aforesaid  shall,  within  the  limits  of 
this  State,  by  any  implication  or  construc- 
tion, be  deemed  to  possess  the  power  of 
discounting  bills,  notes,  or  other  evidence  of 
del)t,  of  receiving  deposits,  of  buying  gold 
or  silver  bullion  or  foreign  coin,  or  buying 
and  selling  bills  of  exchange,  or  of  issuing 
bills,  notes,  or  other  evidences  of  debt  upon 
loan  for  circulation  as  money,  anything  in 
its  charter  or  articles  of  incon)oration  to  the 
contrary  thereof  notwithstanding. 

'"And  provided  further.  That  all  certificates 
to  be  hereafter  issued  by  the  secretaiy  of 
state  under  the  provisions  of  tliis  act  shall 
expressly  set  forth  the  limitations  and  re- 
strictions contained  in  the  preceding  pro- 
viso." 

§  2.  That  any  person  or  persons,  agent, 
officer,  or  eiiirdoye  of  any  foreign  corpora- 
tion who  shall  transact  any  business  within 
this  State  for  any  such  foreign  corporation 
without  the  provisions  of  this  act  being  first 
complied  with  sliall  be  guilty  of  a  misde- 
meanor, and  ui)on  conviction  tliereof  shall 
be  punislied  by  fine  not  exceeding  one  tliou- 
sand  dollars,  at  the  discretion  of  the  court; 


DELAWARE. 


21 


I'eace  and  order;  foreign  insurance  companies  —  Ch.  148,  v.  17;  ch.  179,  v,  14. 


Provided,  however,   That  the  provisions  of 
this   act   shall   not   apply    to   fire    insurance 
companies  doing  business  in  this  State. 
(Passed  at  Dover,  April  28,  1893.) 

[A    foreigu    corporation,    acting    as    an    adminis- 
trator,  may,  by  its  treasurer,   make  probate  of  a 
debt.      Derringer's    Admr.    v.    Derringer's    Admr 
6  Houst.  64  (79  et  sea.)] 


Chapter  148,  Vol.   17. 

AX  ACT  for  the  preservation  of  peace  and 
good  order. 

Section  1.  That  corporations  owning  or 
using  any  railroad,  steamboat,  canal,  rolling 
mill,  shipyard,  car  factory,  or  manufactur- 
ing establishment  of  any  Ivind.  within  this 
State,  may,  jointly  or  severally,  from  time 
to  time,  apply,  by  petition,  to  the  governor 
to  commission  such  person  or  persons  as 
the  said  coiiioration  or  corporations  may 
designate,  to  act  as  special  constables  for  the 
protection  of  the  property  of  said  coiTpora- 
tion  or  corporations,  and  for  the  preservation 
of  peace  and  good  order  on  their  respective 
premises,  railroad  trains,  or  steamboats,  and 
also  for  the  protection  of  persons  travelling 
thereon. 

§  2.  The  goveraor,  upon  such  application, 
may,  if  he  thinks  it  proper  so  to  do.  appoint 
such  persons,  or  so  many  of  them  as  he 
may  deem  proper,  to  be  such  special  con- 
stables, and  shall  issue  to  evei"y  person  so 
ap])ointed  a  commission  for  tlie  term  of  two 
years,  unless  so<iuer  revolved:  and  the  per- 
son thereby  appointed  shall,  before  entering 
upon  the  duties  of  his  office,  take  and  sub- 
scribe, before  a  justice  of  the  peace,  an  oath 
or  affirmation  that  he  will  perform  his  duties 
with  fidelity,  and  caiise  his  commission, 
with  such  affidavit  endorsed  thereon,  to  be 
duly  recorded  in  the  recorder's  office  of 
the  county  wherein  he  resides.  Every  such 
special  constable  so  commissioned  and  quali- 
fied shall  possess  and  exercise,  within  this 
State,  all  the  authority  and  powers  now  con- 
ferred on  policemen  in  the  city  of  "Wilming- 
ton. 

§  3.  The  govenior  may  at  any  time  revoke 
any  such  commission  at  his  pleasure,  and, 
upon  the  written  application  of  the  corpora- 
tion or  corporations  upon  whose  petition 
such  special  constable  shall  have  been  ap- 
pointed, shall  revoke  such  commission:  such 
revocation  to  be  effected  by  an  order  in  du- 
plicate, signed  l>y  the  governor,  one  whereof 
shall  be  mailed  to  the  special  constable  and 
the  other  filed  in  the  recorder's  office  where 
the  commission  is  recorded  and  noted  on 
the  record  of  said  commission. 

§  4.  That  the  compensation  of  every  such 
special  constable  shall  l>e  wlioUy  paid  by 
the  corporation  or  coriwratious  ujion  whose 
petition  he  was  appointed,  and  neither  the  I 
State  nor  any  county  thereof  shall  be  re- 
sponsible for  any  part  of  such  compensation,  j 


§  5.  This  act  shall  be  deoraed  and  taken 
to  be  a  public  act,  and  published  as  such. 
(Passed  at  Dover,  February  27,  1883.) 

See  similar  provisions  in  Maryland. 

Chapter  181,  Vol.   19. 

AX  ACT   for  the  benefit   of   creditors   and 
stockholders  of  insolvent  corporations. 

Section  1.  That  whenever  a  corporation 
shall  be  insolvent,  the  chancellor,  on  the 
application  and  for  the  benefit  of  any  credi- 
tor or  stockholder  thereof,  may,  at  any  time, 
fn  his  discretion,  appoint  one  or  more  per- 
sons to  be  receivers  of  and  for  such  corpora- 
tion, to  take  charge  of  the  estate,  effects, 
business  and  affairs  thereof,  and  to  collect 
the  outstanding  debts,  claims,  and  property 
due  and  belonging  to  the  company,  with 
power  to  prosecute  and  defend,  in  tlie  name 
of  the  corporation  or  otherwise,  all  claims 
or  suits,  to  appoint  an  agent  or  agents  under 
them,  and  to  do  all  other  acts  which  might 
be  done  by  such  corporation  and  may  be 
necessary  and  proper;  tlie  powers  of  such 
receivers  to  be  such  and  continued  so  long 
as  the  chancellor  shall  think  necessary;  Pro- 
vided, however,  That  the  provisions  of  this 
act  shall  not  applj*  to  coi-poratious  for  public 
improvement. 

(Pas«-ed  at  Dover,  March  2.5,  1891.) 


Chapter  179,  Vol.  14. 

AX'  ACT  in  relation  to  foreign  insurance 
companies  doing  business  in  the  State  of 
Delaware. 

Section  1.  That  whenever  the  existing  or 
future  laws  of  any  other  State  of  the  Unite<l 
States,  shall  require  of  insurance  companies 
incorporated  by  this  State,  and  having 
agencies  in  such  other  State,  or  of  the  agents 
thereof,  any  deposit  of  securities  in  such 
State  for  the  protection  of  policy  holders, 
or  otherwise,  or  any  payment  for  taxes, 
penalties,  certificates  of  authority,  license 
fees,  or  otherwise,  greater  than  the  amounts 
required  for  such  puiT)oses  from  similar 
companies  of  other  States  hy  the  then  ex- 
isting laws  of  tliis  State,  then,  and  in  every 
such  case,  all  companies  of  sucli  States, 
establishing,  or  having  heretofore  established 
an  agency  or  agencies  in  this  State,  shall  be 
and  are  hereby  required  to  make  the  same 
deposit,  for  a  like  i)urpose,  with  the  treas- 
urer of  the  State  of  Delaware,  and  to  pay 
said  treasurer  for  taxes,  fines,  penalties, 
certificates  of  authority,  license  fees,  and 
otherwise,  an  amount  equal  to  the  amount 
of  such  charges  and  payments  imposed  by 
the  laws  of  such  State  upon  companies  of 
this  State  and  agents  thereof. 

§  2.  That  all  sums  of  money  received  by 
the  treasurer  of  the  State  of  Delaware 
under  the  provisions  of  this  act,  in  payment 


22 


DELAWARE. 


Surety  companies;  fire  insurance  —  Ch.  694,  v,  18;  ch.  695,  v,  18. 


of  taxes,  penalties,  certificates  of  authority, 
or  license  fees,  from  foreijrn  insurance  com- 
panies transacting  business  in  tliis  State,  by 
agents  or  otherwise,  shall  be  for  the  use 
of  the  State  of  Delaware. 

§  3.  That  all  persons  violating  any  of  the 
provisions  of  this  act  shall  be  liable  to  in- 
dictment, on  information  of  sucli  violation 
being  given  to  tlie  attorney-general  of  this 
State,  or  to  his  deputies,  and.  on  conviction, 
shall  be  fined  not  less  than  one  hundred 
dollars,  nor  more  than  five  hundred  dollars, 
at  the  discretion  of  the  juiy  and  court  trying 
the  same. 

(Passed  at  Dover,  Mai-ch  8,  1871.'* 

Chapter  694,  Vol.  18. 

AX  ACT  in  relation  to  corporate  suretyship 
and  foreign  surety  companies. 

Section  1.  That  any  corporation  duly 
chartered  by  any  of  the  United  States  or 
foreign  country,  and  authorized  and  em- 
powered by  its  charter  to  transact  the  busi 
ness  of  fidelity  insurance  and  corporate 
suretysliip  within  the  State  or  country  from 
wliich  it  derives  its  charter,  and  having  a 
paid-up  capital  of  at  least  one  hundred 
and  fifty  thousand  dollars,  or  a  paid-up 
capital  and  other  resources  amounting  alto- 
gether to  at  least  one  hundre<l  and  fifty 
thousand  dollars,  may  be  admitted  to  do 
such  business  in  this  State  upon  filing  and 
keeping  in  the  office  of  the  insurance  com- 
missioner a  power  of  attorney  executed 
under  the  seal  of  such  company,  designating 
a  resident  of  this  State  as  its  attorney,  upon 
whom  all  process  and  papers  in  any  suits 
brought  in  any  court  of  this  State  against 
such  company  may  be  served,  wliLch  said 
attorney  may  be  thereby  authorized  and 
directed  to  cause  the  appearance  of  such 
company  to  be  entered  to  any  such  suits. 

§  2.  Every  such  company  applying  for 
admission  to  transact  business  in  this  State, 
shall  file  with  the  insurance  commissilouer 
a  copy  of  its  charter  and  its  last  annual 
statement  showing  its  assets  and  liabilities; 
and  annually  thereafter,  it  sliall  file  a  like 
annual  statement,  and  shall  pay  such  fees 
to  tlie  insurance  commissioner  as  are  now, 
or  may  hereafter  be  provided  by  law  with 
respect  to  insurance  companies. 

§  3.  Every  such  company  complying  with 
the  provisions  of  this  act  is  hereby  fully 
invested  with  power  to  execute  and  deliver 
bonds  insuring  the  fidelity  of  persons  hold- 
ing positions  of  responsibility  and  tnist, 
public  and  private,  of  becoming  sole  surety 
in  any  case  where,  by  law,  a  bond  or  bonds 
with  one  or  more  sureties  may  be  required 
or  permitted  for  any  legal  punwse  whatso- 
ever, including  the  case  of  surety  upon 
contracts,  public  and  private  official  bonds, 
and  cases  pending  in  any  of  the  courts  of 
this  State,  except  bail  bonda  in  criminal 
cases. 


§  4.  Any  public  oflBcer  or  department  of 
State,  county  or  municipal  government, 
wliose  duty  it  may  or  shall  hereafter  be  to 
approve  tlie  surety  upon  any  bond  or  bonds, 
may  in  his  or  their  discretion,  accept  and 
approve  sucli  l)onds  when  executed  by  the 
principal  therein,  and  any  surety  company 
duly  autliorized  to  do  busiuoss  in  this  State 
under  the  provisions  of  this  act.  The  Levy 
Court  of  the  several  counties  of  this  State 
may  be.  and  they  are  autliorized  in  their 
discretion  to  accept  such  bonds  as  security 
for  collectors  of  county  taxes  in  lieu  of  the 
security  now  provided  for  by  the  laws  of 
this  State. 

§  o.  Any  company  admitted  to  do  business 
in  this  State  under  the  provisions  of  this 
act,  shall  pay  such  tax  or  taxes  as  may  here- 
after be  imposed  upon  such  companies:  and 
it  shall  be  tlie  duty  of  any  officer  receiving 
such  tax  or  taxes  to  issue  to  such  company 
or  its  agent,  upon  the  payment  of  such  tax, 
receipts  therefor  in  duplicate,  and  such  com- 
pany, or  its  agent,  shall  thereupon  deliver 
to  the  insurance  commissioner  one  of  such 
duplicate  receipts  and  the  insurance  com- 
missioner shall  not  issue  any  certificate  of 
authority  to  do  business  in  this  State  to  any 
comjiany  in  arrears  for  any  taxes  due  to  this 
State. 

(Passed  at  Dover.  March  28.  1889.1 

Chapter  695,  Vol.  18. 

AX   ACT  to  define  the  liability  of   fire   in- 
surance companies  in  certain  cases. 

Section  1.  Whenever  any  policy  of  in- 
surance shall  be  issued  to  insure  any  real 
property  in  this  State  against  loss  by  fire, 
tornado  or  lightning,  and  the  property  in- 
sured shall  be  wholly  destroyed  without 
criminal  fault  on  the  part  of  the  insured, 
or  his  assigns,  the  amount  of  the  insurance 
stated  in  such  policy  shall  be  taken  con- 
clusively to  be  the  true  value  of  the  prop- 
erty insured  and  the  true  amount  of  loss 
and  measure  of  damages,  isubject  to  the 
proviso  hei^in);  and  eveiy  such  policy, 
whether  hereafter  issued  or  renewed,  shall 
have  endorsed  across  the  face  of  it  the  fol- 
lowing: "  It  is  agreed  between  insurer  and 
insured  that  the  value  of  the  insured  prop- 
erty   is   of   the    sum    of   !f :    and    this 

estimate  shall  be  binding  on  both  i)art.ies  as 
to  value;  [Provided,  however.  That  nothing 
herein  contained  shall,  in  case  of  loss,  pre- 
vent the  company  insuring  from  adjusting 
the  loss  by  replacing  the  property  de- 
stroyed.] "  And  in  case  any  owner  shall  ef- 
fect any  subsequent  insurance  upon  any 
larger  value  than  so  agreed,  all  insurance  as 
well  as  that  then  existing  as  that  subse- 
quently olitained  shall  become  void. 

§  2.  This  act  shall  apply  to  all  policies  of 
insurance  hereafter  made  or  issued  upon 
real  property  in  tliis  State,  and  also  to  the 
renewal  which  shall  hereafter  be  made,  of 


DELAWARE. 


23 


Express  companies;  attachment;  practice  —  Ch.  700,  v.  10;  cli.  lOG,  G.  L. 


all  policies  heretofore  issued  in  this  State, 
and  the  contracts  made  by  such  policies 
and  renewals  shall  be  construed  to  be  con- 
tracts made  under  the  laws  of  this  State. 
§  3.  The  court  upon  rendering  judgment 
against  any  insurance  company  upon  any 
such  policy  of  insurance,  shall  allow  the 
plaintiff  a  reasonable  sum  as  an  attorney's 

fee  to  be  taxed  as  part  of  the  costs. 

§  4_  *  *  *  ♦  « 

(Passed  at  Dover,  March  29,  1889.) 

Chapter  700,  Vol.  19. 

AN  ACT  in  relation  to  express  companies 
doing  business  in  this  State. 

Section  1.  That  it  shall  be  unlawful  for 
any  express  company,  firm,  corporation,  or 
individual,  carrying  on  an  express  business 
in  this  St;ite,  or  for  any  agent,  officer  or 
employe  of  such  express  company,  firm, 
coi'poration,  or  individual,  to  charge  or  re- 
ceive for  the  transportation,  or  for  the  trans- 
portation and  delivery  of  any  bundle  or 
package  containing  anything  of  value,  a 
greater  compensation  for  such  service  than 
the  same  company,  firm,  corporation,  or  in- 
dividual, charges  and  receives  for  like  ser- 
vice in  tlie  States  of  Pennsylvania  and 
Maryland.  Any  express  company,  firm,  cor- 
poration or  individual,  or  any  agent,  officer 
or  employe  of  any  such  express  company, 
firm,  corporation  or  individual,  violating  the 
provisions  of  this  act  shall,  upon  conviction 
before  anj-  justice  of  the  peace,  be  fined  not 
less  than  twenty  dollars  nor  more  than  one 
hundred  dollars  for  each  and  every  such 
offence. 

U'assed  at  Dover,  May  2,  1893.) 

Chapter  435,  Vol.  17. 

AX  ACT   in   relation   to   the  duties  of   the 
State  treasurer. 

Section  1.  That  it  shall  be  and  is  hereby 
made  the  duty  of  the  State  treasurer  to 
make  a  written  report  to  each  house  of  the 
general  assembly  within  ten  days  after  the 
commencement  of  every  regular  or  special 
session  thereof,  showing  all  unpaid  taxes  due 
the  State  from  any  corporation  liable  to  pay 
such  taxes,  and  in  such  report  shall  state  in 
detail  the  amount  of  tax  unpaid  by  any  such 
corporation  and  the  name  of  the  corpora- 
tion so  in  default. 

§  2.  That  whenever  any  corporation  liable 
to  pay  taxes  to  the  State  shall  make  default 
of  the  same  for  the  space  of  sixty  days  after 
demand  for  payment  thereof  by  the  State 
treasurer,  it  shall  be  and  is  hereby  made  the 
duty  of  the  State  treasurer  to  certify  the 
facts  to  the  attorney-general  for  such  pro- 
ceedings in  the  premises  by  him  as  may  be 
Avarranted  by  the  laws  of  this  State. 

(Passed  at  Dover,  April  14,  ISSo.) 


Chapter  182,*  Vol,  15. 

A  supplement  to  chapter  104  of  the  Revised 
Statutes  of  the  State  of  Delaware. 

Section  1.  A  writ  of  foreign  attachment 
may  be  issued  out  of  the  superior  court  of 
this  State  against  any  corporation,  aggregate 
or  sole,  not  created  by  or  existing  under  the 
laws  of  this  State,  upon  affidavit  made  by 
the  plaintiff  or  any  other  credible  person, 
and  tiled  with  the  prothonotary  of  said  court, 
that  the  defendant  is  a  corporation  not 
created  by,  or  existing  under  the  laws  of 
this  State,  and  is  justly  indebted  to  the  said 
plaintifi:'  in  a  sum  of  money,  to  be  specified 
in  said  affidavit,  and  which  shall  exceed 
fifty  dollar's. 

§  2.  The  said  writ  shall  be  framed,  di- 
rected, executed  and  returned,  and  like  pro- 
ceedings had  as  in  the  case  of  a  foreign  at- 
tachment issued  under  the  chapter  to  wliich 
this  act  is  a  supplement,  except  that  attach- 
ments to  be  issued  under  this  act  shall  be 
dissolved  only  in  the  manner  hereinafter 
provided. 

§  3.  In  any  attachments  to  be  issued  under 
this  act,  judgment  shall  be  given  for  the 
plaintiff  at  the  second  term  after  the  issuing 
of  the  writ,  unless  the  defendant  shall  have 
caused  an  appearance  by  attorney  to  be 
entered,  in  which  case  the  like  proceedings 
shall  be  had,  as  in  suits  commenced  against 
a  corporation  by  summons:  Provided,  how- 
ever, if  the  defendant  in  the  attachment,  or 
any  sufficient  person  for  him,  shall,  at  any 
time  before  judgment,  give  security  for  the 
payment  of  any  judgment  that  may  be  recov- 
ered in  said  proceedings  with  costs,  then 
the  garnishees  and  all  the  property  attached, 
shall  be  discharged,  and  the  attachment  dis- 
solved, and  like  proceedings  be  had  as  in 
other  cases  of  foreign  attachment  under  tlie 
act  to  which  this  is  a  supplement,  in  which 
the  attachment  has  been  dissolved  by  special 
bail.  Such  security  shall  be  approved,  and 
the  form  and  amount  thereof  determined  by 
the  court  in  term  time,  or  by  any  judge 
thereof,  in  vacation;  but  the  court  may  pre- 
scribe the  form  of  such  security  by  general 
rule  in  that  behalf. 

(Passed  at  Dover,  March  2,  1857;  amended, 
March  17,  1875.) 


Chapter  CVI. 

Of  Pleading  and  Practice  in.  Civil  Actions. 

§  6.  *  *  *  [In  any  action  by  or  against 
any  corporation,  it  shall  not  be  necessary  for 
the  plaintiff"  or  the  trial  to  prove  the  incorpo- 
ration and  existence  of  such  corporation,  but 
the  same  shall  be  taken  to  be  admitted  as 
alleged  on  the  record  unless  the  defendant. 


*Xote.—  This  chapter  comprises  chapter  424  of 
vohime  11,  as  amended  by  chapter  181,  volume  1."., 
and  is  published  In  accordance  with  section  2  of 
said  chapter. 


24 


DELAWARE. 


Record  of  deeds;  taxation  —  Laws,  1897. 


or  Avhen  there  is  nioro  than  one  (lofendaut. 
some  one  of  the  defendants  shall  have  filed, 
at  or  before  the  time  of  filing  the  plea  in 
such  action,  an  attid/ivit  denyin^r  the  exist- 
ence of  the  corporation  as  alleged.  Such 
atfidavit  may  be  made  by  the  president,  sec- 
retary, treasurer,  cashier  or  any  director  of 
any  corporation  defendant.] 

Sec  ch.  147,  §  1  (2),  and  note. 

AN  ACT  concei'nin^  the  puldication  of  the 
laws. 

Section  1.  That  the  secretary  of  state  be 
and  he  is  hereby  directed  to  exclude  from 
the  publication  of  tlie  laws  of  this  State  all 
acts  of  incorporation,  and  other  acts  of  a 
private  nature,  unless  such  acls  contain  a 
provision  directing  tlieir  publication. 

§  2.  Inoperative. 

§  3.  (As  amended  JMay  8,  1895.)  That  the 
secretaiy  of  state  is  liereby  authorized  and 
directed  to  demand  and  receive  for  the  use 
of  the  State,  on  certifyius'  any  act  of  incoi"po- 
ration,  the  sum  of  twenty  dollars  when  tlie 
capital  stock  of  such  corporation  shall  not 
e.vceed  fifty  thousand  dollars,  and  an  addi- 
tional sum  of  twenty  cents  for  each  and 
every  thousand  dollars  above  fifty  thousand 
dollars,  or  when  such  corporation  is  given 
the  power  to  increase  its  capital  stocli  to  an 


amount  exceeding  fifty  thousand  dollars, 
twenty  cents  for  eacli  and  every  thousand 
dollars  which  it  is  given  power  to  increase 
above  fifty  thousand  dollars;  and  on  certify- 
ing any  other  act  or  resolution  of  a  private 
nature,  he  sliall  demand  and  receive  for  tlie 
use  of  the  State  a  fee  of  ten  dollars,  except 
that  in  all  divorce  acts,  and  in  all  acts  of  a 
private  character  pertaining  to  the  ac- 
Ivuowledgment  or  recording  of  deeds  or  otlu-r 
papers,  or  to  titles  or  conveyance  of  real 
estate,  he  sliall  demand  and  receive  for  the 
use  of  the  State  a  fee  of  twenty  dollars  in 
each  case.  Tliat  all  corporations  created  by 
act  of  the  legislature  of  this  State,  except 
muiiicij)al  corporations,  shall  pay  to  the  sec- 
retary of  State  for  the  use  of  the  State  the 
cost  of  the  publication  of  any  such  acts  of 
incorporation  which  may  be  published  in 
any  edition  of  the  laws  of  this  State  to  be 
hereafter  issued.  This  act  shall  not  take 
effect  until  the  first  day  of  Januaiy,  Anno 
Domini,  eighteen  hundred  and  ninety-six. 

§  4.  That  it  shall  not  be  lawful  for  the 
clerks  of  the  tAvo  houses  of  tlie  legislature, 
or  either  of  them,  hereafter  to  give  or  permit 
copies  of  such  acts  as  are  referred  to  in  the 
foregoing  sections  to  be  taken,  unless  the 
certificate  of  the  secretaiy  of  sta,te  is  ap- 
pended thereto. 

(Passed  at  Dover,  February  17,  1866.) 


LEGISLATIVE  ACTS  ENACTED  SUBSEQUENTLY  TO  1893. 


Act  1.  To  make  valid  the  record  of  certain  deeds. 

2.  To  equalize  taxation. 

3.  Supplement   to  preceding  act. 

4.  Relating  to   foreign   corporations. 

Act  1. 

AN  ACT  to  make  valid  the  record  of  certain 
deeds. 

Whereas,  There  are  many  conveyances  of 
real  estate  within  the  State  of  Delaware 
executed  and  delivered  bona  fide  by  the  cor- 
porations, grantors  therein,  under  which  the 
gi-antees  in  said  conveyances,  and  those 
claiming  under  them,  have  entered  into  and 
continuously  held  quiet  and  uninterrupted 
possession  of  the  premises  so  conveyed, 
which  said  deeds  were  not  acknowledged 
and  certified  in  accordance  with  the  require- 
ments of  the  laws  of  this  State  in  force  at 
the  time  of  their  execution,  but  have  been, 
nevertheless,  entered  upon  the  records  by  the 
recorders  of  detnls  in  and  for  the  several 
counties  of  tills  State;  and 

Whereas,  By  reason  of  such  defect  the 
record  of  said  deeds  camiot  be  offered  in  evi- 
dence; therefore, 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  of  the  State  of  Delaware  in 
General  Assembly  met: 

Section  1.  That  the  record  of  any  deed 
dated  prior  to  the  first  day  of  January,  A.  D. 
one    thousand    eiglit    hundred    and    ninety- 


seven,  executed  by  any  corporation  having 
authority  to  make  the  same,  which  was  duly 
signed  and  sealed  by  the  party  therein 
named  as  grantor  or  grantors,  notwithstand- 
ing it  may  not  appear  that  the  execution 
and  acknowledgment  of  the  said  conveyance 
was  duly  authorized  by  resolution  of  the 
directors,  trustees  or  other  managers,  or  by 
the  legally  constituted  attorney  of  such  cor- 
poration, shall  be  and  the  same  is  hereby 
made  valid  and  effectual  in  law,  as  if  .said 
deed  had  been  correctly  acknowledged  and 
certified,  and  the  said  record  or  any  office 
copy  thereof  shall  be  admitted  as  evidence 
in  all  of  the  courts  of  this  State,  and  shall 
for  all  purpos(>s  be  valid  and  conclusive  as 
if  said  deed  had  been  in  all  respects  acknowl- 
edged, and  the  acknowledgment  certified  in 
accordance  with  the  then  existing  laws. 
(I*assed  at  Dover,  February  25,  1897.) 

Act  2. 

AN  ACT  to  equalize  taxation  for  State  and 
county  purposes. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  of  tlie  State  of  Delaware  in 
Genei'al  Assembly  met: 

§  4.  The  president  and  secx'etary  of  all 
coiTiorations  and  associations  liable  to  taxa- 
tion under  this  act  shall,  on  the  first  day 
of  De<ember   in  each  year,   make  their  re- 


DELAWAKE. 


25 


Taxation  —  Laws,  1897. 


si)eotive  returns  under  oath  to  the  assessor 
of  the  hundred  or  assessment  district  in 
VN-hicli  tlie  principal  otlice  or  business  place 
of  the  corporation  or  association  is  situated; 
Avhich  return  shall  show  the  whole  number 
of  shares  in  each  of  said  corporation  or 
association,  the  market  value  of  each  share 
and  the  a,ti-,ijre,i;ate  market  or  real  value  of  all 
the  shares,  with  the  name  of  the  owner  and 
the  number  of  shares  owned  by  each  re- 
spectively. 

§  i>.  Any  officer  of  any  corporation  or  asso- 
ciation failing?  to  make  return  or  report  as 
herein  reciuired  shall  be  guilty  of  a  misde- 
meanor, and  upon  conviction  thereof  shall 
pay  a  line  of  not  less  than  ten  nor  more 
than  live  hundred  dollars  or  be  imprisoned 
not  less  than  ten  days  nor  more  than  six 
months. 

§  14.  That  all  acts  and  parts  of  acts  incon- 
sistent witli  this  act  are  herebv  repealed. 

(Passed  at  Dover,  May  20,  1897.) 

Act  3. 

A    supplement    to    an    act,     entitled  "An 

Act    to    equalize   taji:ation    for    State  and 

county  purposes,"  passed  at   Dover,  May 
20,  1897. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  of  the  State  of  Delaware  in 
General  Assembly  met: 

Section  1.  That  in  any  of  the  affidavits  re- 
qitired  by  the  act  entitled  "  An  act  to  equal- 
ize taxation  for  State  and  county  purposes." 
pased  at  Dover.  May  20,  1897,  the  presfdeut, 
secretary,  treasurer  or  cashier  of  a  corpora- 
tion may  make  the  same  on  behalf  of  said 
corporation,  or  any  member  of  a  firm  or  part- 
nership on  behalf  of  said  firm  or  partnership. 

(Passed  at  Dover,  May  20,  1897.) 

Act  4. 

AX  ACT  in  relation  to  foreign  coi-porations. 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  of  the  State  of  Delaware  in 
General  Assembly  met: 

Section  1.  That  no  foreign  corporation 
shall  engage  in,  prosecute  or  transact  any 
business  of  any  kind  within  the  limits  of 
this  State  on  or  after  the  first  day  of  June, 
A.  D.,  1897,  without,  in  addition  to  what 
is  now  required  by  the  laws  of  this  State, 
first  filing  a  certificate  under  its  corporate 
seal  and  the  hand  of  its  president  or  head 
officer,  attested  by  its  secretary,  in  the  office 
of  the  prothonotary  of  the  superior  court 
of  the  State  of  Delaware  in  each  of  the  coun- 
ties of  this  State,  designating  the  name  and 
residence  of  some  person  or  agent  within 
this  St^te  upon  whom  service  of  process 
may  be  made. 

§  2.  That  all  process  sued  out  of  this  St<ate 
in  any  court  of  this  State  against  such  cor- 
porati<m.  all  orders  made  by  any  court  of 
this  State,  all  rules  and  notices  of  any  kind 
required   to  be  served  on  or  given   to   any 


such  corporation  may,  after  said  first  day 
of  June,  A.  1).  18!i7,  be  served  on  or  given  to 
such  person  or  agent  so  certified  as  afore- 
said, and  such  service  or  notice  shall  be  as 
effectual  and  shall  operate  as  if  it  had  beeu 
served  on  or  given  to  said  corporation. 

§  3.  The  prothoncjtary  of  the  superior  court 
of  the  Stiite  of  Delaware  in  each  county  of 
this  State  shall  procure  and  keep  a  book 
which  is  hereby  named  "  Record  of  Agents 
of  Foreign  Corporations."  and  shall  enter 
and  record  therein  the  name  of  every  foreign 
corporation,  designating  by  certificate  any 
person  or  agent  as  aforesaid,  the  name  of 
such  person  or  agent,  the  name  of  the  State 
in  which  said  conjoration  is  iucori)orateil. 
and  the  date  of  the  filing  such  certificate;  and 
for  making  the  above  entries  the  prothono- 
tary making  the  same  shall  receive  from 
the  corporation,  whose  certificate  it  is,  a  fee 
of  one  dollar. 

§  4.  Any  such  foreign  coi-poration,  by  fil- 
ing a  certificate  of  the  same  kind  and  natin-e, 
executed  as  aforesaid  in  the  several  offices 
aforesaid,  may  change  such  agent  or  person 
and  substitute  another  person  or  agent  for 
the  purposes  aforesaid;  Provided,  however, 
everj'  such  person  or  agent  mentioned  in  this 
act  shall  at  the  time  of  his  appointment  be  a 
resident  of  this  State;  And  provided  further, 
however,  if  any  person  or  agent  di'Signated 
and  certified  as  prescribed  in  this  act.  shall 
die  or  remove  from  this  State,  then  the  for- 
eign corix)ration  for  which  such  person  or 
agent  has  been  so  designated  and  certified 
shall,  within  ten  days  after  the  death  or 
removal  as  aforesaid  of  such  agent  or  person 
in  the  same  jnanner  as  is  prescrilied  in 
section  one  of  this  act.  substitute,  designate 
and  certify  the  name  of  another  person  or 
agent  for  the  purposes  aforesaid,  and  all 
process,  orders,  rules  and  notices  mentioned 
in  section  two  of  this  act  may  be  served  on 
or  given  to  such  substituted  per.son  or  agent 
with  like  effect  as  is  prescribed  in  said  sec- 
tion two  of  this  act. 

§  5.  That  any  foreign  corporation  engaging 
in,  prosecuting  or  transacting  any  business 
of  any  kind  within  tlie  limits  of  this  State 
on  or" after  the  said  first  day  of  June,  A.  D. 
1897.  without  first  having  conqilied  with  the 
provisions  of  this  act  shall  be  guilty  of  a 
misdemeanor,  and  upon  conviction  thereof 
shall  be  fined  not  less  than  two  hundred  dol- 
lars, nor  more  than  five  hundred  dollars  for 
each  and  every  offense.  Any  ag«'nt  of  any 
foreign  conwi'Jition  tliat  shall  transact  any 
business  within  the  limits  of  this  State  for 
any  fon'ign  coi-poration  before  such  foreign 
conioratlon  has  conq>lied  with  all  of  the  pro 
visions  of  this  act.  shall  be  guilty  of  a  misde- 
meanor, and  upon  conviction  there<if  shall 
be  fined  not  less  than  one  hundred  dollars 
nor  more  than  five  hundred  dollars  for  each 
and  everv  offense. 

§  n.  This  act  shall  be  and  is  a  public  act, 

(PassiHl  at  Dover.  May  12.  1897.) 

See   Const.,    art.    IX,   §  5. 


IOT)EX  TO  DELAWARE. 


ACTIONS:  Page. 

corporation  may  maintain  and  defend  7,  10 

against  corporation   7 

service  of  process  on  corporation  7 

not  to  abate  by  dissolution 19 

to  enforce  liability  of  directors,  officers  and  stockholders 19 

ADMINISTRATOR: 

may  vote  as  stockholder 17 

AGENT: 

designation  of,  by  foi-eign  corporation  25 

corporation  may  appoint    10 

ALTERATION: 

of  certificate  of  incorporation   13 

AMENDMENT: 

of  charter,  acceptance  of  constitution 6 

to  certificate  of  incorporation  13 

APPROVAL: 

of  certificate  of  incorporation  by  associate  judge 14 

ASSESSMENTS: 

by-lawa  to  regulate  enforcement   7 

directors  may  levy    15 

hoTV  paid 15 

collection  of,  how  enforced 1"»,  16 

ATTACHMENT: 

of  franchise  of  toll  company  on  mesne  process H 

of  shares  of  stock,  sale 8 

process  to  be  left  with  oflScer S 

sale  void  as  against S,  9 

application  of  proceeds  of  sale  9 

certain  corporations  subject  to  9 

against  foreign  corporation 23 

proceedings   upon    23 

BONDS: 

of  surety  companies  to  be  accepted  22 

BOOKS: 

chancellor  may  order  brought  in  state  18 

BUILDING  AND  LOAN  ASSOCIATIONS: 

loan  or  sale  of  funds '2 

BY-LAWS: 

corporation  may  adopt   ^'    H 

what  to  prescribe   ">    H 

regulating  elections,  when  to  be  made 1 ' 

CANNING  COMPANIES: 

creation  of  9 

CAPITAL  STOCK: 

not  to  be  withdrawn  12 

amount,  certificate  to  state 12 

subscribers,  certificate  to  state  names 13 

16 


28  INDEX  TO  DELAWARE. 

CAPITAL  STOCK  — (Continued):  Page. 

increase,  meetings  for 15 

supplemental  certificate  for   15 

certificate  of  amount  paid,  etc 16 

paid  in  money 18 

CERTIFICATE  OF  INCORPORATION: 

■nhat  to  set  forth  13 

signed  by  incorporators    13 

amendments  and  alterations 13 

associate  judge  to  approve   14 

publication  of  application   14 

to  be  recorded  in  office  of  secretary  of  state   14 

copy  of,  as  evidence  14 

CHARTERS    (See  Certificate  of  Incorporation): 

granted  under  general  law   5 

amendments  by  general  laws   5 

forfeitures,  general  assembly  to  provide  for 5 

acceptance  of  constitution  before  amendment 6 

continuance  after  annulment  or  expiration   7 

of  foreign  corporation  to  be  filed 20 

fees 20 

CONVEYANCES: 

by  certain  corporations,  legalized  24 

CORPORATIONS: 

created  under  general  laws    5 

CREDIT: 

county,  city  or  town  not  to  loan   5 

CREDITORS: 

liability  of  stockholders  to   11 

of  directors  for  illegal  dividends 12 

for  loans  to  stockholders 18 

for  false  certificates  and  notices  18 

distribution  of  assets  among 19 

DIRECTORS: 

elections,  stockholder  entitled  to  one  vote G 

bonds   of  ofiicers    7 

number,  by-laws  to  fix  or  alter 11 

dividends  from  surplus  profits   12 

capital  not  to  be  withdrawn   12 

liability  for  illegal  dividends,  etc 12 

dissent  may  be  entered  12,  13 

business  to  be  managed  by 14 

must  be  stockholders   14 

not  less  than  three   14 

election  by  stockholders  14 

president,  how  elected    14 

failure  to  elect  not  to  dissolve  14 

vacancies,  how  filled   14 

assessments  levied  by.    (See  Assessments.) 15,  16 

certificate  fixing  capital  stock 1(5 

voluntary  dissolution,  resolution   16 

election  of,  list  of  stockholders  16,  17 

to  be  by  ballot 17 

executors,    etc.,   may   vote    17 

director  not  to  be  inspector 17 

court  may  inquire  into 17 

not  held  on  regular  day   17 

by-laws  regulating,  when  to  be  made   17 


INDEX  TO  DELAWARE.  29 

DIRECTORS  —  (Continued) :  Page. 

may  havo  office  out  of  state  ly 

purchase  of  property  by  18 

trustees  on  dissolution   18 

powers  and  duties   IS,  It) 

liability,  how  enforced   It) 

DISSOLUTION: 

corporation  may  effect    11 

A'oluutary,  resolution  of  directors IG 

stockholders  meeting  for  IG 

certificate  for,  of  secretary  of  state   10 

publication   of   certificate    1(5 

settlement   of   corporate   affairs    IG 

directors  trustees  for  creditors  on IS 

continuance  after l"j 

receivers  may  be  appointed   11) 

and  trustees  to  pay  debts   lU 

distribution   of   assets    19 

lien  of  laborers  on  assets 19 

property  to  vest  in  stockholders T.) 

action  not  to  abate   19 

DIVIDENDS: 

to  be  made  from  surplus  profits   12 

illegal,  liability  of  directors  for   112 

DRAINAGE: 

of  low  lands,  corporations  for   11 

appointment  of  commissioners   11 

owners  benefited  to  be  assessed,  etc  11,    12 

powers  and  duties  of  commissioners 11 


ELECTION: 

of  directors,  list  of  stockholders   10,  17 

transfer-book,  evidence  of  right  to  vote 17 

to  be  by  ballot 17 

executors,  etc.,  may  vote 17 

director  not  to  act  as  inspector 17 

court  to  inquire  into    17 

not  held  on  regular  day    17 

by-laws  regulating,  when  to  be  made 17 

EXECUTOR: 

may  vote  as  stockholder 17 

EXISTENCE,  CORPORATE: 

expiration,    continuance    after    7 

duration,   of  private  corporations    10 

certificate  to  set  forth   13 

continuance  after  dissolution    19 

extension  of,  certificate  to  be  filed   20 

EXPRESS  COMPANIES: 

charges    regulated    22 


FALSE: 

certificates  and  notices,   liability  of  oflScers 18 

FEES: 

for  filing  and  certifying  charters   20,    24 

for  filing  charter  of  foreign  corporation 20 

FIRE  INSURANCE  COMPANIES: 

policies,    provisions   respecting    22 


30  INDEX  TO  DELAWARE. 

FOREIGN  CORPORATIONS:  rage. 

agent  to  be  designated  for  service  of  process 6 

service  of  process  on   25 

designation  to  be  recorded   25 

change    of    designation    25 

penalty  for  failure  to  designate 25 

copy  of  charter  to  be  filed 20 

certificate  issued   to    20 

proceedings  by  attachment  against   23 

FORFEITURES: 

of  charters  and  franchises,  general  assembly  to  provide 5 

FRANCHISES: 

forfeiture,  general  assembly  to  provide  for   5 

of  toll  companies,  sale  of   H 

rights  of  purchasers   8 

redemption 8 

attached  on  mesne  process  8 

FRUITS: 

corporations  for  canning  or  preparing 9 

GOVERNOR: 

to  appoint  special  constables 21 

GUARDIAN: 

may  vote  as  stockholder 17 

INSOLVENT  CORPORATIONS: 

lien  of  laborers  on  assets   19 

receivers  may  be  appointed  for   21 

INSURANCE  CORPORATIONS: 

foreign,  deposit  of  securities  21 

LABORERS: 

lion  of,  on  assets  of  insolvent  corporation  19 

LIABILITY: 

ot  stockholders  to   creditors    11 

of  directors  for  illegal  dividends   12 

for  loans  to  stockholders 18 

for  false  notices  and  certificates  18 

of  officers,  directors  and  stockholders,  action  to  enforce 19 

LIEN: 

of  laborers  on  assets  of  insolvent  corporation   19 

LOAN: 

to  stockholders,  prohibited IS 

LOW  LANDS: 

corporations   for  drainage    11 

commissioners  to  be  appointed 11 

valuations  to  be  determined   11 

assessment  of  benefits   11 

MEETINGS: 

by-laws    to    regulate    7,  15 

quorum 7 

first,  how  called   7,  15 

voting  at,  by-laws  to  regulate   15 

proxy,  stockholders  may  vote  by  15 

increase  of  capital  stock   15 

to  be  held  at  principal  place  of  business   18 

called   by  stockholders    18 


lOTDEX  TO  DELAWARE.  31 

MESNE  PROCESS:  p^^  ^ 

franchise  of  toll   company,   attached   on u 

MONEY: 

corporation  not  to  issue  notes,  etc.,  as -i, 

MORTGAGE: 

corporations  may  execute    iq 

NAME,  CORPORATE: 

certificate  to  set  forth    23 

OFFICERS: 

corporation   may   appoint    7_  iq 

bonds  of,  when  executed   7 

election  of,  by  directors   14 

by-laws  may  prescribe  qualifications 14 

failure  to  elect  not  to  dissolve  14 

vacancies,  how  filled   14,  15 

loans  to  stockholders   IS 

liability  for IS 

false  notices  and  certificates  by,  liability  18 

liability,  action  to  enforce    19 

OFFICES: 

out  of  state,  corporation  may  have   14 

PERSONAL  PROPERTY: 

corporation  may  acquire  and  convey   10 

value,  certificate  to  set  forth 13 

PLACE  OF  BUSINESS: 

principal,  certificate  to  set  forth  13 

what  place  deemed  to  be 14 

books  to  be  kept  at   18 

principal,  to  be  within  state  18 

PLEADINGS: 

of  incorporation,  how  made 23 

POWERS,  CORPORATE: 

prescribed   generally    7 

of   private   corporations    10 

implied,   what   are    11 

PRESIDENT     (See  Officers): 

election  of 14 

certificate  to  fix  capital  stock   10 

PROCESS: 

designation  by  foreign  corporation  for  service  of 25 

PROPERTY: 

not  to  be  taken  without  compensation   5 

PROXY: 

mode  of  voting,  by-laws  to  provide 7 

stockholders   may   vote   by    15 

PURPOSES: 

incorporation  for  certain    13 

corporate,  certificate  to  set  forth   13 

QUORUM: 

by-laws  to  provide    " 

REAL   PROPERTY: 

corporation  may  acquire  and  convey   i'' 

value,  certificate  to  set  forth   13 


32  IXDEX  TO  DELAWARE. 

RECEIVERS:  Page. 

appointment  on  dissolution   19 

distribution  among  creditors,  etc   19 

o(  insolvent  corporations   -1 

SEAL,  COMMON: 

corporation  to  have   7,  10 

SECRETARY    (See  Officers): 

election  of   !■! 

duties   of    14 

SERVICE: 

designation  of  agent  by  foreign  corporation   i^ 

of  process  on  corporation 7 

by  publication ^ 

SPECIAL  CONSTABLES: 

appointment  of,  to  protect  property  of  certain  corporations 21 

STATE  TREASURER: 

report   of   unpaid  taxes    ^3 

STOCK: 

not  to  be  issued  except  for  property,  etc 6 

attachment  of,  sale  of   ^ 

certified  copy  of  process  to  be  filed   *^ 

sale  void  as  against   ^ 

certification  and  transfer,  by-laws  to  regulate   11 

certificates,  stockholders  to  have  15 

shares,   deemed   personal   property    15 

transfer,  how  made  15 

as  collateral  security   15 

assessments,  levying  of   15 

enforcement    of,    collection    15.  16 

sale  of,  for  unpaid   16 

issue  of,  in  payment  of  property   18 

capital,  not  to  be  withdrawn 12 

amount,  certificate  to  state  12 

increase,  meetings  for   15 

certificate  for,  to  be  filed  15 

certificate  of  amount  paid,  etc 16 

paid  in  money    18 

STOCKHOLDERS: 

liabiUty  to  creditors    11 

directors  must  be    14 

election  of 14 

vote  by  proxy 15 

certificate  of  shares    15 

list  of,  prepared  before  election 17 

open  to  inspection  17 

election  of  directors.    (See  Election;  Directors) 17 

call  of  meeting,  by  publication  of  notice 18 

loan  not  to  be  made  to 18 

liability  of  officer  for  making 18 

liability,  enforcement    19 

SUBSCRIPTIONS: 

commissioners  to  receive,  effect  of  death  20 

SUCCESSION: 

corporation  to  have  power  of 10 

SURETY  CORPORATIONS: 

foreign,  to  file  power  of  attorney 22 

charter  to  be  filed  22 


INDEX  TO  DELAWARE.  33 

SURETY  CORPORATIONS  — (Continued):  Page, 

foreign,  power  to  execute  bonds,  etc 22 

bonds  to  be  accepted   22 

TAXATION: 

to  be  uniform   5 

exemptiona  prescribed  by  general  law 5 

of  corporations,  state  treasurer  to  report  unpaid 23 

equalization  of,  for  certain  purposes    24,  25 

TOLL  COMPANIES: 

franchise,  sale  of,  under  execution  H 

rights  of  purchasers  H 

redemption 8 

attachment  on  mesne  process S 

warrant  of  distress ^ 

TRANSFER: 

of  stock,  how  made  15 

as  collateral  security   15 

books,  eA'idence  of  right  to  vote 17 

TREASURER    (See  Officers): 

election  of  1'* 

TRUSTEE: 

may  vote  as  stockholder 17 

VACANCIES: 

in  offices,  how  filled    I'i 

WIND  UP    (See  Dissolution): 

corporation  may   H 


FLORIDA. 


TABLE  OF  CONTENTS. 


CONSTITUTIONAL  PROVISIONS. 

Page. 
Declaration  of  rights 5 

Art.      III.  Legislative    power    5 

IX.  Taxation -, 

XVI.  Miscellaneous  provisions 5 

REVISED    STATUTES. 
Second  Division. 

TITLE    I.       OF    PROVISIONS    APPLICABLE    TO  MORE  THAX  OXE  COURT. 

Ch.     7.  Locality  of  actions 6 

11.  Commencement  of  suits  at  law 0 

19.  Of  executions 7 

Fourth  Division. 

TITLE   I.    CONTRACTS   RELATIVE   TO  REAL  AND  PERSONAL  PROPERTY. 

Ch.  1.  Alienation  by  deed   8 

TITLE  III.      CORPORATIONS. 

Ch.  1.  General  provisions g 

2.  Corporations  for  profit  •) 

Fifth  Division.      Part  First.      Crimes. 

TITLE    II.      OFFENSES   AND    PUNISHMENTS. 

Ch.  4.  Offenses  against  property  15 

LEGISLATIVE   ACTS    SUBSEQUENT    TO  1892. 


FLORIDA. 


coisrsTiTUTioisr  of  Florida- i88t. 


PROVISIONS  RELATING  TO  CORPORATIONS. 


Declaration  of  Rights. 

Sec.  17.  Laws    impairing    obligation    of    contracts, 
proliibited. 

ARTICLE  III. 

Legislative  Department. 

See.  25.  General  laws  required  for  certain  corpo- 
rations. 

ARTICLE  IX. 

Taxation. 

Sec.  7.  Taxes  not  to  be   levied  for  corporation. 

8.  Illegal  taxes  not  to  be  removed,  etc. 

9.  Credit  of  State  or  muniGipalities  not  to  be 

loaned  to  corporations. 

ARTICLE  XVI. 

Miscellaneous  Provisions. 

Sec.  16.  Corporate  property  sliall  be  taxed. 

29.  Private  property  not  to  be  taken  without 
compensation. 

DECLARATION  OE  RIGHTS. 

§  17.  No    *     *    *    law  impairing  the  obli- 
gation of  contracts,  .shall  ever  be  passed. 


See  §  2119. 


ARTICLE  III. 


Legislative    Department. 

§  25.  The  legislature  shall  provide  by  gen- 
eral law  for  incorporating  such  educational, 
agricultural,  mechanical,  mining  and  other 
useful  companies  or  associations  as  may  be 
deemed  necessary. 

General  laws  for  incorporation.     §§  2122-2127. 

ARTICLE  IX. 

Taxation. 

§  7.  No  tax  shall  be  levied  for  the  benefit 
of  any  chartered  company  of  the  State,  nor 
for  paying  interest  on  any  bonds  issued  by 
such  chartered  companies,  or  by  counties, 
or  by  corporations,  for  the  above-mentioned 
purpose. 

§  8.  No  person  or  corporation  shall  be  re- 
lieved by  any  court  from  the  payment  of  any 
tax  that  may  be  illegal,  or  illegally  or  irregu- 
larly assessed,  until  he  or  it  shall  have  paid 
sucli  portion  of  his  or  its  taxes  as  may  be 
legal,  and  legally  and  regularly  assessed. 


§  10.  The  credit  of  the  State  shall  not  be 
pledged  or  loaned  to  any  individual,  com- 
pany, corporation  or  association;  nor  shall 
the  State  become  a  joint  owner  or  stock- 
holder in  any  companj^  association  or 
corporation.  The  legislature  shall  not  au- 
thorize any  county,  city,  borough,  township 
or  incorporated  district  to  become  a  stock- 
holder in  any  company,  association  or  corpo- 
ration, or  to  obtain  or  appropriate  money  for, 
or  to  loan  its  credit  to,  any  corporation,  asso- 
ciation, institution  or  individual. 

ARTICLE  XVI. 

Miscellaneous  Provisions. 

§  16.  The  property  of  all  corporations,  ex- 
cept the  property  of  a  corporation  which 
shall  construct  a  ship  or  barge  canal  across 
the  peninsula  of  Florida,  if  the  legislature 
should  so  enact,  whether  heretofore  or  here- 
after incorpox'ated,  shall  be  subject  to  taxa- 
tion unless  such  property  be  held  and  used 
exclusively  for  religious,  scientific,  munici>- 
pal,  educational,  literary  or  charitable  pur- 
poses. 

See  Revenue  Act  of  1893,  at  p.  17. 

[A  transfer  of  property  subject  to  taxation  by 
persons  in  their  individual  caijacity  to  themselves 
as  constituting  a  corporation,  does  not  constitute 
such  corporation  an  innocent  purchaser  of  said 
property  so  as  to  defeat  the  State's  claim  for 
taxes  thereon.  Bloxhara  v.  R.  R.  Co.,  35  Fla.  625; 
s.    c,    17   So.    Rep.   902. 

A  corporation  from  which  taxes  are  due  the 
State  cannot  defeat  the  collection  thereof  oy 
vesting  its  property  subject  to  taxation  in  an- 
other corporation,  of  which  it  remains  a  con- 
stituent part.     Id.] 

§  29.  No  private  property  nor  right  of  way 
shall  be  appropriated  to  the  use  of  any  cor- 
poration or  individual  until  full  compensa- 
tion therefor  shall  be  first  made  to  the 
owner,  or  first  secured  to  him  by  deposit  of 
money;  which  compensation,  irrespective  of 
any  benefit  from  any  improvement  proposed 
by  such  corporation  or  individual,  shall  be 
ascertained  by  a  jury  of  twelve  men  in  a 
court  of  competent  jurisdiction,  as  shall  be 
prescribed  by  law. 

Eminent  domain.     §  2158. 


FLOKIDA. 


Locality  of  actions;  commencement  of  suits  —  R.  S.,  §§  1001,  1011,  1019,  1023,  1024. 


REYISED  STATUTES  OF  FLOEIDA- 1892. 


Second  Division.     Of  Civil  Courts. 

TITLE    I.       OP    PROVISIONS    APPLICABLE 
TO    MORE    THAN    OXE    COURT. 

CHAPTER  VII. 

Locality  of  Actions. 
Sec.  1001.  Suits  against  corporations. 

§  1001.  Suits  against  domestic  corporations 
shall  be  commenced  only  in  the  county  (or 
Justice's  district)  where  such  corporation 
shall  have  or  usually  keep  an  office  for  the 
transaction  of  its  customary  business;  and  in 
the  case  of  companies  incorporated  by  other 
States  or  countries,  and  doing  business  in 
this  State,  suits  shall  be  commenced  in  a 
county  or  justice's  district  wherein  such 
company  may  have  an  agent  or  other  repre- 
sentative. 

Corporation  may  sue  and  be  sued.  §  2121(2), 
note.     Service  of  summons.     §§  1019-1024. 

CHAPTER   XI. 
Commencement  of  Suits  at  Law. 

ARTICLE   II.     I'liOCESS,    FORM    OF. 
Sec.  1011.  Against  corporations. 

.  §  1011.  In  all  actions  against  any  corpora- 
tion, it  shall  be  sufficient  to  issue  a  summons 
to  the  proper  officer,  commanding  him  to 
summon  the  said  corporation,  by  its  corpo- 
rate name,  to  appear  and  answer  the  action 
on  the  pi'oper  return  day,  which  summons 
shall  be  returnable  in  the  manner  and  sub- 
ject to  the  same  rules  and  regulations  as 
otlier  process. 

See  21  Fla.  353;  12  id.   138. 
See  §  2122(2),  note. 

ARTICLE  VI.    TROGESS,    HOW   SERVED. 

Sec.  1019.  Upon  a  private  corporation. 

1023.  Effect  of  sen'ice  upon  a  corporation. 

1024.  Service   upon    domestic    corporation   in 

tlie  absence  of  oflicers  or  agents. 

§  1019.  Process  against  a  corporation, 
domestic  or  foreign,  may  be  served: 

1.  Upon  the  president  or  vice-president  or 
other  head  of  the  corporation.  In  the  ab- 
sence of  such  head: 


2.  T'pon  the  cashier  or  tx'easurer,  or  secre- 
tary, or  general  manager;  or,  in  the  absence 
of  all  the  above: 

3.  Upon  any  director  of  such  company;  or, 
in  the  absence  of  all  of  the  above: 

4.  Upon  any  business  agent  resident  in 
the  county  in  which  the  action  is  brought. 

5.  If  a  foreign  corporation  shall  have  none 
of  the  foregoing  officers  or  agents  in  this 
State,  service  may  be  made  upon  any  agent 
transacting  business  for  it  in  this  State. 


Action  to  be  commenced  where.     §  1001. 
of  process.     §  1011.     See  §  2121(2),  note*. 


Form 


[Service  of  process  on  ofiicers.     State  et  al.   v. 
R.  R.  Co.  et  ai.,  15  Fla.  201.] 


§  1023.  After  service  upon  a  corporation, 
the  same  proceedings  to  final  judgment  shall 
be  had  against  such  corporation  as  are  had 
in  other  suits  at  law  after  the  return  of 
execution  of  summons  ad  respondendum. 

§  1024.  When  process  against  any  coii^ora- 
tion  of  this  State  cannot  be  served  owing  to 
the  failure  of  said  corporation  to  elect  offi- 
cers or  appoint  agents,  their  absence  from 
the  State  for  a  period  of  six  months  before 
the  issuing  of  said  writ,  or  because  they 
are  unknown,  it  shall  be  the  duty  of  the 
officer  to  return  said  writ,  with  the  causes  of 
his  inability  to  serve  the  same,  and  upon 
the  return  of  said  writ  as  aforesaid,  the 
judge  of  the  court  from  which  the  same  shall 
have  issued  shall  make  an  order  at  any 
time,  setting  forth  the  names  of  the  parties, 
the  nature  of  the  action,  suit  or  other  pro- 
ceeding, the  court  in  which  the  same  has 
been  instituted,  and  requiring  the  said  cor- 
poration to  appear  and  defend  the  said  ac- 
tion, suit  or  other  proceeding,  and  the 
publication  of  said  order  once  a  week  for  the 
space  of  two  months  in  some  newspaper 
published  in  the  county  in  which  said  action, 
suit  or  other  proceeding  shall  be  instituted, 
shall  be  a  full  and  sufficient  notification  to 
the  said  corporation  of  the  institution  of  said 
action,  suit  or  other  proceeding.  However 
no  judgment  by  default  or  decree  pro  con- 
fesso  shall  be  taken  or  rendered  against  said 
corporation  until  due  proof  shall  have  been 
made  of  the  publication  of  said  order,  as 
hereinbefore  provided. 


FLORIDA. 


Executions  —  R.  S.,  §§  1190,  1210-1216. 


CHAPTER  XIX. 
Of  Executions. 

ARTICLE   I.     GENERALLY. 
Bee.  1190.   I*l-operty  subject  to  levy. 

Execution. 

§  1190.  *  *  *  Stock  in  corporations, 
sliall  l)e  subject  to  levy  and  sale  under  exe- 
cution. 

Execution  .igninst  stockholders.  §§  2152,  2153. 
Equitable  execution.  §  1211.  Execution  against 
stock.     S§  1212-1218. 

ARTICLE    III.     EXECUTIONS  AGAINST 
CORPORATIONS. 

Sec.  1210.  Fi.   fa.   obtainable. 

1211.  Equitable    executions     by   appointment 
of  receiver. 

§  1210.  Upon  any  judgment  against  any 
corporation,  a  plaintiff  may  sue  out  a  fieri 
facias,  and  the  writ  of  fieri  facias  may  be 
levied  as  well  on  the  cun-ent  money  as  on 
the  goods  and  chattels,  laud  and  tenements 
of  said  corporation. 

§  1211.  If  such  writ  cannot  be  satisfied 
In  whole  or  in  part,  for  want  of  property  of 
the  defendant  subject  to  levy  and  sale  out 
of  which  to  satisfy  the  same,  upon  petition 
of  the  judgment  creditor,  or  of  bis  agent  or 
attorney,  the  circuit  court  sitting  in  chan- 
cery within  whose  circuit  such  coqioration 
may  have  been  doing  business,  or  in  which 
any  of  its  effects  are  to  be  found,  may  by 
order  sequestrate  the  property,  things  in  ac- 
tion, goods  and  cliattels  of  such  corporation, 
for  the  purpose  of  enforcing  such  judgment, 
and  may  appoint  a  receiver  for  the  same, 
and  the  receiver  so  appointed  shall  be  sub- 
ject to  the  rules  prescribed  by  law  for  re- 
ceivers of  the  propei'ty  of  other  judgment 
debtors.  His  ijower  shall  extend  throughout 
the  State. 

ARTICLE    IV.      AGAINST    STOCK    IN    CORPO- 
RATIONS. 

Sec.  1212.  What  shares  of  stock  subject  to  levy. 

1213.  Manner  of  levy. 

1214.  Officer  may   require   exhibit  of  stock. 

1215.  Stock   owned    In   corporations,    how    as- 

certained. 

1216.  Creditor  to  furnish  description  of  stock. 

1217.  Effect  of  levy, 

1218.  Sale,  manner  of. 

§  1212.  Shares  of  stock  in  any  corporation 
Incorporated  by  the  laws  of  this  State  shall 
be  subject  to  levy  of  attachments  and  execu- 
tions, and  to  sale  under  executions  on  judg- 
ments or  decrees  of  any  court  in  this  State. 

See  §§  1190,  1210,  1211,  2152,  2153. 

§  1213.  Attachments  or  executions  may  be 
levied  on  such  shares  by  the  sheriff  or  other 
officer  holding  such  process,  exhibiting  the 


same  to  the  president,  vice-president,  gen- 
eral manager,  or  other  chief  otficer,  or  to  the 
officer  having  custody  of  the  stock  books  or 
transfer  books  of  the  corporation  in  which 
the  attachment  or  judgment  debtor  may  own 
shares  of  stock,  and  by  informing  such  offi- 
cer that  a  levy  is  thereby  made  upon  such 
debtor,'s  sliaros  of  stock  in  such  corporation, 
and  such  sheriff  or  other  officer  shall  indorse 
such  levy  on  such  process. 

§  1214.  At  the  time  of  making  such  levy 
as  aforesaid,  the  officer  holding  such  pro- 
cess shall  demand  of  the  officer  of  the  cor- 
poration to  whom  the  process  shall  be  ex- 
hibited a  statement  in  writing  of  the  num1)er 
of  shares  of  stock  owned  by  such  debtor  in 
said  cori>oration,  together  with  the  amount 
still  due  thereon.  It  shall  be  the  duty  of 
the  said  officer  to  furnish  said  statement  at 
once  to  the  said  sheriff  or  other  officer  (who 
shall  indorse  the  same  on  said  process);  and 
any  officer  of  any  corporation  i-efusing  or 
failing  to  make  such  statement  upon  such 
demand,  or  making  an  untrue  statement  in 
response  to  such  demand,  shall  be  guilty  of 
a  misdemeanor,  and  sliall,  upon  conviction, 
be  fined  a  sum  of  not  less  than  one  Imndrod 
dollars  or  be  imprisoned  in  the  county  jail 
not  less  than  ten  days. 

§  1215.  If  such  attachment  or  execution 
creditor  shall  believe  that  the  debtor  owns 
shares  of  stock  in  said  corporation  at  the 
time  of  the  levy  aforesaid  Avhich  do  not  ap- 
pear in  the  answer  of  the  officers  of  the  cor- 
poration to  the  demand  of  the  sheriff  or 
other  officer  holding  the  process  to  belong  to 
the  said  debtor,  he  may  propound  interroga- 
tories to  the  officers  of  said  corporation  or 
any  of  them,  and  to  the  said  debtor,  touching 
the  ownership  of  any  shares  of  stock  in  said 
corpoi'ation  by  said  debtor  at  the  time  of 
said  levy,  and  the  persons  to  whom  such 
interrogatories  are  propounded  shall  be  re- 
quii'ed  to  file  their  answers  vmder  oatli  to  the 
same  within  ten  days  in  the  office  of  the 
clerk  of  the  circuit  court  of  said  county. 
And  if  any  person  shall  refuse  to  answer 
such  interrogatories,  or  shall  answer  auy  of 
them  untruly,  he  shall  be  guiltj'  of  a  misde- 
meanor, and  shall  be  fined  not  less  than  one 
hundred  dollars  or  be  Imprisoned  not  less 
than  ten  days  in  the  couuty  jail.  If  the  an- 
swers to  said  interrogatories  shall  state  the 
ownership  by  the  said  debtor  of  stock  in  said 
corporation  not  disclosed  by  the  answers  of 
the  officers  of  said  corporation,  made  imder 
section  1214,  the  sheriff  or  other  officer  hold- 
ing the  said  process  shall  indorse  thereon  a 
description  of  said  stock. 

§  1216.  If  the  creditor  shall  believe  the 
answers  of  the  officers  of  such  corporation 
to  the  sheriff  or  other  officer  holding  the  pro- 
cess as  aforesaid,  and  the  answers  of  such 
officers  of  the  corporation  and  the  debtor,  to 
said  Inten-ogatories  to  state  untruly  the 
stock  owned  by  such  debtor,  he  may  furnish 
to  the   sheriff  or  other  officer  holding  the 


8 


FLORIDA. 


Executious;  powers  of  corporations  —  R.  S.,  §§  1217,  1218,  2119-2121. 


process  a  description  of  the  stock  which  he 
believes  the  debtor  to  own;  and  it  shall  be 
the  duty  of  the  sheriff  or  other  officer  to  pro- 
ceed to  sell  the  debtor's  interest  In  such 
stock  as  hereinafter  provided. 

§  1217.  From  the  time  of  the  levy  of  said 
process  as  provided  In  section  twelve  hun- 
dred and  thirteen,  all  the  shares  owned  by 
the  said  debtor  in  such  corporation,  no  mat- 
ter how  the  description  of  it  may  be  there- 
after ascertained,  shall  be  bound  thereby, 
and  no  transfer  of  the  same  not  then  entered 
upon  the  transfer  book  of  the  said  cori^ora- 
tion  shall  be  valid  and  effectual  as  against 
the  levy  of  the  said  process.  And  if  any 
person  shall  antedate  or  procure  to  be  ante- 
dated any  enti-y  upon  the  books  of  said  cor- 
poration for  the  purpose  of  avoiding  the 
effect  of  the  said  levy,  he  shall  be  guilty  of 
a  misdemeanor,  and  shall  upon  conviction, 
be  fined  not  less  than  one  hundred  dollars 
or  be  imprisoned  in  the  county  jail  not  lees 
than  ten  days. 

§  1218.  Shares  of  stock  levied  upon  as  here- 
inbefore provided  shall  be  sold  in  the  same 
manner  as  other  property  levied  upon.  The 
notice  of  such  sale  shall  contain  a  statement 
of  the  number  of  shares  to  be  sold,  the  cor- 
poration in  which  said  shares  are  held,  the 
amount  paid  in  thereon,  and  the  amount  un- 
paid. The  sheriff  or  other  officers  conduct- 
ing said  sale  shall  execute  to  the  purchaser 
thereat  a  bill  of  sale  of  said  shares,  and 
such  bill  of  sale  shall  vest  in  the  purchaser 
all  the  title  of  the  judgment  debtor,  and 
upon  the  presentation  of  such  bill  of  sale 
to  the  secretary  or  other  officer  controlling 
the  transfer  books  of  such  corporation,  it 
shall  be  his  duty  to  transfer  the  said  stock 
from  the  judgment  debtor  to  the  purchaser. 

ARTICLE   V.      EXECUTION   AGAINST    STOCK- 
HOLDERS FOR  CORPORATE  DEBT. 

Sec.  1219.  See  section  2152. 

Fourth  Division.     Of   Real   and   Personal 
Property. 

TITLE       I.       CONTRACTS      RELATTVE       TO 
REAL  AND  PERSONAL   PROPERTY. 

CHAPTER  I. 
Alienation  by   Deed. 

ARTICLE    II. 
Sec.  1955.  Conveyances  by  corporations. 

§  1955.  Any  corporation  may  convey  lands 
by  deed  sealed  with  its  common  seal  and 
signed  in  Its  name  by  the  president  or  chief 
executive  officer  of  the  corporation. 

See  §  2121(4). 

TITLE  III,      CORPORATIONS. 

Oh.  1.  General  provisions. 

2.  Corporations  for  profit. 


CHAPTER  I. 
General  Provisions. 

Sec.  2119.  This  title  extends  to  all  corporations. 

2120.  Corporations  not  dissolved  By  failure  to 

elect  officers. 

2121.  Powers  of  corporations. 

§  2119.  The  provisions  of  this  title  shall  ex- 
tend to  all  coiijorations,  whether  chartered 
by  special  act  of  the  legislature  or  under 
general  law  in  their  respective  classes,  but 
shall  not  in  anywise  affect  the  validity  of 
any  Incorporation  heretofore  created. 

See  Const.,  Dec.  of  Rights.     §  17. 

§  2120.  No  corporations  shall  be  deemed  to 
be  dissolved  by  failure  to  elect  or  appoint 
officers  on  the  given  day,  but  the  officers 
previously  elected  or  appointed  shall  hold 
their  offices  until  the  qualification  of  their 
successors. 

Dissolution.  §  2154  et  seq.  Service  of  sum- 
mons when  corporation  falils  to  elect  oflScers. 
§  1024. 

§  2121.  Every  coiijoration  by  virtue  of  Its 
existence  as  such  shall  have  power: 

[Where  a  grant  of  power  Is  clearly  defined,  and 
no  mode  Is  prescribed  for  Its  exercise,  corpora- 
tion may  adopt  such  mode  as,  In  its  judgment,  will 
secure  the  purpose  contemplated.  Ins.  &  Tr.  Co. 
Y.   Lanier,   5  Fla.   110.] 

1.  To  have  succession  by  its  corporate 
name  for  the  period  limited  In  its  charter 
and  when  no  period  is  limited,  perpetually. 

Change  of  name.  §§  2150,  2151.  Misnomer  In 
deed.     §  2160. 

[Duration  of  franchise  granted  by  legislature 
fixed  by  Constitution  or  by  the  enactment  Itself. 
R.   R.   Co.   V.   Allen,   15  Fla.   637. 

Misnomer  fatal  to  Indictment  of  officer.  Alden 
V.   State,  18  Fla.  187.] 

2.  To  sue  and  be  sued  in  any  court  of  law 
or  equity. 

See  §§  1001,  1011,  1019,  1023,  1024,  1190,  1210 
et  seq.,  and  2152  et  seq.  Corporation  may  sue 
Its  members  for  arrears  or  other  debts.  §  2161. 
Want  of  legal  organization  not  a  defense.     §  2159. 

[Corporation  may  sue  on  note  made  payable  to 
agent.     Ins.  &  Tr.  Co.  v.  Gray,  3  Fla.  262. 

Action  of  trespass  vl  et  armis  will  lie  against  a 
corporation.     Edwards  v.   Bank,  1  Fla.   136. 

Form  of  action  against  corporation,  how  deter- 
mined.    Land  Co.  v.  Mitchell,  4  Fla.  192. 

Shareholder  cannot  testify  for  corporation.  Ins. 
&  Tr.  Co.  V.  Cole.  4  Fla.  3.59. 

Corporation  can  maintain  action  upon  an  Impllea 
promise  for  collection  of  assessments.  Kirksey  v. 
Plankroad  Co.,  7  Fla.  23;  6  id.  262.  dlstinpciiished. 

Injunction  to  restrain  irreparable  damage  to 
vested  rights.  F.,  etc.,  R.  R.  Co.  v.  P.,  etc.,  R. 
R.   Co.,  10  Fla.   145. 

An  Individual  stockholder  cannot  prosecute  an 
appeal  from  a  judgment  against  the  corporation 
of  which  he  is  a  member.  State  v.  R.  R.  Co., 
15  Fla.  690.  ,      ,. 

Unincorporated  company  cannot  sue  In  Its  com- 
pany name.     Richardson  v.  Smith,  21  Fla.  336.] 


FLORIDA. 

Powers  of  corporations;  incorporation  —  R.  S.,  §§  2121  (3-7),  2122,  2123. 


3.  To  make  contracts  and  to  adopt  and  use 
a  common  seal  and  alter  the  same  at 
pleasure. 

Contracts  with  de  facto  corporation.  §  2159. 
Misnomer  of  corporation  in  an  instrument.  §  2160. 
See  §  1955. 

[Party  cannot  avoid  contract  with  corporation 
upon  pretense  of  mismanagement  or  abuse  of 
powers  by  board  of  directors.  Ins.  &  Trust  Co. 
v.  Lanier,  5  Pla.  110. 

Contract  with  corporation  not  voidable  by  rea- 
Bon  of  abuse  of  corporate  powers.     Id. 

Charter  need  not  expressly  confer  power  to 
contract  by  agent.  Land  Co.  v.  Mitchell,  4  Fla. 
192. 

Private  seals  of  a  committee  not  seal  of  cor- 
poration in  making  contract.  Mitchell  v.  Land 
Co.,  4  Fla.  200. 

Bond  given  in  attachment  suit  must  be  under 
corporate  seal.     Tanner  v.  Hall,  22  Fla.  391. 

Where  a  new  corporation  is  created  by  the  con- 
Bolidation  of  two  or  more  other  corporations,  and 
no  provision  is  made  by  statute  or  the  articles  of 
Incorporation  for  the  payment  of  the  debts  and 
liabilities  of  the  constitutent  corporation,  the  new 
corporation  assuming  all  the  debts  and  liabilities 
of  the  constituent  companies,  which  follow  as 
an  incident  of  the  consolidation.  Bloxham  v.  R. 
R.   Co.,   ."..i   Fla.   G-!.->:   s.    c.   17   So.   Rep.   902. 

A  corporation  resident  in  one  State  can  contract 
In  another.     Duke  v.   Taylor,  19  So.   Rep.  172.] 

4.  Where  special  provision  is  not  made  by 
law  or  otherwise  to  hold,  buy,  convey  or 
mortgage  such  personal  or  real  estate  as  the 
purposes  of  the  corporation  shall  require, 
also  to  take,  hold  and  convey  such  other  real 
and  personal  property  as  shall  be  necessary 
for  the  corporation  to  acquire  in  order  to  ob- 
tain or  secure  the  payment  of  any  indebted- 
ness or  liability  to  it. 


See    §    1955.      Eminent    domain, 
nomer  In  instrument.     §  21G0. 


§    2158.      Mis- 


[Delivery  of  deed  to  officer  or  servant  Is  a  de- 
livery to  corporation  itself.  Ins.  &  Tr.  Co.  v. 
Cole,  4  Fla.  359. 

Deed  by  president  of  corporation,  valid,  when. 
Union,  etc.,  v.  Call,  5  Fla.  409.  Burden  of  proof 
on  party  contesting  it.     Id. 

A  mortgage  by  a  corporation  organized  prior  to 
June,  1888,  acknowledged  by  the  vice-president, 
was  not  necessarily  invalid  on  the  ground  that  the 
vice-president  may  have  been  interested  in  the 
mortgage.  Fla..  etc..  Ex.  v.  Rivers,  3G  Fla.  575; 
s.   c,   18  So.   Rep.  850.] 


5.  To  appoint  such  stibordinate  officers  and 
agents  as  the  affairs  of  the  corporation  shall 
require,  and  to  allow  them  suitable  com- 
pensation. 

See  Act  of  1893  to  prevent  blacklisting,  p.  IG. 

[Charter  need  not  expressly  confer  power  to 
contract  by  agent.  Land  Co.  v.  Mitchell,  4  Fla. 
192.] 

6.  To  make  by-laws. 
See  §  2137. 

[Power  of  directors  to  amend  by-laws.  Stock- 
ton v.  Harmon,  32  Fla.  312;  s.  c,  13  So.  Rep.  833.] 

17 


7.  To  increase  or  diminish  by  a  vote  of  its 
members,  cast  as  tlie  by-laws  may  direct, 
the  number  of  directors,  managers  or  trus- 
tees, so,  however,  that  tlie  numlter  shall  not 
be  less  than  tlu-ee,  nor  more  than  thirteen. 

See  §§  2138,  2139,  2140. 


CHAPTER  II. 

Corporations  for  Profit. 

Art.     1.  Authority  to  form  corporations. 

2.  Method   of   incorporation. 

3.  Capital  stock. 

4.  By-laws. 

5.  Officers. 

6.  ^Meetings. 

7.  Records. 

8.  Increase  and   reduction   of  capital   stock. 

9.  Amendment    of    charter    and    change    of 

name. 

10.  Execution. 

11.  Dissolution. 

12.  Miscellaneous. 


ARTICLE   I.      AUTHORITY   TO   FORM    CORPO- 
RATIONS. 

Sec.  2122.  Number  of  incorporators. 

§  2122.  Any  three  or  more  per.sons  may 
associate  themselves  and  become  incor- 
porated for  the  transaction  of  any  lawful 
business  of  a  public  or  private  character,  in- 
cluding all  works  of  internal  improvement. 

See  Const.,  art.  Ill,   §  25. 

[Rules  of  interpretation  of  grants  of  franchises; 
strictly  con.strued  against  grantees.  Gas  Co.  v. 
Pensacola,  33  Fla.  322;  s.  c,  4  So.  Rep.  826.  And 
liability  to  the  public.  R.  R.  Co.  v.  R.  R.  Co.,  10 
Fla.    14.5. 

An  attempted  organization  In  Florida  under  the 
charter  of  the  laws  of  another  State,  no  author- 
ity therefor  being  shown,  renders  participants 
liable  as  partners  in  Florida.  Duke  v.  Taylor, 
19  So.  Rep.  172. 

A  corporation  has  its  domicile  at  the  place  of 
its  creation.  Id.  And  if  created  under  the  laws 
of  one   State  cannot  organize   in  another.     Id. 

A  corporation  can  have  no  legal  existence  out 
of  the  boundaries  of  the  sovereignty  by  which  it 
is  created.  It  must  dwell  in  the  place  of  Its 
creation,  and  cannot  migrate  to  another  sover- 
eignty. Tavlor  v.  Branham,  35  Fla.  297:  s.  c,  17 
So.  Rep.  552.  A  corporation  created  under  the 
laws  of  any  other  State  cannot  come  to  Florida 
and  exercise  corporate  functions  wiiuout  becom- 
ing incorporate<l  under  laws  of  Florida,  and  if  It 
attempts  to  do  so,  its  liabilities  contracted  here, 
rest  upon  its  members  or  stockholders,  in  this 
jurisdiction,    as    partners.    Id.] 

ARTICLE  II.     METHOD  OF  INCORPORATION. 

Sec.  2123.  Requisites   of   proposed    charter. 

2124.  Notice    of    intention    to    apply    for   let- 

ters patent. 

2125.  Issue  and  delivery  of  letters  patent. 

2126.  Letters   patent   and    charter   or   copies 

to  be  evidence. 

2127.  Corporation     not   to  transact    business 

until  certain  requisites  compiled  with. 

§  2123.  The  proposed  charter  of  an  intended 
corporation  must  be  subscribed  by  three  or 
more  persons,  and  shall  set  forth: 


10 


FLORIDA. 


Metliod  of  incorporation;  capital  stock  —  R.  S.,  §§  2124-2128. 


1.  The  uame  of  the  corporation  and  the 
place  of  business. 

2.  The  general  nature  of  the  business  to  be 
transacted. 

3.  The  amount  of  the  capital  stock  author- 
ized, the  number  and  par  value  of  tlie  shares 
Into  which  it  is  divided,  and  the  terms  and 
conditions  upon  -whicli  it  is  to  be  paid  in. 

4.  The  term  for  which  it  is  to  exist. 

5.  By  what  officers  the  business  of  the 
company  is  to  be  conducted,  and  the  times 
at  whicii  they  will  be  elected,  and  the  names 
of  the  officers  who  are  to  conduct  the  busi- 
ness until  those  elected  at  the  first  election 
shall  be  qualified. 

6.  The  highest  amount  of  indebtedness  or 
liability  to  which  the  corporation  can  at  any 
time  subject  itself. 

7.  The  names  and  residences  of  the  sub- 
scribers. 

The  proposed  charter  shall  be  acknowl- 
edged by  at  least  three  of  the  subscribers  be- 
fore some  officer  authorized  to  take  the 
acknowledgment  of  deeds. 

See   §   2122,   note. 

[Contracts  bv  and  with  rle  facto  corporations. 
See  §  2159,  and  note.  Defectively  organized  cor- 
poration cannot  be  attacked  collaterally,  but  only 
in  direct  proceedings  instituted  by  the  State  for 
that  purpose.  Id.  But  see  Dulse  v.  Taylor,  19 
So.  Rep.   172.] 

§  2124.  The  proposed  charter,  together  with 
notice  of  the  intention  to  apply  to  the  gov- 
ernor for  letters  patent  thereon,  shall  be  pub- 
lished for  four  successive  weeks,  once  each 
week,  in  some  newspaper  published  in  the 
county  where  the  place  of  business  is  to  be 
located,  which  notice  shall  be  signed  with 
the  names  of  at  least  three  of  the  sub- 
scribers, and  the  said  proposed  charter  shall 
be  on  file  in  the  secretary  of  State's  office 
during  the  four  weeks  of  publication. 

§  2125.  The  proposed  charter,  accompanied 
by  the  proof  of  publication  of  notice,  shall 
then  be  produced  by  the  governor,  who  shall 
examine  the  same,  and  if  he  find  it  to  be  in 
proper  form  and  for  an  object  authorized  by 
law,  and  that  due  notice  has  been  given, 
letters  patent  shall  issue  incorporating  the 
subscribers,  their  associates  and  successors 
into  a  body  politic  and  corporate,  in  deed 
and  in  law,' by  the  name  chosen,  for  the  pur- 
poses and  upon  the  terms  named  in  the 
charter.  The  secretary  of  State  shall  annex 
to  the  letters  patent  a  certified  copy  of  the 
charter,  retaining  the  original  on  file,  and 
before  delivering  the  letters  patent  shall  re- 
cord them  and  the  charter  in  a  book  kept  for 
that  purpose,  and  shall  receive  from  the  cor- 
poration before  such  deliveiy  a  charter  fee 
of  one  hundred  dollars  for  the  State  treasury, 
besides  such  other  fees  as  are  allowed  by 
law. 

Corporation  shall  have  succession  by  its  corpo- 
rate name.     S  2121(1). 


§  2126.  The  letters  patent,  or  a  certified 
copy  thereof  given  by  the  secretary  of  State 
under  the  great  seal,  shall  be  conclusive  evi- 
dence of  the  existence  of  the  corporation  in 
all  actions  and  proceedings  where  the  ques- 
tion of  its  existence  is  only  collaterally  in- 
volved, and  prima  facie  evidence  in  all  other 
actions  and  proceedings.  The  original 
charter  with  the  certificate  of  the  recording 
thereof  in  the  office  of  the  secretary  of  State 
indorsed  thereon,  or  a  copy  from  the  record 
thereof  certified  by  the  secretary  of  State, 
shall  be  evidence  of  the  contents  of  the 
charter  in  all  actions  and  proceedings. 

Corporation  cannot  deny  its  own  legal  existence. 
S  2159. 

§  2127.  No  corporation  shall  transact  any 
business  until  it  has  had  the  letters  patent 
with  a  certified  copy  of  the  charter  i-ecorded 
in  the  office  of  the  clerk  of  the  circuit  court 
of  the  county  wherein  the  principal  place  of 
business  is  located,  and  has  also  filed  with 
the  secretary  of  State  and  with  the  said  clerk 
(except  in  the  case  of  building  and  loan  asso- 
ciations) duplicate  affidavits  by  its  treasurer 
that  ten  per  cent,  of  its  capital  stock  has 
been  subscribed  and  paid.  If  any  corpora- 
tion shall  transact  any  business  before  com- 
plying with  these  requirements,  or  if  any 
corporation  chartered  by  a  special  act  of  the 
legislature  shall  transact  any  business  before 
filing  said  duplicate  affidavits  and  paying  a 
charter  fee  of  one  hundred  dollars  to  the  sec- 
retary of  State  for  the  State  treasury,  its 
stockholders,  or  in  the  latter  case  its  incor- 
porators and  stockholders,  shall  be  person- 
ally liable  for  all  of  the  corporation  debts  as 
if  they  were  members  of  a  general  partner- 
ship, and  not  stockholders  of  a  corporation. 

ARTICLE  III.     CAPITAL  STOCK, 

Sec.  2128.  Par  value  and  payment  of  subscription. 

2129.  Directors  to  make  calls  for  payments. 

2130.  Stock  to  be  personal  estate. 

2131.  Transfer. 

2132.  Executors,    etc.;     no    personal   liability 

for  calls. 

2133.  Treasurer  to  keep  list  of  stockholders. 

2134.  Return   of     stock   and     stockholders    to 

comptroller. 

2135.  Transfer  to  avoid  taxation. 

213G.   Stock  statement  to  be  filed  with  comp- 
troller. 

§  2128.  The  capital  stock  of  all  corporations 
shall  be  divided  into  shares  of  not  less  than 
ten  dollars  each,  and  all  payments  of  stock, 
and  of  interest  money  shall  be  made  in  law- 
ful money  of  the  United  States,  unless  it 
shall  be  stated  in  the  charter  that  the  capital 
stock,  or  some  therein  designated  portion, 
shall  be  payable  in  property,  labor  or  ser- 
vices at  a  valuation  to  be  fixed  by  the  cor- 
porators,   which    valuation,    as    well    as    a 


FLORIDA. 

Subscribers;  stock;  by-laws  —  R.   S.,  2129-2137. 


11 


general  description  of  the  property,  shall  be 
contained  in  the  charter. 

Shares  of  stock  are  taxable.  See  Revenue  Act 
of  1S95,  at  p.  17.  Fraudulent  issue  of  certificates, 
penalty.     §  2468. 

[Omission  to  designate  in  charter  the  amount  of 
capital  stock.     Kirksey  v.  Road  Co.,  7  Fla.  23.] 

§  2129.  The  directors  may  require  the  sub- 
scribers to  the  capital  stock  to  pay  the 
amounts  by  them  respectively  subscribed  in 
such  manner  and  in  such  installments  as 
may  be  required  in  the  charter  or  by-laws. 
If  any  stockholder  neglect  to  pay  any  in- 
stallment, so  re(iuired,  the  directors  may  in 
accordance  with  the  provisions  to  be  made 
in  the  by-laws  forfeit  and  sell  his  stock,  and 
shall  apply  the  proceeds  to  tlie  expenses  of 
sale  and  to  the  unpaid  installments,  return- 
ing the  balance,  if  any,  to  the  delinquent 
stockholder. 

[Corporation  may  maintain  action  upon  an  im- 
plied promise  for  collection  of  assessments.  Kirk- 
sey  V.  Plankroad  Co.,  7  Fla.  23.  distinguishing 
Barhep  v.  Road  Co.,  6  id.  202,  and  Dibble  v.  Same, 
id.  279. 

Subscription  to  stock,  terms  of,  construed.  Kirk- 
sey  V.  Plankroad  Co.,  supra.  Where  the  body 
of  subscription  contains  stipulations,  as  for  road 
pursuing  particular  route,  such  stipulations  are 
conditions  precedent  and  must  be  strictlv  com- 
plied with.  Martin  v.  R.  R.  Co..  8  Fla.  370.  Oral 
testimony  to  vary  terms  of  subscription  inadmis- 
sible except  to  show  fraud  or  mistake.     Id. 

Rights  and  remedies  of  stockholders.  See  Bowes 
€t  al.  V.   Hoeg.  15  Fla.  403. 

A  stockholder  may  discharge  his  liability  by 
payment  of  bona  fide  claim  against  the  corpora- 
tion. Hood  V.  French.  19  So.  Rep.  16.5.  Or  by 
showing  a  bona  fide  debt  due  him  from  the  cor- 
poration.    Id.] 

§  2130.  The  stock  of  every  corporation  shall 
be  deemed  personal  estate. 

And  is  taxable  as  such.  See  Revenue  Act  of 
1S95.   at   p.    17. 

§  2131.  Stock  shall  be  transferal)le  in 
the  manner  prescribed  in  the  by-laws,  but 
no  stock  shall  be  transferred  until  all  pre- 
vious assessments  thereon  shall  have  been 
fully  paid  in.  Every  person  becoming  a 
stockholder  by  such  transfer  shall,  in  pro- 
portion to  his  stock,  succeed  to  all  the  rights 
and  liabilities  of  the  prior  holder. 

Fraudulent  transfer,  penalty.  §§  2135,  2468. 
Fraudulent  issue,  penalty.     §  2468. 

[Sale  of  stock  —  caveat  emptor.  Foster  et  al. 
V.  Ambler,  24  Fla.  519;  s.  c,  5  So.  Rep.  263.] 

§  2132.  No  person  holding  stock  as  exec- 
utor, administrator,  guardian  or  trustee  shall 
be  personally  liable  as  stockholder  for  any 
calls  or  installments  on  part  paid  stock,  but 
the  estate  and  funds  in  his  hands  shall  be 
liable  in  like  manner  and  to  the  same  extent 
as  a  testator,  intestate,  ward  or  cestui  que 


trust  would  be,  if  he  had  been  living  or  com- 
petent to  buy  and  hold  the  same  stock  in  his 
own  name. 

§  21.33.  The  treasurer  or  cashier  shall  keep 
an  accurate  list  of  the  stockholders  with  the 
number  of  shares  owned  by  eacli.  which 
shall  at  all  times  upon  written  application 
by  any  stockholder  be  open  to  his  inspection, 
and  if  such  officer  refuse  to  exhibit  the  list, 
he  shall  forfeit  fifty  dollars  for  each  offense 
to  be  deducted  from  his  salary. 

Books  of  corporation  admissible  in  evidence. 
§  2470.     False  entry  in  books,  felony.     S  2408. 

§  2134.  The  treasurer  or  cashier,  or  in  the 
absence  of  such  officers,  the  president  or  di- 
rectors, shall  annually  make  a  return  to  the 
State  comptroller,  containing  the  name  and 
residence  of  each  stockholder  with  the  num- 
ber of  shares  belonging  to  him  and  the  par 
and  cash  market  value  of  such  sliares.  and 
shall  also  state  the  whole  amount  of  the 
capital  stock  and  the  amount  actually  paid 
in,  and  the  real  estate  subject  to  assessment 
for  taxes  and  the  personal  estate,  and  if  such 
officers  refuse  or  neglect  to  make  such  re- 
turn, the  corporation  shall  forfeit  the  sum  of 
not  less  than  one  hundred  dollars  for  each 
offense  to  the  use  of  the  State,  to  be  re- 
covered in  any  action  of  tort. 

§  213.5.  If  any  stockholder  fraudulently 
transfer  stock  to  avoid  taxation,  he  shall  for- 
feit to  the  use  of  the  State  one-half  of  the 
par  value  of  the  stock  thtis  transferred  and 
if  he  knowingly  misinform  the  cori)oration 
in  any  way  to  impede  or  prevent  the  asses.s- 
ment  for  collection  of  his  tax.  he  shall  forfeit 
to  the  State  a  sum  not  less  than  one  hundred 
dollars  nor  more  than  five  hundred  dollars, 
the  said  sums  to  be  recovered  by  action  of 
tort. 

Transfer  of  stock.  §  2131.  Fraudulent  transfer, 
felony.     §  2468. 

§  213G.  A  statement  of  the  amount  of  the 
capital  stock  subscribed  and  of  the  amount 
actually  paid  in  and  of  the  indebtedness  of 
the  corporation  shall  be  filed  once  in  six 
months  in  the  office  of  tlie  State  comptroller, 
or  oftener  whenever  the  comptroller  shall 
direct. 


ARTICLE   IV. 
Sec.  2137.  By-laws. 


BY-LAWS. 


§  2137.  The  by-laws  shall  be  taken  and 
deemed  to  be  the  law  of  the  corporation  sub- 
ordinate to  its  charter  and  the  Constitution 
and  laws  of  this  State  and  of  the  United 
States.  They  shall  be  made  by  the  stock- 
holders at  the  first  annual  meeting  or  at  any 
special  meeting  called  for  that  purpose,  un- 
less the  charter  prescribes  another  body  or  a 
different  mode.  They  shall  prescribe  the 
time  and  place  of  meetings  of  the  corpora- 
tion, the  powers  and  duties  of  its  officials 


12 


FLOKIDA. 


Officers;  meetings;  records  — R.  S.,  §§  2138-2147. 


and  such  other  matters  as  may  be  pertinent 
and  necessary  for  the  business  to  be  trans- 
acted, and  may  contain  penalties  not  exceed- 
ing twenty-live  dollars  in  amount  for  the 
breach  thereof. 

See  §  2121(6). 

[Power  of  directors  to  amend  bv-laws.     Stockton 
V.  Harmon,  32  Fla.  312;  13  So.  Rep.  833.] 

ARTICLE   V.     OFFICERS. 

Sec.  2138.  Officers;  choice,  term  and  number. 
2130.  Vacancies. 
2140.  Time  of  election. 

§  2138.  The  business  of  the  corporation 
shall  be  managed  and  conducted  by  a  presi- 
dent, a  board  of  directors,  a  treasurer  or 
cashier  and  such  other  officers  and  agents  as 
the  corporation  may  authorize.  The  di- 
rectors shall  be  chosen  annually  by  the  stock- 
holders at  the  time  fixed  in  the  charter;  they 
shall  be  stocliholders  qualified  to  vote  at  the 
election  at  which  they  are  chosen.  The  man- 
ner of  the  choice  and  of  the  choice  of  all 
other  agents  and  officers  shall  be  prescribed 
by  the  by-laws.  One  of  the  directors  shall  be 
chosen  president  by  the  directors  or  by  the 
stocliholders.  as  the  by-laws  shall  direct. 
The  stoclcholders  may,  at  a  meeting  called 
for  that  purpose,  determine,  fix  or  change 
the  number  of  directors  that  shall  thereafter 
govern  its  affairs.  A  majority  of  the  whole 
number  of  directors  shall  be  necessary  to 
constitute  a  quorum. 

See  §§  2121(7),  2163,  2467. 

[Sureties  on  bond  of  an  officer  of  a  corporation 
not  released  by  neglect  or  laches  of  other  officers. 
B.  &  L.  Assn.  V.  Price,  16  Fla.  204;  s.  c,  19 
id.   127. 

Mere  fact  that  president,  unknown  to  other  di- 
rectors, is  interested  in  contract  let  by  company 
does  not  make  contract  void,  if  it  is  otherwise 
free  from  fraud.  R.  R.  Co.  v.  Kittel,  52  Fed. 
Ren.  63. 

Execution  of  mortgage  by  secretary  de  facto. 
Id. 

It  is  not  necessary  that  a  director  or  managing 
agent  of  the  corporation  should  be  a  stockholder 
therein  unless  it  is  expressly  required  by  the 
statute  or  charter.  Fla.,  etc.,  Ex.  v.  Rivers,  36 
Fla.  575;  s.  c,   18  So.  Rep.  850.] 

§  2139.  In  case  of  the  death,  removal  or 
resignation  of  the  president  or  treasurer  or 
other  officer,  or  of  any  of  the  directors  the 
remaining  directors  may  supply  the  vacancy 
thus  created  until  the  next  election. 

§  2140.  All  officers  who  are  to  be  elected 
by  the  stoclvholders  shall  be  elected  on  the 
day  appointed  by  the  charter  for  that  pur- 
pose, but  if  from  any  cause  an  election  shall 
not  be  held  on  that  day.  the  corporation  shall 
not  on  that  account  be  dissolved,  but  an  elec- 
tion shall  be  called  by  the  directors  as  soon 
as  practicable  thereafter,  due  notice  of  the 
meeting  for  that  purpose  being  given  accord- 
ing to  law. 

Process  against  corporation  when  no  officers  are 
elected.     §  1024. 


ARTICLE  VL     MEETINGS. 

Sec.  2141.  Stockholders'    and    directors'    meetings. 
Notice. 

2142.  Meetings  called  by  justice  of  the  peace. 

2143.  Same.     Presiding  officer. 

2144.  How    meeting    may    be    held    when    not 

legally  called. 

2145.  Quorum. 

2140.  Voting.     Proxies. 

§  2141.  The  time,  place  and  manner  of 
calling  stocliholders'  meetings  (except  when 
regulated  by  law  or  by  the  charter),  or  meet- 
ings of  the  directors,  sliall  be  fixed  by  tlie 
by-laws,  but  notice  of  stoclvholders'  meetings 
shall  always  be  published  in  a  newspaper  of 
the  county  wherein  the  place  of  business  is 
located  for  at  least  two  weeks,  once  each 
week,  before  such  meeting,  and  where  a 
stockholder's  residence  is  known,  a  notice 
shall  also  be  served  on  him  personally,  or 
mailed  to  his  usual  post-office  address  at 
least  two  weeks  before  the  meeting. 

§  2142.  Whenever  from  Avant  of  sufficient 
by-laws,  or  of  officers  duly  authorized,  or 
from  the  neglect  or  refusal  of  such  officers, 
or  from  any  other  legal  impediment,  a  legal 
meeting  of  any  corporation  cannot  otherwise 
be  called,  any  justice  of  the  peace  in  the 
county  wherein  it  is  desirable  to  hold  such 
meeting,  on  a  written  application  of  stock- 
holders holding  one-third  of  the  stock,  may 
issue  a  warrant  to  any  of  said  stockholders 
directing  him  to  call  a  meeting  of  the  cor- 
poration by  giving  the  usual  notice. 

§  2143.  When  a  meeting  is  called  by  such 
warrant,  the  person  to  whom  the  warrant  is 
directed  shall  preside  until  a  presiding  offi- 
cer be  chosen,  if  there  be  no  officer  present 
whose  duty  it  may  be  to  preside. 

§  2144.  When  stockholders  who  hold  four- 
fifths  of  the  stock  shall  be  present  at  a  meet- 
ing, however  called  or  notified,  and  shall 
sign  a  written  consent  thereto  on  the  record 
of  the  meeting,  the  acts  of  such  meeting 
shall  be  as  valid  as  if  legally  called  and 
notified. 

§  2145.  A  majority  of  the  stock  shall  con- 
stitute a  quorum  at  stockholders'  meetings. 

§  2146.  In  all  elections  of  officers  and  in 
deciding  all  questions  at  stockholders'  meet- 
ings, each  stockholder  shall  be  entitled  to 
one  vote  on  each  share  of  stock  held  by  him, 
but  no  stockholder  whose  liability  for  un- 
paid assessments  or  calls  is  past  due  shall  be 
allowed  to  vote.  Stockholders  may  vote  by 
proxy,  duly  authorized  in  writing. 


ARTICLE   VII.     RECORDS. 
Sec.  2147.  To  be  open  to  Inspection. 

§  2147.  The  secretary,  or  other  officer  or 
agent  of  a  corporation,  who  by  the  by-laws 
is  made  the  custodian  of  its  books,  records, 
papers  or  other  property,  shall  keep  the 
same  in  his  possession,  and  at  all  times  dur- 


FLORIDA. 


13 


Increase,  etc.,  of  stock;  charter  amendments;  execution  —  R.  S.,  -§  2148-2152. 


ing  business  hours  have  the  same  ready  to  be 
exhibited  to  any  officer,  director  or  commit- 
tee appointed  by  the  stocliholders  represent- 
in.tr  cnc-touth  of  all  the  subscribed  stock,  and 
shall  furnish  them,  or  either  of  them,  tran- 
scripts from  the  records  ot  proceedings  of 
the  board  of  directors  under  his  official  hand 
and  seal  on  the  payment  to  him  of  the  same 
fee  as  that  required  by  law  to  the  clerk  of 
the  circuit  court  for  tr.nnseripts  from  the  rec- 
ords of  his  office;  and  the  said  custodian  shall, 
on  resigning  his  office,  or  otherwise  vacating 
the  same,  malve  over  all  such  books,  records, 
papers  and  all  other  property  of  the  corpora- 
tion which  are  in  his  possession  to  his  suc- 
cessor ill  office,  or  where  no  successor  has 
been  appointed  or  elected,  to  the  board  of 
directors,  if  any,  or  to  the  person  or  persons 
appointed  by  the  stockholders,  and  such 
custodian  on  being  duly  subpoenaed  to  ap- 
pear as  a  witness  in  any  case  on  trial  in  any 
court  of  justice  in  this  State  shall  attend 
and  produce  such  books  and  records  of  the 
corporation  as  may  be  demanded  in  such 
subpoena  to  be  used  on  such  trial. 

Making  false  entries  in  books,  penaTty.  §  2467. 
Books  to  be  evidence.      §  2470. 

ARTICLE    VIII.      INCREASE    AND    REDUC- 
TION  OF   CAPITAL   STOCK. 

Sec.  2148.  Method  of  increase. 
2149.  Method  of  reduction. 

§  2148.  Any  corporation  may  increase  its 
capital  stock  to  any  amount  by  holding  an 
election  of  the  stockholders  at  its  place  of 
business,  having  published  notice  of  the  time 
and  place  and  object  of  the  meeting  once 
a  week  for  four  weeks  prior  thereto,  in  one 
newspaper  published  in  the  county,  and  hav- 
ing served  or  mailed  the  usual  notice  for 
stockholders'  meetings,  and  if  at  such  meet- 
ing two-thirds  of  all  the  stockholders  in  the 
corporation  shall  vote  to  increase  the  capital 
stock,  it  shall  be  the  duty  of  the  president 
within  thirty  days  thereafter  to  make  a  re- 
turn to  the  secretary  of  State,  under  oath, 
of  tlie  amount  of  such  increase,  and  the 
terms  ou  which  such  additional  stock  is 
issued,  and  from  the  time  the  said  return 
is  filed  the  increase  of  stock  shall  be  author- 
ized and  when  issued  shall  become  a  pai't  of 
the   capital. 

§  2149.  Any  corporation  may  reduce  its 
capital  stock,  or  alter  or  change  the  par 
value  of  the  shares  thereof,  within  the  limits 
allowed  by  law,  by  unanimous  vote  of  the 
stock,  in  the  same  manner  as  is  provided  for 
the  increase  of  capital  stock,  with  the  cer- 
tificate of  the  State  comptroller  indorsed 
upon  the  affidavit  that,  in  his  judgment,  the 
ability  of  the  corporation  to  meet  its  out- 
standing indebtedness  and  liabilities  will  not 
be  impaired  thereby. 


ARTICLE  IX.  AMENDMENT  OF   CHARTER 
AND  CHANGE  OF  NAME. 

Sec.  2150.  Method  of  amending  charter. 
2151.  Change  of  name. 

§  2150.  Any  corporation  desiring  to  alter 
or  amend  its  charter  shall  adopt  the  pro- 
posed alteration  or  amendment  by  a  vote  of 
three-fourths  of  all  its  stock,  at  a  meeting 
held  for  that  purpose,  and  called  and  notified 
as  provided  for  meetings  for  increase  of  capi- 
tal stock.  If  the  proposed  alteration  or 
amendment  shall  be  so  adopted,  the  corpora- 
tion shall  give  four  weeks'  notice  once  each 
Aveek  of  the  intention  to  apply  to  the  gov- 
ernor therefor,  in  some  newspaper  published 
in  the  county  wherein  the  principal  place  of 
business  is  located,  setting  forth  the  desired 
alteration  or  amendment.  The  corporation 
shall  prepare  a  certificate,  under  the  common 
seal,  of  the  proposed  alteration  or  amend- 
ment as  adopted  as  aforesaid,  Avhicli  certifi- 
cate shall  be  on  file  in  the  secretary  of 
State's  office  during  the  time  of  publication, 
and  afterwards,  together  with  the  proof  of 
publication  and  notice,  shall  be  produced  to 
the  governor,  who  shall  examine  the  same, 
and  if  he  find  it  to  be  in  proper  form,  and 
that  due  notice  has  been  given,  and  that 
the  proposed  alteration  or  amendment  will 
be  beneficial  and  lawful,  and  not  injurious 
to  the  community,  and  is  in  accord  witli  the 
purposes  of  the  charter,  he  shall  approve 
thereof,  and  thereupon  letters  patent  shall 
issue  I'eciting  the  alteration,  or  amendment, 
and  the  said  letters  patent  shall  then  he  re- 
corded in  the  secretary  of  State's  office  and 
then  in  the  office  of  the  clerk  of  the  circuit 
court  where  the  original  charter  was  re- 
corded, and  from  the  date  of  the  recording 
in  the  secretary  of  State's  office,  the  said 
alteration  or  amendment  shall  be  deemed 
and  taken  as  a  part  of  tlie  charter. 

§  2151.  Any  corporation  desiring  to  change 
its  name  may  so  resolve  at  any  general  meet- 
ing of  the  stockholders,  and  upon  filing  a 
certificate  of  the  resolution  under  the  com- 
mon seal,  in  the  office  of  the  secretaiy  of 
State,  letters  patent  shall  issue,  reciting  the 
change  of  name,  which  letters  patent  shall 
be  recorded  as  provided  in  the  last  section. 
No  two  corporations  shall  bear  the  same  cor- 
porate name. 

ARTICLE  X.     EXECUTION. 

Sec.  21.52.  May  Issue  against  stockholders. 

2153.  Custodian    of    records    to    give    sheriff 
necessary  information. 

§  2152.  If  any  execution  shall  issue  against 
the  property  or  effects  of  any  corporation, 
and  there  cannot  be  found  whereon  to  levy, 
then  such  execution  may  be  issued  against 
any  of  the  stockholders  to  an  extent  equal 
in  amount  for  so  much  as  may  remain  un- 
paid upon  the  subscription  and  no  further, 
and  all  property  whether  real  or  personal  of 
any  stockholder  in  any  corporation  aforesaid 


14 


FLORIDA. 

Books;  dissolution  —  R.  S.,  §§  2153-2157. 


shall  be  exempt  from  the  debts  and  liabili- 
ties of  such  corporation  contracted  in  its 
corporate  capacity,  except  the  stoclc  of  said 
stocliholder  of  or  in  said  corporation  to  the 
extent  mentioned  aforesaid. 

See  §§  1190,   1210-1218. 

§  2153.  The  clerk  or  other  officer  having 
charge  of  the  books,  records  and  papers  of 
any  corporation,  on  demand  of  any  officer 
holding  execution  against  the  same,  shall 
furnish  such  officer  with  the  name,  places 
of  residence  and  the  amount  of  liability  of 
every  person  liable  as  aforesaid,  and  if  such 
officer  refuses  so  to  do  he  shall,  upon  com- 
plaint thereof,  be  liable  to  a  fine  not  ex- 
ceeding five  hundred  dollars. 


ARTICLE  XI.     DISSOLUTIUN. 

Sec.  2154.  Dissolution  on   application   of  majority. 

2155.  Corporate  existence  continued  for  pur- 

poses of  settlement. 

2156.  Stockholders'  liability  for  debts  unpaid 

at  dissoUition. 

2157.  Froceedings  on  voluntary  or  other  dis- 

solution. 

§  2154.  When  a  majority  in  interest  of  the  j 
stockholders  of  a  coii>oration  desire  to  i 
close  their  concerns,  they  may  apply  by  i 
petition  to  the  circuit  court,  setting  forth 
the  grounds  of  their  application,  and  the 
court  on  due  notice  by  publication  for  a  rea- 
sonable period  given  to  all  parties  interested 
may  hear  the  matter,  and  for  reasonable  and 
just  cause  decree  a  dissolution  of  the  cor- 
poration, and  the  corporation  so  dissolved 
shall  be  deemed  and  held  extinct  in  all  re- 
spects as  if  its  charter  had  expired  by  its 
own  limitation,  and  the  settlement  of  the 
affairs  of  such  corporation  so  dissolved  shall 
be  managed  as  prescribed  in  cases  of  vol- 
untary dissolution  in  section  2157. 

See  §  2120. 

[Dissolution  of  corporation  does  not  extinguish 
its  debts.  Howe  v.  Robinson,  20  Fla.  3.52.  Dis- 
solved corporation.  Relieving  creditors  of.  Id. 
Limitations  of  actions  against.  Id.  Scire  facias 
does  not  lie  upon   a  judgment   against.    Id.] 


§  2155.  All  corporations  shall  continue 
bodies  corporate  for  the  term  of  three  years 
after  the  time  of  dissolution  from  any  cause, 
for  the  purpose  of  prosecuting  or  defending 
suits  by  or  against  them  and  enabling  them 
to  gradually  settle  their  concerns,  to  dispose 
of  and  convey  their  property  and  to  divide 
their  capital  stock,  but  for  no  other  purpose. 

§  2156.  If  any  corporation  dissolved  leav- 
ing debts  unpaid,  suits  may  be  brought 
against  any  persons  who  were  stockholders 
at  the  time  of  such  dissolution,  without  join- 
ing the  con'oration  in  such  suit,  for  so  much 
as  may  remain  unpaid  upon  his  or  her  sub- 
scription and   no  further,  the  collection  to 


be  made  from  the  stock  of  each  stockliolder 
respectively  only,  and  if  any  numl)er  of 
stockholders  (defendants  in  the  case)  shall 
not  have  property  enough  in  stock  to  satisfy 
his  or  their  portion  of  the  execution,  then 
the  amount  of  deficiency  shall  be  divided 
equally  among  all  the  remaining  stockliold- 
ers  and  -c-ollections  made  accordingly,  deduct- 
ing from  the  amount  a  sum  in  proportion  to 
the  amount  remaining  unpaid  on  the  plain- 
tiff's subscription  at  the  time  the  corporation 
dissolved. 

[For  discussion  of  personal  liability  of  stock- 
holders, see  Flash  et  al.  v.  Coun,  16  li'la.  428. 

Stockholders  liable,  upou  dissolution,  for  debts  to 
an  amount  equal  to  par  value  of  stock  held  by 
them.  Gibbs  v.  Davis,  2T  Fla.  531;  s.  c,  S  So. 
Rep.  633.  Not  necessary  that  dissolution  be  es- 
tablished by  legislative  enactment  or  judicial  pro- 
ceedings before  creditors  can  proceed  against 
stockholdei-s.  Id.  Liability  of  stockholders  dis- 
cussed.   Id.] 


§  2157.  Upon  the  voluntary  dissolution  of 
any   corporation  already   created,   or  which 
may  hereafter  be  created,  by  the  laws  of 
this   State,   the  president  and  directors,   at 
the  time  of  its  dissolution,  shall  be  trustees 
of  such  corporation,  with  full  power  to  settle 
its  affairs,  collect  its  outstanding  debts,  and 
divide  the  moneys  and  other  property  among 
the  stockholders,  after  pajing  the  debts  due 
and  owing  by  such  corporation  at  the  time  of 
its  dissolution,  as  far  as  such  money  and 
property  will  enable  them;  they  may  sue  for 
and  recover  such  debts  and  property  by  the 
name  of  the  trustees  of  such   corporation, 
and  may  also  be  sued  by  the  same,  and  such 
trustees   shall  be  jointly   and   severally   re- 
sponsible to  the  creditors  and  stockholders  of 
such  corporation,  to  the  extent  of  its  prop- 
erty and  effects  that  shall  have  come  into 
their  hands,  but  in  the  event  of  dissolution 
from    any    other   cause    a   petition    may    be 
filed   in   the   circuit  coiirt  by  any  three   or 
more  creditors  or  stockholders  of  any  corpo- 
ration, praying  that  a  receiver  be  appointed, 
and  the  court,  or  judge  thereof  at  chambers, 
shall  hear  and  consider  said  petition,   and 
for  just  and  reasonable  grounds  shall  grant 
said  petition  and  appoint  a  receiver,  and  un- 
less the  president  and  directors  of  such  cor- 
poration   shall   swear  that   the   corporation 
is  solvent  and  exhibit  proof  of  the  same  sat- 
isfactory to  the  court  or  judge,  such  petition 
shall  be  granted  and  a  receiver  appointed, 
but  no  voluntary  dissolution  shall  be  made 
or  permitted  after  the  institution  of  any  suit 
or   proceeding  against   any   corporation   for 
an  involuntary  or  forced  dissolution. 

[OflBcers  of  insolvent  corporation  trustees  for 
creditors.     Ins.  &  Trust  Co.  v.  Lanier,  5  Fla.  110. 

Must  be  sued  in  county  where  otHce  is  kept. 
Edwards  v.  Bank,  1  Fla.  130.] 


FLOKIDA. 


15 


Miscellaneous;  offenses  — R.  S.,  §§  2158-21&4,  24G7,  24G8. 


ARTICLE   XII.     MISCELLANEOUS. 

Sec.  2158.  Eminent   domain. 
21.50.   Estoppel. 
21(;o.   Misnomer. 

2161.   Corporation  may  sue  members. 
21(;2.  Diversion  of  funds. 
21(53.  Dividend   by   insolvent   corporations. 
2164.  Provisions   of    this    chapter   to   be   gen- 
eral. 

§  213S.  The  president  and  directors  of  any 
corporation  organized  for  the  purpose  of  con- 
structing, maintaining  or  operating  public 
works,  or  their  properly  authorized  agents, 
may  enter  upon  any  lands,  public  or  private, 
necessary  to  the  business  contemplated  in 
the  charter,  and  may  appropriate  the  same, 
or  may  take  from  any  land  most  convenient 
to  their  works  any  timber,  stone,  earth  or 
other  material  which  may  be  necessary  for 
the  construction  and  tlie  keeping  in  repair 
of  its  works  and  improvements,  upon  mak- 
ing due  compen.sation  according  to  law  to 
private  OAvners. 

See  Const.,  art.   VI.   §  29. 

§  2].^0.  Xo  body  of  persons  acting  as  a  cor- 
poration under  this  chapter  shall  be  per- 
mitted to  set  the  want  of  legal  organization 
as  a  defense  to  an  action  against  them  as  a 
corporation,  nor  sliall  any  person  sued  on 
a  contract  made  with  the  corporation,  or 
sued  for  an  injury  to  its  property  or  a  wrong 
done  to  its  interests  be  permitted  to  set  up 
a  want  of  such  legal  organization  in  his 
defense. 

Certified  ropy  of  letters  patent  conclusive  evi- 
dence.    §  2126. 

[Persons  contractinar  with  de  facto  corporation 
estopped  from  denying  its  corporate  existence. 
Booske  v.  Ice  Co..  24  Fla.  5.jO:  s.  c.  5  So.  Rep. 
247.     But  see  Duke  v.   Taylor.   19  id.   172. 

An  attempted  organization  in  Florida  under  the 
charter  of  the  laws  of  another  State,  no  authority 
therefor  being  shown,  renders  participants  liable 
as  partners  in  Florida.     Id. 

Where  a  corporation  de  facto  extends  its  busi- 
ness, the  stockholders  are  not  liable  as  partners. 
Id.] 

§  21G0.  A  misnomer  of  a  corporation  in 
any  deed  or  instrument  shall  not  vitiate  the 
same  if  the  corporation  shall  be  therein  suffi- 
ciently described  to  ascertain  the  intent  of 
the  parties,  and  tliis  shall  apply  to  all  corpo- 
rations of  every  character  and  for  any  law- 
ful purpose. 

[Misnomer  in  indictment  of  oflHcer  is  fatal.  AI- 
den  V.  State,  18  Fla.  187.] 

§  2101.  All  corporations  by  any  suit  at  law 
may  sue  for,  recover  and  receive  from  their 
respective  members  all  arrears,  or  other 
debts,  dues,  and  other  demands  which  may 
be  owing  to  them,  in  like  manner,  mode  and 
form  as  they  miglit  sue  for  and  recover  the 
same  from  any  other  person. 

§  2162.  Diversion  ])y  a  corporation  of  its 
funds   or   property   to  purposes   or   objects 


other  than  those  named  in  the  charter,  or  the 
payment  of  dividends,  leaving  insutficient 
funds  to  meet  outstanding  liabilities,  shall 
work  a  forfeiture  of  its  charter  and  of  all 
powers  and  lirivilcgcs  conferred. 

§  2103.  If  the  directors  shall  knowingly  de- 
clare and  pay  any  dividend  when  the  corpo- 
ration is  insolvent,  or  any  dividend  the  pay- 
ment of  which  Avould  render  it  insolvent, 
they  shall  be  jointly  and  severally  liable  for 
the  debts  of  the  corporation  then  e.xisting  to 
the  extent  of  the  dividends  so  declared.  If, 
however,  any  director  be  absent  at  the  time 
of  making  the  dividend  or  shall  at  the  time 
object  thereto  in  writing,  he  shall  not  be 
so   liable. 

§  2164.  The  foregoing  provisions  shall  apply 
to  every  class  of  corporation  for  profit,  ex- 
cept as  limited  by  the  special  provisions  of 
the  sub-chapters  hereof. 

Fifth  Division.     Crimes  and  Criminal  Pro- 
cedure. 

Part  First.     Crimes. 

TITLE  II.     OFFENSES  AXD  PI  XISHMEXTS. 

CHAPTER  IV. 

Offenses  against  Property. 

ARTICLE  V. 

Sec.  2467.  Making  false  entries,  etc.,  on  books  of 
corporation. 

2468.  Fraudulent  issue  of  certiflcafe  of  stock 

of  corporations. 

2469.  Issuing  stock  or  obligation  of  corpora- 

tion  beyond   authorized   amount. 

2470.  Books   to "be  evidence   in   such   cases. 

§  2467.  Any  officer,  agent,  clerk  or  servant 
of  a  corporation  who  makes  a  false  entry  in 
the  books  thereof,  with  intent  to  defraud, 
and  any  person  wliose  duty  it  is  to  make  in 
such  books  a  record  or  entry  of  the  transfer 
of  stocks,  or  of  the  issuing  and  cancelling  of 
certificates  thereof,  or  of  the  amount  of 
stock  issued  by  such  corporation,  who  omits 
to  make  a  true  record  or  entry  thereof,  with 
intent  to  defraud,  shall  be  punished  by  im- 
prisonment in  the  State  prison  not  exceed- 
ing ten  years,  or  by  fine  not  exceeding  ten 
thousand  dollars. 

[Indictment  of  officer;  misnomer  fatal.  Alden 
V.   State,  18  Fla.   187.] 

§  240S.  Any  officer,  agent,  clerk  or  servant 
of  a  corporation,  or  any  other  person,  who 
fraudulently  issues  or  transfers  a  certificate 
of  stock  of*  a  corporation  to  any  person  not 
entitled  thereto,  or  fraudulently  signs  such 
certificate,  in  blank  or  otherwise,  with  the 
intent  that  it  shall  be  so  issued  or  transferred 
by  himself  or  any  other  person,  shall  be 
punished  by  imprisonment  in  the  State 
prison  not  exceeding  ten  years,  or  by  fine  not 
exceeding  ten  thousand  dollars. 


16 


FLORIDA. 


Offenses  and  punishments  —  R.  S.,  §§  2469,  2470,  2483. 


§  2469.  Any  ofBcer,  agent,  clerk  or  servant 
of  a  corporation,  or  any  other  person,  who 
Issues,  or  signs  with  intent  to  issue,  any  cer- 
tificate of  stoclc  in  a  coiijoration,  or  who  is- 
sues, signs  or  indorses  with  intent  to  issue 
any  bond,  note,  bill  or  other  obligation  or 
security  in  the  name  of  such  corporation, 
beyond  the  amount  authorized  by  law,  or 
limited  by  the  legal  votes  of  such  corpora- 
tion or  its  proper  officers;  or  negotiates, 
transfers  or  disposes  of  such  certificate,  with 
intent  to  defraud,  shall  be  punislied  by  im- 
prisonment in  the  State  prison  not  exceeding 
ten  years,  or  by  a  fine  not  exceeding  ten 
thousand  dollars. 

§  2470.  On  tlie  trial  of  any  person  under 
the  three  preceding  sections,  the  books  of 
any  corporation  to  which  such  person  has 


access  or  the  right  of  access  shall  be  admis- 
sible in  evidence. 

ARTICLE  VII. 

Sec.  2483.  Fictitlons    signature   of   olTicer    of    cor- 
poration. 

§  24S3.  If  a  fictitious  or  pretended  signa- 
ture, purporting  to  be  the  signature  of  an 
officer  or  agent  of  a  corporation,  is  fraud- 
ulently affixed  to  any  instrument  or  writing 
purporting  to  be  a  note,  draft  or  evidence  of 
debt  issued  by  sucli  corporation,  with  intent 
to  pass  the  .same  as  true,  it  shall  be  deemed 
a  forgery  though  no  such  person  may  ever 
have  been  an  officer  or  agent  of  such  corpora- 
tion, or  ever  have  existed. 


LEGISLATIVE  ACTS  RELATING  TO  CORPORATIONS,  ENACTED 
SUBSEQUENTLY  TO  1892. 


1.  To     prohibit     wrongful     combinations     against 

■n-orkmeu. 

2.  For  the  protection  of  discharged  employes,  and 

to    prevent    blacklisting. 

3.  For  the  assessment  and   collection  of   revenue. 

4.  To  prevent  the  use  of  money  for  political  pur- 

poses by  corporations. 

Act  1. 

AN  ACT  to  prohibit  wrongful  combinations 
against  workmen,  and  to  punish  the 
same. 

Be  it  enacted  by  the  legislature  of  the 
State  of  Florida: 

Section  1.  If  two  or  more  persons  shall 
agree,  conspire,  combine,  or  confederate  to- 
gether for  the  purpose  of  preventing  any  per- 
son or  persons  from  procuring  worlc  in  any 
firm  or  corporation,  or  to  cause  the  discharge 
of  any  person  or  persons  from  work  in  such 
firm  or  corporation,  or  if  any  person  or  per- 
sons-shall verbally  or  Ijy  a  written  or  printed 
communication,  threaten  any  injury  to  the 
life,  property  or  business  of  any  person,  for 
the  purpose  of  procuring  the  discharge  of 
any  workman  in  any  firm  or  corporation,  or 
to  prevent  any  person  or  persons  from  pro- 
curing work  in  such  firm  or  corporation, 
such  person  or  persons  so  combining  shall  be 
deemed  guilty  of  a  misdemeanor  and  upon 
conviction  (thereof)  shall  be  punished  by  tine 
not  exceeding  five  hundred  dollars  each,  or 
by  imprisonment  not  exceeding  one  year. 

(Approved  May  31,  1893.) 

Act  2. 
AN  ACT  for  the  protection  of  discharged 
employes  and  to  prevent  blacklisting,  and 
for  other  purposes. 

Be  it  enacted  by  the  legislature  of  the 
State  of  Florida: 

Section  1.  That  if  any  railroad  company  or 
other    corporation    doing    business    in    this 


State,  or  any  person,  agent  or  employer  of 
any  such  company  or  corporation  after  hav- 
ing discharged  any  employe  from  the  ser- 
vice of  any  such  v.'ompany  or  corporation, 
shall  attempt  to  prevent  by  word  or  writing, 
sign  or  other  means,  directly  or  indirectly, 
such  discharged  employe  from  obtaining  em- 
ployment with  any  other  person,  company  or 
corporation,  such  person,  agent,  employer, 
company  or  corporation  shall  be  guilty  of  a 
misdemeanor,  and  on  conviction,  shall  be 
punished  by  a  flue  not  exceeding  five  hun- 
dred dollars  or  less  than  one  hundred  dollars, 
and  such  person,  agent,  employer,  company 
or  corporation  shall  be  liable  in  damages  to 
such  discharged  person,  to  be  recovered  by 
civil  action;  but  this  section  shall  not  be 
construed  as  prohibiting  any  person,  agent, 
employer,  company  or  corporation  from  giv- 
ing in  writing  to  any  other  person,  company 
or  corporation  to  whom  such  discharged  per- 
son has  applied  for  employment,  a  truthful 
statement  of  the  reasons  for  such  discharge; 
and  shall  furnish  to  such  discharged  em- 
ploye on  his  application,  to  sucli  address  as 
may  be  given  by  such  discharged  employe, 
within  ten  days  after  such  application  made 
as  aforesaid,  a  true  copy  of  any  such  written 
statement. 

§  2.  That  if  any  railroad  company  or  other 
corporation  doing  business  in  this  State, 
shall  authorize  or  permit,  with  its  knowledge 
and  consent,  any  of  its  officers,  agents,  em- 
ployers or  employes  to  commit  either  or  any 
of  the  acts  prohibited  by  this  act  (except  as 
herein  provided),  such  railroad  company  or 
corporation  shall  be  liable  in  damages  to 
such  employe  so  prevented  from  obtaining 
employment,  to  be  recovered  by  him  in  a 
civil  action. 

§  3.  That  it  shall  be  the  duty  of  any  per- 
son, officer,  agent,  employer,  company  or  cor- 
poration aforesaid,  after  having  discharged 


FLORIDA. 


17 


Blacklisting;  taxation  —  Acts  of  1893,  1895. 


any  employe  from  the  service  of  any  such 
company  or  corporation,  upon  written  de- 
mand by  such  employe,  to  furnish  to  him, 
within  ten  days  from  the  application  for  the 
same,  a  full  statement  in  writing  of  the 
cause  or  causes  of  his  discharge,  and  if  any 
such  person,  officer,  agent,  employer,  com- 
pany or  corporation  as  aforesaid  shall  refuse 
within  ten  days  after  demand  as  herein  pro- 
vided to  furnish  sucli  statement  to  such 
discharged  employe,  it  shall  be  ever  after 
unlawful  for  any  such  person,  officer,  agent, 
employer,  company  or  corporation  to  furnish 
any  statement  of  the  cause  of  such  discharge 
to  any  person  or  corporation  or  to  in  any  way 
blaclilist  or  to  prevent  such  discharged  em- 
ploye from  procuring  employment  elsewhere, 
subject  to  the  penalties  prescribed  in  sec- 
tion one  of  this  act.  And  on  the  trial  of  any 
person,  company  or  corporation,  for  a  viola- 
tion of  the  provisions  of  this  act.  any  other 
person  who  may  have  authorized  or  per- 
mitted, with  knowledge  and  consent  as  afore- 
said, any  such  offense,  or  who  may  have 
participated  in  the  same,  shall  be  a  com- 
petent witness,  and  be  compelled  to  give  evi- 
dence, and  nothing  then  said  by  such 
witness  shall  at  any  time  be  received 
or  given  in  evidence  against  him  in 
any  prosecution  against  the  said  wit- 
ness, except  on  an  indictment  for  per- 
jury in  any  matter  to  which  he  may  have 
testified;  and  on  the  trial  of  any  such  person 
for  any  violation  of  this  act.  the  prosecution 
shall  have  the  authority  and  process  of  the 
court  trying  the  case  to  compel  the  produc- 
tion in  court,  to  be  used  in  evidence  in  the 
case,  the  boolis  and  papers  of  any  such  per- 
son, company  or  corporation,  and  a  failure 
to  pi'oduce  the  same,  after  such  reasonable 
notice  as  the  court  may  in  each  case  provide, 
shall  l>e  in  contempt  of  court,  and  punishable 
as  such  against  the  custodian  or  person,  com- 
pany or  corporation  having  the  control  or  in 
charge  of  such  books  and  papers,  who  shall 
fail  to  produce  the  same:  Provided,  That 
such  written  cause  of  the  discharge,  when 
so  made  as  aforesaid,  at  the  request  of  such 
discharged  employe  shall  never  be  used  as 
the  cause  for  an  action  for  slander  or  for 
libel,  either  civil  or  criminal,  against  the  per- 
son or  authority  furnishing  the  same. 

§  4.  That  it  shall  be  the  duty  of  any  person, 
company  or  corporation,  who  has  received 
any  request  or  notice  in  writing,  sign,  word 
or  otherwise,  from  any  other  person,  com- 
pany or  corporation,  preventing  or  attempt- 
ing to  prevent  the  employment  of  any  per- 
son discharged  from  the  service  of  either 
of  the  latter,  on  demand  of  such  discharged 
employe,  to  furnish  to  such  employe  within 
ten  days  after  such  demand,  a  true  state- 
ment of  the  nature  of  such  request  or  notice, 
and  if  in  writing,  a  copy  of  the  same,  and 
if  a  sign,  the  interpretation  thereof,  with 
the  name  of  the  person,  company  or  corpo 
ratidu  furnishing  the  same,  with  the  place 
of  business  of  the  person  or  authority  fur- 


nishing the  same;  and  a  violation  of  this 
section  shall  subject  the  offender  to  all  the 
penalties,  civil  and  criminal,  provided  by  the 
foregoing  sections  of  this  act. 

§  5.  That  the  provisions  of  this  act  shall 
apply  to  and  prevent,  under  all  the  penalties 
aforesaid,  railroad  companies  or  corporations 
under  the  same  general  management  and 
control  but  having  separate  divisions,  super- 
intendents or  master-mechanics,  master- 
machinists  or  similar  officers,  for  separate  or 
different  lines,  their  officers,  agents  and  em- 
ployes, from  preventing  or  attempting  to 
prevent  the  employment  of  any  such  dis- 
charged person  by  any  other  separate  divi- 
sion, or  officer  or  agent  or  employer  of  any 
such   separate  railroad  line  or  lines. 

§  6.  That  all  laws  or  parts  of  laws  in  con- 
flict with  this  act  be  and,  the  same  are 
hereby  repealed. 

§  7.  That  this  act  shall  take  effect  imme- 
diately upon  its  passage  and  approval  by  the 
governor. 

(Approved,  June  10,  1893.) 

Act  3. 

AN  ACT  for  the  assessment  and  collection 
of  revenue. 

Be  it  enacted  by  the  legislature  of  the 
State  of  Florida: 

Section  1.  That  all  property,  real  and  per- 
sonal, in  this  State,  not  hereby  expressly 
exempt  therefrom,  shall  be  subject  to  taxa- 
tion in  the  manner  provided  by  law. 

§  3.  The  terms  personal  property  and  per- 
sonal estate,  as  used  in  this  chapter,  shall 
have  the  same  meaning,  and  shall,  for  the 
purpose  of  taxation,  be  construed  to  include 
*  *  *  all  public  stocks  or  sliares  in  all 
incorporated  or  unincorporated  companies. 

§  8.  The  owner  or  holder  of  stock  in  any 
incorporated  company,  firm  or  firms,  doing 
business  under  corporate  names;  which  is 
taxed  on  its  capital  stock,  shall  not  be  taxed 
as  an  individual  for  such  stock;  Provided. 
That  such  stock  is  returned  for  assessment 
by  such  company;  Provided,  That  this  sec- 
tion shall  not  apply  when  the  property  of 
the  incorporated  companies  is  in  this  State, 
and  taxes  are  paid  on  the  same.    *    *    * 

§  69.  All  laws  and  parts  of  laws  in  conflict 
with  the  provisions  of  this  act  are  hereby 
repealed. 

(Approved,  June  1,  1895.) 

See  Const,  art.  XVI,  §  16.  Stock  is  personal 
property.  §  2130.  See  §§  21.33,  2134.  Transfer 
to  avoid   taxation.    §    21.35. 

Act  4. 
AN  ACT  to  prevent  the  use  of  money  for 
political  purposes  by  corporations. 
Be  it  enacted   by   the   legislature   of   the 
State  of  Florida: 

Section  1.  No  foreign  or  non-resident  corpo- 
ration  or   coi-poraiiou   organized    under   the 


18 


FLOEIDA. 


Crimes  against  franchise  —  Act  of  1S97. 


laws  of  tlie  United  States,  doing  business 
in  this  State,  nor  any  domestic  coi-poration. 
shall  pay  or  contribute,  or  offer,  consent  or 
agree  to  pay  or  contribute,  directly  or  in- 
directly, any  money,  property  or  thing  of 
value  to  any  political  party,  organization, 
committee  or  individual  for  any  political 
purpose  whatsoever,  or  for  the  purpose  of 
influencing  legislation  of  any  kind,  or  to  pro- 
mote or  defeat  the  candidacy  of  any  person 
for  nomination,  appointment  or  election  to 
any  political  office. 

S  -.  Any  otticer,  employe,  agent  or  attor- 
ney or  other  representative  of  any  corpora- 
tion, acting  for  and  iu  bvhalf  of  such  cor- 
poration, who  shall  violate  this  act  shall  be 
punished  upon  conviction  by  a  fine  of  not 
less  than  one  thousand,  nor  more  than  ten 
thousand  dollars,  or  by  imprisonment  in  the 
State  prison  for  a  period  of  not  less  than 
two  nor  more  than  five  years,  or  by  both 
such  fine  and  imprisonment  in  the  discretion 
of  the  court  or  judge  before  whom  such 
conviction  is  had.  and  the  coi-poration,  if  a 
domestic  corporation,  is  dissolved,  if  after 
a  proper  proceeding  upon  quo  warranto,  in 
either  the  circuit  or  supreme  court  of  the 


State,  to  be  prosecuted  by  the  attorney-gen- 
eral of  the  State,  the  court  shall  fine  and 
give  judgment  that  section  one  of  this  act 
has  been  violated  as  charged,  and  if  a 
foreign  or  non-resident  corporaiion,  its  right 
to  do  business  in  this  State  ceases. 

§  3.  The  violation  of  this  act  by  any  officer, 
employe,  agent,  attorney  or  other  representa- 
tive of  a  coxTporation,  shall  be  prima  facie 
evidence  that  such  officer,  employe,  agent, 
attorney  or  other  representative  of  such  cor- 
poration is  acting  for  and  in  behalf  of  such 
corporation. 

§  4.  Any  person  or  persons  who  shall  aid. 
abet,  or  advise  a  violation  of  this  act  shall 
be  guilty  of  a  felony,  and  upon  conviction 
shall  be  punished  as  in  section  one  of  this 
act. 

§  5.  Violations  of  this  act  shall  be  pros^ 
cuted  in  the  county  where  such  payment  or 
contribution  is  made. 

§  6.  All  laws  and  parts  of  laws  in  conflict 
with  tliis  act  be  and  the  same  are  hereby 
repealed. 

§  7.  This  act  shall  take  effect  immediately 
upon  its  approval  by  the  governor. 

(Approved  .Tune  2,  1897.) 


INDEX  TO  FLORIDA. 


AGENTS:  Page. 

corporation  may  appoint  and  fix  compensation y 

AGRICULTURAL  CORPORATIONS: 

general  laws  to  be  passed  for  incorporation  of 5 

AMENDMENT: 

of   charter,   method  of    13 

ASSESSMENTS.    (See  Stock;  Capital  Stock.) 
ATTACHMENT: 

levy  ot,  upon  shares  of  stock  7 

how  made 7 

statement  of  shares  owned  by  debtor,  to  be  made 7 

interrogation  of  officers  of  corporation 7 

BLACKLISTING: 

of  employes,  prohibited    17 

BOOKS: 

of  corporation  open  to  inspection   12,  1.3 

to  be  made  over  to  successor 13 

BUSINESS: 

nature  of,  charter  to  state   10 

not  to  be  transacted  until  letters-patent,  etc.,  are  recorded 10 

BY-LAWS: 

power  to  make  9 

manner  of  paying  installments,  may  prescribe 11 

transfer   of   stock    11 

deemed   laws   of   corporation    11 

when  made    11 

what  to  prescribe    11 

manner  of  electing  directors   12 

meetings  of  stockholders   12 

CAPITAL  STOCK: 

charter  to  state  amount  of ^  '^ 

shares  of,  in  what  amount 1'^ 

payments,  how  made   1*^-  H 

statement  of  amount  subscribed  and  paid  H 

increase  or  reduction,  how  made  13 

if  taxed,  stock  of  stockholders  exempt 1" 

CHARTER: 

subscribed  by  three  or  more  persons   ^ 

contents  of    10 

acknowledgment  of   1^ 

publication  of   1^ 

submission  of,  to  governor   10 

letters-patent,  to  be  annexed  to   10 

filed  in  office  of  secretary  of  state 10 

evidence  of  facts  stated   10 

manner  of  paying  for  stock,  may  prescribe H 


20  INDEX  TO  FLORIDA. 

CHARTER  — (Continued):  Tage. 

amondinont  by  vote  of  three-fourths  of  stock   13 

notice  of  application  for,  to  be  published   13 

certificate  of,  to  be  filed 13 

letters-patent  issued  for   13 

forfeiture  for  division  of  funds,  etc 15 

CIRCUIT  COURT: 

clerk,  letters-patent  and  charter  to  be  filed  in  office  of 10 

COMBINATIONS: 

against  workmen,  prohibited  1^ 

CONTRACTS: 

laws  impairing  obligation  of  ^ 

corporation  may  make   ^ 

CREDIT: 

of  state  not  to  be  loaned ^ 

of  county,  town,  city  or  borough,  not  to  be  loaned  5 

DIRECTORS: 

number,  may  be  changed   9,  12 

manner  of  paying  for  stock,  to  prescribe 11 

business  managed  by   12 

election  of  12 

to  be  stockholders   12 

by-laws  to  prescribe  manner  of  choosing   12 

president  to  be  chosen  by  12 

quorum 12 

vacancies  in  offices,  filled  by  12 

record  of  proceedings,  open  to  inspection 13 

trustees,  upon  voluntary  dissolution  of  corporation 14 

povrers  and  duties  of  14 

liability  of 14 

eminent  domain,  when  may  be  exercised 15 

liability  of,  for  declaring  illegal  dividends 15 

for  false  entries    15 

DISSOLUTION: 

not  effected  by  failure  to  elect  officers 8,  12 

receiver  to  be  appointed,  when  not  voluntary 14 

application  of  stockholders  for 14 

decree,    when    made    14 

corporations,   when  to  exist   after    14 

debts  unpaid  upon,  liability  of  stockholders  for 14 

directors  trustees,  upon  involuntary 14 

powers  of,   as    14 

DIVIDENDS: 

liability  for  declaring  illegal   15 

EDUCATIONAL  CORPORATIONS: 

general  laws  to  be  passed  for  incorporation  of 5 

EMINENT  DOMAIN: 

right  of,  how  exercised    5 

when  may  be  exercised   15 

EMPLOYES: 

combinations  against,  prohibited  16 

prevention  of,  from  receiving  employment  16 

blacklisting  prohibited 16 

statement  of  cause  of  discharge  to  be  furnished  to 16,  17 

ESTOPPEL: 

of  defense  of  want  of  organization   15 


INDEX  TO  FLOKIDA.  21 

EVIDENCE:  Page. 

letters-patent,  of  existence  of  corporation   10 

charter,  of  facts  contained 10 

EXECUTION: 

stock  in  corporation  subject  to  levy  under 7 

levy  upon,  how  made 7 

levy  upon  property  of  corporation 7 

returned   unsatisfied,    sequestration    7 

when  may  be  levied  against  stockholders  for  debt  of  corporation 13 

FALSE  ENTRIES: 

in  books  of  corporation,  a  crime   I5 

FOREIGN  CORPORATION: 

service  of  process  upon (j 

FORGERY: 

fictitious  signature  by  officers  a 16 

GENERAL  MANAGER,    (See  Officers.) 

GOVERNOR:  1 

to  grant  letters-patent  to  corporations 10 

of  amendment  of  charter 1'6 

INCORPORATION: 

for  what  purposes  9 

INCORPORATORS: 

number  of,  necessary   9 

INCREASE:  1 

of  capital  stock,  how  made   13 

INDEBTEDNESS: 

charter  to  state  highest  amount  of 10 

INSPECTION: 

records,  books  and  papers  of  corporation,  open  to 12 

INSTALLMENTS.    (See  Stock;  Capital  Stock.) 

LANDS: 

conveyances  of,  by  corporations 8 

LETTERS-PATENT: 

granted  by  governor,  upon  charter   10 

evidence  of  existence  of  corporation   10 

record  of  in  office  of  clerk  of  circuit  court 10 

corporation  not  to  transact  business  before   .  . .' 10 

for  amendment  of  charter  1"^ 

LEVY: 

of  attachment  and  execution  upon  shares  of  stock 7 

how  made   7 

statement  of  shares  owned  by  debtor  to  be  made 7 

interrogation  of  officers  of  corporation   7 

sale  of  stock    ^ 

LIABILITY: 

of  stockholders  for  debts  of  corporation  13,  14 

when   dissolved    !•* 

of  directors,  for  illegal  dividends  15 

MECHANICAL  CORPORATIONS: 

general  laws  for  incorporation  of ^* 

MEETINGS: 

stockholders,  notice  of   1  - 

when  directed  by  justice  of  the  peace 1- 

validation,  by  consent  of  four-fifths  of  stockholders   1- 


22  INDEX  TO  FLORIDA. 

MEETINGS  —  (Continued) :  Page. 

stockholders,  quorum,  what  constitutes   12 

votes  at 12 

proxies 12 

MINING  CORPORATIONS: 

general  laws  for  incoi'poration  of 5 

MISNOMER: 

in  deed  or  instrument  does  not  vitiate 15 

NAME: 

charter  to  contain   10 

change  of,  by  corporation   13 

two  corporations  not  to  have  same  13 

OFFICERS: 

statement  of  shares  of  stock  owned  by  debtor 7 

interrogation  of,  by  sheriff  7 

refusal  to  answer,  punishment   7 

answers    false,  creditor  to  furnish  description  of  stock 7 

failure  to  elect,  not  to  dissolve  corporation  8,  12 

to  hold  until  successors  qualify  8 

corporation  may  appoint   9 

business  managed  by    12 

charter  to  state  names  of  10 

vacancies,  filled  by  directors    12 

when  elected  by  stockholders    12 

false  entries  in  books,  a  crime 15 

stock,  fraudulent  issue  of 15 

issuing  beyond  authorized  amount   16 

fictitious  signature,  a  forgery 16 

blacklisting  employes,  punishment  of   16 

liability  of,  for  using  money  of  corporation  for  political  purposes 17,  18 

ORGANIZATION: 

want  of  legal,  not  a  defense 15 

PERSONAL  ESTATE: 

corporation  may  hold  and  convey   9 

stock   deemed    11 

statement  of,  to  be  returned 11 

POLITICAL  PURPOSES: 

corporations  not  to  contribute  money  for  17,  18 

POWERS: 

generally,  of  corporations   8 

PRESIDENT    (See  Officers): 

directors  to  elect  one  of  their  number   12 

PROCESS: 

service  of,  upon  corporation  6 

effect  of 6 

when  officers  or  agents  are  absent 6 

when  made  by  publication  q 

PROPERTY: 

not  to  be  taken  without  compensation   5 

corporation  may  hold  and  convey 9 

PROXIES: 

at  stockholders'  meeting 12 


INDEX  TO  1 LOEIDA.  23 

QUORUM:  '  Page. 

at  directors'  iiioetings   12 

at   stockholders'   meetings    1- 

REAL  ESTATE: 

corporation  may  hold  and  convey 9 

amount  and  value  to  be  returned  to  comptroller 11 

RECEIVER: 

appointment  of,  when  property  of  corporation  is  sequestrated 7 

upon  dissolution  other  than  voluntary 14 

RECORDS: 

of  corporation,  open  to  inspection   12,    13 

to  be  made  over  to  successor liJ 

REDUCTION: 

of  capital  stock,  how  made    13 

SALE: 

of  shares  of  stock,  under  levy   8 

SEAL,  COMMON: 

corporation  may  make  and  alter 8 

SECRETARY    (See  Officers): 

to  permit  inspection  of  books,  records  and  papers 12,  13 

books,  records  and  papers  to  be  made  over  to  successor 13 

SECRETARY  OF  STATE: 

charter  to  be  filed  in  office  of 10 

SEQUESTRATION: 

of  property  of  corporation,  when  writ  of  fi.  fa.  cannot  be  satisfied 7 

receiver  may  be  appointed 7 

SERVICE: 

of  process  upon  corporation    6 

when  officers  or  agents  are  absent G 

effect  of,  upon  corporation 6 

by  publication,  order  for   6 

STATE: 

credit  of,  not  to  be  loaned   5 

stockholder,  not  to  become 5 

STATEMENT: 

returned  to  comptroller  for  tax  purposes   11 

capital  stock  subscribed  and  paid  in  to  be  filed 11 

STOCK: 

subject  to  levy  under  execution    7 

shares  of,  subject  to  levy  of  attachment   7 

levy  upon,  how  made 7 

officers  to  make  statement  of,  owned  by  debtor 7 

interrogation  of,   by  sheriff   7 

creditor  to  furnish  description  of   7 

transfer  of,  not  to  be  made  after  levy 8 

sale  of  shares  of,  levied  upon    8 

transfer  of,  to  avoid  taxation   11 

deemed  personal  estate    11 

transferrable  as  prescribed  by  by-laws 11 

assessments  must  be  paid  before 11 

books  to  bo  kept   11 

open  to   inspection    11 

amendment  of  charter,  by  vote  of  three-fourths  of 13 

fraudulent  issue  of,  a  crime  15 

beyond  authorized  amount  a  crime   Hi 

not  taxed,  when  capital  stock  is   17 


24  INDEX  TO  FLOKIDA. 

STOCK— (Continued):  i  Pago. 

capital,  charter  to  state  amount   10 

conditions  under  which  paid  in   10 

shares,  in  what  amounts 10 

payments,  how  made   10,  11 

statement  of  amount  subscribed  and  paid  in 11 

increase  or  reduction  of  13 

increase,  president  to  return  to  secretary  of  state 13 

reduction,  unanimous  vote  for  13 

certificate  of  comptroller 13 

STOCKHOLDER: 

state  not  to  become 5 

county,  city,  borough,  township,  not  to  become   5 

neglect  to  pay  installment 11 

upon  transfer  to  succeed  to  rights 11 

executor,  administrator  and  trustee,  liability  as 11 

list  of,  to  be  kept * 11 

open  to  inspection    11 

names  and  residences  to  be  returned  to  comptroller 11 

transfer  of  stock  to  avoid  taxation 11 

officers,   when   elected  by    12 

meetings  of,  notice  of 12 

when  directed  by  justice  of  the  peace 12 

consent  of  four-fifths  may  validate   12 

quorum 12 

votes  at 12 

proxies 12 

vote  of,  for  amendment  of  charter 13 

change  of  name,  at  meetings   13 

liability  of,  for  judgment  against  corporation   13 

measured  by  amount  unpaid  in  capital  stock 13 

dissolution  of  corpoation,  application  for   14 

decree  for   14 

liability  for  debts  upon   14 

when  not  taxed  on  stock  17 

SUBSCRIBERS: 

names  and  residences,  charter  to  state   10 

SUBSCRIPTIONS: 

to  capital  stock,  how  paid   10,  11 

failure  to  pay,  effect  of 11 

SUCCESSION: 

powers  of,  by  corporation   8 

SUITS: 

against  corporations,  where  commenced .  6 

summons  against  corporations   6 

service  of  process  in,  how  made   6 

by  publication,  when  made 6 

corporations  may  sue  and  be  sued 8 

SUMMONS: 

against   corporations    6 

service  of,  how  made  6 

TAX: 

levy  of,  for  benefit  of  corporation,  prohibited   5 

relief   of   corporation   from    5 

TAXATION: 

of  property  of  all  corporations,  except  benevolent,  etc.,  subject  to 5 

transfer  of  stock  to  avoid   11 

stock  deemed  personal  property  for  purposes  of   17 

when  capital  stock  subject  to,  stockholders  are  not 17 


INDEX  TO  FLORIDA.  25 

TERM:  Page. 

of  corporate  existence,  charter  to  state 10 

TREASURER    (See  Officers): 

books  of  stockholders,  to  keep   11 

open  to  inspection   11 

return  of  names  and  residences  of  stockholders   11 

statements  to  comptroller   11 

TRANSFER: 

of  stock,  not  to  be  made  after  levy 8 

when  sold  under  execution   8 

of  stock,  made  as  prescribed  by  by-laws 11 

to  avoid  taxation 11 

VICE-PRESIDENT.    (See  Officers.) 

WRIT  OF  FI.  FA.: 

issued  against  property  of  corporation    7 

returned   unsatisfied,   sequestration   of  property   of   corporation    7 

WORKMEN: 

wrongful   combinations   against    16 

18 


GEORGIA. 


TABLE   OF  CONTENTS. 


CONSTITUTIONAIi   PROVISIONS. 

Art.       I.  BUI    of    lights P&ge. 

III.  Legislative  department [  .  .  '  '  '/'] g 

IV.  Power   of     tlie     general     assembly     over  laxallini         r. 

VII.  Taxation y.' ''.".'.'.'.'.'.'.'..]].'.  ^.' .'.  ^  '  '      5 

CODE  PROVISIONS. 
Part  First.     Political  and  Public  Organization  of  the  State. 

TITLE   VIII.      PUBLIC   REVENUE. 

Ch.  1.  Taxation  by  the  State 7 

TITLE   XVII.      REGULATIONS   OF  TRADE    AND   COMMERCE. 

Ch.  1.  Banks  and  banking g 

Part  Second.     The  Civil  Code, 

TITLE   I.      OF  PERSONS. 

Ch.  1.  Their  rights  and  status 8 

ARTICLE  IV.    OF  CORPORATIONS. 

Sec.  1.  Their  nature   and   kinds    8 

2.  Their  creation    9 

3.  Their  powers  and  liabilities 13 

4.  Their  dissolution 15 

TITLE   III.      OF   RELATIONS   ARISING    FROM  CONTRACTS. 

Ch.  2.  Debtor  and  creditor 16 

5.  Principal   and  agent 16 

TITLE   IV.      OF  PROPERTY. 

Ch.  1.  Of  realty 17 

2.  Of  personalty 17 

TITLE  V.      OF  ESTATES. 

Ch.  2.  Of   estates   for   life 17 

TITLE  VI.     OP  TITLE  AND  THE  MODE  OF    CONVEYANCE. 

Ch.  3.  Of  title  by  decedent,  administration,   etc 17 

4.  Of  title  by  judicial  sale 18 

TITLE   IX.      OF   EftUITY. 

Ch.  6.  Of  administration  of  assets IS 

Part  Third.     The  Code  of  Practice. 

TITLE   II.      OP  ACTIONS. 

Ch.  3.  Petition  and  process If* 

TITLE   X.      OF  EVIDENCE. 

Ch.  3.  Discovery    -1 

Part  Fourth.    Penal  Laws. 

TITLE    I.      PENAL   CODE. 

Division  Eleventh.     Cheats  and  Swindles. 
LEGISLATIVE  ACTS  PASSED   SUBSEQUENTLY  TO  CODE  OF   1882. 


GEORGIA. 


COA'STITUTIO^  OF  GEOEGIA-187 


PROVISIONS  RELATING  TO  CORPORATIONS. 


AUTICLE  I,   SECTION  HI. 

Bill  of  Eights. 

Par.  2.  Laws    Impairing?   obligations    of    contracts, 
or   making   irrevocable   grants   or   privi- 
leges prohibited. 
3.  No   grants    or    special    privileges    sball    be 
revoked,    except,    etc. 

AUTTCLE  III,  SECTION  Vn. 

Legislative  Department. 

Par.  18.  General  assembly  sball  not  grant  corpo- 
rate powers,   but  shall  prescribe  man- 
ner in  which  courts  shall  grant  them. 
20.  Street  railways  shall  not   be  constructed 
without   consent   of  authorities. 

ARTICLE  IV,  SECTION  II. 

Power  of  the  General  Assembly  over  Tax- 
ation. 

Par.  1.  General    assembly    may    regulate    railroad 
freights  and  tariffs. 

2.  Right     of     eminent     domain,      or      police 

powers     of     the    State    shall     never   be 
abridged. 

3.  General     assembly    shall    not    remit    for- 

feiture   of    charter    of    existing    corpora- 
tions   except    upon    certain    conditions. 

4.  One    corporation    may    not    buy    stock    in 

another  to   lessen    competition. 
6.  Railroad    company    not    to    deceive    public 
as   to    rates. 

6.  No    provision     in     this    article     shall     be 

deemed  to  impair  obligation  of  any  con- 
tract. 

7.  Provisions    of    this    article    shall    be    en- 

forced. 

ARTICLE  VII,   SECTION  II. 

Taxation. 

Par.  5.  Power    to    tax    corporate    property    shall 
not  be  surrendered  or  suspended. 

SECTION  V. 

Par.  1.  State  shall   not  become  a  stockholder  In, 
or  loan  its  credit  to  any  corporation. 

ARTICLE  I,   SECTION  III, 

Par.  ir.  No  bill  of  attainder,  ex  post  facto 
law,  retroactive  law,  or  law  impairing  the 
obligation  of  contracts,  or  making  iiTevo- 
cable  grants  of  special  privileges  or  immuni- 
ties, shall  be  passed. 

See  Const.,  art.  I,  par.  3;  art.  IV,  par.  6;  art. 
VII,  par.  5;  Code,  §  1CS2  et  seq. 


[A  private  corporation  is  a  contract  between 
the  government  and  corporators,  and  rights  and 
privileges  conferred  by  charter  cannot  be  re- 
pealed or  Impaired  by  legislature  without  con- 
sent or  default  of  corporation.  Young  v.  Har- 
risons,  6   Ga.    130. 

Where  an  act  of  incorporation  is  passed,  malt- 
ing directors  personally  liable  for  certain  acts, 
if  committed,  this  charter  is  not  a  contract,  but 
it  is  quasi  ex  contractu;  and,  upon  commission 
of  these  acts,  an  action  quasi  ex  contractu  Is 
raised.    Banks   v.    Darden,   18   Ga.    318. 

Original  contract  between  stockholders  and  cor- 
poration, as  contained  in  charter,  cannot  be  ma- 
terially altered  by  an  amended  charter,  without 
consent  of  stockholders.  May  v.  Railroad  Co., 
48  Ga.   109.1 

Par.  III.  No  grant  of  special  privileges  or 
immunities  shall  be  revolved,  except  in  such 
manner  as  to  work  no  injustice  to  the  cor- 
porators or  creditors  of  the  incorporation. 

See  5  1685. 

[A  private  corporation  cannot  be  deprived  of 
its  franchise  except  by  judicial  judgment  upon 
a  quo  warranto.    State  v.    Mayor,   5   Ga.   250.] 

ARTICLE  III,  SECTION  VH. 

Par.  XVIII.  The  general  assembly  shall 
have  no  power  to  grant  corporate  powers 
and  privileges  to  private  companies,  except 
banking,  insurance,  railroad,  canal,  naviga- 
tion, express  and  telegraph  companies; 
*  *  *  but  it  shall  prescribe  by  law  the 
manner  in  which  such  powers  shall  be  ex- 
ercised by  the  courts. 

See  §  1674    et  seq. 

[An  unconstitutional  act.  although  void  as  a 
law,  may  operate  as  notice,  not  only  to  the 
corporation  who  accept  of  it,  but  the  third  persons 
who  act  upon  it.     Robinson  v.  Bank,  18  Ga.  65.] 

Par.  XX.  The  general  assembly  shall  not 
authorize  the  construction  of  any  street  pas- 
senger railway  within  the  limits  of  any  in- 
coi-porated  town  or  city,  without  the  consent 
of  the  corporate  autliorities. 

ARTICLE  IV,  SECTION  H. 

Par.  I.  The  power  and  authority  of  regulat- 
ing railroad  freights  and  passenger  tariffs, 
preventing  unjust  discriminations,  and  re- 
quiring reasonable  and  just  rates  of  freight 


GEORGIA. 


Eminent  domain;  forfeiture,  etc. —  Const.,  Art.  iv,  §  2;  Art.  vii,  §§  \1, 


and  passenger  tariffs,  are  hereby  conferred 
upon  the  general  assembly,  whose  duty  it 
shall  be  to  pass  laws,  from  time  to  time,  to 
rejriilate  freight  and  passenger  tariffs,  to  pro- 
hibit unjust  discriminations  on  the  various 
railroads  of  this  State,  and  to  prohibit  said 
roads  from  charging  other  than  just  and 
reasonable  rates,  and  enforce  the  same  by 
adequate  penalties. 

Tar.  II.  The  exercise  of  the  right  of 
eminent  domain  shall  never  be  abridged,  nor 
so  construed  as  to  prevent  the  general  as- 
sembly from  taking  the  property  and  fran- 
chises of  incorporated  companies,  and  sub- 
jecting them  to  public  use,  the  same  as 
property  of  individuals;  and  the  exercise  of 
the  police  power  of  the  State  shall  never  be 
abridged,  nor  so  construed  as  to  permit 
corporations  to  conduct  their  business  in 
such  a  manner  as  to  infringe  the  equal  rights 
of  individuals,  or  the  general  well-being  of 
the  State. 

Par.  III.  The  general  assembly  shall  not 
remit  the  forfeiture  of  the  charter  of  any 
corporation,  now  existing,  nor  alter  or  amend 
the  same,  nor  pa.ss  any  other  general  or 
special  law  for  the  benefit  of  said  corpora- 
tion, except  upon  the  condition  that  sucli 
corporation  shall  thereafter  hold  its  charter 
subject  to  the  provisions  of  this  Constitution; 
and  every  amendment  of  any  charter  of  any 
corporation  in  this  State,  or  any  special  law 
for  its  benefit,  accepted  thereby,  shall 
operate  as  a  novation  of  said  charter  and 
shall  bring  the  same  under  the  provisions  of 
this  Constitution:  Provided,  That  this  sec- 
tion shall  not  extend  to  any  amendment  for 
the  purpose  of  allowing  any  existing  road  to 
take  stock  in  or  aid  in  the  building  of  any 
branch  road. 

See  §  1682. 

Par.  IV.  The  general  assembly  of  this 
State  shall  have  no  power  to  authorize  any 


corporation  to  buy  shares,  or  stock,  in  any 
other  corporation  in  tliis  State,  or  elsewhere, 
or  to  make  any  contract,  or  agreement  what- 
ever, with  any  such  corporation,  which  may 
have  the  cft"ect,  or  be  intended  to  have  the 
effect,  to  defeat  or  lessen  competition  in  their 
respective  businesses,  or  to  encourage  mo- 
nopoly; and  all  such  contracts  and  agree- 
ments shall  be  illegal  and  void. 

Par.  V.  No  railroad  company  shall  give, 
or  pay,  any  rebate,  or  bonus  in  the  nature 
thereof,  directly  or  indirectly,  or  do  any  act 
to  mislead  or  deceive  the  public  as  to  the 
real  rates  charged  or  received  for  freights  or 
passage;  and  any  such  payments  shall  be 
illegal  and  void,  and  these  prohibitions  shall 
be  enforced  by  suitable  penalties. 

Par.  VI.  No  provision  of  this  article  shall 
be  deemed,  held,  or  taken  to  impair  the  ob- 
ligation of  any  contract  heretofore  made  by 
the  State  of  Georgia. 

See  Const.,  art.  I,  paragraphs  2,  3. 

Par.  VII.  The  general  assembly  shall  en- 
force the  provisions  of  this  article  by  appro- 
priate legislation. 

ARTICLE  VII,   SECTION  II. 

Par.  V.  The  power  to  tax  corporations  and 
corporate  property,  shall  not  be  surrendered 
or  suspended  by  any  contract  or  grant  to 
which  the  State  shall  be  a  party. 

Taxation  of  corporations,  sre  §  799  et  seq. 

SECTION  V. 

Par.  I.  The  credit  of  the  State  shall  not  be 
pledged  or  loaned  to  any  individual,  com- 
pany, corporation  or  association,  and  the 
State  shall  not  become  a  joint  owner  or 
stockholder  in  any  company,  association  or 
corporation. 


GEORGIA. 

Taxation  —  Rev.  Code,  §§  799,  802,  816,  826-827,  876. 


EEYISED  CODE  OF  GEORGIA- 1882. 


Part  First.     Political  and  Public  Org-aniza- 
tion  of  the  State. 

TITLE  VIII.      PURi^ic  REVENUE. 

CHAPTER  I. 

Taxation  by  the  State. 

ARTICLE  II. 
Sec.  700.  Taxable   property,    what. 

802.  Moneyed    and    stock    corporations    liable 
to    taxation. 

§  799.  All  real  and  personal  estate,  whether 
owned  by  individuals  or  corporations,  resi- 
dent or  non-resident,  are  liable  to  taxation, 
unless  especially  exempted. 

[License  tax  on  foreign  corporations.  Ins.  Co. 
V.    City.   50  Ga.    530.] 

§  802.  *  *  *  All  moneyed  or  stock  cor- 
porations, unless  exempted  or  differently  pro- 
vided for  in  their  charters,  are  liable  to 
taxation  upon  such  capital  stock  as  other 
property. 

ARTICLE  III. 
Sec.  816.  Tax  on  railroads  and  other  corporations. 

§  816.  The  several  railroads  and  other  in- 
corporated or  unincorporated  companies  of 
every  kind,  except  banks  which  are  not  ex- 
empt by  their  charter  otherwise,  or  for  which 
there  is  not  a  different  method  of  taxation 
specially  prescribed,  pay  the  same  rate  per 
cent,  upon  the  whole  amount  of  their  capital 
stock  paid  in  as  is  levied  on  other  capital, 
together  with  the  same  rate  per  cent,  upon 
their  net  annual  profits:  (Provided,  That 
this  section  shall  be  not  so  construed  as  to 
include  loan  and  building  associations,  but 
tlio  same  are  hereby  declared  exempt  from 
taxation  upon  their  capital  stock  and  net 
annual  profits.) 

[What  is  capital  stock  liable  to  taxation.  High- 
tower  V.  Thornton,  8  Ga.  486.  Tax  to  be  paid  on 
whole  amount  of  capital  stock  paid  in,  and  not 
on  market  value  thereof.  Wilson  v.  FactoiT,  44 
Ga.  388.] 

ARTICLE  IV. 

Sec.  826.      Returns    of    foreign    companies    to    be 
made. 
826d.  Returns   to   be   Itemized. 
Siifig.  Existing  penalities  remain. 
827.      Other  returns,   to   whom   made. 

§  820.  The  returns  of  all  banks,  railroad, 
and  insurance  and  express  companies,  and 
agents  of  foreign  companies,  authorized  in 
this  State,  shall  be  made  to  the  comptroller- 
general  by  the  first  day  of  May  in  each  year, 
and  tlie  taxes  thereof  shall  be  paid  to  the 
State  treasurer  by  the  first  day  of  October 
in  each  year. 

§  82Cd.  Whenever  corporations,  companies, 
persons,  agencies,  or  institutions,  are  re- 
quired by  law  to  make  returns  of  property. 


or  gross  receipts,  or  business,  or  income, 
gross,  annual,  not,  or  any  other  kind  or.  any 
other  return,  to  the  comptroller-general,  for 
taxation,  such  return  sliall  contain  an  item- 
ized statement  of  property,  each  class  or 
species  to  be  separately  named  and  valued, 
or  an  itemized  account  of  gross  receipts,  or 
business,  or  income,  as  above  defined,  or 
other  matters  required  to  be  returned,  and 
in  case  of  net  income  only,  an  itemized  ac- 
count of  gross  receipts  and  expenditures,  to 
show  how  the  income  returned  is  ascertained, 
and  such  returns  shall  be  carefully  scruti- 
nized by  the  comptroller-general,  and  if  in  his 
judgment  the  property  embraced  therein  is 
returned  below  its  value,  he  shall  assess  the 
value,  within  sixty  days  thereafter,  from  any 
infoi-mation  he  can  obtain,  and  if  he  shail 
find  a  return  of  gross  receipts,  or  business, 
or  income,  as  above  defined,  or  other  matters 
requii-ed  to  be  returned  as  aforesaid,  below 
the  true  amount,  or  false  in  any  particular, 
or  in  anywise  contrary  to  law,  he  shall  cor- 
rect the  same  and  assess  the  true  amount, 
from  the  best  information  at  his  command, 
within  sixty  days.  In  all  cases  of  assess- 
ment, or  of  correction  of  returns,  as  herein 
provided,  the  officer  or  person  making  such 
returns  shall  receive  notice  and  shall  have 
the  privilege,  within  twenty  days  after  such 
notice,  to  refer  the  question  of  true  value  or 
amount,  as  the  case  may  be,  to  arbitrators  — 
one  chosen  by  himself,  and  one  chosen  by  the 
comptroller-general  —  with  power  to  clioose 
an  umpire  in  case  of  disagreement,  and  their 
award  shall  be  final. 

§  826g.  Nothing  in  the  three  preceding 
sections  shall  alter  or  affect  the  penalties 
now  provided  by  law  against  defaulting  or 
delinquent  corporations,  companies,  persons, 
or  institutions,  referred  to  therein,  or  to  alter 
or  affect  the  mode  of  enforcement  of  such 
penalties,  now  provided  by  law. 

§  827.  All  other  companies  or  persons  taxed 
shall  make  their  returns  to  the  receiver  of 
the  respective  counties  where  the  persons 
reside  or  the  office  of  the  company  is  located, 
except  in  cases  of  miuing  companies.    *    *    • 

ARTICLE  V. 

Sec.  876.  Defaulting    corporations. 

877.  l>eliii<iuent  corporations,  penalty. 

878.  Penalty   where  none   Is  fixed. 

882.   Executions     against    corporations,     how 

directed. 
901.  Defaulting  companies,    etc. 

§  876.  If  any  corporation,  company,  person, 
agency  or  institution,  who  are  required  to 
maketlieir  returns  to  the  comptroller-gen- 
eral, shall  fail  to  return  the  taxable  prop- 
erty or  specifics,  or  pay  annually  the  taxes 


8 


GEORGIA. 


Taxation  —  Rev.  Code,  §§  877,  878,  882,  901;  Banks,  id.,  §  1496. 


for  which  they  are  liable  to  the  State 
treasury,  the  comptroller-general  shall  issue 
against  thoui  an  execution  for  tlio  amount  of 
taxes  due,  according  to  law,  togotlier  witli 
the  costs  and  penalties. 

[Section  cited.  Railroad  Co.  v.  Goldsmith,  62 
Ga.   463.] 

§  877.  The  penalty  against  all  such  cor- 
porations sliall  be  the  forfeiture  of  their 
charters.  And  if  not  chartered  by  this  State, 
then  the  immediate  suspension  of  their  busi- 
ness therein. 

§  878.  The  penalty  or  default  tax  on  banks, 
railroads  and  otlier"  corporations,  where  there 
is  no  special  provision,  shall  be  three  times 
the  amount  of  their  lawful  tax. 

§  882.  The  executions  issued  by  tlie  comp- 
trollei*- general  against  any  bank  or  other 
company  shall  he  directed  to  all  and  singular 
the  sheriffs  and  other  lawful  officers  of  this 
State,  witli  directions  to  levy  the  same  on 
the  property  of  tlie  corporation  or  company, 
with  power  to  issue  and  serve  garnishments 
upon  the  debtors  of  the  corporation. 

§  901.  Any  incorporated  or  other  company 
making  default,  sliall  be  taxed  by  the  col- 
lector as  such  defaulters  are  by  the  comp- 
troller-general. 

TITLE    XVII.       REGILATIOXS    OF    TRADE 
AXD    COMMERCE. 

CHAPTER  I. 

Banks  and  Banking. 

ARTICI-E  IV. 

Sec    1496.  Transferrer  of   stock,   exempt   from  in- 
dividual   liability,    when. 

§  1400.  (As  amended  December  12,  1892.) 
When  a  stockholder  in  any  bank  or  other 
corporation  is  individually  lialde  under  the 
charter  and  shall  transfer  his  stock,  he  shall 
be  exempt  from  such  liability  unless  he  re- 
ceives written  notice  from  a  creditor  within 
six  months  after  such  transfer  of  his  inten- 
tion to  hold  him  liable;  Provided,  he  shall 
witliin  ten  days  thereafter  cause  notice  of 
sucli  transfer  to  be  published  once  a  week 
for  four  weeks  in  the  newspaper  wliicli  pub- 
lishes the  sheriff's  sales  of  the  county  in 
which  such  corporation  shall  keep  its  prin- 
cipal office. 

[Transfers  of  stock  made  void  by  charter  if 
made  within  six  months  previous  to  failure  of 
corporation  liability.    Lumpkin  v.  .Tones,  1  Ga.  27. 

The  personal  liability  of  a  corporate  stockholder 
for  debts  of  corporation  continues  until  the  stock- 
holder has  sold  and  transferred  his  stock  and 
given  notice  thereof  under  the  Code.  Brobston 
y.  Downing,  22  S.  E.   Hep.  277. 

With  or  without  a  clause  in  charter  restraining 
personal  statutory  liability  of  stockholders  to 
amount  of  stock  at  its  par  value  at  the  time 
debt  in  question  was  created,  liability  exists  and 
continues  for  any  debt  incurred  by  the  corpora- 
tion at  any  time  until  stockholder  who  claims 
to  be  exempt  by  reason  of  having  sold  and 
transferred  his  stock  before  debt  was  created  has 
given  notice  of  such  sale  conformably  to  section 
1406  of  the  Code.  Brobston  v.  Downing,  95  Ga. 
505;  s.  c,  22  S.  E.  Rep.  277. 


Where  personal  statutory  liability  of  stock- 
holders is  to  be  apportioned  amongst  all  agree- 
ing to  the  relative  amount  of  stock  severally  by 
each,  and  where  corporation  is  insolvent  and  has 
no  assets  applicable  to  payment  of  ifs  unsecured 
creditors,  one  or  more  of  the<se  cretntors  may 
bring  suit,  in  behalf  of  tho«e  of  others  who  may 
choose  to  come  in  and  be  made  i)arties,  against 
all  the  stockholders  and  enforce  their  statutory 
liability  and  apportion  the  amount  which  each 
should"  contribute  to  discharge  the  claims  of  the 
various  creditors.  Brobston  v.  Downing,  95  Ga. 
50.1:  s.  c.  22  S.   E.  Rep.  277. 

Where  it  was  stipulated  in  original  contract  of 
subscription,  that  it  was  "  to  be  binding  upon 
each  party  hereto  when  .$50,000  has  been  bona 
fide  subscribed,  and  not  before,"  anil  the  sub- 
scriptions actually  amount  to  less  than  that 
amount,  none  of  the  subscriptions  were  legally 
bound  to  pay.  Branch  v.  Augusta  Glass  Works, 
95  Ga.  57.",:  s.  c.  23  S.  E.  Rep.  128. 

Creditors  of  an  Insolvent  corporation,  the  direc- 
tors of  which,  having  full  control  of  Its  affairs, 
have  misappropriated  its  assets  so  as  to  put  the 
same  beyond  reach  of  these  creditors,  inay  unite 
in  an  equitable  petition  for  purpose  of  subject- 
ing tiiese  creditors  to  individual  liability  because 
of  said  misappropriation.  Ellis  v.  rullman,  95 
(ia.  4-15;  s.  c.  22  S.  E.  Rep.  5CS. 

Where  stock  of  an  incorporated  company  is 
pledged  by  the  owner  as  collateral  security  for 
payment  of  a  debt,  the  pledgee  is,  as  a  general 
rule,  entitled  to  collect  and  receive  the  dividends 
thereon  unless  this  right  is  reserved  by  pledgor 
at  the  time  pledge  is  made.  Guarantee  Co.  v. 
East  Rome.  96  Ga.  511;  s.  c.  23  S.  E.  Rep.  503. 

Wliere  president,  secretary  and  treasurer  act- 
ually know  that  certain  shares  of  stock  therein 
have  been  transferred  by  the  persfln  in  whose 
name  the  stock  stands  on  the  company's  bool<s, 
to  another,  such  knowledge  is  notice  to  the  cor- 
poration itself.  Guarantee  Co.  v.  East  Rome,  96 
Ga.  511:  s.  c.  23  S.  E.  Rep.  503. 

In  the  absence  of  express  statutory  authority 
the  stock  of  one  corporation  cannot  be  consoli- 
dated with  that  of  another,  against  objection 
of  a  majority  of  stockholders  in  their  corporation. 
Tompkins  v.    Comptin.   21   S.   E.    Rop.   79. 

Where  corporation  has  authority  to  Increase 
Its  capita!  from  .$10,000  to  S.50.000.  and  it  only 
increases  it  to  ,$15,000.  which  anio\int  was  fully 
paid  up,  and  it  has  appropriated  all  of  its  prop- 
erty for  its  debts,  there  are  no  unpaid  subscrip- 
tion.s  which  the  stockholders  are  liable  for.  Hale 
V.   Iron  Co..   22   S.   E.    Rep.   217. 

Calls  for  payment  of  subscriptions  which  are 
payable  "  as  the  directors  may  direct."  cannot 
be  made  by  mere  street  conversation  between 
president  and  directors  of  corporation.  In  which 
they  "  agree  "  that  he  mav  call  in  the  subscrip- 
tions as  needed.  Such  calls  must  be  made  by 
corporate  action  on  part  of  directors.  Branch  v. 
Antrusta  Glass  Works,  95  Ga.  573;  s.  c,  23  S.  B. 
Rep.  128. 

Part  Second.    The  Civil  Code. 

TITLE    I.      OF    PERSONS. 

CHAPTER  I. 

Rights  and  Status  of  Persons. 

ARTICLE    IV.       OF    CORPORATIONS     GENER- 
ALLY. 

Section  I. 

Their  Nature  and  Kinds. 

Sec.  1670.  Corporation    defined. 
1671.  Public    or   private. 
1072.   Public. 
1673.  Private. 

§  1670.  A  corporation  is  an  artificial  per- 
son created  by  law  for  specific  purposes,  the 
limit  of  whose  existence,   powers   and   lia- 


GEORGIA. 


Corporations;  their  creation  —  Rev.  Code,  §§  1671-1675. 


bilities  is  fixed  by  the  act  of  incorporation, 
usually  called  its  charter. 

fCorporatlon  defined.  Frederick  v.  Council,  5  Ga. 
561.  Possesses  only  those  properties  conferred  by 
charter,  either  expressly  or  as  incidental  to  its 
very  existence.  Id.  Is  embraced  In  a  statute 
under  designation  of  "  person,"  unless  expressly 
excepted  or  excluded  by  necessary  implication. 
Kailroad  v.  Paulk,  24  Ga.  356.  Is  not  a  "  citi- 
zen."   Manganese  Co.  v.   Ward,   73  Ga.   491. 

Entity  not  affected  by  entire  change  of  personnel 
of  officers  and  members.  Mathis  v.  Morgan,  72 
Ga.  517.  Not  a  "  person  "  in  law  until  after 
grant  of  Its  charter.  Bartram  v.  Mfg.  Co.,  69 
Ga.   751.] 

§  1671.  Corporations  are  either  public  or 
private. 

§  1672.  A  public  corporation  is  one  having 
for  its  object  the  administration  of  a  portion 
of  the  powers  of  government,  delegated  to  it 
for  that  purpose  —  such  are  municipal  corpo- 
rations. 

§  1673.  All  others  are  private,  whether  the 
object  of  incorporation  be  for  public  con- 
venience or  individual  profit,  and  vv'hether 
the  purpose  be,  in  its  nature,  civil,  religous 
or  educational. 

[See  R.    &  B.   Co.    v.    State,   54   Ga.   404.] 

Section.  II. 
Their  Creation. 

Sec.    1674.      By  Trhom  created. 

1675.  Foreign  corporations. 

167oa.    Foreign  corporations  hold  lands,  how. 

1676.  Organization  under  order  of  court. 

§  1674.  The  power  to  create  corporations  in 
this  State  vests  in  the  general  assembly,  and 
the  courts,  by  whom  all  charters  must  be 
granted. 

See  Const.,  art.  Ill,  par.  18;  Act  4,  at  p.  24. 

[Grants  of  exclusive  privileges  to  corporations 
are  to  be  strictly  construed,  and  if  terms  of 
grant  are  ambiguous,  ambiguity  must  operate  in 
favor  of  public.  McLeod  v.  Burroughs,  9  Ga.  213; 
R.  R.  Co.  V.  R.  R.  Co.,  49  Ga.  151;  R.  R.  Co.  v. 
Smith,  70  Ga.  094. 

Corporations  chartered  in  two  States,  may  for 
some  purposes  be  recorded  as  one  entire  entity. 
R.  R.  Co.  V.  Hammond.  58  Ga.  523. 

General  assembly  cannot  constitutionally  Incor- 
porate three  corporations  by  one  law.  King  v. 
Banks.   01   Ga.  20. 

Consulidation  illegal,  not  consummated;  notes 
given  in  lieu  of  delivered  stock  in  consolidated 
companv.  not  collectible.  Tompkins  v.  Compton, 
93  (;a.  .">20:  s.  c,  21  S.  E.  Rep.  79. 

Charter  fundamentally  changed  by  legislature 
without  consent  of  previous  subscribers  of  stock, 
releases  It.  Academv  v.  Flanders,  7T>  Ga.  15; 
Snook  V.  Imp.  Co..  S3  Ga.  62:  s.  <:.  9  S.  E.  Rep. 
1104.  Wlietlu'r  cl'.nnge  is  fundamental  is  for  de- 
cision by  court.  Id.  Railroad  terminus  changed, 
is  friiidaiiieiilal.     Id. 

Amendment,  If  repugnant  to  original  charter. 
repeals  the  charter  if  accepted.  R.  R.  Co.  v. 
Goldsmith.    62    Ga.    463. 

Not  competent  for  general  assembly  to  enact 
law  creating  three  separate  and  distinct  corpora- 
tions, or  reviving  by  name  three  charters  which 
had  become  obsolete.  Ex  parte  Conner,  51  Ga. 
571;  King  v.  Banks,  61  Id.  20;  Howell  v.  State, 
71  Id.   229. 


Charter  of  private  corporation  Is  a  contract 
between  State  and  corporation;  an'd  terms  of 
such  contract  are  to  be  looked  for  In  body  of 
Instrument,  not  In  title  or  caption.  Gofdsmlth  v. 
R.   R.   Co..  62  Ga.  473;   Same  v.    Same,   Id.  4K>. 

Charter  of  bank  Is  a  public  law,  and  courts  will 
take  judicial  cognizance  thereof.  Terry  v.  Bank, 
66    Ga.    177. 

Charter  passed  by  legislature  Is  a  public  law. 
Gunn  V.  R.  R.  Co.,  74  Ga.  509.  Legislative  power 
to  create  corporation.  Bridge  Co.  v.  Wood,  14 
Ga.  80.] 


§  1675.  (As  amended  December  9,  1893.) 
Corporations  created  by  other  States  or  for- 
eign governments,  are  recognized  in  our 
courts  only  by  comity,  and  so  long  as  the 
same  comity  Is  extended  in  tlieir  courts  to 
corporations  created  by  this  State.  But  no 
foreign  corporation  shall  exercise  within  this 
State  any  corporate  powers  or  privilegt'S 
which  by  the  Constitution  or  laws  of  Georgia 
are  denied  or  prohibite<l  to  corporations  cre- 
ated by  this  State,  or  the  exercise  of  wliich 
is  contrary  to  the  public  policy  of  this  State, 
anything  In  the  charter  or  corporate  powers 
of  the  said  foreign  coiTX)i-atlon  to  the  con- 
trary notwithstanding.  Whenever  any  for- 
eign corporation  shall  exercise  or  attempt 
to  exercise  within  this  State  any  corporate 
power  or  privilege  denied  or  prohibited  to 
corporations  created  by  this  State,  by  the 
Constitution  or  laws  of  this  State,  or  con- 
trary to  the  public  iK)licy  of  this  State,  it 
shall  be  the  duty  of  the  courts  to  declare 
said  corporate  powers  or  privileges  invalid 
and  of  no  force  or  effect  within  this  State, 
and  to  restrain  or  prohibit  by  appropriate 
process,  order  or  judgment,  the  exercise  of 
said  coriiorate  powers  or  privileges  by  said 
foreign  corporation  at  the  instance  of  any 
party  at  interest,  or  at  the  instance  of  the 
attorney-general,  when  tlie  latter  shall  be 
directed  by  the  governor  to  proceed  to  that 
end  in  the  name  of  the  State. 


[A  corporation  can  have  no  legal  existence  out 
of  the  sovereignty  by  which  it  Is  created;  but 
Its  existence  may  be  recognized  In  another  State, 
and  it  may  there  be  contracted  with.  V.  B.  R.  R. 
Co  V.  E.  T.  &  G.  R.  R.  Co.,  14  Ga.  3^.  Right 
to  sue  controlled  by  comity.  Society  v.  Gattrell, 
23   Ga.   448.  ^       , 

Attachment  will  He  agaln.st  a  foreign  corpora- 
tion, even  though  It  be  not  doing  business  here. 
Wilson  V.   Danforth.   47  Ga.   676. 

Although  corporations,  as  such,  can  do  no  cor- 
porate act  out  of  limits  of  State  granting  Its 
charter,  yet  its  agents  and  officers  may  bind  It  by 
contracts"  and  engagements  made  In  other  States, 
and  minutes  of  board  of  directors  may  be  u^ed 
as  evidence,  though  the  meetings  appear  to  have 
been  held  out  of  State  chartering  the  corporation. 
Mining  Co.    v.   King,   45  Ga.    34.  .        »,. 

Foreign  corporation  transacting  business  In  tnia 
State  mav  be  garnished  for  a  debt  which  may 
be  owed  "anvwhere  in  this  State  where  suit  for 
such  a  debt  could  be  brought.  R.  R.  Co.  v.  Tyson, 
48  Ga.  351.  .  ,_.   . 

Foreign  corporation  becoming  Indebted  under 
contnicts  made  In  Georgia.  Is  liable  to  suit  upoii 
such  contracts  In  this  State,  though  at  time  of 
Institution  no  business  was  being  done  by  ''otn- 
pany.  It  having  no  place  of  business  In  the^^btate 
of  Its  Incorporation.  Bank  v.  Mfg.  Co.,  5j  Oa. 
36. 


10 


GEORGIA. 


Creation  of  corporations  —  Rev.  Code,  §§  1675a,  1676. 


Courts  of  thl8  State  have  no  Jurisdiction  of 
suit  In  personam  against  forelpn  corporation,  un- 
less c'ontrat-t  was  inado  in  Georgia,  or  Georgia 
agent  was  connected  therewith.  Remedy  Is  by 
attachment.    I{awl<night   v.    Ins.    Co.,   5.5   Ga.    194. 

Counsel  for  foreign  corporation  not  competent 
to  verify  amendments  to  exceptions,  when.  In.s. 
Co.  V.   Gray,   61   Ga.  515. 

Subscriber  to  stock  of  foreign  corporation, 
whose  subscription  was  induced  by  fraudulent 
representations,  may  repudiate  contract,  and  pro- 
ceed by  attachn)ent  as  for  money  had  and  re- 
ceived.   Ins.   Co.  V.  Turner,  61  Ga."561. 

AfTulavit  for  attachment  need  not  disclose  that 
defendant  is  a  corporation.  Residence  beyond 
this  State  implies  that  debtor  is  not  a  domestic 
corporation.     R.    R.    Co.   v.   IMant.   5S   Ga.    167. 

A  Georgia  court  has  no  jurisdiction  to  dissolve 
a  foreign  corporation.  Dodge  v.  Manganese  Co., 
69  Ga.   665. 

Foreign  company  buying  domestic  railroad,  be- 
comes domestic  corporation,  when.  Angler  t. 
R.   R.   Co.,  74  Ga.  634. 

Foreign  corporation  subject  to  attachment  in  this 
State.  R.  R.  Co.  v.  Sav.  Inst.,  64  Ga.  18.  Pro- 
vision   malving   it    liable    to    suit,    cumulative.    Id. 

Suit  in  personam  cannot  be  maintained  against 
a  foreign  corporation  on  contract  made  out  of 
the  State.  Remedy  is  in  rem,  by  attachment  or 
garnishment.  Rawknlght  v.  Ins.  "Co.,  .55  Ga.  194; 
Min.  Co.  V.  Purdy,  65  Id.  499.  Mechanics'  lien 
against,    enforced    here.    Id. 

Foreign  railroad  company  with  principal  ofUce 
In  Fulton  county,  by  statute,  suable  for  Injury 
in  other  county.    Williams  v.  Ry.  Co.,  90  Ga.  519. 

Court  of  Georgia  has  no  jurisdiction  over  nonresi- 
dent foreign  corporation;  a  resident  agent  to 
audit  and  pay  claims  does  not  alter  case.  Schmld- 
lapp  V.    Ins.    Co.,   71   Ga.   246. 

Judgment  construing  charter  In  State  of  crea- 
tion,   followed   here.     Clark   v.    Tomer,   7.^   Ga.    1 

One  giving  a  deed  to  a  foreign  corporation 
under  a  power  of  sale  to  secure  a  loan,  held 
estopped  to  deny  the  right  of  the  corporation  to 
exercise  the  power.  Ray  v.  Home,  etc.,  Co.,  HQ 
S.    E.    Rep.   734.] 


§  1675.1.  (As  amended  December  13,  1895.) 
Any  foreign  corporation  or  corporations  in- 
corporated by  the  laws  of  any  other  State, 
and  cLiiming  to  own  lands  in  Georgia  in 
quantity  amounting  to  as  much  as  five  thou- 
sand acres,  shall  be  incorporated  by  the  laws 
of  Georgia  within  tAvelvo  months  after  Feb- 
ruary twenty-eighth,  eighteen  hundred  and 
seventy-seven,  and  on  their  failing  to  do  so, 
the  State  of  Georgia  will  not  consent  to  the 
said  corporation  owning  the  said  lands  so 
located  in  her  territory,  and  any  foreign  cor- 
poration or  corporations  hereafter  incorpo- 
rated by  the  laws  of  other  States,  who  shall 
claim  to  own  lands  in  the  State  of  Georgia 
in  quantity  amounting  to  five  thousand  acres 
or  upwards,  shall  become  incorporated  by 
the  laws  of  the  State  of  Georgia,  and  in  de- 
fault thereof,  Georgia  will  not  consent  that 
said  foreign  corporation  or  corporations  in- 
corporated by  the  laws  of  anotlier  State  shall 
own  said  lands  in  her  territory;  and  no  for- 
eign corporation  or  corporations  Incorporated 
by  the  laws  of  another  State  shall  own  more 
than  five  thousand  acres  of  land  except  upon 
the  condition  aforesaid  of  becoming  a  corpo- 
ration under  the  laws  of  Georgia;  Provided, 
That  this  section  sliall  not  ai)iily  to  any 
foreign  corporation,  or  any  con^oration  incor- 
porated by  the  laws  of  any  other  State  on- 
gaged  in  the  business  of  lending  monej'  on 


real  estate  security,  nor  to  any  such  corpo- 
ration which  holding  a  lien  upon  real  estate 
to  secure  the  payment  of  any  debt,  when 
said  corporation,  in  order  to  prevent  loss,  is 
compelled  to  become  the  purchaser  of  lands 
covered  by  deed  or  mortgage  to  secure  a 
loan;  Provided,  however.  That  the  benefits 
and  privileges  of  the  foregoing  proviso  shall 
not  apply  to  any  foreign  corporation  which 
does  or  may  lend  money  in  tliis  State  at  a 
greater  rate  of  interest  than  eight  per  cent 
per  annum.  In  estimating  the  amount  of  in- 
terest charged,  there  shall  be  included  any 
and  all  commissions  or  fees  which  may  be 
paid  to  said  company  or  its  duly  authorized 
agents. 


[On  bill  by  foreign  corporation  to  recover  real 
estate,  charter  of  such  foreign  corporation  must 
show  right  to  hold.  Cotton  Gin  Co.  v.  Barrett, 
66   Ga.    52G. 

State  alone  can  make  the  question  as  to  right 
of  such  corporation  to  hold  said  land.  Mortg. 
Co.  V.  Tennille,  87  Ga.  28;  s.  c,  13  S.  E.  Rep. 
158.] 


§  1676.  A  private  corporation,  for  any  pur- 
pose whatever,  except  banking  or  insurance, 
may  be  created  in  this  State  by  complying 
with  the  following  provisions: 

1.  (As  amended  September  8,  1891.)  The 
persons  desiring  the  charter  shall  file  in 
the  office  of  the  cleric  of  the  superior  court 
of  the  county  in  which  they  desire  to  trans- 
act business,  a  petition  or  declaration,  speci- 
fying the  objects  of  their  association,  and 
the  particular  business  they  propose  to  caiTy 
on.  together  with  their  corporate  name,  and 
the  amount  of  capital  to  be  employed  by 
them  actually  paid  in,  and  their  place  of 
doing  business,  and  the  time  not  exceeding 
twenty  years,  for  which  they  desire  to  be 
incorporated;  which  petition  or  declaration 
shall  be  published  once  a  weelv  for  four 
weeks  in  the  nearest  public  gazette  to  the 
point  where  such  business  is  located,  before 
said  court  shall  pass  an  order  declaring  said 
application  granted.  After  the  granting  by 
the  court  of  the  order  of  incorporation,  the 
petition  and  said  order  shall  be  recorded  to- 
gether by  said  clerk  in  a  book  to  be  kept  for 
that  purpose,  and  to  be  known  as  "  the  Rec- 
ord of  Superior  Court  Charters,"  and  which 
shall  be  kept  appropriately  indexed  by  said 
clerk;  but  this  shall  not  dispense  with  the 
recording  of  the  order  of  incorporation  upon 
tlie  minutes  of  tlie  court,  also  as  a  part  of 
the  proceedings  of  the  court,      *      •      * 

See  Act  4,  at  p.  24. 

[Applicants  must  specif.v  business  to  be  carried 
on,  place  of  business  and  amount  of  capital  to 
be   used.    In    re   Deveaux,    54    Ga.    673. 

Fraud  in  inducing  one  to  join  in  organizing 
company,  reliovable  against  in  equity.  Stewart 
V.  Rutherford,  74  Ga.  435.  Corporation  properly 
a  party.  Id.  Insolvcnc.v  of  corporation  need  not 
be   alleged,    nor   relief   asked    of   stockholders.    Id. 

Injunction  against  procurement  of  charter,  not 
granted.  Med.  Col.  v.  Thompson,  92  Ga.  564;  s.  C, 
18  S.  E.  Rep.  430. 


GEORGIA. 

Creation  of  corporation  —  Rev.  Code,  §  1676,  subds.  2,  3. 


n 


Fraud  of  corporation  in  obtaining  its  cliarter 
cannot  be  set  up  as  a  defense  bv  its  debtors. 
Pattison  v.  B.  &  L.  Assn.,  63  Ga.  374.] 

2.  If,  upon  hearing  such  petition,  the  court 
shall  be  satisfied  that  the  application  is  legiti- 
mately within  the  purview  and  intention  of 
this  Code,  it  shall  pass  an  order  declaring 
the  said  application  grantetl,  and  the  peti- 
tioners and  their  successors  incorporated  for 
and  during  a  term  not  exceeding  twenty 
years,  with  the  privilege  of  renewal  at  the 
expiration  of  that  time  according  to  the  pro- 
visions above  set  forth.  A  certified  copy  of 
this  petition  and  order,  under  the  seal  of 
the  court,  shall  be  evidence  of  such  incorpo- 
ration in  any  court  in  this  State. 

Commissioners  appointed  by  law  to  receive  sub- 
BcrlptioDS  to  stock  have  discretion  to  determine 
what  is  a  bona  fide  subscription.  Napier  v.  Poe, 
12  Ga.  170. 

When  petition  to  Superior  Court  to  obtain  char- 
ter failed  to  state  fully  objects  of  corporation, 
defect  In  petition  held  to  be  cured  by  court's 
specifying  objects  in  granting  Its  assent.  Red- 
wine  V.    L.    &    B.   Assn.,   54   Ga.   474. 

Purposes  and  objects  of  corporation,  when  suffi- 
ciently set  forth  In  petition.  Van  Pelt  v.  B.  & 
L.  Assn.,  70  Ga.  430;  s.  c,  4  S.   E.  Rep.  501. 

Power  of  courts  to  grant  charter  to  corpora- 
tions Is  legislative  and  not  judicial.  Gaslight  Co.  v. 
West,  78  Ga.  318.  There  Is  no  provision  authoriz- 
ing anyone  to  appear  and  object  to  such  grant 
of  corporate  powers,  and  order  granting  charter 
1b   reviewable.    Id. 

Estoppel  to  deny  existence  of  corporation,  as 
against  creditors  without  notice,  after  charter 
obtained.  Stewart  Co.  v.  Rau,  92  Ga.  511;  s.  c,  17 
S.  E.  Rep.  748. 

Acceptance  of  charter  presumed,  if  granted 
after  being  applied  for.  City  v.  Gaslight  Co.,  71 
Ga.   106. 

Parties  carrying  on  business  as  a  corporation 
de  facto,  estopped  from  denying  corporate  char- 
acter and  name.  Ice  Co.  v.  Porter,  70  Ga.  637. 
Corporation  de  facto  changed  Into  one  de  jure 
liable  for  debts  of   first.    Id. 

One  dealing  with  a  corporation  as  such,  estopped 
to  deny  corporate  existence.  Bank  v.  Padgett, 
69  Ga.  159.  And  members  of  de  facto  corporation 
not   liable  as   individuals   or   as   partners.    Id. 

One  corporation  dealing  with  another  Is  estopped 
to  deny  corporate  existence  of  the  other,  when. 
Imboden  v.   Mln.   Co.,   70  Ga.  86. 

Under  Constitution  of  1868,  Superior  Courts  had 
no  authorltv  to  incorporate  manfacturlng  com- 
panies.   Kehler  v.   Mfg.   Co.,  55  Ga.   639. 

3.  No  corporation  created  under  this  ar- 
ticle shall  commence  to  exercise  the  privi- 
leges conferred  by  the  charter,  until  ten  per 
cent,  of  the  capital  stock  is  paid  in,  and  no 
charter  shall  have  any  force  or  effect  for  a 
longer  period  than  two  years,  unless  the 
corporators,  within  that  time,  shall  in  good 
faith  commence  to  exercise  the  powers 
granted  by  the  act  of  incorporation;  and,  in 
case  of  the  failure  of  said  corporation,  the 
stockholders  shall  be  bound,  in  their  private 
capacity,  to  any  creditor  of  said  corporation 
for  the  amount  of  stock  subscribed  for  by 
him,  until  the  said  subscription  is  fully  paid 
up,  or  imtil  the  stockliolder  shall  have  paid, 
out  of  his  private  property,  debts  of  tlie  saJd 
corporation  to  an  amount  equal  to  his  un- 
paid subscription. 

Relief  from  individual  liability.  See  Act  of 
1894,  p.  28;  see  §  33C7  et  seq. 


[This  clause  not  applicable  to  legislative  char- 
ters. City  V.  Gaslight  Co.,  70  Ga.  464.  It  Is 
the  amount  of  shares  subscribed,  and  not  the 
sums  paid  in,  which  constitutes  the  capital  stock. 
Hightower  v.  Thornton,  8  Ga.  486.  A  subscrip- 
tion for  stock  Is  a  debt,  which  corporation  may 
call  In  to  satisfy  creditor.  Id.  Right  to  have 
iinpa  d  stock  drawn  in,  to  exUnguIsh  outstand- 
ing debts.  Is  as  clear  and  strong  after  as  before 
dissolution.  Id.  Unpaid  subscriptions  are  oor- 
porate  property,  which  can  be  reached  bv  cred- 
itors; and  this  right  exists  entirely  independent 
of  any  statutory  provision.  Id.  A  court  of  equity 
will  provide  a  remedy  to  enable  creditors  to  ap- 
propriate  this   trust    fund.    Id. 

Misrepresentations  made  by  a  companv  before 
Incorporation  cannot,  after  Incorporation,  be 
made  ground  of  an  action,  by  creditors  of  the 
corporation  against  stockholders.  Matthews  v. 
Stanford,  17  Ga.  543.  Neither  can  fraudulent  non- 
disclosures or  concealments.  Id.  The  action 
should   be   against   the  parties   Implicated.    Id. 

Where  stockholder  Is  made  Indlviduallv  liable 
upon  execution  Issuing  against  corporation,  he  Is 
entitled  to  the  remedy  by  illegality,  same  as  any 
other  defendant  in  fl.  fa.  Force  v.  Leather  Co., 
22  Ga.  86. 

Change  in  location  of  railroad,  If  consistent 
with  original  design  and  object  of  the  enterpriso, 
s\-ill  not  relieve  stockholder  from  his  subscription, 
though  made  without  his  consent.  Wilson  v. 
R.   R.  Co.,  33  Ga.  466. 

Where  no  notice  of  call  or  assessment  of  stock 
is  required  to  be  given  by  the  charter,  such 
notice  not  essential.    Id. 

An  issue  or  an  offer  to  issue  cerllflcates  of 
stock  is  not  a  condition  precedent  to  right  of 
recovery  and  subscription.  Fulgam  v.  R.  R.  Co., 
44  Ga.  597;  R.  R.  Co.  v.  Ayres,  56  Id.  2.30. 

Holders  of  preferred  stock  entitled  to  claim  as 
creditors,  when.  Tot  ten  v.  TIson.  .54  Ga.  130. 
Suit  for  stock  subscription;  no  defense  that  rail- 
road company  has  been  author! 7jed  by  an  action. 
Mulllns  V.  R.   R.  Co.,   54  Ga.  5S0. 

Subscriber  to  stock  contracts  with  reference 
to  charter;  number  of  shares  to  be  subscribed, 
or  stock  necessary  to  do  contemplated  business, 
constitutes  important  element.  R.  R.  Co.  v. 
Sullivan.  Same  v.  Amberg,  57  Ga.  240.  Release 
of  subscriptions  pro<luces  same  practical  result 
as  failure  to  t-ake  amount  subscribed  by  charter. 
Id.  Nominal  subscription,  to  fulfill  letter  and 
break  spirit  of  contract,  no  compPiance  with 
charter.    Id. 

In  suit  to  collect  capital  stock  subscribed,  evi- 
dence of  value  of  that  or  anv  other  stock.  Irrel- 
evant.    R.    R.    Co.    V.    Ayres.   .56   Ga.   2.30. 

Calls  for  subscription  must  be  clearly  proved, 
and  recovery  should  be  limited  to  aggregate 
amount  of  calls  not   met.    Id. 

Where  subscriptions  to  be  paid  in  property, 
burden  is  on  corporation  to  show  that  such  pay- 
ment was  equivalent  to  cash.  Hayden  v.  Cotton 
Factory,   61   Ga.   233. 

Directors  having  approved  and  accepted  sub- 
scription, burden  of  showing  that  all  such  sub- 
scriptions were  worthless  or  fraudulent  is  on 
partv  setting  up  such  defense.  Hayden  v.  Cot- 
ton  Factory,  61  Gn.   2.33. 

Number  and  qualification  of  directors,  fixed  by 
charter,  essential  to  be  adhered  to  to  make  calls 
valid;  but  payments  under  irregular  calls  show 
acquiescence.     R.  R.  Co.  v.  Vason.  57  Ga.  314. 

Conditions  precedent  to  validity  of  calls  must 
be  shown,   before  recovery  can   be  had.    Id. 

Forfeiture  of  stock  for  failure  to  meet  calls. 
Is  satisfaction  of  debt;  but  mere  threat  to  for- 
feit if  not  paid  will  not  bar  action.    Id. 

Member  of  chartered  company  bound  by  acts 
of  company,  when.     May  v.   R.  R.  Co.,  48  Ga.   100. 

Title  of  purchaser  of  stock  complete  when  seller 
has  given  on  the  scrip  authority  to  proper  oflicer 
to  transfer,  and  price  has  been  paid.  Ross  v. 
R.   R.   Co.,  53  Ga.  514. 

Capital  stock  not  subscribed  to  minimum,  and 
unpaid,  but  coi-poratoi-s  organized,  doing  business, 
contract  debts,  etc.;  liability  to  creditors.  Burns 
V.  Beck,  S3  Ga.  471;  s.  c,  10  S.  E.  Rep.  121. 


12 


GEOEGIA. 


Creation  of  corporations  —  Rev.  Code,  §  1676,  subds.  4-7. 


Amount  of  capital  stock  being  in  discretion  of 
company,  wlien  once  fixed  by  it  conditional  sub- 
scriptions not  talit'n  into  the  estimate.  Brand  v. 
R.  K.  Co.,  77  Ga.  odG;  s.  c,  1  S.  E.  Uep.  255. 

Subscriptions  to  stocli  beyond  charter  limit  are 
void  and  not  collectible.  Clark  v.  Turner,  73 
Ga.   1. 

Failure  to  secure  subscriptions  to  amount  of 
minimum  required  by  charter,  or  release  of  sub- 
scriptions below  that  amount,  discharges  sub- 
scriber.   Hendrix  v.   Academy,  73  Ga.   438. 

"Where  charter  requires  certain  amount  of  stock 
to  be  subscribed  and  ten  per  cent,  paid  in  before 
beginning  business,  these  are  conditions  precedent, 
and  business  done  before  complying  is  ultra  vires. 

A  subscriber  on  condition  that  others  would 
purchase  his  shares  at  the  end  of  three  years 
on  thirty  days'  notice,  held  not  required  to  elect 
to  keep  the  stock,  or  to  give  said  notice,  im- 
mediately on  the  three  vears  expiring.  Rogers 
V.    Burr,    25   S.    E.    Rep.    339. 

A  subscriber  on  condition  of  a  guarantee  of 
dividends  for  a  certain  term  held,  entitled  to  re- 
cover on  the  guarantee,  though  he  did  not  satisfy 
the  guarantors  of  the  failure  to  pay  dividends 
until    the    expiration    of    said    term.    Id. 

Evidence  held  to  show  a  contract  between  plain- 
tiff and  the  promoters  of  a  corporation  for 
services  in  obtaining  subscribers  to  stock.  Pratt 
T.  Finkle,  25  S.   E.   Rep.  941. 

A  receiver  of  a  corporation  may  deliver  stock 
to  a  subscriber  on  payment  of  the  subscription. 
Chattanoga  R.  &  C.  R.  Co.  v.  Warthen,  25  S.  E. 
Rep.    988. 

A  sale  of  a  subscription  to  a  company  in  which 
the  subscrilier  was  not  entitled  to  receive  stock 
on  payment,  held  not  to  avoid  the  subscription 
where  the  sale  was  rescinded.    Id. 

Material  aniemhnenis  ot  the  charter,  which 
were  not  accepted,  held  to  avoid  a  subscription.    Id. 

Parol  evidence  is  not  admissible  to  show  that  a 
subscription  to  stock  was  made  upon  an  oral 
condition  agreed  to  before  the  subscription  was 
signed.     Id. 

Where  the  subscription  was  assigned  to  another 
corporation,  held  that  the  subscriber  was  entitled 
to    receive   stock    in    the    successor   company.    Id. 

The  assignee  of  a  subscription  to  railroad  stock 
may  enforce  payment  in  any  case  in  which  the 
company  could  do  so.    Id.  • 

Holder  of  stock  as  collateral,  not  vested  with 
powers  and  privilege  of  a  stockholder.  Bank  v. 
Sibley,  71  Ga.  726. 

Conditions  precedent  in  note  given  for  install- 
ments of  stock  subscribed,  discussed.  Johnson  v, 
R.  R.  Co..  SI  Ga.  725;  s.  c,  8  S.  E.  Rep.  531. 

Conditional  subscriptions  not  estimated  in 
reckoning  capital  stock  subscribed,  when.  Brand 
V.  R.  R.  Co..  77  Ga.  512;  s.  c.  1  S.  E.  Rep.  255. 

AVhere  some  subscriptions  have  been  made  upon 
a  condition  precedent  plaintiff  must  show  that 
conditions  have  been  either  complied  with  or 
waived.    Id. 

Future  creditors  cannot  call  on  stockholders 
who,  by  resolution,  have  reduced  subscriptions 
below  charter  minimum,  for  more  than  difference, 
unless  credit  was  given  on  good  faith  of  original 
amount.  Hill  v.  Silvey,  81  Ga.  509;  s.  c,  8  S.  E. 
Rep.  8f'8. 

Subscriber  not  estopped  by  ratification  from 
setting  up  that  company  began  business  in  viola- 
tion  of  law.     Academy   v.    Flanders,    To    Ga.    14. 

Fraud  in  Inducing  suljscriptions,  equity  proper 
form  for  redress.  Bank  v.  Bartlett.  71  Ga.  79.S. 
But  subscriber  cannot  avoid  his  contract.  If.  after 
notice  of  the  fraud,  he  lias  derived  any  benefit 
of  his  shares  or  in  any  manner  acted  as  a  share- 
holder.   Id. 

Subscription  Induced  by  fraud,  binding  where 
debts  suiisequently  contracted.  Turner  v.  Ins. 
Co..   65   Ga.   G49. 

Transfer  of  stock  and  receiving  back  assets, 
Impose  no  liability,  when.  Morgan  v.  Brower, 
77   Ga.    634. 

Fraud  between  corporation  and  corporator  does 
not  affect  creditors.  Howard  v.  Glenn,  85  Ga. 
2.38;  s.  c,  11  S..  E.  Rep.  610. 

Release  of  some  stockholders  no  release  to  an- 
other unless  his  liability  increase  thereby.    Id. 


Stockliolders  relieved  of  liability  for  Indorsing 
note  of  corporation,  by  foreclosure  of  mortgage 
of  corporate  property,  whether  liable  to  other 
creditors  for  diminution  of  assets.  AVeihl  v.  Atla. 
Co.,  89  Ga.  297:  s.  c,   15  S.  E.   Rep.  282. 

While  corporation  formed  under  provisions  of 
above  seetion  may  not  begin  and  transact  busi- 
ness for  which  it  was  chartered  until  lo  per  cent, 
of  the  capital  stock  had  been  paid  in,  it  may, 
before  it  has  been  done,  organize  and  collect 
subscriptions  to  its  actual  stock.  Branch  v. 
Augusta  Glass  Co.,  95  Ga.  573;  s.  c,  23  S.  E.  Rep. 
128. 


4.  The  clerk  of  the  court,  for  his  services, 
shall  receive  the  usual  fees  allowed  for  simi- 
lar services  Iii  other  cases. 

Fees  of  secretary  of  State  found  In  L.  1894, 
at  p.  38. 

5.  Coi-porations  thus  created  may  exercise 
all  corporate  povi'ers  necessary  to  the  pur- 
pose of  their  organization,  but  shall  make 
no  contract  or  purchase,  or  hold  any  prop- 
erty of  any  kind,  except  such  as  is  necessary 
in  legitimately  carrying  into  effect  such  pur- 
pose, or  for  securing  debts  due  to  the 
company. 

Powers  of  a  corporation.    §   1679. 

6.  (As  amended  Dec.  16,  1897.)  The  pow- 
ers conferred  in  this  section  shall  extend  to 
the  amendment  and  renewal  of  all  charters 
contemplated  In  said  section,  with  the  juris- 
diction of  said  courts,  whether  the  original 
charter  sought  to  be  amended  or  renewed 
was  originally  granted  by  the  general  as- 
sembly of  the  State  or  by  a  superior  court  of 
this  State. 

[An  act  to   extend   charter  of  a  corporation,  by 

usage,     included     the     terms     or     condition  by 

which    said    extension    is    granted.       Robinson  v. 
Bank,    18   Ga.   65.] 

7.  (Enacted  December  16,  1897.1  The  re- 
newal of  charters  by  the  superior  courts  of 
this  Stiite  imder  the  powers  conferred  by 
this  section,  shall  be  granted  by  the  said 
superior  courts  in  advance  of  the  expiration 
of  sucli  charters,  but  to  talce  effect  from  the 
date  of  such  expiration,  upon  the  filing  in 
the  office  of  said  su]ierior  court  of  a  petition 
signed  with  tlie  con^orate  name  of  the  com- 
pany Avhose  charter  is  sought  to  be  renewed, 
stating  the  name  of  the  corporation,  when 
incorporated,  the  date  and  manner  of  its 
original  inconioration,  and  all  amendments 
thereto,  that  it  desires  a  renewal  of  its 
charter  as  set  out  in  tlie  original  act  of 
incorporation,  and  the  amendments  tliereto. 
togetlier  with  any  furtlier  amendments 
which  may  be  desired  in  the  renewal  of  said 
charter;  and  shall  file  along  with  said  peti- 
tion a  certified  abstract  from  the  minutes  of 
the  corporation  showing  tliat  the  application 
for  renewal  and  amendment  had  been  au- 


GEORGIA. 


13 


Powers  and  liabilities  of  corporations  —  Rev.  Code,  §  1678. 


tlinri/i<l  by  proii'r  <  iiri;()r:it('  action,  and 
shall  in  all  other  respects  comply  with  the  re- 
quirements of  this  section,  so  far  as  the 
same  applies  to  the  grant  of  incoiiioration 
for  the  company  or  association  whose 
charter  is  sought  to  be  renewed. 

Section  III. 

Powers  and  Liabilities  of  Corporations. 

Sec.  1678.  Continuance. 
1679.  l'ower.s. 
1080.  Responsibilities   for  acts  of   officers. 

§  1678.  Corporations  have  continuous  suc- 
cession during  the  time  limited  l)y  their 
charter,  notwithstanding  the  death  of  their 
members.  Should  any  charter  granted  in  fu- 
ture by  the  general  assembly  to  a  private 
corporation  be  silent  as  to  its  continuance, 
such  charter  shall  expire  at  the  end  of  thirty 
years  from  the  date  of  its  grant. 

[Death  of  all  members  works  a  flissolution. 
$  1687.  See  R.  R.  Co.  v.  R.  li.  Co.,  49  Ga.  151. 
Section  cited.    R.   &  B.  Co.   v.   State.  54  Ga.   404.] 

§  1679.  All  corporations  have  the  right  (1) 
to  sue  and  be  sued. 

See  §   3367  et  seq. 

[Clause  in  Constitution  requiring  all  civil  cases 
to  be  tried  in  county  where  defendant  resides 
applies  to  corporations  as  well  as  natural  persons. 
Bank  v.   Gibson,   11   Ga.   458. 

The  legal  and  equitable  rights  of  a  corporation 
are  to  be  measured  by  same  standard  in  rendition 
of  verdicts  of  juries  as  those  of  natural  persons. 
Green  v.  So.  Ex.  Co..  41  Ga.  515. 

Corporations  liable  for  libelous  publication. 
Mach.  Co.  V.  Souder,  58  Ga.  04.  Acts,  of  agent 
which    will    charge   corporation    therewith.    Id. 

In  action  on  contract,  corporation  need  not  set 
out  how  or  by  what  authority  it  was  incorporated 
nor  aver  itself  to  be  a  corporation.  Wilson  v. 
Mach.   Co..  55  Ga.  672. 

Stockholders,  unless  authorized  by  statute,  are 
not  allowed  to  plead  and  defend  for  corporation 
when  suit  is  against  it.  and  they  are  not  parties 
on  the  record.  Blackman  v.  R.  &  B.  Co.,  58  Ga. 
189. 

Nam  of  corporation  is  of  its  very  essence,  and 
a  change  of  name  in  the  fi.  fa.  from  that  by  which 
it  is  sued,  and  judgment  entered  is  a  material 
variance.    Bradford  v.   W.   L.   Co.,   58  Ga.   280. 

Effect  of  change  of  name  by  act  of  legislature 
upon  pending  suit  bv  the  corporation.  W.  L.  Co. 
V.    Bank,  53  Ga.   30. 

That  plaintiff  corporation  owns  majority  of 
Btock  In  defendant  corporation  does  not  affer-t 
rights  nor  preclude  defense.  Bradford  v.  W.  L. 
Co.,  58  Ga.   280.  ^  ^     ^. 

Stockholders  cannot  maintain  bill  for  protection 
of  corporate  propert.v,  without  alleging  refusal 
of  eorporation  to  act  In  corporate  name.  Ware 
V.   Bazemore.   58   Ga.   316. 

Court  of  chancery  has  no  authority  to  compel 
domestic  corporation  to  go  into  foreign  State  and 
specificallv  contract.  R.  R.  Co.  v.  Hammond, 
58  Ga.   523. 

Son  of  stockholder  incompetent  as  juror  in  case 
of  which  corporation  is  party.  R.  R.  Co.  v.  Hart, 
60  Ga.  550.  ^.  , 

Books  of  corporation  produced  on  notice  ami 
read  in  part,  how  far  evidence.  Vischer  v.  R.  R. 
Co.,  34  Ga.   536.  ..... 

Books  Including  stock-ledser  admissible  in  suit 
between  company  and  stockholder.  R.  R.  <-0.  ^■ 
Vason,  57  Ga.  314. 


Minutes  of  corporation  touching  contract,  ad- 
missible In  evidence,  when.  Brower  v.  E.  Rome 
Co..  84  Ga.  219;  s.  c,  10  S.   E.   Rep.  629. 

Misnomer  In  name  of  corporator  immaterial, 
when.     Imbedden   v.   Miu.    Co.,   70  Ga.  88. 

Where  corporation  Is  sued  by  part  of  Its  name 
only,  error  may  be  corrected  by  amendment. 
Johnson  v.  R.  R.  Co.,  74  Ga.  397;  R.  R.  Co.  v. 
Sullivan,  14  Id.  277;  R.  R.  Co.  v.  Rodgers,  00  Id. 
251. 

AVhere  name  of  plaintiff  Imports  a  corporation, 
but  It  Is  not  alleged  that  plaintiff  is  so,  a  judg- 
ment Is  not  void  for  mere  want  of  such  allega- 
tion. Academy  v.  Hardin,  78  Ga.  29.  Whether 
the  name  so  Imports,  Is  for  judicial  determina- 
tion.    Rules  for  deciding.    Id. 

Court  will  take  judielal  notice  of  names  of  all 
companies  chartered  by  legislature.  Jackson  v. 
State,   72  Ga.   28. 

Too  late,  after  verdict,  to  take  exception  on 
ground  that  declaration  did  not  allege  that  de- 
fendant was  a  corporation.  Cribb  v.  Lumber  Co., 
82  Ga.  .o97;  s.  c.  9  S.  E.  Rep.  426. 

Criminal  negligence,  corporation  not  guilty  of, 
when.  Allen  v.  factory,  82  Ga.  76;  s.  c,  8  S.  E. 
Rep.  68. 

Subsequent  creditors  cannot  sue  for  property 
lost  by  fraud,  where  corporation  has  waived  or 
omitted   to   sue.    Morgan    v.    Brower,    77    Ga.    635. 

If  property  be  damaged  by  illegal  acts  of  cor- 
poration, president  cannot  mitigate  damages  by 
offer  to  buy  property.  Mayor  v.  Harris,  75  Ga. 
762. 

Possessory  warrant  to  obtain  corporate  prop- 
erty, requisites  of  affidavit.  McEvoy  v.  Hussey, 
64  Ga.  314. 

Where  a  corporator  has  a  clear  legal  right,  which 
has  been  violated  by  the  corporation,  and  he  has 
no  other  adequate  legal  remedy,  he  is  entitled 
to  relief  by  mandamus.  Waring  v.  Med.  Soc, 
38  Ga.  608. 
I  Xo  funds,  and  unprofitableness  of  franchise,  no 
reason  against  mandamus.  Canal  Co.  v.  Sbuman, 
91  Ga.  400;  s.  c,  17  S.  E.  Rep.  937. 

Plea  of  nul  tiel  corporation  will  not  He.  when. 
Nutting  V.  Hill,  71  Ga.  557. 

Transactions  between  corporators,  throwing 
light  on  work  of  corporation,  admissible  In  evi- 
dence.   Imboden  v.   Min.   Co.,  70  Ga.  87. 

Minority  stoekholders  may  have  relief  In  equity 
for  fraud,  conspiracy  or  acts  ultra  vires,  but 
right  to  relief  mav  be  forfeited  through  laches. 
Alexander  v.  Searcy,  81  Ga.  536;  s.  c,  8  S.  E. 
Rep.  630. 

Where  mortgage  made  by  officers  of_corporation 
has  been  foreclosed.  Individual  stockholder  can- 
not interfere  b.v  Injunction  to  restrain  levy  and 
sale  under  mortgage  without  showing  sufficient 
reason  wh.v  corporation  Itself  Is  not  part.v  com- 
plainant.    Henry   v.    Elder.    63  Ga.    347. 

Injunction  at  Instance  of  'minority,  to  restrain 
policv  of  majoritv.  not  granted,  when.  Lamar  v. 
House,   76  Ga.   640. 

Mandamus  will  not  lie  to  compel  officers  of 
bank  to  transfer  stock  from  the  vendor  to  a  pur- 
chaser, except  under  judicial  sale.  Bank  v.  Har- 
rison,   66   Ga.    696. 

Sole  shareholder  may  be  Indleted  individually 
for  injury  to  property  by  the  corporation.  Castle- 
berrv  V.   State.  62  Ga.  442. 

If  "scrip  representing  stock  be  stolen,  name  of 
one  forger!,  and  stock  sold  and  transferred  on 
books,  a  bill  will  lie  to  compel  issue  of  new 
stock  and  granting  of  dividends  by  company,  or 
in  default  thereof,  to  compel  purchasers  to  replace 
stock.    Blaisdell  v.   Bohr,   68  Ga.  56. 

Tse  and  exercise  of  riirhts  and  privileges  ac- 
quired or  usurped  from  another  corporation  snh- 
iects  user  to  its  bunlen.  inclu<ling  suit  that  could 
be  maint:ilned  against  it.  R.  R.  Co.  v.  Fulghum, 
87   G.T.   263:   s.   c.   13   S.   E.   Rep.   649. 

Expiration  of  corporation  not  prevented  by 
snecial  law  as  to  pomling  litigation  only.  T.oean 
V    R    R    Co..  87  Ga.  .-..33;  s.  c.  13  S.  E.  Rep.  516. 

Dissolved  corpornflnn  c;innot  prosecute  pending 
suit  when.  Van  Pelt  v.  B.  &  L.  Assn.,  8<  Ga. 
.370;  s.  c.  13  S.  E.  Rep.  .'>74. 

A  conversion  of  property  belonging  to  the  cor- 
poration gives  a  stockholder  no  right  to  sue  there- 


14 


GEORGIA. 


Corporate  powers  —  Rev.  Code,  §  1679    (2)-(6),  1680. 


for  in  his  own  name.  Steele  Co.  v.  Laurens,  24 
S.    E.    Kcp.   755. 

A  stockholder  in  a  corporation  cannot  maintain 
an  action  against  the  directors  for  otBcial  mis- 
conduct, whereby  the  income  of  the  corporation 
is  decreased,  without  mailing  other  interested 
stockholders  parties  to  the  action.  Bethune  v. 
Wells,    21    S.    E.    Rep.    230. 

A  corporation  is  a  necessary  party  to  an  action 
by  a  stockholder  against  the  directors  for  mis- 
conduct in  oflQce.    Id. 

A  trading  corporation  held  liable  as  accom- 
modation indorser  on  a  note  in  the  hands  of  a 
bona  fide  purchaser.  Jacobs  Pharmacy  Co.  v. 
Southern  I!.  &  T.  Co.,  55  S.  E.  Rep.  171. 

A  corporation  held  not  liable  in  garnishment  to 
one  of  its  salaried  officers,  where  at  no  time,  on 
striking  a  balance,  there  would  hare  been  any- 
thing due  to  the  officers.  Bank  v.  Light  &  Water 
Co..    26   S.    E.    Rep.    473.] 


(2.)  To  have   and  use  a  common  seal. 

(3.)  To  make  by-laws,  binding  on  their 
own  members,  not  inconsistent  witti  the 
laws  of  this  State  and  of  the  United  States. 


See  §§  16S0,  1999. 

[Corporation  can  exercise  no  power  over  cor- 
porators, beyond  those  conferred  by  charter,  ex- 
cept on  condition  of  their  agreement  and  consent. 
Winter  v.  R.  R.  Co.,  11  Ga.  438.  When  neither 
charter  nor  any  general  statute  imposed  on  stock- 
holders of  a  corporation  a  liability  to  pay  its 
debts,  such  liability  cannot  be  imposed  by  a  by- 
law. Reid  V.  Mfg.  Co.,  40  Ga.  98.  If  individual 
members  have  represented  to  public  that  they 
were  so  liable,  they  are  bound,  not  as  subscribers, 
but  as  individuals.  Id.  Officer's  of  corporation  ac- 
cepting and  serving  under  known  liy-laws  are  to 
be  understood  as  accepting  such  by-laws.  INIfg. 
Co.  V.  Brown,  58  Ga.  240.  And  a  by-law  which 
creates  a  lien  on  stock,  for  debts  due  the  cor- 
poration, is  binding  as  between  the  corporators. 
Tuttle  V.  Walton,  1  Ga.  4.3.  But  a  by-law  which 
Infringes  a  statute  is  void.  Haywood  v.  Mayor, 
12  Ga.  405.] 


(4.)  To  receive  donations  by  gift  or  will. 

(5.)  To  purchase  and  hold  such  property, 
real  or  personal,  as  is  necessary  to  the  pur- 
pose of  their  organization. 


[Mortgage  by  stockholders,  officers  Interested, 
effect  of.  Hoist  v.  Burrus,  79  Ga.  Ill;  s.  c,  4 
S.  E.  Rep.  108. 

Purchasing  property  or  engaging  In  business 
outside  of  charter,  is  ultra  vires.  Reynolds  v. 
Simpson,  74  Ga.  454.  Aliter.  if  to  secure  or  col- 
lect  debt   in    good    faith.    Id. 

Stockholder  under  deed  from  company  cannot 
set  up  a  prescriptive  title  bevond  wliat  company 
might.    Moses  v.  Mfg.  Co.,  62  Ga.  455. 


(6.)  And  to  do  all  such  acts  as  are  neces- 
sary for  the  legitimate  execution  of  this 
purpose. 

[Directors,  unless  expressly  restrained  either  by 
charter  or  by-laws,  may  exercise  ordinary  powers 
of   a   corporation.    Min.    Co.    v.    King,    45   Ga.    .34. 

Incidental  powers  of  mining  corporation.  Id. 
Of  corporation  for  manufacture  of  pig  iron.  Iron 
Co.  V.  Jones,  52  Ga.  56.  Of  lumber  company.  Ell- 
ington V.  Lumber  Co.,  93  Ga.  53;  s.  c,  19  S.  E. 
Rep.  21. 

Injunction  asked  by  stockholders  against  action 
of  company  which  they  claimed  to  be  ultra  vires 
refused  bv  chancellor.  Cozart  v.  R.  &  B.  Co., 
54  Ga.   379. 


Allowing  stockholders  to  pay  up  subscriptions 
before  due  In  depreciating  currency  is  ultra  vires. 
R.  R.   Co.   V.  Vason,  57  Ga.  314. 

Sawmill  company,  by  express  consent  of  stock- 
holders and  directors,  when  incidental  and  neces- 
sary to  its  business,  may  legally  guarantee  in- 
terest on  railroad  bonds.  Mercantile  Co.  v.  Emp. 
Co.,  91  Ga.  0.36;  s.  c,   IS  S.   E.   Rep.   358. 

A  corporation  cannot  be  a  peddler.  Iron  Co.  v. 
Johnson.  84  Ga.  7.54;  s.  c.  11  S.  E.  Rep.  233. 

Railroad  company  to  form  partnership  is  ultra 
vires.    Gunn  v.  R.  R.  Co.,  74  Ga.  509. 

Towers  of  a  corporation  are  llmiteS  by  act  of 
incorporation,  and  besides  powers  specially 
granted,  it  has  those  which  are  common  to  all 
corporations.  Power  to  form  partnership  not  one 
of  those  which  is  common  to  all.    Id. 

No  corporation,  whether  private  or  public,  can 
exercise  any  power  not  expressly  conferred  or 
necessarily  implied  to  enable  it  to  carry  into 
effect  purpose  for  whicli  it  was  created.  This  is 
Inseparable  from  the  very  definition  of  a  cor- 
poration as  given  by  section  1670.  Church  v. 
City,  76  Ga.  188;  Leverett  v.  Ry.  Co.,  96  id.  386; 
s.  c,  24  S.  E.  Rep.  154. 

Corporation  has  only  the  power  conferred  bv 
its  charter.  Singleton  v.  R.  R.  Co.,  70  Ga.  464. 
And  such  powers  are  always  to  be  strictly  con- 
strued, and  its  obligations  to  be  strictly  per- 
formed, whether  they  may  be  due  to  State  or  to 
individuals.    Id. 

No  remedy  can  be  had  for  breach  of  contract 
which  Is  ultra  vires.  Hose  Co.  v.  Philpot,  53  Ga. 
625. 

Exclusive  grants  are  to  be  strictly  construed, 
and  will  not  be  extended  further  than  their  terms 
require.  R.  R.  Co.  v.  Augusta,  96  Ga.  565;  s.  c, 
2.-',  S.   E.  Rep.  501. 

Ultra  vires  could  not  be  pleaded  against  a  bona 
fide  purchaser,  in  defense  of  a  note  given  by  the 
corporation  for  property  it  had  no  autliority  to 
buy,  though  it  offered  to  rescind  the  sale  when 
the  offer  wag  not  made  on  the  grounds  of  ultra 
vires.    Towers  v.  Inman,  23  S.  E.   Rep.  418. 

Where  a  railroad  company,  incorporated  under 
general  act,  accepts  amendments  to  Its  charter 
by  a  special  act.  and  afterward,  without  objection 
of  its  stockholders,  contracts  with  respect  to 
powers  conferred  by  special  act,  both  corporation 
and  stockholders  are  bound  by  such  contract, 
whether  special  act  be  valid  or  not.  Johnson  v. 
Trust   Co.,  21   S.   E.    Rep.   576. 

Evidence  examined,  and  held  that  the  secretary 
of  defendant  corporation  had  authority  to  make 
and  endorse  notes  in  its  corporate  name.  Jacobs 
Pharmacy  Co.  v.  Southern  Banking  &  Trust  Co., 
25  S.  E.  Rep.  171. 

One  giving  a  deed  to  a  foreign  corporation  under 
a  power  of  sale  to  secure  a  loan,  held  estopped 
to  deny  the  right  of  the  corporation  to  exercise 
the  power.  Ray  v.  Home,  etc.,  Co.,  26  S.  E. 
Rep.  56.] 


§  1680.  Eveiy  corporation  acts  through  its 
officers,  and  is  responsible  for  the  acts  of 
such  officers  in  the  sphere  of  their  appropri- 
ate duties;  and  no  corporation  shall  be  re- 
lieved of  its  liability  to  third  persons  for  the 
acts  of  Its  officers  by  reason  of  any  by-law  or 
other  limitation  upon  the  power  of  the 
officer,  not  Ijnown  to  such  third  person. 

Agents,  appointment  and  power  of.  §  2182  et 
sect- 


[Persons  acting  publicly  as  officers  of  a  cor- 
poration will  be  presumed  rightfully  in  office, 
and  their  official  acts  will  be  binding  on  corpora- 
tion so  far  as  third  persons  are  concerned.  Hall 
V.    Carey,   5   Ga.    2.39. 

If  a  corporation  be  dissolved  or  surrendered  the 
officers  under  it  share  its  fate.  State  v.  Mayor, 
5   Ga.   250.    The  savings  of  a   stockholder   do   not 


GEOliGlA. 


15 


Corpniate  powers;  dissolution  —  Rev.  Code,  §§  KJS1-1G85. 


hind  corporation.  Mitchell  v.  R.  R.  Co..  17 
(ia.  574.  Corporation  lialile  in  damages  for  wrongs 
coraniittcKl  by  its  otfic-crs  and  ajrcnts.  Green  v. 
So.  Ex.  Co..  41  Ga.  .">1.5.  Corporation  bound  by 
audited  accounts  of  its  treasurer.  Min.  Co.  v. 
King.  45  Ga.  '.'A.  And  by  contract  made  by  agent 
in  another  State.    Id. 

Assets  placed  in  liands  of  officer,  corporation 
necessary  party  to  bill  tiled  by  stockholder  against 
such  othcer  for  account.  I'oung  v.  Moses,  53  Ga. 
628. 

Assignment  by  officers  after  term  had  expired 
under  authority  of  stocljholders  granted  before, 
valid.  They  were  othcers  de  facto  if  not  de 
jure.     Milliken  v.   Steiner,   50  Ga.   251. 

Contracts  between  two  corporations,  not  ren- 
dered void  by  fact  that  persons  making  it  were 
othcers   in    both.     Mayor   v.    Innian,    57    Ga.    37U. 

Directors  are  agents  of  tlie  corporation,  and  not 
of  the  stockholders.  McDougald  v.  Bellamy,  18 
Ga.  411. 

l>irectors  cannot  be  considered  as  trnstees,  or 
prohibited,  as  such,  from  purcliase  of  trust  prop- 
erty or  stock  belonging  to  corporation.  Hartridge 
V.   l\ockwell,  5  Ga.  2(jU. 

Settlemeuis  between  company  and  stockholder, 
to  whom  lormer  is  Indebted,  may  be  mane  by 
directors,  nothing  fraudulent  appearing.  K.  li. 
Co.  V.   Vason,  57  Ga.  314. 

Ccintract  made  with  corporation  itself,  mistake 
In  deed  by  otficer,  in  execution,  corrected.  Town 
Co.  V.  I'.iower,  80  Ga.  1:58;  s.  c,  7  S.  K.  Hep.  273. 
That  othcer  had  power  lo  contract,  and  to  exe- 
cuie,    not   alter  case.     Id. 

Action  for  deceit  against  directors  for  hypothe- 
cating illegal  stock,  not  affected  bj;  subsequent 
dealing  with  corporation.  ISauk  v.  Sibley,  71  (ia. 
727.  And  in  such  action  a  corporate  existence 
cannot  be  called  in  question.    Id. 

Declarations  of  directors  inadmissible  to  prove 
one  to  have  been  an  agent.  K.  K.  Co.  v.  Var- 
nedoe.  81  Ga.  11  ti;  s.  c,  7  S.  E.   Uep.   129. 

Directors  and  shareholders  are  quasi  trustees, 
and  without  special  power  under  charter  cannot 
liind  corporation  or  its  assets  by  contract  to  pay 
usury.     Warehouse  Co.  v.  Johnson,  152  Ga.   3US. 

Corporation  bound  by  license  granted  liy  gen- 
eral superintendent.  K.  R.  Co.  v.  Mitchell,  69  Ga. 
114. 

Unwise  and  improper  management  of  affairs  of 
corporation  does  not  furnish  reason  lor  equitable 
interference  at  instance  of  general  creditors, 
when.    Dodge  v.    Manganese   Co.,    <iU   Ga.   605. 

Corporation  liable  for  negligence  of  manager, 
n^actory  v.   Speer,  09  Ga.   137. 

Mortgage  by  stockholders,  officers  interested, 
effect  01.  Hoist  v.  Buirus,  79  Ga.  117;  S.  c,  4 
S.  E.  Uep.  1U8. 

Stockholders  cannot  maintain  action  against  di- 
rectors for  official  misconduct,  whereby  income 
of  corporation  is  decreased,  without  making  other 
interested  stockholders  parties.  P.ethune  v.  Wells, 
94  Ga.  480;  s.  c,  21  S.  E.  Rep.  23U. 

A  corporation  is  necessary  party  to  action  by 
stockholders  against  directors  for  misconduct  in 
office.    Id. 

Accommodation  indorsers  being  directors,  not 
entitled  to  notice  of  protest,  when.  Hull  v.  Myer, 
lM,i  Ga.  074;  s.  c,   16  S.   E.   Rep.  653. 

Note  given  by  officer  or  agent  of  corporation 
Illegal,  no  recovery  on  common  counts  for  money 
had  and  received,  when.  Dobbins  v.  Mfg.  Co., 
75   Ga.   239. 

Notice  to  president  is  notice  to  corporation. 
White  V.   liariow,  72  Ga.  8.SS. 

Directors  and  managers  are  trustees  for  stock- 
holders, and  are  personally  liable  for  misappro- 
priation. Real  Estate  Cf.  v.  15ank,  75  Ga.  40. 
Equity  is  proper  form  In  which  to  seek  release. 
Id. 

Whether,  for  stock  illegally  issued  In  excess  or 
amount  authorized  by  ciiarter,  tne  corporation  it- 
self or  the  directors  individually  are  liable,  Is 
not  decided.      Bank   v.    Sibley,   71   Ga.    72«i. 

Agent's  authority,  by  resolution  of  directors,  to 
purchase  under  contract  reserving  title.  Mer- 
ehams  V.  Cottiell,  U6  Ga.  168;  s.  c,  23  S.  E.  Rep. 
127. 

19 


Evidence  examined,  and  held  that  the  secretarv 
of  defendant  corporation  had  power  and  authority 
to  make  and  indorse  notes  in  its  corporate  naun'. 
.lacol.s  rharmacy  Co.  v.  Sontliern  Banking  A: 
Trust  Co.,  25  S.   E.   Rep.   171.] 


Section    IV. 
Of  Dissolution. 

Sec.  1082.  State   resei-ves    riglit    to    withdraw    pri- 
vate charter. 

1083.  Charters     heretofore     granted,      vest"  d 

rights. 

1084.  Torjioration,   how  dissolved. 
lt.85.  Charter,   how  forfeited. 
Iti.Mi.   Surrender  of  franchises. 
lt)87.   Death  of  members. 

lt;.SS.   Disposition  of  assets  npon  dissolution. 
10S9.  Dissolution   not  to  affect  collateral   lia- 
bility. 

§  1082.  In  all  rasos  of  private  cliartors 
hereafter  si'smterl  the  State  reserves  tlic 
right  to  withdraw  the  franehise,  unless  such 
right  is  e.xpressly  negatived  in  the  charter. 

See  Const.,  art.  I,  p.  2. 

[Section  cited.  State  v.  R.  R.  Co.,  60  Ga.  270; 
R.  &  B.  Co.  V.  State,  54  id.  401.  Where  ex«-lii 
sive  authority  is  vested  in  a  private  corporation 
by  its  charter,  general  assembly  retains  power 
to  modify  or  restrict  such  exclusive  grant.  R.  R. 
Co.  V.   R.   R.   Co.,  49  Ga.  152.] 

§  lfiS3.  Private  corporations  heretofore 
created,  without  the  reservation  of  the  right 
of  dissolution,  and  where  individual  rights 
have  become  vested,  are  not  subject  to  di.s- 
solution  at  the  Avill  of  the  State. 

See  Const.,  art.  I,  par.  2. 

[Section  cited.  R.  &  B.  Co.  v.  State,  54  Ga. 
404.] 

§  1G84.  Eveiy  corporation  is  dissolved.  1. 
Bj'  expiration  of  its  charter;  2.  By  forfeiture 
of  its  charter;  3.  By  a  surrender  of  its  fran 
chises;  4.  By  the  death  of  all  its  members 
without  provisions  for  a  succession. 

[Section  construed.  I.ogan  v.  R.  R.  Co.,  87 
Ga.  .5:^3:  s.  c,  13  S.  E.  Rei..  510.  Cited.  Young  v. 
Moses,  53  Ga.  629.  Bankruptcy  does  not  terminate 
corporate  exisience  nor  viicaie  (jitJce  of  directors. 
Holland  v.  I'eyman.  60  (;a.  174.  Rights  of  cred 
iters  after  dissolution,  how  enforced.  Logan  v. 
R.  R.  Co..  supra.  Idssolved  corporation  cannot 
prosecute  pending  suits,  when.  Van  Pelt  v.  B.  i^: 
L.  Assn.,  87  Ga.  370;  s.  c,   13  S.  E.  Rep.  574.] 

§  1685.  A  corporation  may  forfeit  it« 
charter:  1.  By  a  wilful  violation  of  any  of 
the  essential  conditions  on  which  it  is 
granted;  2.  By  a  misuser  or  non-user  of  it.s 
franchises.  This  dissolution  dates  from  the 
judgment  of  a  court  of  competent  jurisdic- 
tion declaring  the  forfeiture. 

See  Const.,  art.  I,  par.  3. 

[Section    cited.      Young    v.    Mo.ses,    53    Ga.    629. 

A  private  corporation  cannot  be  deprived  of  its 
franchise  except  by  judiiial  judgment  upon  a 
quo  warranto.  Stale  v.  Mayor,  5  (ia.  250.  If  a 
corporation  be  diss<dved  or  surrendered  the  offi- 
cers under  it  share  Its  fate.  Id.  Corporation 
mav  be  dissolved  for  a  breach  of  trust.  Young 
V.  Harrisons,  0  Ga.  130. 


16 


GEORGIA. 


Dissolntlou  — Rev.  Code,  §§  lG8(i-lG89;  Lieu  on  shares,  id.,  §  199'J. 


No  advantage  can  be  taken  of  any  non-user  or 
misuser  on  part  of  corporation,  by  any  defendant 
In  anv  collateral  action.  Id.;  R,  R.  Co.  v.  R.  R. 
Co..   14   Ga.   327. 

The  fact  of  one  person  becoming  owner  of  all 
stock  and  property  of  a  corporation  does  not 
render  a  corporation  dormant,  or  forfeit  fran- 
chises, and  it  is  still  suable  in  its  corporate 
name.     Mfg.   Co.   v.   White,  42  Ga.   148. 

Charter  of  corporation  mav  be  forfeited  for 
what.  City  v.  Gas  Light  Co.,  71  Ga.  100.  For- 
feiture ami  dissolution  can  be  affected  only  by 
Judgment  of  court  so  declaring,  but  only  from 
such  judgments.  Id.  Misuser  or  non-user  cannot 
be  set  up  collaterally  as  a  defense  to  an  action. 
Id.] 

§  16SG.  A  corporation  may  be  clissolved  by 
a  voluut^iiy  surreuder  of  it.s  franchises  to  the 
State.  In  such  case  such  surrender  does 
not  relieve  its  officers  or  members  from  any 
liability  for  the  debts  of  the  corporation. 


Forfeiture    for    delinquent    taxes.      §    877. 
S  1689U.     Individual  liability.     §  1676  (3). 


See 


[Indivlrtuais  who  compose  a  corporation  may. 
by  conti'act  or  in  law,  incur  liabilities,  during  its 
existence,  which  will  survive  the  charter.  High- 
tower  V.  Thornton,  8  Ga.  4Sfi.  Though  at  com- 
mon law,  upon  dissolution.  rtel)ts  due  to  and  from 
corporation  are  extinguished.     Id. 

Under  Code,  a  corporation  may,  by  voluntary 
surrender  of  its  franchises,  terminate  its  exist- 
ence. Bank  v.  Heard,  37  Ga.  401.  But  if  created 
by  legislative  act,  the  surrender  must  be  ac- 
cepted by  the  general  assembly.     Id.] 

§  1687.  The  death  of  all  the  members  of  a 
corpoi'ation,  or  so  many  of  them  as  to  render 
it  impossible  under  the  charter  to  provide  a 
succession,  is  a  dissolution  thereof. 

§  1G88.  Upon  the  dissolution  of  a  corpora- 
tion, for  any  cause,  all  of  the  property,  and 
assets  of  every  description  belonsi'inff  to  the 
cori)oration  shall  constitute  a  fund  —  first,  for 
the  payment  of  its  debts,  and  then  for  equal 
distribution  among  its  members.  To  this  end 
the  superior  court  of  the  county  where  such 
cori^oration  v\'as  located  sliall  have  power  to 
appoint  a  receiver,  under  proper  restrictions, 
properly  to  administer  such  assets  under  its 
direction. 

See  §  3149(a). 


[Creditors  of  insolvent  corporation,  whose 
charter  has  been  forfeited,  and  who  have  ex- 
hausted their  legal  remedies  against  it,  may  sue 
in  chancery,  for  the  assets  of  that  corporation, 
and  have  them  applied  in  payment  of  debt.  High- 
tower  V.  Mustian,  3  Ga.  506. 

It  is  only  in  a  strong  c;ise  that  equity  will,  at 
Instance  of  minority  stockholder,  interfere  with 
management  of  affairs  of  a  corporation,  and  aj)- 
polnt  a  receiver.  General  charges  of  fraud,  il- 
legality or  mismanagement  are  liisufBcient  and 
demurrable.      Hand   v.   Dexter,   41    Ga.    4.54. 

Procedure  to  get  at  assets  in  hands  of  officer 
or  agent  of  dissolved  corporation.  Young  v. 
Moses,  53  Ga.  628.] 

§  1689.  The  dissolution  of  a  corporation, 
from  any  cause,  sliall  not.  in  any  manner, 
affect  any  collateral  or  ultimate  or  other  lia- 
bility, lepilly  incurred  by  any  of  its  officers 
or  members. 


[Ulglit  to  iiave  unpaid  stock  drawn  in,  to  ex- 
tinguisli  outstanding  debts  is  as  clear  and  strong 
after  as  before  dissolution.  Hightower  v. 
Tliornton,  8  Ga.  486.  Action  against  directors 
of  bank  for  overissue  does  not  al)ate  by  expira- 
tion of  charter  during  p.endency  of  suit.  Moultrie 
V.  Smiley,  16  Ga.  2S!).  Above  section  alters*  the 
common-law  rule.  Uobinson  v.  Lane,  19  Ga.  338. 
Liability  of  directors  continue  notwithstanding  ex- 
piration of  charter.  Ilargroves  v.  Chambers,  30 
Ga.  5S1.] 

TITLE    III.       OF    RELATIONS    ARISING 
FROM  CONTRACTS. 

CHAPTER  II. 

Of  Debtor  and  Creditor. 
Aim  CLE    V. 


Sec.  lOfin.  IJen  by  },)y-laws  of  a  corporation. 
2000.  Liens  under  charters. 

§  1999.  The  by-laws  of  a  corporation  may 
create  a  lien  upon  the  shares  of  other  prop- 
erty of  the  stockholders  in  favor  of  the  com- 
pany; sucli  lien  is  binding  upon  the  cor- 
porators tliemselves,  and  upon  all  creditors 
giving  credit  with  notice,  or  purchasers  at 
public  or  private  sale  purchasing  with  notice. 

See  §  1679  (3),  note. 

[Power  to  sell  stock  of  delinquent  stockholder  Is 
a  cumulative  remedy,  and  does  not  'mpair  right 
to  compel  payini'ut  by  action.  Hightower  v. 
Thornton,  S  Ga.  48(!. 

Stfickholder  whose  stock  has  been  forfeited,  not 
relieved  from  iiavnient  of  note  giveu  bv  him  for 
stock.      Mitchell   v.    R.    R.    Co.,    17   Ga.    574. 

Transfer  of  stock  to  an  assignee  did  not  destroy 
existing  liens  to  others.  Dobbins  v.  Walton,  37 
Ga.  614.] 

§  2000.  All  liens  created  under  the  charters 
of  incorporated  companies  are  continued  un- 
der this  Code. 


CHAPTER  V. 
Of  Principal  and  Agent. 

ARTICLE  I. 

Sec.  2182.  Corporation  may  create  an  agent,  how. 
2183.   Agency  irrevocable,  when. 

§  2182.  *  *  *  A  corporation  may  create 
an  agent  in  its  usual  mode  of  transacting 
business,  and  witliout  its  cori)orate  seal. 

Officers,  see  §  1680. 

[Agency  created  by  ratification  of  acts.  Bank 
V.    Bank,  1  Ga.  418. 

Promissory  note  given  b.v  agent  will  bind  cor- 
poration,  when.     Butts  v,  Cuthbi'rtson,  fi  Ga.  166. 

A  corporation  is  Iiabl<>  for  frauds  and  torts  of 
its  agents  in  same  manner  as  individuals;  ten- 
dency of  the  law  is  to  place  cori)orations  and  In- 
dividuals upon  same  footing.  McDougald  v.  Bel- 
lamy, IS  Ga.  411:  Mill  Co.  v.  State,  .54  id.  635. 

If  agent  of  ii  coriiorntion  liave  authority  to  con- 
vey a  mortg;(gi',  and  atlixes  thereto  anvthlng  wlilcli 
the  law  recognizes  as  a  seal,  it  will  l)e  a  good 
execution  bv  the  corporation.  Jolihston  v. 
Cniwley.   2.5  Ga.   .•'.16. 

("on)or!itio!i  may  be  charged  with  TTbel  through 
acts  of  agent.     .Machine  Co.  v.   Souder,  58  Ga.  64. 


GEORGIA. 


17 


Agency  — Rev.  Code,  §§  2183,  2209;  Property,  id.,  §§  2234,  2237,  2256. 


General  superintendent  Is  agent  of  corporation, 
jind  dcnianrt  on  him  by  fiiiploye  for  wasres  was 
stifflcient.    Hobbs  v.  Lumber  Co.,  74  Ga.  371. 

Powers  of  agent  of  corporation  to  make  note, 
under  charter  and  letter  of  attorney,  is  to  be 
construed  by  court.  Dobbins  v.  Mfg.  Co..  75 
Ga.  238.  Agent  to  bind  company,  all  requirements 
of  charter  must  bo  i)ursu('d.     Id. 

Sayings  and  acts  of  :igent.  within  scope,  bind- 
ing.    Ins.  Co.  V.   Edwards,  74  Ga.  228. 

Statement  of  man  that  he  is  agent  will  not 
make  corporation  his  principal.  R.  R.  Co.  v. 
Varnedoe,  81   Ga.   176;  s.   c,   7  S.   E.   Rep.   129. 

Certiorari  of  corporation,  affidavit  of  agent  held 
food  tore.     Pioneer  Co.   v.   Mfg.  Co.,  6(    Ga.  38. 

A  contract  by  agent  under  seal  is  his  individual 
contract,  when.  R.  R.  Co.  v.  Varnedoe,  81  Ga. 
170:  s.  c,  7  S.   E.   Rep.   129. 

Corporation  acts  only  by  and  through  its  mera- 
bei-s  and  agent.s;  their  acts  (rr  fiiiuds  are  its  own. 
Fuche  V.   Browne,  74  Ga.  251. 

Admissions  of  agents  of  corporation,  in  scope  of 
business,  admissible  in  evidenee.  Imboden  v.  Min. 
Co.,  70  Ga.  87.  Also  of  president  in  iin  action 
with  business  of  liis  otHce.  Id.;  Dobbins  v.  P. 
M.    Co.,    75   Ga.    4.50. 

Power  of  agent  to  bind  corporation  by  promis- 
sory note,  not  implied,  when.  Dobbins  v.  Mfg. 
Co..  75  Ga.  238.] 


§  2183.  (As  amended  December  13,  1894.1 
Generally,  an  agency  is  revocable  at  the  will 
of  the  principal.  The  appointment  of  a  new 
agent  for  tlie  performance  of  tlie  same  act, 
or  the  death  of  either  principal  or  agent, 
revolves  the  power.  If,  however,  the  power 
is  coupled  with  an  interest  in  the  agent  him- 
self, it  is  not  revocable  at  will;  and  in  all 
cases  the  agent  might  recover  from  the  pnn- 
cipal,  for  an  unreasonable  revocation,  any 
damages  he  may  have  suffered  by  reason 
thereof,  but  every  creditor  or  other  person 
advancing  money  upon  the  pledge  of  a  cer- 
tificate of  stock,  or  other  script  representing 
an  ownership  interest  in  corporations  in 
Georgia,  shall  have  such  an  irrevocable  in- 
terest in  such  certificate  of  stock  or  other 
script  representing  an  ownership  interest  in 
corporations  in  Georgia  as  not  to  be  affected 
by  the  death,  insanity,  or  legal  disability 
thereafter  of  the  person  in  whose  name  such 
stock  or  otlier  script  stands  upon  the  books 
of  any  corporation  in  Georgia;  But  that  such 
pledgee  or  liolder  of  such  stock  or  script 
assigned  in  blank,  coupled  with  the  power  of 
attorney,  shall  have  the  same  right  after  the 
death,  insanity,  or  legal  disability  of  the 
person  in  whose  name  said  stock  stands 
upon  the  books  of  said  corporation  as  before 
the  death,  insanity,  or  legal  disability  of  such 
person. 

ARTICLE  III. 
Sec.  2200.  AVhen  agent  has  right  of  action. 

§  2209.  Generally  an  agent  has  no  riglit  of 
action  on  contracts  made  for  his  principal. 
The  following  are  exceptions: 

2.  Wheie  promissory  notes  or  otlier  evi- 
dences of  debt  are  made  payable  to  an  agent 
of  a  corporation  or  joint-stock  company. 


TITLE   IV.   OP  PROPERTY. 

CHAPTER  I. 

Of  Realty. 
Sec.  2234.  Franchise,   when   exclusive. 

§  2234.  No  franchise  granted  by  this  State 
shall  be  held  to  be  exclusive,  unless  plainly 
and  expressly  so  declared  to  be  in  the  grant. 

[In  construction  of  statutes,  made  in  derogation 
of  common  right,  and  In  favor  of  corporation,  care 
should  be  taken  no*  to  extend  tliem  beyond  their 
express  words  or  tlieir  clear  import.  Mayor  v. 
U.  R.  Co.,  7  Ga.  221;  Mayor  v.  Hartridve,  8  Ga. 
2:1. 

Where  exclusive  authority  is  vested  in  a  private 
corporation,  said  body  retains  power  to  modify  or 
re.-iiriet  such  exclusive  grants.  R.  R.  Co.  v.  R.  It. 
Co.,  49  Ga.  1.51. 

Charter  rlglits  antagonistic  to  rights  of  private 
propei'ty  will  be  strictly  construed,  and  their 
exercise  must  be  in  direct  compliance  with  law 
granting  them.     R.  R.  Co.  v.  Gilbert,  Ti  Ga.  591. 

Grants  of  power  must  be  expressed  or  by  neces- 
sarv  implication.  Davis  v.  K,  R.  Co.,  87  Ga.  G05; 
s.  c,   13  S.   E.  Rep.  507.] 

CHAPTER  II. 

Of  Personalty. 

Sec.  2237.  Stocks   in    incorporated   companies   per- 
sonalty. 

§  2237.  (As  amended  December  11,  1893.* 
*  *  *  Stocks  representing  shares  in  an 
incorporated  company  holding  lands  or  a 
franchise  in  or  over  lands  are  personalty. 

[Railroad  stock  is  personal  assets.  R.  R.  Co. 
V.  Thomason,  40  Ga.  408;  Ross  v.  R.  li.  Co.,  53 
Id.  514. 

Bona  fide  purchaser  of  railroad  stock  protected. 
Stiuson  V.   Thornton,   56  Ga.  377.] 


TITLE  V.     OF  ESTATES. 

CHAPTER  II. 

Estates  for  Life. 

Sec.  2256.  Issue    of     new    stock     belongs     to     re- 
mainderman. 

§  2256.  The  natural  increase  of  the  prop- 
erty belongs  to  the  tenant  for  life.  Any  ex- 
traordinary accumulation  of  tlie  corpus  — 
such  as  is.sue  of  new  stock  upon  the  share  of 
an  incoi-porated  or  joint-.stock  company  — 
attaches  to  the  corpus  and  goes  with  it  to  the 
i-emainderman. 

["  Income  "  devised  to  life  tenant,  with  re- 
malnder  over,  dividends,  whether  In  cash  or  In 
certificates  of  indebtedness,  are  part  of  the  in- 
come, and  go  to  life  tenant.  Miller  v.  Guerrard, 
67  Ga.   284.] 

TITLE  VI.     OF  TITLE  A>D  THE  MODE  OF 
CO  WE  VANCE. 

CHAPTER  III. 

Administration. 
Section   XII. 
Of  Foreign  Administrators. 
Sec.  2618.  Foreign  executor,  administrator  or  guar- 
dian may  transfer  stock. 

§  2618.  (As  amended  December  IS,  1893.1 
Such  (a)  foreign  executor  or  administrator  or 


18 


GEORGIA. 


Levy  on  shares  —  Rev.  Code,  §  2626;  Receivers,  id.,  §  3149a. 


fcnt'ijrn  {riiardian  may  transfer  the  stock  of 
any  liank  or  other  corporation  in  this  State 
standinsr  in  tlie  name  of  the  decedent  or 
ward  and  cliock  for  deposits  made  by  him 
and  dividends  declared  on  his  stock,  first 
filing  witli  the  bank  or  corporation  a  certi- 
fied copy  of  his  appointment  and  qualifica- 
tion; Provided,  however,  That  no  stock  shall 
be  transferred  until  the  foreign  executor, 
administrator  or  guardian  shall  have  given 
notice  once  a  weelc  for  four  weeks  in  the 
paper  in  which  the  sheriff's  notices  are  pub- 
lislied  in  the  county  of  the  principal  office 
of  the  corporation  of  his  intention  to  make 
said  transfer. 

[Foreign  guardian.  If  auttiorized  by  law  of 
State  of  api>ointnient,  may  sell  and  transfer  stock 
in  corporation  of  this  State  without  application 
to  courts  here.     Ross  v.  R.  R.  Co.,  53  Ga.  514.] 


CHAPTER  IV. 

Title  by  Judicial  Sale. 
ARTICLE  I. 
Sec.  2C26.  Levy  on  and  sale  of  shares  of  stock. 

§  2626.  (As  amended  December  17,  1894.) 
Shares  in  a  bank  or  other  corporation  may 
be  levied  on  and  sold,  either  under  attach- 
ment or  ti.  fa.,  in  the  county  where  the  corpo- 
ration does  busimess  —  notice  of  such  levy 
being  given  to  the  defendant,  if  his  resi- 
dence be  known,  and  also  the  officers  of  the 
corporation.  Upon  demand  by  any  sheriff, 
constable,  or  other  levying  officer  of  this 
State,  having  in  his  hands  any  execution  or 
attachment  against  any  person  who  is  the 
owner  of  any  shares  or  stock  of  said  bank 
or  joint-stock  company,  uix>n  the  president, 
superintendent,  manager,  or  other  officer  of 
any  corporation  or  joint-stock  company  hav- 
ing access  to  the  books  thereof,  said  presi- 
dent, superintendent,  manager,  or  other  offi- 
cer aforesaid  sliall  disclose  to  said  levying 
officer  the  number  of  shares  and  the  par 
value  thereof  owned  by  the  defendant  in 
said  execution  or  attachment,  and  on  refu- 
sal to  do  so,  shall  be  considered  in  contempt 
of  court  and  punished  accordingly.  Such 
sales  shall  be  made  only  by  the  sheriff  or 
his  deputy,  and  constables  levying  thereon 
shall  turn  over  such  levies  to  the  sheriff. 
Only  one  share  shall  be  sold  at  once.  Tlie 
sheriff  shall  give  the  purchaser  a  certificate 
of  his  purchase,  which,  on  presentation  to 
the  officers  of  the  coi-poration,  shall  author- 
ize a  transfer  of  the  stock  to  him.  Transfers 
of  stock  after  levy  of  an  attacliment.  or  after 
judgment,  and  with  notice  to  the  corporation 
of  the  levy  or  judgment,  are  absolutely  void. 
If  the  shares  be  in  a  railroad,  canal,  turn- 
pike, or  plank-road  company,  they  may  be 
levied  on  and  sold  in  any  county  through 
which  the  same  passes. 

[Where  stock   Is   attached    and   sold   at   sheriff's 
sale,  it  Is  duty  of  proper  officer  of  corporation  to 


make  necessary  transfer  on  books  of  company. 
If  he  refuses  to  do  ."so,  mandamus  Is  the  proper 
proceeding.     Bailey   v.   Stohe<-ker,   38  Ga.   2r>!.». 

Mere  transfer  of  stock  on  books  by  an  otticcr  of 
a  company  will  not  make  company  liable  as  guar- 
antor of  vendor's  tille  to  the  slock.  Nulling  v. 
Thomasson,  4G  Ga.  34. 

Stock  held  as  collateral  is  subject  to  attachment. 
Kyle  V.  Montgomery,  73  Ga.  337. 

Purchaser  of  stock  at  sheriff's  snip  with  notice 
of  Hen  purchases  such  Interest  as  corporation 
had.  Tuttle  v.  "Walton,  1  Ga.  43.  Stock  in  a 
corporation  is  not  subject  to  be  levied  on,  under 
an  attachment  against  owner  of  stock.  Haley  v. 
Reld,  16  Ga.  437.] 


TITLE   IX.      OF  EQIITY. 

CHAPTER  VI. 

Administration  of  Assets. 

Sec.  3149a.  Receiver    of    assets    of    Insolvent    cor- 
poration. 

§  3149a.  (As  amended  December  13.  1894.) 
In  case  any  corporation,  not  municipal,  or 
any  trader,  or  firm  of  traders,  shall  fail  to 
pay,  at  maturity,  any  one  or  more  matured 
debts,  payment  of  which  has  been  properly 
demanded  of  such  debtor,  and  by  him  re- 
fused, and  shall  be  insolvent,  it  shall  be  in 
the  power  of  tlie  court  of  equity,  under  a 
creditor's  bill,  to  which  one  or  more  credit- 
ors, representing  one-third  in  amount  of  the 
unsecured  debt  of  such  insolvent  coiijoration, 
trader,  or  firm  of  traders,  whose  debts  are 
matured  and  unpaid,  shall  be  necessary  par- 
ties, to  proceed  to  collect  the  assets,  real 
and  personal,  including  choses  in  action  and 
money,  and  appropriate  the  same  to  the  cred- 
itors of  such  trader,  firm  of  traders,  or  cor- 
poration. 

Relief  from  individual  liability.  See  Act  No.  11, 
p.  28.     See  §  1673  (3),  note. 

[A  citizen  cannot  be  made  receiver  of  a  broken 
corporation  without  his  consent.  Bethune  v. 
I>ougherty,  21  Ga.  257.  Tnder  above  section, 
counsel  fees  are  to  be  borne  by  creditors  pro- 
portionately. Trust  Co.  v.  Thurman,  20  S.  E. 
Rep.    141. 

An  existing  corporation  may  make  an  assign- 
ment for  benefit  of  creditors.  McCallle  v.  Wal- 
ton. 37  Ga.  611. 

Insolvent  corporation  is  incapable  of  making 
general  assignment  for  benefit  of  creditors,  either 
with  or  without  preference.  Steel  Co.  v.  Agr. 
Works,  76  Ga.  1.35. 

Assignment  by  corporation,  while  In  existence, 
good  against  debtor  though  charter  expires  be- 
fore assignee  sues.  Harvey  v.  Cubbedge,  75  Ga. 
703. 

Assets  of  corporation  trust  fund  to  pay  debts, 
and  stockholder  is  chargeable  with  notice  of  the 
trust,  and  cannot  hold  adversely  so  as  to  defeat 
jiidgment  creditor.     Moses  v.  Mfg.  Co.,  62  Ga.  456. 

Unpaid  subscriptions  of  insolvent  corporation  are 
assets  for  benefit  of  creditors,  of  which  court  of 
equitv  will  compel  pavment.  King  v.  Sullivan,  93 
(ia.  621;  s.  c,  20  S.  E.  Rep.  76.  But  jurisdiction 
for  this  purpose  over  a  foreign  corporation  which 
lias  no  otiice.  ofbcer,  agent,  or  place  of  business  in 
this  State,  cannot  be  obtained  by  merely  serving 
corporation  by  publication.  Id.  How  creditors 
must  proceed  "in  such  case.     Id.  ,        ,        ^ 

A  non-trading  corporation  subject  to  Insolvent 
Traders'  Law.  Nat.  Bk.  v.  Factory,  91  Ga.  2^; 
s.   c,   18  S.   E.  Rep.   IGO. 


GEORGIA. 

Suits  asainst  corporations  —  Rev.  Code,  §§  3367-3369. 


19 


Corporafion  expires  by  limitation  of  cliartor; 
pending  suit,  a  rpfeiver  anpointod.  rocoivpr  main- 
t.iins  action.  Houston  v.  Redwise,  85  Ga.  130;  s.  c, 
11   S.  E.  Kep.  662. 

Prosideut  of  insolvent  corporation  liable  for 
rnntcnipt.  ■^^•hen.  Tolleson  v.  Bank,  85  Ga.  171; 
s.  f..  n  S.  F.  Kep.  riDO. 

Decree  making  assessment  for  unpaid  s\ibscrip- 
tlon  to  capitnl  stoek  of  insolvent  corporation, 
binds  corporator  though  he  has  no  notice.  Howard 
V.  f.'lenn.  S5  Ga.  2?.H:  s.  c.  11  S.  K.  Rep.  010. 

Corporate  assets  of  every  desorintion  constituted 
fi-nd  for  pavnient  of  its  debts.  Beck  v.  Hender- 
son,  76  Ga.   360. 

(\'ipital  stock  subscribed  reduced  by  resolution 
to  actual  amount  paid  in.  all  subscribers  assent- 
ing, releases  them  from  further  liability  to  cor- 
poration and  to  each  other.  Hill  v.  Silvey,  81  Ga. 
,^01:  s.  c,  8  S.  E.  Rep.  St)S.  Hut  reduction  being 
to  .in  amount  less  th.nn  nii"imum  .Tutbnri/ed 
capital,  creditors  may  hold  stockholders  for  dif- 
fpyrrre.     Id. 

Tf  amount  fixed  and  reqtiired  by  charter  has  not 
been  stibseribed,  or  subscriptions  hnve  been  real- 
ized, without  consent  of  stoekholders,  his  sub- 
prriiitlon  cannot  be  enforced  against  him.  Brand 
v.   T^.   R.   Co..  77  Ga.   -<(t(^:  s.   e..   1    S.   E.   Rep.  2.^.^. 

Eo'iitable  transfer  to  third  per«on  to  pay  debts 
of  eorporation  are  enjoined  at  suit  of  shareholder 
not  paid  up.     I.andes  v.   Mfg.  Co.,  73  Ga.  172. 

Owner  of  all  the  shares  of  a  bank  owins  no 
debts,  transferring  title  to  charter  is  not  liable 
for  debts  subserjuentl.v  contracted,  when.  Mor- 
g;in  V.  Brown,  77  Ga.  627. 

Rreeiver  may  sue:  a  decree  authorizing,  admis- 
gible.  without  pleadings,  when.  Beck  v.  Hender- 
son.   76   Ga.    360. 

Insolvent  forporutlon  may  make  mortgage  as 
additional  security  to  note  indorsed  by  stockhold- 
ers. AVelhl  V.  Atla.  Co.,  89  Ga.  297;  s.  c,  15  S.  E. 
Rer.  ?S2. 

■When  corporation  is  to  be  regarded  as  insolvent. 
Bapkinsr  Co.  v.  Lumber  Co.,  91  Ga.  625;  s.  c,  17 
S.   ^.   Rep.  968. 

T^e  f.Tct  that  one  corporation  owns  the  enti'-" 
capital  stock  of  another  does  not  vest  in  it  legal 
title  to  the  latter's  propert.v  so  as  to  render  such 
propertv  subject  *n  tlie  former's  debts  as  asrninst 
the  latter's  creditor.  Exchange  Bank  v.  Mason 
Const.    Co.,   25   S.    E.   Rep.    .326. 

On  rescission  of  a  contract  of  sale  entered  into 
bv  an  Insolvent  corporation,  a  stockholder  who 
advanced  money  for  the  betterment  of  the  prop- 
ert.v purchased,  held  not  entitled  to  restitution 
as  n  creditor  precedent.  Collins  Park.  etc..  R. 
Co.  V.   Short  Elec.   Ry.   Co.,  25  S.   E.   Rep.   929.] 


Part  Third.    The  Code  of  Practice. 

TITLE    II.      OF   ACTIOXS. 
CHAPTER  III. 

Petition  and  Process. 

ARTICLE   11.      PARTICULAR  CA!?E.S. 

Section  III. 


Suits   against   Corporations. 

Sec.   3367.  Joint-stock       companies,       corporations, 
etc.,   how   sued. 
3368.  Liability   of  railroad   companies   for  in- 
jury  to  person   or  property. 
33C9.   Service  of  process  a<rainst  corporations.  I 
33c>fl({,i    Lessees  of   railroad,   how   served. 

3370.  When    and    how     service    may    be     per- 

f(>cted    by    pnblication. 

3371.  Notice  to   stockholders   and   effect   of. 
3;'.72.   Execution,  ftrojiert.v  subject  to. 

3373.  Presiding  officer  bound  to  give  names  of 

stockholders,  etc. 

3374.  President    or    stockholder    may    defend 

suit.  1 

3375.  Illegality  of  execution.  i 

3376.  Preceding  sections  cumulative  only. 


§  3.367.  In  all  suits  again.st  the  members  of 
a  ijrivale  as.sociation,  joiut-srock  cnmnany, 
or  the  members  of  existing  or  dissolved  cor- 
porations, to  recover  a  debt  due  by  the  a.'^so- 
eiation.  company,  or  corporation,'  of  which 
they  are  or  have  been  members,  or  for  the  ai>- 
propriation  of  money  or  funds  in  tlieir  hands 
to  the  payment  of  sucli  debt,  tlie  plaintiff 
or  complainant  in  such  suit  may  institute 
the  same,  and  proceed  to  judgment  therein 
against  all  or  any  one  or  more  of  tlie  mem- 
bers of  such  association,  company,  or  corpo- 
ration, or  any  other  pei-son  "liable,  and 
recover  of  the  member  or  members  sued  the 
amount  of  unpaid  stock  in  his  hands,  or 
other  indebtedness  of  each  member  or  mem- 
bers: Provided,  The  same  does  not  excee*l 
the  amount  of  the  plaintiff's  debt  against 
such  association,  company,  or  corporation; 
and  if  it  exceeds  such  debt,  then  so  mucii 
only  as  will  be  sufficient  to  satisfy  such 
debt. 

See  §  1679  (1),  note. 

[Suit  may  be  brought  In  usual  way  by  citizen 
of  Georgia  against  a  corporation,  though  "cause  of 
action  arose  in  another  State.  Berry  v.  R.  R.  Co., 
39  Ga.  555.  Section  referred  to  and  construed. 
R.  R.  Co.  V.  McDauiel,  56  Ga.  195.] 

§  3368.  In  all  cases  where  the  person  or 
property  of  an  individual  ma.v  be  injured,  or 
such  property  destro.ved,  by  the  carelessness, 
negligence,  or  improper  conduct  of  any  rail- 
road company,  or  officer,  agent,  or  emjiloye 
of  such  company,  in  or  by  the  running  of 
the  cars  or  engines  of  the  same,  such  com- 
pany shall  be  liable  to  pay  damages  for  the 
same  to  any  one  whose  property  or  person 
may  be  so  injured  or  destroyed,  notwith- 
standing any  by-laws,  rules,  or  regulations, 
or  notice,  which  may  be  made,  passed,  or 
given,  by  such  company,  limiting  its  lia- 
bility.' 

§  3369.  Service  of  all  bills,  subpoenas, 
writs,  attachments,  and  other  original  pro- 
cess necessaiT  to  the  commencement  of  any 
suit  a.gainst  any  conwration  in  any  court  of 
law  or  equity,  except  as  hereinafter  pro- 
vided, may  be  perfected  by  serving  any 
officer  or  agent  of  such  corporation,  or  by 
leaving  the  same  at  the  place  of  transacting 
the  usual  and  ordinary  jniblic  business  of 
such  corporation,  if  any  such  place  of  busi- 
ness then  sliall  be  within  the  jurisdiction  of 
the  court  in  which  said  suit  may  be  com- 
mencetl.  The  officer  shall  specify  the  mode 
of  service  in  his  return. 

[Service  of  summons  upon  a  corporation.  See 
W.  L.  Co.  V.  Bank,  30  Ga.  0S5.  I'pon  a  foreign 
corporation.     Ins.  Co.  v.  Carrugi,  41  (4a.  660. 

Agent  of  a  foreign  corporation  may  acknowledge 
seiwice  so  as  to  authorize  a  general  ludgment 
against  lils  principal.  R.  R.  Co.  v.  R.  it.  Co.. 
51   Ga.  4.-.8. 

Service  upon  president  In  county  where  he  rc- 
slfled  at  commencement  of  action,  where  books 
were,  and  where  stockholders  were  under  notice 
to  meet.  Is  sufficient  service  on  company.  Bank 
V.   Mfg.  Co..  55  Ga.  .36. 


20 


GEORGIA. 


Suits  against  corporations  —  Rev.  Code,  §§  3369a-3372. 


Service  of  garnishment  on  domestic  corporation, 
whose  president  resides  in  this  State,  must  be 
upon  president,  and  not  upon  suijordinate  oflicer, 
though  president  be  temporarily  absent.  Steiuer 
V.  R.  U.  Co.,  60  Ga.  552;  Brigham  v.  liy.  Co.,  74 
id.  365. 

Garnishment  served  on  corporation  based  on 
grant  of  charter  is  void.  Bartram  v.  Mfg.  Co., 
0'>>  Ga.  751. 

Members  of  company  cannot  be  held  liable  as 
partners  under  summons  directed  to  company  as 
a  corporation.      Id. 

Jurisdiction  of  corporation,  as  defendant,  where 
locality  not  fixed  by  charter,  but  office  established 
in  county  of  suit.  Coal  Co.  v.  Hazlett,  83  Ga. 
."50:  s.  c.  10  S.  i:.  Rep.  -1:^5. 

Officer  serving  process  on  corporation  to  certify 
In  his  return  manner  in  which  sucii  service  was 
perfected.    Hayden   v.   Bank,   66  Ga.   150. 

Service  on  general  manager,  though  out  of  State, 
su^cient,  when,  Stewart  v.  Rutherford,  74  Ga. 
436. 

Affidavit  denying  legality  of  service  insufficient, 
when.     Hotel  Co.  v.   Furniture  Co..  73  Ga.  94. 

The  agent  of  a  foreign  corporation  attending 
court  as  a  witness  for  the  State  in  a  criminal 
cause,  is  exempt  from  service  upon  him  as  such 
agent  for  process  against  the  corporation.  Fi- 
delity &  Deposit  Co.  V.  Everett,  25  S.  E.  Rep.  734.] 

§  3369a.  Whenever  any  railroad  company, 
incorporated  under  the  Laws  of  this  State,  or 
whose  line  of  road  may  extend  into  this 
State,  may  have  leased  their  line  of  road 
to  any  person  or  corporation,  and  said  lessee, 
or  lessees,  are  in  possession  of  said  road,  ser- 
vice on  such  leasing  company  may  be  per- 
fected as  follows:  The  plaintiff  shall  file 
with  the  clerk  of  the  superior  court,  judge 
of  the  county  court,  or  justices  of  the  peace, 
where  such  suit  is  commenced,  a  notice  in 
writing,  directed  to  the  president  of  the  leas- 
ing company,  informing  him  fully  of  the 
pendency  of  such  suit,  and  its  nature,  which 
*jhall  be  enclosed  in  a  stamped  envelope,  to 
be  furnished  by  and  at  the  expense  of  the 
plaintiff,  and  sent  by  said  clerli.  county 
judge  or  justice,  through  the  mail  to  the 
president  of  the  leasing  company  at  his  resi- 
dence, at  least  fifteen  days  before  the  ap- 
pearance term,  and  said  clerk,  judge  or  jus- 
tice shall,  in  addition,  deliver  to  tlie  sheriff 
or  constable  a  copy  of  the  writ  or  summons, 
who  shall  serve  the  same  on  the  depot  agent 
of  said  lessees,  and  make  return  thereof  as 
in  other  cases. 

[Venue  of  action  against  railroad  company.  See 
35  Ga.  144.  Declarations  of  employes  of  railroad 
•  ompany  should  be  received  with  caution.  Wright 
V.  R.   &  B.  Co.,  34  Ga.  330.] 


S  3370.  In  all  cases  where  any  corporation 
shall  have  no  public  place  for  doing  busi- 
ness, or  shall  have  no  individual  in  office 
upon  whom  service  of  writs  or  process  may 
be  perfected  within  the  knowledge  of  any 
party,  complainant  either  in  law  or  equity, 
the  said  complainant  may  make  an  affidavit 
that  the  said  corporation  has  no  public  place 
of  doing  business,  or  has  no  individual  in 
office  upon  whom  sei'vice  of  writs  or  process 
may  be  perfected,  within  the  knowledge  of 
said  complainant,  and  such  affidavit  being 
filed  in  the  clerk's  office  of  the  court  to  which 


the  said  writ  may  be  made  returnable,  tlu" 
clerk  of  the  said  court  shall  issue  a  citation 
to  the  said  defendants  to  be  and  appear  at 
the  said  court,  to  answer  tlie  complaint ; 
wliich  citation  shall  be  pul)lislied  once  a 
weeli  for  tliree  weeks  prior  to  the  court  to 
which  the  said  complaint  may  be  returnable, 
in  some  newspaper  published  in  the  county 
in  which  suit  is  brought.  If  no  paper 
is  published  therein,  then  in  the  one  nearest 
thereto;  and  such  advertisement  sliall  be 
deemed  and  held  a  service  upon  sucli  corpo- 
ration for  all  purposes  either  in  law  or 
equity,  and  any  copy  of  the  newspaper  con- 
taining said  publication  shall  be  received  in 
any  of  the  courts  as  sufficient  evidence  of 
such  service. 

[Section    referred    to   and  construed.      Heard    v. 

Sibley,    52   Ga.    312;    Young  v.    .Aioses,   53    id.    628; 

Cherry  v.  R.  R.  Co.,  59  Id.  447;  Branch  v.  Bank, 
50  id.  413.] 

§  3371.  Plaintiffs  or  complainants,  within 
one  mouth  after  the  institution  of  any  suit 
or  suits,  at  law  or  equity,  against  any  cor- 
poration, joint-stock  or  manufacturing  com- 
pany, may  publish  once  a  week,  for  four  suc- 
cessive weeks,  in  some  public  gazette  of 
this  State,  notice  of  the  commencement  of 
said  suit  or  suits,  and  said  publication  shall 
qperate  as  notice  to  each  stoclcholder  in  said 
corporation,  joint-stock  or  manufacturing 
company,  for  the  purposes  hereinafter 
mentioned. 

[Notice  by  publication  under  this  section  need 
not  appear  of  record.  Stone  v.  Davidson,  56  Ga. 
179.  Section  referred  to  and  construed.  Heard 
V.  Sibley,  52  Ga.  311;  Gresbam  v.  Crosslaud,  51) 
id.  278.] 

§  3372.  When  notice  has  been  given  as  pro- 
vided in  the  preceding  sections,  and  a  judg- 
ment or  decree  has  been  obtained  against 
any  corporation,  joint-stoclv  or  manufac- 
turing company,  where  the  individual  or  pri- 
vate property  of  the  stoclcholders  is  bound 
for  the  whole  or  any  part  of  the  debts  of  said 
incorporation,  joint-stoclc  or  manufacturing 
company,  execution  slinll  first  be  issued 
against  the  goods  and  chattels,  lands  and 
tenements  of  said  corporation,  joint-stock  or 
manufacturing  company;  and  upon  the  re- 
turn thereof  by  the  proper  officer,  witli  the 
entry  thereon  of  "  no  pi'operty  to  be  found," 
then,  and  in  tliat  case,  the  cleric,  or  other 
officer,  upon  an  application  of  the  plaintiff, 
his  agent,  or  attorney,  accompanied  with  a 
certificate  as  hereinafter  directed  to  be  ob- 
tained, forthwitli  sliall  issue  an  execution 
against  eacli  of  tlie  stockholders  (if  required) 
for  tlieir  ratable  part  of  said  debt  and  cost  of 
suit,  in  proportion  to  their  respective  shares, 
or  other  liabilities  under  their  charter  of 
incorporation. 

[Section  referred  to  and  construed.  Heard  v. 
Sibley,  52  Ga.  311. 

Judgment  creditor  of  corporation  may  go  into 
a  court  of  equity  to  reach  equitable  assets  of  cor- 


GEOHGIA. 


21 


Suits  agaiust  corporations  —  Rev.  Code,  §§  3373-3376;  Discovery,  id.,  §§  3810,  3811,  3813. 


poratlon,  to  exhaust  his  legal  remedies.  Stinson 
V.  ■Williams,  35  Ga.  170. 

Equity  will  compel  payment  of  sufBcleiit  per 
cent,  of  unpaid  stock  to  meet  debts.  11.  It.  Co. 
V.   McDaniel,  5G  Ga.  101. 

Judgments  of  stockholders  against  company  may 
be  set  off  in  equitv  ajrainst  suit  un«U'r  individual 
liability  calls.  Boyd  v.  Hall.  r>(i  Ga.  "><;:?.  But 
such  judgment  may  be  attaokfd  for  fraud.     Id. 

■\Vhere  charter  provides  that  stocklioldors  shall 
bf>  liable  pro  rata  for  debts  of  comi)any,  recovery 
of  entire  debt  may  be  out  of  one.  provided  it  does 
not  exceed  defendant's  proportion,     id.] 


stock  and  manufacturing  companies  shall  be 
under.'Jtootl  and  construed  as  cumulative  of 
tlie  common  law. 

[Remedy  under  sections  .3.167  to  3375  are  cumu- 
lative. Mosley  v.  Jones.  06  (Ja.  4C6.  Suit  against 
individuals  named  and  to  foreclose  lien,  judgment 
against  them,   valid.    Id.] 


§  3373.  It  shall  lie  the  duty  of  tho  presi- 
dent or  presidiufj  otticor  of  such  incorpora- 
tion, joint-sloclv  or  manuf;icturinjr  company, 
by  whatever  name  he  may  be  designated, 
upon  application  of  the  plaintiff,  his  agent, 
or  attornej',  forthwith  to  give  a  certiticate, 
under  oath,  of  the  stoclvliolders  in  said  com- 
pany, and  the  number  of  shares  owned  by 
each  at  the  time  of  tlie  rendition  of  judg- 
ment against  said  company;  and  if,  upon  ap- 
plication by  the  plaintiff,  his  agent,  or 
attorney,  the  president,  or  officer  aforesaid, 
sliall  refuse  to  give  a  certifioate  as  aforesaid, 
or  shall  abscond  or  conceal  himself  to  avoid 
giving  the  same,  the  plaintiff,  liis  agent,  or 
attorney  may  malce  oath  of  such  refusal,  and 
the  clerk,  or  other  officer,  shall  issue  an  exe- 
cution against  such  president  or  presiding 
officer,  as  aforesaid,  for  the  amount  of  prin- 
cipal, interest  and  cost  of  said  suit. 

[Transfer  of  shares  on  books  Is  prima  facie  evi- 
dence of  ownership  of  shares.  Thornton  v.  Lane, 
11  Ga.  459.  As  to  duty  of  president  under  above 
section,  see  Stone  v.  Davidson,  56  Ga.  182.] 

§  3374.  If  the  president,  or  other  officer  of 
said  corporation,  joint-stock  or  manufactur- 
ing company,  sliall  fail  or  refuse  to  defend 
said  suit  or  suits  brought  as  aforesaid,  any 
one  of  the  stoclvholders  of  the  said  comiiany 
shall  be  permitted  to  i)lead  to  and  defend 
the  same  in  as  full  and  ample  manner  a.s 
said  company,  in  its  corporate  capacity, 
could  or  might  do. 

[Unless  expressly  authorized  by  statute,  stock- 
holders are  not  allowed  to  plead  and  defend  for 
the  corporation,  and  are  not  parties  on  the  record. 
Blackman  v.  B.  &  B.  Co.,  r>H  Ga.  IS!).  And  can- 
not maintain  bill  for  protection  of  corporate  prop- 
erty, without  alleging  refusal  of  cori)oration  to 
act"  in  its  corporate  name.  Ware  v.  Bazemore.  >"»S 
Ga.  317.  Seeti'-n  referred  to  and  construed.  Stone 
V.  Davidson,  oG  Ga.  ISl.] 

§  337.''>.  In  a  judgment  against  a  corpora- 
tion, joint-stock  or  manufacturing  company, 
under  the  provisions  of  this  Code,  the  defend- 
ant or  defendants  in  execution  shall  be  enti- 
tled to  an  illegality  under  the  same  rules, 
regulations  and  restrictions  as  defendants 
are  in  other  cases. 

[Section  referred  to  and  construed.  Stone  v. 
Davidson,  56  Ga.  181.] 

§  337G.  The  preceding  sections  in  relation 
to   proceedings   against   corporations,   joint- 


TITI.E   X.      OF   KVIDEXCE. 

CHAPTER  III. 

Discovery  from  the  Parties. 

Sec.  .3S10.  Discovery  at  law. 

;^811.  Interrogjitories  directed  to  officers  of 
eorporation    may    be   filed. 

3813.  Failing  to  answer,  or  answering  eva- 
sively. 

§  3810.  Discovery  may  be  had  from  the  op- 
posite party,  either  nominal  or  real,  in  any 
case  pending  in  any  court  in  this  State. 

§3811.  (As  amended  November  12,  1889.) 
The  party  seeking  the  discovery  may 
eitlier  subpoena  the  other  jiaity  as  a. 
witness,  or  else  file  interrogatories,  and 
sue  out  a  commission,  as  in  cases 
provided  for  other  witnesses.  In  the 
latter  event,  the  right  of  cross-examina- 
tion exists  as  in  other  ca.ses,  and  in  all  cases 
in  any  of  the  courts  of  this  State  where 
either  the  plaintiff  or  defendant  is  a  corpo- 
ration, either  foreign  or  domestic,  public  or 
private,  it  shall  be  the  right  of  the  opposite 
party  to  file  with  the  clerk  of  the  court, 
where  such  case  is  pending,  inteiTogatories 
directed  to  the  president,  secretary,  treas- 
urer, or  other  officer  or  agent  of  said  corpo 
ration,  and  it  shall  be  the  duty  of  the  officer 
or  agent  named  in  such  interix)gatories  to 
sue  out  a  commission  directed  to  himself, 
and  to  have  said  interrogatories  executed 
and  returned  to  the  next  term  of  the  court; 
Provided,  The  opposite  party,  or  his  attor- 
ney, shall  give  twenty  days'  notice  before 
the  sitting  of  said  court  to  the  attorney  of 
record,  or  to  any  officer  or  agent  of  such  cor- 
poration in  the  county  whore  suit  is  pending, 
that  inteiTOgatories  have  been  so  filed,  and 
provided  said  corporation  or  its  agent  shall 
not  be  required  to  advance  the  costs  of  exe- 
cuting said  interrogatories. 

§  3813.  (As  amended  November  12,  1SS9.) 
*  *  *  And  if  eitlier  party  be  a  corpora- 
tion, the  officer  calle<l  on  to  give  testimony 
shall  be  subject  to  atta<-hment  for  contempt 
upon  his  failure  to  answer,  and  the  court 
may  dic<miss  the  case  or  strike  the  plea,  ac- 
cording as  the  party  corporation  may  be 
plaintiff  or  defendant,  upon  the  failure  of 
any  of  its  officers  or  agents  to  give  testimony 
or  to  execute  and  return  inteiTogatories  a.s 
provided  by  law. 


[.Statute  In  respect  to  discovery  does  not  seem 
adapted  to  obtaining  a  diseovery  from  a  corpo- 
ration. ITatcher  v.  Bank,  TO  Ga.  540;  s.  C,  5  S.  E. 
Hep.   127.] 


22 


GEORGIA. 


Illeyal  dividends  —  Rev.  Code,  §§  4604a-e.      Suits  — Act  of  OetoVjer  16,  188."). 


Part  Fourth.     Penal  Laws. 
TITLK    I.      rKXAl,   CODE. 
ELEVENTH    DIVISION. 

Cheats  and  Swindles. 

Sec.  4604a.  When    dlvldeiuls    prohibited. 

4604b.  I'l'ii.ilty    for    violating     preceding    sec- 
tion. 
4604c.  Additional  penalties. 

§  4604a.  No  joint-stock  company,  corpora- 
tion, body  corporate,  or  other  associeition, 
shall  declare  any  dividend,  or  dividends,  or 
distribute  any  money  among  its  members  as 
profits,  when  such  dividend  or  dividends,  or 
money,  are  not  the  legitimate  proceeds  of  its 
investments. 

[Dividends  on  stock  correspond  to  hire  property. 
Purchaser  of  stock  for  an  administrator  at  unau- 
thorized Bale,  liable  for  dividends,  with  Interest 
thereon.      Nutting   v.    Thoniasson,   .57   Ga.   418. 

Dividends  treated  as  lost,  are  those  Innocently 
paid  by  corporation,  whether  to  purchaser  him- 
self or  those  holding  under  him.  Id.  Payments 
to  transferees  are  all  iiuiocent,  \inless  corporation 
is  chargeable  with  negligence  or  breach  of  faith, 
In   suffering  transfers  to  be  made.     Id. 


Timely  notice  to  corporation  b.v  purchaser  of 
stock  would  hold  dividend  for  him.  I'hjidzy  v. 
Murray,  b:i  (in.  "-IS:  s.  c.   Ki  S.   K.  Hep.  ."i.'.s. 

To  agree  lo  amount  of  aecniinK  dividend  not 
same  as  to  agree  to  pay  Interest  on  amount  of 
stock,  even  tiiough  rate  be  the  same.  R.  U.  Co.  v. 
I'apot,  07  Ga.  076.  Dividends  presumed  to  fol- 
low stock.     Id. 

I>ivlden(ls  paid  b.v  mistake  recoverable.    Iil. 

The  right  of  pledgee  to  recover  dividetifis  >  >> 
the  stock  pledged,  determined.  Armour  v.  E. 
Home  Town   Co.,   '25   H.    E.   Kep.   504. J 

§  4G()4b.  Any  president,  director  or  direct- 
ors, or  otlier  olticer  or  agent  of  any  joints 
stock  company,  corporation,  bo<ly  corporate, 
or  otlier  association,  violating  the  provisions 
of  tlie  preceding  section,  shall  be  guilty  of  a 
misdemeanor,  and,  on  conviction,  shall  be 
punished  as  provided  in  section  4310  of  the 
Code. 

§  4G04c.  Should  the  president,  directors, 
or  other  agent  of  anj'  corporation,  declare 
a  dividend  or  dividends,  in  violation  of  the 
section  aforesaid,  tliey  shall,  in  addition  to 
the  punishment  prescribed  in  tlie  section 
preceding,  be  liable  to  be  sued  for  double 
tlie  amount  of  damages  that  any  person,  or 
persons,  may  sustain  in  consequence  of  the 
declaring  of  such  dividend  of  dividends. 


ACTS  CONCERNING  CORPORATIONS,  PASSED  SUBSEQUENT  TO  THE  CODE 

OF  1882. 


1.  To   define   where    corporations   may    be   sued, 

and  how  service  of  summons  may  be  effected. 

2.  To  authorize  manufacturing  and  mining  com- 

panies  to    become    incorporated   as     savings 
banks. 

3.  To    prevent   officers   or    agents   from    using    or 

borrowing   money   or  other  property   of   cor- 
poration. 

4.  To  authorize  judges  of  Superior  Courts  to  call 

Special  Terms  to  grant  charters   to   corpora- 
tions. 

5.  To   protect    discharged   employes   and   prevent 

blacklisting. 
G.  To  ratify  and  confirm  charters  granted  by  the 
Superior  Courts  since  Acts  of  November  13, 
1889. 

7.  To  require  certain  corporations  to  give  to  dis- 

charged employes  the  causes  of  their  removal 
or  disciiarge. 

8.  To  provide  for  renewal   of  charters  heretofore 

granted   by  the  general   assembly. 

9.  To   provide  for  amendments  of  charters  here- 

tofore granted  by   the  general   assembly. 
Ifi.   To    regulate   assignments   for   benefit   of   cred- 
itors. 

11.  To  provide  In   what  manner  stockholders  hav- 

ing  individual    liability   shall    be    relieved   of 
the  same. 

12.  To  prohibit  combines  and  trusts. 

i;;.  Authorizing  judicial    sale   of  franchises  of   in- 
solvent corporations. 

Act  1. 

AN  ACT  to  define  where  corporations,  min- 
ing or  joint-stoclv  companies  may  be  sued, 
and  to  define  how  service  of  the  suit  may 
be  effected. 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  the  state  of  Georgia,  and  it  is 
hereby  enacted  by  the  authority  of  the  same. 


That  from  and  after  the  passage  of  this  Act, 
any  cori)oration,  mining  or  joint-stock  com- 
pany, chartered  by  authority  of  this  State, 
may  be  sued  on  contracts  in  that  county  in 
which  the  contract  sought  to  be  enforced 
was  made,  or  is  to  be  performed,  if  it  has 
an  office  and  transacts  business  there.  Suits 
for  damages,  because  of  torts,  Avrong  or  in- 
jury done,  may  be  brought  in  the  county 
where  the  cause  of  action  originated.  Ser- 
vice of  such  suits  may  be  effected  by  leaving 
a  copy  of  tJie  writ  witli  the  agent  of  the  de- 
fendant, or  if  there  be  no  agent  in  the 
county,  then  at  the  agency  or  place  of 
business. 

§  2.  Be  it  further  enacted  by  the  authority 
aforesaid,  That  where  such  corjioration  or 
company  has  an  agent  and  place  of  business 
in  any  county  or  district  in  which  there  may 
be  a  suit,  attjichment  or  judgment  upon 
which  garnishment  is  souglit  against  sucli 
corporation  or  company,  the  court  wlierein 
Is  pending  said  proceedings  upon  which  the 
garnishment  is  based  sliall  have  jurisdiction 
also  of  tlie  garnishment  proceeding,  and  ser- 
vice of  summons  of  garnishment  upon  the 
agent  in  charge  of  the  office  or  business  of 
tlie  corporation  or  company  in  the  county  or 
district  at  tlie  time  of  service  shall  be  suffi- 
cient service. 

§  3.  Be  it  enacted  by  the  authority  afore- 
said. That  all  laAvs  and  parts  of  laws  in 
conflict  with  the  provisions  of  this  act  be, 
and  the  same  are  hereby  repealed. 

(Approved  October  16,  1SS5.) 


GEORGIA. 


23 


Manufacturing,  etc.,  companies  as  savings  banks  —  Act  of  September  2,  1887. 


[Officer's  return  designatinj?  person  served  sim- 
ply "  aRent,"  not  basis  for  takiiiR  judguit'iit 
against  rori)oration  by  default.  Ilargia  v.  Ily. 
Co..  y<->  Ga.  42;  s.  c,   15  S.  E.   liep.  Gol.] 

Act    2. 

A\  ACT  to  authorize  manufaotiirinj;  and 
luiuinjr  companies  to  become  incorporated 
as  savings  banks;  to  prescribe  the  manner 
of  such  incorporation;  to  define  the  pow- 
ers and  liabilities  of  such  companies  when 
so  Incorporated;  to  secure  by  lien  and  de- 
fine the  rights  of  depositors  therein;  to 
fix  the  rate  of  iinterest  to  be  paid  deposit- 
ors, and  for  other  purposes. 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  Georgia,  Tliat  any  manufac- 
turing or  mining  company,  under  the  laws 
of  this  State,  with  propei-ty  of  the  value  of 
twenty-five  thousand  dollars,  over  and  be- 
yond its  lien  or  secured  debts,  upon  request 
of  a  majority  of  the  stock  voting  at  an  an- 
nual or  called  meeting,  may  and  shall  l)e 
Incorporated  and  authorized  to  do  a  savings 
bank  business  upon  the  president  tliereof 
filing  a  petition  for  a  charter  as  a  savings 
bank,  which  said  petition  shall  be  sworn  to 
by  said  president  before  a  judge  of  tlie  su- 
perior or  city  court  of  this  State,  and  sljall 
set  forth  the  vote  ajiiilying  for  said  fran- 
chise, the  amount  of  stock  actually  paid  in, 
the  cost  and  present  value  of  its  real  estate, 
the  cost  and  present  value  of  any  and 
all  buildings,  fixtures  and  improvements 
thereon,  the  cost  and  present  value  of  all 
machinery  used  and  employed  by  said  com- 
pany, the  amount  of  insurance  upon  the 
buildings,  fixtures,  maciiinery  and  improve- 
ments of  Siiid  company,  the  value  of  the 
property  of  said  company  over  and  beyond 
its  lien  or  secured  debts,  the  total  indebted- 
ness of  saijd  company  and  tlie  character  and 
amount  of  all  lien  or  secured  debts. 

S  2.  Be  it  further  enacted,  Tliat  upon  said 
petition  so  sworn  to  being  filed  with  the 
secretaiy  of  State  and  showing  therein  un- 
der the  oath  of  the  president  that  the  said 
company  owns  and  possesses  property  of 
the  value  of  twenty-five  thousand  dollars 
over  and  beyond  its  lien  or  .secured  debts, 
the  secretary  of  State  sliall  issue  to  said 
company,  under  the  great  seal  of  the  State, 
a  certificate  substantially  as.  follows:  To  all 
whom  these  presents  .may  come,  greeting: 
A\  hcreas.  ,   incoritorated   under 

the  laws  of  this  State,  having  filed  a  petition 
for  savings  bank  franchises  in  terms  of  the 
law,  and  it  appearing  from  the  oath  of  the 
president  thereto  that  said  company  owns 
and  possesses  property  of  the  value  of 
twenty-five  thousand  dollars  over  and  be- 
yond its  lien  or  secured  debts,  and  having 
complied  M-ith  requirements  of  the  law  in 
such  cases  made  and  i)rovidetl:  Tlierefore, 
by  virtue  of  the  act  of  the  general  assembly, 
the  State  of  Georgia  hereby  grants  to 
full  authority  to  exercise  the  pow- 


ers and  privileges  of  a  savings  bank,  and  to 
do  a  savings  l>ank  business  in  terms  of  the 
law  in  such  cases  provided,  all  depositors  In 
such  savings  liank  to  have  a  first  lien  on 
the  property  of  said  company  as  provided  by 
law  subject  to  sucli  liens  as  exist  at  the  date 
hereof  and  to  all  taxes.  In  witness 
whereof,  thefie  presents  have  been  signed  bv 
the  governor  and  secretarj-  of  State,  at  At- 
lanta, and  tlie  great  seal  of  the  State  at- 
tached thereto,  this  ....  day  of 18 

And  thereupon  said  comjiany  shall  be  a  cor- 
poration to  do  a  savings  1i;ink  business  with 
the  powers  and  subject  to  th<  ^abilities  in 
this  act  contained.  A  copy  of  said  petition 
and  certificate  shall  be  recorded  in  the  office 
of  the  clerk  of  the  superior  court  of  the 
county  in  which  said  company's  principal 
office  is  located  within  thirty  days  after  said 
cei-tificate  has  been  issue<l. 

§  3.  Upon  the  issuance  of  said  certificate 
said  company,  in  addition  to  its  chartere<l 
powers  as  a  manufacturing  or  mining  com- 
pany, shall  have  jiower  to  receive  money  on 
deposit;  to  pay  interest  as  may  be  agreed  on 
therefor:  to  use  or  lend  said  mone.v;  to  issue 
bank-books,  certificates  of  deposit;  to  lend 
said  money  on  such  security  as  it  may  deem 
fit,  whether  real  or  personal:  to  make  by- 
laws for  tlie  govemnient  of  its  savings  banl< 
department;  to  require  notice  of  not  more 
tlian  three  months  to  be  given  before  it 
shall  be  required  to  pay  a  depositor;  to  allow 
the  mone.v  so  deposited  to  be  drawn  out  by 
check  or  draft;  but  nothing  in  this  act  shall 
be  held  or  taken  to  authorize  said  company 
to  do  a  general  banking  or  discount  bnsines^s. 
§  4.  Be  it  further  enacted,  That  said  com- 
pany shall  be  required  to  receive  on  deposit 
any  sum  not  less  than  ten  cents  and  not 
more  tlian  one  thousand  dollars:  but  no  per- 
son shall  be  allowed  to  have  or  keep  on  de- 
posit at  any  one  time  more  tlian  one  thou- 
sand dollars,  except  when  the  excess  beyond 
the  sum  is  due  to  interest  accrued  or  due,  or 
:  added  to  the  sum  on  deposit  as  accrued  5n- 
!  terest  or  as  Interest  on  interest  accrued  and 
,  added. 

i      S  5.  Be  it  further  enacted.  That  it  shall 
!  be  unlawful  for  said  company  to  receive  or 
I  have  on  deposit  from  any  one  jierson  more 
;  than  one  thousand  dollars,  or  to  pay  interest 
on  the  same,  except  as  provided  in  the  pre- 
ceding section. 
§  fi.  Be  it  further  enacted,   That  married 
I  women  and  minors  shall  be  allowed  in  their 
!  own  names  to  deposit  money  in  said  savings 
bank,  and  tlie  money  so  deposited  shall  not 
be  subject  to  the  control  of  any  husband, 
parent,    guardian    or   trustee,    but    may    be 
drawn  or  checked  out  by  the  married  women 
or  minors  depositing  the  same. 

§  7.  Be  it  further  enacted.  That  subject  to 
liens  existing  at  the  date  of  the  issuance  of 
the  certificate  and  petition  hereinbefore  re- 
ferred to,  and  to  any  and  all  taxe.-*  for  State, 


24 


GEORGIA. 


Miinnfjicturin.L:,  cli'..  ciiuiiiniiii's  as  savinirs  banks  —  Ad  of  Si'ptoniber  2,  ISST. 


county  01'  municipal  purposes,  eiich  and 
every  depositor  therein  sliall  have  a  first  lieu 
upon  all  real  estate,  niaehiuery  and  improve- 
ments of  said  company  owned  at  tlie  date 
of  said  petition,  and  upon  all  additions 
thereto  subsequently  made  or  acquired,  and 
upon  any  and  all  insurance  money  received 
in  case  of  fire,  provided  the  same  is  not  re- 
invested in  similar  property  to  which  the 
lieu  hereby  given  shall  attach.  In  case  of 
tlio  insolvency  assignment,  bankruptcy,  dis- 
solution or  forfeiture  of  said  company,  said 
depositors  shall  each  and  all  have 'a  lien 
upon  all  the  as^.s.  moneys,  notes,  books, 
accounts  and  cIh-..  >  in  action  and  other  per- 
sonal property  ux  eveiy  sort,  and  tlie  lieu 
provided  for  in  tjiis  section  may  be  fore- 
closed or  enforced  by  appmpriate  proceed- 
ings by  bill  in  equity  to  which  one  or  more 
depositoi-s  may  be  party. 

§  8.  Be  it  further  enacted.  That  said  com- 
pany shall  be  authorized  to  pay  interest  on 
deposits  at  a  rate  to  be  agreed  on  not  lesjs 
than  four  per  cent,  nor  more  tlian  eight 
per  cent.  But  no  interest  shall  be  paid  on 
deposits  left  for  less  than  three  months, 
except  by  special  contract.  The  same  rate 
of  interest  shall  be  paid  all  depositors  with- 
out discrimination,  and  on  the  first  days  of 
July  and  Jauuaiy  of  eacli  year  successively, 
the  interest  due  shall  be  credited  to  the  de- 
positors account  and  itself  bear  interest. 
fc?aid  company  may  change  the  rate  of  in- 
terest to  be  paid  by  Avritten  notice  posted 
in  its  savings  bank  office  every  six  months, 
the  rate  of  interest  in  no  case  to  be  less 
than  four  per  cent.,  nor  more  than  eight 
per  cent. 

§  9.  Be  it  further  enacted.  That  such  com- 
panies ai-e  hereby  authorized  to  make  rules 
and  by-laws  for  the  government  of  banliing 
business  not  inconsistent  with  law;  to  de- 
fine the  duty  of  their  officers;  to  require  bond 
and  security;  to  fix  place  or  places  where  de- 
posits will  be  received;  to  change  the  same; 
to  print  and  circulate  matter  encouraging 
saving,  and  generally  to  do  and  perform 
such  acts  and  things  needful  or  necessai-y  in 
the  prosecution  of  said  business  not  incon- 
sistent with  law. 

§  10.  Be  it  further  enacted.  That  no  com- 
pany doing  a  savings  bank  business  under 
the  provisions  of  this  act  shall  receive  on 
deposit  any  sum  after  the  amount  of  dei)osiis 
actually  on  hand  are  equal  in  amount  to  the 
value  of  its  property  beyond  its  secured 
debts  at  the  date  of  the  deposit  offeretl.  Said 
savings  bank  sliall  be  subject  to  all  the  pro- 
visions of  the  general  banking  law  of  this 
State  so  far  as  applicable  to  the  banking 
business  done  by  said  savings  bank. 

§  11.  Be  it  further  enacted.  That  as  to  de- 
posits made,  the  statute  of  limitations  shall 
not  apply  until  demand  is  made  b.y  check 
or  in  writing  for  the  sum  on  deposit,  and  all 
unclaimed  sums,  Mhen  tlie  depositor  is  dead 
without  heirs,  or  for  other  cause  said  deposit 


is  not  called  for,  shall  be  subject  to  such 
disposition  as  may  l)y  law  be  provided. 

S  V2.  Be  it  furtiier  enacted,  That  all  laws 
and  parts  of  laws  in  conflict  witli  this  act 
be,  and  ilie  same  are  hereby  repealed. 

(.Approved  September  2,  1SS7.) 

Act  3. 

AN  ACT  to  prevent  officers  or  agents  of 
banks  or  other  conjorations  from  using  or 
borrowing  any  money  or  otlier  property  of 
said  banks  or  other  corporations  without 
the  permission  of  the  board  of  directors;  to 
provide  a  penalty  for  a  violation  of  this 
act,  and  for  other  purposes. 

Section  1.  Be  it  enacted.  That  from  and 
after  the  passage  of  this  act,  it  shall  be  un- 
lawful for  any  officer  or  agent  of  any  bank 
or  other  corporation  to  use  or  boiTow  for 
himself,  directly  or  indirectly,  any  money 
or  other  property  belonging  to  any  banlc  or 
other  coi'poration  of  wliicli  he  is  an  officer  or 
agent  without  the  permission  of  a  majority 
of  the  board  of  directors,  or  of  a  committee 
of  the  board  authorized  to  act,  and  said 
agent  or  officer  so  offending,  or  any  otlu-r 
officer  or  agent  of  the  same  corporation  loan- 
ing money  or  property  of  the  said  corpora- 
tion to  another  agent  or  officer  thereof  with- 
out the  permission  of  a  majority  of  the  board 
of  directors,  (n*  of  a  committee  authoriKcd 
to  act,  shall  be  held  guilty  of  a  misdemeanor, 
and  on  coiivi<-tion  shall  be  punished  as  pre- 
scribed in  section  forty-three  hundred  and 
ten  of  the  Code;  Provided,  That  nothing 
herein  shall  be  held  to  relieve  any  officer  so 
offending  from  the  pains  and  penalties  of 
any  other  violation  of  the  penal  laws  of  this 
State  Avhen  the  same  is  committed  by  means 
of  using  or  l)orrowing  the  propertj'  of  said 
corporation  Avithout  the  permission  herein 
required. 

s;  2.  Be  it  furtiier  enacted.  That  all  laws 
and  parts  of  laws  in  conflict  Avith  this  act 
be,  and  the  same  are  hereby  repealed. 

(Approved  September  5,  1887.) 

Act  4. 
AN  ACT  to  authorize  tli<>  judges  of  the  su- 
perior courts  of  this  State  to  call  special 
terms  of  their  courts  to  grant  charters  to 
corporations  under  the  same  rules,  regula- 
tions and  restrictions  now  reiiuired  by 
\aw  for  grant  of  same. 

Section  1.  lie  it  enacted  by  the  general 
assembly  of  tlie  State  of  Geoi-gia,  That  from 
and  after  the  passage  of  tliis  act,  the  judges 
of  the  superior  courts  or  this  State  are 
hereby  authorized  in  their  discretion  to  call 
and  hold  special  terms  of  said  courts  for  the 
purpose  of  granting  cliarters  to  corporations 
under  the  same  rules,  regulations  and  re- 
strictions now  required  by  law  for  the  grant 
of  cliarters. 

§  2.  Be  it  fui'ther  enacted  by  the  authority 
of   the  same,   That  all   laws  and   parts   of 


GEORGIA. 

Protection  of  employes  —  Act  of  August  13,  1.891. 


25 


laws  in  conflict   with  this  act  be,  and   the 
same  are  iienOiy  repealed. 

(Approved  Septenibor  21,  1887.) 

[Above  act  authorising  Judges  to  call  special 
terms  to  grant  charters  to  corporations,  not  un- 
constitutional. Branch  v.  Augusta  Glass  Works, 
t)3  Ga.  573;  s.  c,  'Si  S.  K.  Kci).  l::s.] 


Act  5. 

AN  ACT  for  the  protection  of  discharged 
employes,  and  to  prevent  blacklistin^r,  and 
for  other  purposes. 

Section  1.  Be  it  enacted  by  tlie  ffoneral 
assembly  of  the  State  of  Georgia.  Tliat  if 
any  railroad  corpoi-ation  or  company  or 
other  corporation  doing  business  in  this 
State,  or  any  agent  or  employer  of  any  sucli 
company  or  corporation,  after  having  di.s- 
cliarged  any  employe  from  llie  sorvice  of 
any  such  company  or  corporation,  sliall  pre- 
vent or  attempt  to  prevent  by  word,  writing, 
sign  or  other  means,  directly  or  indirectly, 
such  discharged  employe  from  obtaining  em- 
ployment witli  any  otlier  person,  company 
or  corporation,  such  person,  agent,  employer, 
company  or  corporation  shall  be  guilty  of  a 
misdemeanor,  and  shall  be  punished  by  a 
fine  not  exceeding  five  Imndred  dollars,  nor 
less  than  one  hundred  dollars,  and  such  per- 
son, agent,  employer,  company  or  corpora- 
tion shall  be  liable  in  penal  damages  to  such 
discharged  person,  to  be  recovered  by  civil 
action,  but  this  section  shall  not  be  con- 
strued as  prohibiting  any  person,  agent,  em- 
ployer, company  or  corporation  from  giving 
in  writing  any  other  i)erson,  company  or 
corporation  to  whom  such  discharged  person 
has  applied  for  emjiloyment.  a  trulliful  state- 
ment of  the  reasons  for  sucli  discharge,  and 
shall  furnish  to  such  discliarged  employe  on 
his  application,  to  such  address  as  may  be 
given  by  such  discharged  employe,  within 
ten  days  of  such  application  made  as  afore- 
said, a  true  copy  of  any  such  written  state- 
ment. 

§  2.  Be  it  further  enacted.  That  if  any 
railroad  or  ralhvay  company  or  con)oration, 
or  other  corporation  doing  business  in  this 
State,  sliall  authorize  or  permit,  with  its 
knowledge  and  consent,  any  of  its  or  their 
officers,  agents  or  employers  to  commit 
either  or  any  of  the  acts  prohibited  in  this 
act  (except  as  In  this  act  provideil),  such 
railroad  or  railway  company  or  conioration, 
or  other  corporation,  shall  be  liable  in  treble 
damages  to  sucli  employe  so  prevente<l  from 
obtaining  employment,  to  be  recovered  by 
him  in  a  civil  action. 

§  3.  Be  it  further  enacted,  That  it  shall 
be  the  duty  of  any  person,  officer,  agent, 
employer,  or  company  or  corporation  afoi-e- 
said,  after  having  discharged  any  employe 
from  the  service  of  any  such  corporation 
or  company,  upon  written  demand  by  sucJi 
employe,  to  furnish  to  him,  within  ten 
days    fx'om    the    application    of    tlie    same, 


a    full    statement   in   writing  of  the  cause 
or    causes    of    his    discharge,    and    if  any 
such    person,    officer,    agent,    emplover,    (.r 
company  or  con»oration   as   aforesaid  shall 
refuse    within    ten    days    after   demand    as 
'  herein  provided  to  furnish  such  statement  to 
such   dischargetl   employe,   it   shall   be  ever 
after  unlawful   for  any  sueh   jierson,  com- 
pany or  corix)ration  to  fui-nish  any  sfatement 
I  of  the  cause  of  such  discharge  to'any  person 
or  corporation  or  to  in  any  way  blacklist   or 
to  prevent  such  dlschai-ged  person  from  pro- 
curing employment  elsewhere,  subject  to  the 
penalties  prescrilied  in  section  1  of  this  act. 
And  on  the  trial  of  any  person  for  offending 
j  against  the  provisions  of  this  act,  any  otlier 
person   who   may   have   authorized   or  per- 
mitted,   with    knowledge    and    consent    as 
I  aforesaid,    any    such    offense,   or   who   may 
have  participated  in  the  same,   shall  be  a 
competent  witness,  and  be  compelled  to  give 
evidence,    and    nothing   then    said    by    such 
witness   shall   at   any   time   be   received   or 
given  in  evidence  against  him  In  any  prose- 
cution against  the  said  witness,  except  on  an 
indictment   for   perjury,    in   any    matter   to 
which   he   may   have  testified,   and   on   the 
trial  of  any  such  person  for  any  violation 
of  this  act.  the  prosecution  shall  have  the 
authority   and   process   of  the  court  trying 
the  case  to  compel  the  production  In  court, 
to  be  used  In  evidence  In  the  case,  the  books 
and    papers   of  any    such   person,    company 
or  corporation,  and  a  failure  to  produce  the 
same,   after  such   reasonable  notice  as  the 
court  may  In  each  case  provide,  shall  be  a 
contempt  of  court,  and  punishable  as  such 
as  against  the  custo^lian  or  person,  company 
or    corporation    having    tlie    control    or    in 
charge  of  such  books,  and  papers,  who  shall 
fall  to  produce  the  same;  T*rovided,  That  said 
written  cause  of  discharge,   when   so   made 
as   aforesaid,    at   the   reiiuest   of    such    dis- 
charged   emidoye    shall    never    he    used    as 
the  cause  for  an  action   for  slander  or  for 
libel,    either   civil   or   criminal,    against   the 
person  or  authority  furnishing  the  same. 

§  4.  Be  it  further  enactiMl,  That  it  shall 
be  the  duty  of  any  ptM-son,  company  or 
corporation,  who  has  recehed  any  request 
or  notice  in  writing,  sign,  word  or  otherwls"-. 
from  any  other  person.  com])any  or  corjiora- 
tion,  preventing  or  attempting  to  prevent  tiie 
employment  of  any  person  dischargeil  from 
the  service  of  either  of  the  latter,  on  demand 
of  such  discharged  employe,  to  furnish  to 
such  emiiloye,  within  ten  days  after  such 
demand,  a  true  statement  of  the  nature  of 
such  iTQuest  or  notice,  an<l  If  In  writing,  n 
copy  of  the  same,  and  if  a  sign,  the  Inter- 
pretatlion  thereof,  with  the  name  of  the  per- 
son, comitany  or  corporation  furnishing  tlie 
same,  with  the  i)lace  of  business  of  the  per- 
son or  authority  furnishing  the  same,  and  a 
violation  of  this  section  shall  subject  the 
ofifender  to  all  the  penalties,  chll  anil  crimi- 
nal, provided  by  the  foregoing  sections  of 
this  act. 


26 


GEORGIA. 


Employes;  charters  —  Acts  of  September  7,  October  21,  1801. 


§  5.  Be  It  further  enacted.  That  the  pro- 
visions of  this  act  shall  apply  to  and  pre- 
vent, under  all  the  penalties  aforesaid,  rail- 
road companies  or  corporations,  under  the 
same  general  manajremont  and  control  but 
having  separate  divisions,  sujiorintendents, 
or  master  mechanics,  master  machinist's  or 
similar  officers  for  separate  or  different  lines, 
their  officers,  agents  and  employers  from 
preventing  or  attempting  to  prevent,  the  em- 
ployment of  any  such  discharged  person  by 
any  other  separate  division,  or  officer,  or 
agent  or  employer  of  any  such  separate  rail- 
road line  or  lines. 

§  T).  Be  it  further  enacted,  That  all  laws 
In  <x)nflct  with  this  act  be.  and  the  same 
are,  hereby  repealed. 

(Approved  August  13,  1S91.) 

Act  6. 

AN  ACT  to  ratify  and  confirm  all  charters 
of  corporations  grant-ed  by  tlie  superior 
courts  of  this  State  since  the  passage  of 
the  act  approved  November  13,   1889. 

Section  1.  Be  it  enacted  by  the  general  as- 
sembl5'  of  the  State  of  Georgia,  That  all 
chai-ters  of  corporations  whicli  have  been 
granted  by  tlie  sui>erior  courts  of  this 
State  since  tlie  passage  of  the  above 
recited  act,  approved  November  13,  1889, 
in  the  granting  of  whicl\  tlie  law  of 
this  State  in  such  case  provided  has 
been  substantially  complied  with,  as  it 
existed  previous  to  the  passage  of  said  above 
recited  act.  be,  and  tlie  same  is,  hereby 
ratified  and  confirmed,  and  declared  to  be 
valid  and  legal  and  to  have  all  the  force, 
effect,  power  and  authority  as  if  said 
charters  had  been  granted  in  strict  compli- 
ance and  conformity  with  said  above  re- 
cited act,   appixived  November  13,    1889 

§  2.  Be  it  further  enacted.  That  all  laws 
and  parts  of  laws  in  conflct  with  this  act 
be.  and  the  .snme  are  hereby  repealed. 
(Approved  September  7,  1891.) 

Act  7. 

AN  ACT  to  require  certain  corporations  to 
give  to  their  discharged  employes  or 
agents  the  causes  of  their  removal  or  dis- 
charge, when  discharged  or  removed. 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  the  State  of  Georgia,  Tliat  here- 
after, when  any  railroad  company,  telegraph 
company,  express  company,  or  electjic  street 
railroad  company  shall  discharge  or  remove 
any  agent  or  employe,  it  shall  be  the  duty 
of  such  company,  when  requested,  in  writ- 
ing, by  such  discharged  agent  or  employe,  to 
give  a  specific  sta,teraent,  in  writing,  setting 
forth  tlie  reason  or  i-easons  which  have 
prompted,  caused  or  induced  such  discharge 
or  removal,  and  if  such  discharge  or  i-e- 
moval  has  been  prompted,  caused  or  induced, 
in  whole  or  In  part,  by  any  complaint  or 


communication  made  to  such  company,  it 
shall  be  the  duty  of  the  company  to  Inform 
the  discharged  agent  or  employe  of  the  sub- 
stance and  nature  of  such  communication 
or  complaint,  and  when  and  by  wliom  such 
comi)lalnt  or  communication  v\as  mnde. 

§  2.  Be  it  further  enacted,  That  the  writ- 
ten request  provided  for  in  the  preceding  sec- 
tion of  this  act,  to  be  effective,  must  be 
signed  by  the  discharged  agent  or  employe, 
and  be  delivered,  by  an  officer  autliorized  to 
serve  the  process  of  citation  of  a  court 
within  this  State,  either  to  the  president, 
secretary  or  treasurer  of  such  company,  or 
to  the  local  agent  representing  such  com- 
pany in  any  county  within  this  State,  or  bj' 
leaving  the  same  at  the  principal  office  of 
such  company  during  office  hours. 

§  3.  Be  it  further  enacted.  That  any  com- 
pany to  whom  has  been  delivered  a  written 
request,  as  provided  for  in  the  preceding  sec- 
tion of  this  act,  shall  have  twenty  days  from 
the  date  of  the  delivery  thereof  within 
which  to  give  the  information  requested. 
The  statement  requii-ed  by  such  company  to 
be  given  to  a  discharged  agent  or  employe 
may  be  delivei-ed  to  such  agent  or  employe 
by  an  officer  authorized  to  serve  tlie  process 
of  citation,  or  by  leaving  the  same,  addressed 
to  such  discharged  agent  or  employe,  witli 
the  county  clerk  of  the  county  in  which  the 
written  request  was  preferred.  If  such 
company  shall  fail  or  refuse  to  give  the  in- 
formation as  hereinbefore  provided  for,  or 
shall  give  a  false  statement  thereof,  it  shall 
be  liable  to  such  discharged  agent  or  em- 
ploye for  damages  In  the  sum  of  five  thou- 
sand  dollars. 

§  4.  Be  it  further  enacted.  That  all  laws 
and  parts  of  laws  in  conflict  with  this  act 
be,  and  the  same  are,  hereby  repealed. 

(Approved   October   21,    1891.) 

Act  8. 

AN  ACT  to  provide  for  the  renewal  of 
all  cliarters  heretofore  granted  by  the 
general  assembly  of  Georgia  by  special 
acts  to  liaiilving,  insurance,  railroad,  canal, 
navigation,  e.vpress  and  telegraph  com- 
panies. 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  Georgia,  Tliat  any  banking,  in- 
surance, railroad,  canal,  navigation,  express 
and  telegraph  companies,  heretofore  incor- 
porated by  the  general  assembly,  by  special 
act  may  from  time  to  time  I'enew  its  charter 
by  filing  with  the  secretaiy  of  State  a 
petition  signed  Avith  the  corporate  name, 
stating  the  name  and  cliarter  of  the  corpora- 
tion, when  incorporated,  giving  tlie  date  of 
the  original  act  of  incorporation  and  all 
amendments  tliereto,  that  it  desires  a  I'e- 
iiewal  of  its  charter  as  set  out  in  the  original 
act  of  incorporation  and  the  acts  amenda- 
toi'y  thereof,  and  paying  to  the  secretajw  of 
State  a  fee  of  one  hundred  dollars,  to  be 


GEOEGIA. 


27 


Renewal  and  amendment  of  charters  —  Acts  of  December  20,  1893. 


covered  by  him  into  the  treasury  of  the 
State,  and  filing  along  with  said  petition  a 
certified  abstract  from  tlie  minutes  of  the 
corporation,  showing  that  the  application  for 
renewal  had  been  authorized  by  proper  cor- 
porate action.  Tliereupon  the  secretaiy  of 
State  shall  issue  to  tlie  petitioning  corpora- 
tion tlie  following  certificate,  to  wit: 
"  Georgia.  To  whom  it  may  concern,  greet- 
ing: (insert  name  of  petitioning  corpoi'ation), 
a  corporation  created  by  an  act  of  the  gen- 
eral assembly  of  the  State  of  Georgia,  by 
an  act  approved  (insert  date  of  approval 
of  act  of  iucoi-i>oration,  and  acts  amenda- 
tory thert^f.  approved  (insert  date  of  ap- 
proval amending  acts),  having  petitioned  for 
a  renewal  of  the  charter  of  said  corporation  in 
terms  of  the  statute  in  such  case  made  and 
provided,  tlie  grant  of  coi-porate  powers  and 
privileges  set  out  in  the  above  recited  acts 
is  hereby  renewed  fpr  the  space  of  thirty 
years,  as  to  all  parts  tliereof  not  in  coufiicij 
with  the  Constitution  and  laws  now  or  here- 
after of  force  in  this  State.  Witness  my 
official  hand  and  the  seal  of  the  State,  this 
day  of  18.  .." 

§  2.  Be  it  further  enacted.  That  upon  the 
filing  of  the  petition  and  abstract,  and  the 
Issuance  of  the  certificate  prescribed  in  the 
foregoing  section  of  this  act,  tlie  corporation 
shall  be  conclusively  presumed  to  have  ac- 
cepted the  renewal  of  its  charter,  and  said 
corporation  shall  be,  and  continue  for  the 
space  of  thirty  years,  a  body  corporate,  with 
all  the  powers,  privileges  and  liabilities  as 
granted  in  the  original  act  of  incorporation 
and  the  amendments  thereto,  so  far  as  the 
same  are  not  in  conflict  with  the  Constitu- 
tion and  laws  of  the  State,  now  or  hereafter 
of  force. 

§  3.  Be  It  further  enacted.  That  the  sec- 
retary of  State  shall  keep  of  file  the  peti- 
tions and  abstracts  specified  in  the  first 
section  of  this  act,  and  shall  keep  a  book  in 
which  he  shall  enter  the  names  of  all  cor- 
porations o])taining  renewals  of  charters 
under  this  act,  and  the  date  of  the  renewal. 

§  4.  Be  it  further  enacted,  That  all  laws 
and  parts  of  laws  in  conflict  herewith  be, 
and  the  same  are,  hereby  repealed. 

(Approved  December  20,  1893.) 


Act  9. 

AN  ACT  to  provide  for  the  grant  of  cor- 
porate powers  and  privileges  by  amend- 
ment to  the  charters  heretofore  granted 
by  special  acts  of  the  general  assembly 
to  banking,  insurance,  railroad,  canal, 
navigation,  express  and  telegraph  com^ 
panies. 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  Georgia,  That  any  banking, 
insurance,  railroad,  canal,  navigation,  ex- 
press or  telegraph  company,  heretofore  in- 
corporated   by    the    general    assembly    by 


special  act,  may  amend  its  charter  so  as  to 
acquire  any  or  all  of  the  corporate  powers 
and  privileges  grantetl  to  a  like  corporation 
under  the  acts  already  or  to  be  hereafter 
passed,  providing  for  the  grant  of  corporate 
powers  and  privileges  to  sucii  companies 
by  the  secretary  of  State,  by  filing  with  ilie 
secretary  of  State  a  petition,  signed  with 
the  corporate  name,  stating  the  name  and 
character  of  the  con»oration,  the  date  of 
the  original  act  of  incorporation  and  all 
amendments  tliereto,  that  it  desires  an 
amendment  to  its  charter  by  having  granted 
It  the  corporate  powers  and  privileges 
granted  to  similar  corporations  by  the  act, 
or  certain  specified  sections  of  the  act,  prf>- 
vlding  for  tlie  grant  of  corjiorate  powers 
and  privileges  to  (insert  kind  of  company) 
by  tlie  secretary  of  State,  and  paying  io 
the  secretary  of  State  a  fee  of  twenty-five 
dollars,  to  be  coveretl  by  him  into  tlie 
treasury  of  the  State,  and  also  filing  along 
with  said  petition  a  certified  abstract  from 
the  minutes  of  the  corporation,  showing  that 
the  application  for  amendment  had  been 
authorized  by  proper  corporate  action. 
Thereupon  the  secretary  of  State  shall  issue 
to  the  corporation  the  following  certificate: 
"  Georgia.  To  whom  it  may  concern,  gi-eet- 
ing:  (insert  here  name  of  petitioning  cor- 
poration), a  corporation  created  bj-  an  ait 
of  the  general  assembly  of  this  State  by 
an  act  approved  (insert  here  date  of  aji- 
proval  of  act),  a.nd  acts  amendatory  thereof, 
approved  (insert  here  date  of  approval  of 
amendatory  acts),  having  petitioned  for  an 
amendment  of  the  charter  of  said  corjiora- 
tion,  in  terms  of  the  law  in  such  case  made 
and  provided,  the  corporate  powers  and 
privileges  set  out  In  the  act,  or  certain 
specified  sections  of  the  act,  providing  for 
the  grant  of  corporate  powers  and  privileges 
by  the  secretary  to  (insert  charter  of  com- 
pany), are  hereby  conferred  upon  (insert 
name  of  company  desiring  amendment). 
Witness  mv  hand  and  the  seal  of  this  State, 
this day  of ,  IS.  .." 

§  2.  Be  it  further  enacted.  That  after  the 
filing  of  said  petition,  and  the  Issuance  of 
the  certificate  prescribed  in  the  foregoing 
section,  the  corporation  sliall  be  conclusively 
presume<l  to  have  accepted  the  amendment 
specified,  and  shall  have,  enjoy  and  exercise 
all  the  corporate  powers  and  privileges  set 
out  in  the  act,  or  the  particular  section  of 
the  act  specified  in  the  petition,  and  certifi- 
cate prescribed  in  the  fii"st  section  of  this 
act. 

§  3.  Be  it  further  enacte<l,  That  the  sec- 
retary shall  keep  of  file  all  petitions  and 
transcripts  filed  with  him  under  the  pro- 
visions of  the  first  section  of  this  act,  and 
shall  also  keep  a  book  in  which  he  shall 
enter  the  names  of  all  the  companies  obtain- 
ing tJie  amendments  to  charters  under  this 
act.  the  date  of  the  amendment  and  the  act, 
or  portions  of  the  act,  adopted  as  an  amend- 
ment. 


28 


GEORGIA. 


Assijriiiiunits;  liability  of  stockholders — Acts  of  December  13,  December  14,  1894. 


§  4.  Be  it  further  enacted  That  all  laws 
and  paj'ts  of  laws  iu  coutliet  with  this  act 
he,  and  the  same  are,  hereby  repealed. 

(Approved  December  20,  1S93.) 

Act  10. 

AN  ACT  to  regulate  the  law  of  assignments 
for  the  Ix^netit  of  creditors,    etc. 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  the  State  of  Georgia,  and  it  is 
hereby  enacted  by  authority  of  the  same, 
That  any  corporation,  not  municipal,  may 
make  an  assignment  for  the  benefit  of  cred- 
itors, but  no  sucli  corporation  sliall  be  al- 
lowed to  prefer  any  creditor  or  class  of 
creditors,  except  such  as  have  debts  entitled 
to  priority  by  the  laws  of  this  State. 

§  6.  Be  it  further  enacted.  That  at  the 
time  of  signing  said  deed  of  assignment, 
*  *  *  the  otticer  acting  for  the  coi-pora- 
tion  making  an  assignment,  shall  make  an 
affidavit  annexed  to  such  assignment,  that 
"  the  said  assignment  conveys  all  property 
held,  claimed,  or  owned  by  the  assignor  at 
the  time  of  making  tlie  assignment;  that 
all  recitals  and  all  estimates  of  totals  and 
values  tlierein  and  all  list  creditors  are  ti'ue 
to  the  best  of  his  knowledge  and  belief;  and 
that  the  debts  set  out  as  due  to  the  preferred 
creditors  are,  bona  fide,  just,  due,  and  un- 
paid; and  that  said  assignment  is  not  made 
tor  the  purpose  of  hindering,  delaying,  or 
defrauding  creditors." 

§  9.  Be  it  further  enacted,  That  no  prop- 
erty In  this  State  shall  pass  under  any  as- 
signment made  by  corporations,  persons,  or 
firms  out  of  this  State,  unless  such  foreign 
assignment  shall  comidy  with  the  law  of 
assignments  in  this  State. 

(Approved  December  13,  1894.) 

Act  11. 

AN  ACT  to  provide  in  what  manner  stock- 
holders in  banks  and  other  corporations 
having  individual  liability  shall  be  relieved 
of  the  same,  etc. 

Section  1.  Be  it  enacted  ]>y  the  general 
assembly  of  the  State  of  Oorgia.  and  it  is 
hereby  enacted  by  authority  of  the  same, 
That  "from  and  after  the  passage  of  this  act, 
whenever  a  stockliolder  in  any  bank  or  otlier 
corporation  is  individually  liable  under  the 
charter,  and  shall  transfer  his  stock,  he  shall 
be  exempt  from  such  liability  by  such  trans- 
fer, unless  such  bank  or  other  corporation 
shall  fail  within  six  months  from  the  date 
of  such  transfer. 

§  2.  Be  it  further  enacted,  That  the  stock- 
holders in  whose  names  the  capital  stock 
stands  upon  the  books  of  such  bank  or  other 
corporation  at  tlie  date  of  its  failure  shall 
be  primarily  liable  to  respond  upon  sucli 
individual  liability;  but  upon  proof  made 
that  any  of  said  shareholders  at  the  date  of 
the  failure  are  insolvent,  recourse  may  be 
had    against    the    person    or    persons    from 


whom  such  insolvent  shareholder  received 
his  stock,  if  within  a  period  of  six  months 
prior  to  the  date  of  the  failure  of  such  bank 
or  other  conwration. 

§  3.  Be  it  further  enacted.  That  such  in- 
dividual liability  shall  be  an  asset  of  such 
bank  or  other  corporation,  to  be  enforced 
by  the  assignee,  receiver,  or  other  officer 
having  the  legal  right  to  collect,  marshal 
and  distiibute  the  assets  of  such  failed 
bank  or  other  corporation. 

§  4.  Be  it  further  enacted  by  the  authority 
aforesaid.  That  all  banks  and  other  corpora- 
tions, whose  shareholders  are  individually 
liable  under  their  ■ehax-ter,  shall  keep  on  hand 
at  all  times  a  true  and  con-ect  list  of  the 
shareholders  of  such  bank  or  other  corpora- 
tion, and  it  shall  be  the  right  of  any  crenlitor 
of  such  banlv  or  other  corporation  to  inspect 
the  same  at  any  time  during  the  business 
hours  of  any  working  day,  and  it  is  hereby 
made  the  duty  of  the  president  and  other 
officers  of  the  bank  or  other  corporation  to 
produce  such  tests,  from  time  to  time,  a.s 
may  be  required  by  any  creditor  of  said 
bank  or  other  coiiDoration. 

§  5.  Be  it  further  enacted  by  the  authority 
aforesaid.  That  the  president  and  other  offi- 
cers of  such  bank  or  other  coiT)oration  in 
charge  of  its  business  at  the  time  such  de- 
mand is  made  by  any  creditor  to  inspect  the 
list  of  shareholders,  who  shall  fail  or  refuse, 
upon  such  demand  made  by  any  creditor  of 
said  bank  or  corporation  within  the  business 
liours  of  any  working  day,  to  permit  sncli 
creditor  to  inspect  such  list  of  shareholders, 
shall  be  guilty  of  a  misdemeanor,  and,  upon 
conviction  by  any  court  having  jurisdiction 
of  the  same,  shall  be  punished  as  prescribed 
in  section  4310  of  the  Code  of  Georgia. 

§  0.  Be  it  further  enacted.  That  all  laws 
and  parts  of  laws  in  coufiict  with  this  Liav 
be,  and  the  same  are,  hereby  repealed. 
(Approved  December  18,  1S94.) 

Act  12. 

AN  ACT  to  declare  unlawful  and  void  all  ar- 
rangements, contracts,  agreements,  trusts, 
or  combinations,  made  with  a  view  to  les- 
sen or  which  tend  to  lessen,  free  competi- 
tion in  the  importation  or  sale  of  articles 
imported  into  this  State;  or  in  the  manu- 
facture or  sale  of  articles  of  domestic 
growth  or  of  domestic  raw  material;  to 
declare  unlawful  and  void  all  an-ange- 
ments,  contracts,  agreements,  trusts,  or 
combinations  between  persons  or  corpora- 
tions designed,  or  which  tend  to  advance, 
reduce  or  control  tlie  price  of  such  product 
or  article  to  producer  or  consumer  of  any 
such  product  or  articles;  to  provide  for 
forfeiture  of  the  charter  and  franchise  of 
any  con)oration,  organized  under  the  laws 
of  this  State,  violating  any  of  the  pro- 
visions of  tliis  act;  to  prohibit  every  for- 
eign conioration.  violating  any  of  the  pro- 
visions of  this  act,  from  doing  business  in 


GEORGIA. 


29 


Trusts  aud  tonibines;  sale  of  franchise  —  Acts,  December  23,  1896;  December  21,  1897. 


this  State;  to  require  the  attorney-general 
of  this  State  to  institute  legal  proeeedinss 
against  any  such  corporations  violating  the 
provisions  of  this  act,  and  to  enforce  the 
penalties  prescribed;  to  prescribe  penalties 
for  any  violation  of  this  act;  to  authorize 
any  person  or  corporation,  damaged  by  any 
such  trust,  agreement,  or  combination,  to 
sue  for  the  recovery  of  such  damages,  and 
for  other  purposes. 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  Georgia,  and  it  is  hereby  en- 
ac-ted  by  the  authority  of  the  same.  That 
from  and  after  the  passage  of  this  act  all 
arrangements,  contracts,  agreements,  tinists, 
or  combinations  between  persons  or  corpora- 
tions made  with  a  view  to  lessen,  or  which 
tend  to  lessen  full  aud  free  competition  in 
the  importation  or  sale  of  articles  imported 
into  this  State,  or  in  the  manufacture  or  sale 
of  articles  of  domestic  growth  or  of  domestic 
raw  material,  and  all  arrangements,  con- 
tracts, agreements,  trusts,  or  combinations 
between  persons  or  coi*porations  designed,  or 
which  tend  to  advance,  reduce  or  control  the 
price  or  the  cost  to  the  producer  or  to  the 
consumer  of  any  such  product  or  article,  are 
hereby  declared  to  be  against  public  policy, 
unlawful  and  void. 

$  2.  Be  it  further  enacted  by  the  authority 
aforesaid,  That  any  corporation,  chartered 
under  the  laws  of  this  State,  which  shall 
violate  any  of  the  provisions  of  this  act, 
shall  thereby  forfeit  its  charter  and  its  fran- 
chise, and  its  corporate  existence  shall  there- 
upon cease  and  determine.  Every  foreign 
cori>oration  M'hich  shall  violate  any  of  the 
provisions  of  this  act  is  hereby  denied  the 
right  to  do,  aud  is  prohibited  from  doing 
business  in  this  State.  It  is  hereby  made  the 
duty  of  the  attorney-general  of  this  State  to 
enforce  this  provision  by  due  process  of  law. 

ij  3.  Be  it  further  enacted  by  the  authority 
aforesaid,  That  any  violation  of  the  pro- 
visions of  this  act  shall  be  deemed,  and  is 
hereby  declared  to  be  destinictive  of  full 
and  free  comi>etition  and  a  conspiracy 
against  trade,  and  any  person  or  persons 
who  may  engage  in  anj-  such  conspii-acy,  or 
Avho  shall,  as  principal,  manager,  director  or 
agent,  or  in  any  other  capacity,  liuowingly 
carry  out  any  of  the  stipulations,  punioses, 
prices,  rates  or  orders  made  in  furtherance 
of  such  conspiracy,  shall  on  conviction,  be 
punished  by  a  fine  of  not  less  than  one  hun- 
dred dollars  or  more  than  tive  lunidred  dol- 
lars, and  by  imprisonment  in  the  penitentiary 
not  less  than  one  year  or  nor  more  than  ten 
years;  or,  in  the  judgment  of  the  court,  by 
either  such  fine  or  such  imprisonment. 

§  4.  Be  it  further  enacted  by  the  authority 
aforesaid,  That  the  provisions  of  this  act 
shall  not  apply  to  agricultui-al  products  or 
live  stock  while  in  the  iwssession  of  the 
producer  or  raiser. 

§  5.  Be  it  further  enacted  by  the  auOiority 
aforesaid,   That  any  person  or  persons,  or 


corix)rations,  that  may  be  injured  or  dam- 
aged by  any  such  arrangement,  contract, 
agreement  trust  or  combination,  described 
in  section  one  of  this  act  may  sue  for  and 
recover  in  any  court  of  competent  juris- 
diction in  this  State,  of  any  person,  persons 
or  coriKiration  operating  such  trust  or  com- 
bination, the  full  consideration  or  sum  paid 
by  him  or  tliem  for  any  goods,  wares, 
merchandise  or  articles,  the  sale  of  which  Is 
controlled  by  such  combination  or  trust. 

S  (».  Be  it  further  enacted  by  the  autliority 
aforesaid,  That  it  shall  be  the  duty  of  the 
judges  of  the  sui>erior  courts  of  this  State 
specially  to  in.struct  the  grand  juries  as  to 
the  provisions  of  this  act, 

§  7.  Be  it  further  enacted  by  the  authority 
aforesaid,  That  all  laws  and  parts  of  laws 
in  conflict  with  the  provisions  of  this  act 
be,  and  the  same  are,  hereby  repealed. 

(Approved  December  23,  1896.) 

Act   13. 

AX  ACT  authorizing  a  judicial  sale  of  the 
franchises  of  insolvent  private  cm-pora- 
tions.  providing  for  the  incon)oration  of 
the  purchaser  or  purchasers  of  such  fran- 
chise, and  for  other  purjxises. 

Section  1.  Be  it  enacted  by  the  general  as- 
sembly of  the  State  of  (Georgia.  That  when- 
ever any  i)rivate  conioration  heretofore  or 
hereafter  created  under  any  general  or 
special  law  of  this  Sfcite  shall  become  in- 
solvent, and  its  assets  be  the  subject  of  ad- 
ministi-ation  by  the  court,  the  franchises 
possessed  ami  Cn joyed  by  such  coriioration 
in  virtue  of  its  charter  or  order  of  incorpora- 
tion shall  be  considered  assets,  and  the  same 
may  be  sold,  under  order  of  the  court, 
through  a  receiver  or  otherwise. 

§  2.  Be  it  further  enacted.  That  the  pur- 
chaser or  purchasers  of  such  franchises, 
their  associates,  successors  and  assigns, 
shall,  upon  complying  with  tlie  requirements 
of  this  act,  have  and  acquire,  and  may 
thereafter  exercise  and  enjoy  the  same 
rights,  privileges,  immunities  and  advan- 
tages conferred  in  the  charter  or  order  of 
incoi-poration  of  such  insolvent  corporation, 
as  fullv  and  absolutely,  in  all  respects,  as 
tlie  former  company  might  or  could  have  had 
and  enjoved  the  same  had  no  such  sale  and 
Dur.-hase' taken  pli'.e:  ITnvidc.l.  That  noth- 
ing in  this  act  shall  be  construed  to  reserve 
to  such  purchaser  or  purchasers  any  exemp- 
tion from  State,  county  or  municipal  tax- 
ation or  anv  special  rights,  privileges  or 
immunities,  inconsistent  with  the  constitu- 
tion of  this  State. 

i  §  3.  Be  it  further  enacted.  That  such  pur- 
chasers their  associates  and  assigns,  may 
organize  anew  in  tlie  manner  prescribed  by 

7  4  Be  it  further  enacted.  That  all  laws 
and  parts  of  laws  in  conflict  with  this  act 
be,  and  the  same  are,   hereby  repealed, 

(Approved  December  21,  1897.) 


IXDEX  TO  GEORGIA. 


ACTIONS:  Page. 

corporations  may  maintain  and  defend 13 

against  stockholders  by  creditors  of  corporation 19 

against  lessees  of  railroads,  notice  of  pendency 20 

service  of  process  by  publication 20 

against  corporations,  notice  of  instituting,  to  be  published 20 

judgment  returned  unsatisfied,  execution  against  stocJchnlders   20 

plaintiff  entitled  to  receive  statement  of  names,  etc.,  of  stockholders 21 

against  corporations,  where  brought 22 

service  on  corporations,  where  made 22 

ADMINISTRATOR: 

foreign,  transfer  of  stock  by 17,  18 

AGENT: 

corporation  may  appoint 16 

of  bank  not  to  borrow  from  bank,  when  24 

ASSETS: 

of  insolvent  corporation,  administration  of IS 

ASSIGNMENT: 

for  benefit  of  creditors,  regulated 28 

ATTACHMENT: 

stock  subject  to,  sale  of,  under 18 

officers  of  corporation  to  state  amount  owned  by  defendant 18 

sales,  how  conducted IS 

BANKS: 

returns  of,  to  comptroller-general,  for  tax  purposes T.  8 

stockholder  transferring  stock,  relieved  from  liability 8 

savings,  manufacturing  and  mining  companies  may  have  charter 23 

officers  or  agents,  when  not  to  borrow  from 24 

BLACKLISTING: 

of  employes,  prohibited   25 

BY-LAWS: 

corporation  may  make ^^ 

creation  of  lien  by,  on  shares  of  stockholders 1" 

CANAL  COMPA^^ES: 

amendment  of  charters  -'•    -^ 

CAPITAL  STOCK: 

ten  per  cent,  must  be  paid  in  before  beginning 1^ 

CHARTER: 

to  bo  held  subject  to  constitution " 

forfeiture,  for  failure  to  make  returns  for  taxation " 

granted  by  order  of  court 

to  be  recorded  and  indexed 

term  of  existence 

renewal  of  existence  after  expiration 

to  have  no  effect  unless  business  commenced  within  two  years ll 

fees  of  clerk  for  granting 

renewal  of.  before  expiration,  when  to  take  effect ^■^ 

proceedings  upon   

20 


32  I:N^DEX  to  GEORGIA. 

CHARTER  —  (Continued) :  Page. 

when  to  expire,  wlien  silent  as  to  duration 13 

private,  legislature  may  withdraw 15 

dissolution  by  expiration  or  forfeiture 15 

forfeiture  for  wilful  violations  15 

for  mis-use  or  non-use   15 

grant  of,  at  special  term 24 

granted  by  superior  court,  confirmed 26 

renewal  of,  granted  by  special  act,  petition  for 26 

fee  to  be  paid  upon 26,  27 

certificate,  secretary  of  state  to  issue  27 

amendment  of,  by  certain  corporations 27,  28 

forfeiture  for  entering  combines  or  trusts  29 

COMBINATIONS: 

to  regulate  prices  or  prevent  competition,  illegal 28,  29 

forfeiture  of  charter  for  entering 29 

4J0MPETITI0N: 

corporation  not  to  purchase  stoclc  to  prevent 6 

trusts  or  combines  to  prevent,  illegal  28,  29 

forfeiture  of  charter  for  entering 29 

CONTINUANCE: 

corporations  have  during  time  limited  in  charter 13 

CONTRACTS: 

obligation  not  to  be  impaired 5 

unnecessary,  not  to  be  made 12 

CORPORATION: 

term  defined   8 

CREDIT: 

of  state  not  to  be  loaned 6 

CREDITORS: 

stockholders  liable  to,  until  capital  is  full-paid 11 

may  sue  stockholders  for  corporate  debts 19 

assignment  for  benefit  of,  regulation 28 


DIRECTORS    (See  Officers): 

liability  of.  for  illegal  dividends 22 

DISCHARGE: 

of  employes,  cause  of,  to  be  furnished 25.    26 

DISCOVERY: 

interrogatories  directed  to  officers  of  corporation 21 

DISCRIMINATION: 

unjust,  general  assembly  to  prevent 5,      6 

DISSOLUTION: 

how  effected    15 

forfeiture  of  charter  for  what 15 

property  constitutes  a  fund 16 

receiver  may  be  appointed  to  distribute 16 

does  not  affect  liability  incurred 16 

uIVIDENDS: 

declared  from  proceeds  of  investments   22 

liability  of  directors  for  declaring  illegal 22 


EMINENT  DOMAIN: 

right  not  to  be  abridged 6 

EMPLOYES: 

discharged,  not  to  be  prevented  from  securing  employment 25 

causes  of  discharge  to  be  furnished 2.5,    26 


IXDEX  TO  GEORCxIA.  33 

EXECUTION: 

Page. 

sale  of  stock  under   ^j. 

against  stockholders  for  debts  of  corporation  ...                                                 on 

EXECUTOR: 

foreign,  transfer  of  stock  by 17  18 

EXISTENCE,  CORPORATE:  

duration  of,  under  order  of  organization n 

EXPRESS  COMPANIES: 

returns  of,  to  comptroller-general,  for  tax  purposes 7  s 

amendment  of  charter  07'  28 

FEES: 

of  clerk  of  court  for  granting  charter j'^ 

FOREIGN  CORPORATIONS: 

returns  of,  to  comptroller-general,  for  tax  purposes 7  8 

recognized  bj'  comity >) 

to  possess  no  greater  powers  than  domestic  corporations 9 

action  against,  for  unlawful  exercise  of  powers u 

owning  lands,  when  to  incorporate 10 

FORFEITURE: 

of  charter  effects  dissolution   1.-, 

Avhat  will  produce ^.^ 

for  entei-ing  combines  or  trusts '><> 

FRANCHISE: 

surrender  of.  works  dissolution   1.-),  10 

not  to  be  held  exclusive I7 

may  be  sold  under  order  of  court LM) 

rights  of  purchasers    29 

UUARDIAN: 

foreign,  transfer  of  stock  by 17,  IS 

INJURIES: 

by  railroads  to  per.son  or  property,  liability  for 19 

INSOLVENT  CORPORATION: 

assets  of,  may  be  collected  and  administered 18 

INSURANCE  COMPANIES: 

returns  of,  to  comptroller-general,  for  tax  purpses 7.  8 

acquisition  of  powers  by  amendment  of  charter 27 

INTERROGATORIES: 

directed  to  corporate  officers,  for  discovery 21 

officers  liable  for  contempt  if  refusing  to  answer 21 

LIABILITY: 

of  stockholder  of  bank,  relieved  when  stock  is  transferred   8,  28 

to  creditors,  until  stock  is  paid  11 

suits  to  recover  on  account  of 19 

of  railroad  company,  for  injuries  to  person  or  property 19 

of  stockholders,  transfer  of  stock,  when  relieves  from 28 

an  asset  of  corporation 28 

LIENS: 

by-laws  may  create,  on  shares  of  stockholders  10 

MANUFACTURING  COMPANIES: 

may  have  charter  for  savings  liank.     (See  Savings  Bank) 2.1.  24 

MINING  COMPANIES: 

niny  have  savings  bank  <'liaT-tcr.     (See  Savings  Ranki 2.''i.  24 


34  IXDEX  TO  GEORGIA. 

MIS-USE:  Page. 

forfeiture  of  elmrter  for 15 

MONOPOLY: 

not  to  be  encouraged 6 

NON-USE: 

forfeiture  of  charter  for 15 

UFFICERS: 

corporation  to  act  through  its 14 

liable  for  acts  of 14 

liability  of,  for  illegal  dividends   '.i2 

of  bank  not  to  borrow  from  bank,  when   24 

ORDER  OF  ORGANIZATION    (See  Charter): 

granted  by  circuit  court   10 

ORGANIZATION    (See   Charter): 

of  corporation,  by  petition  to  court 10 

petition  for,  what  to  state 10 

publication  of  petition    10 

order  of  incorporation 10 

PENDENCY,  NOTICE  OF: 

of  action  against  lessees  of  railroads 20 

PETITION    (See  Charter): 

for  order  of  organization,  what  to  state 10 

publication  of 10 

certified  copy  of,  as  evidence 11 

for  charter  as  savings  bank 23 

for  renewal  of  charter  granted  by  special  act 2<i,  27 

of  certain  corporation  for  amendment  of  charter 27,  28 

PLEDGE: 

of  certificates  of  stock,  rights  of  pledgee 17 

POWERS,  CORPORATE: 

special  grant  of,  general  assembly  not  to  make 5 

extended  to  corporations  whose  charters  are  renewed 12 

specified  generally   13,  14 

grant  of,  by  amendment  to  charter  of  certain  corporation  27 

PRICES: 

trusts  or  combines  to  regulate,  illegal 28,  29 

forfeiture  of  charter  for  entering 29 

PRIVATE   CORPORATIONS: 

what   are    9 

PRIVILEGES  AND  IMMUNITIES: 

special,  not  to  be  granted 5 

PROCESS: 

service  of,  on  corporations   19,  22 

on  companies  leasing  railroads 20 

perfected  by  publication,  when  20 

PUBLIC  CORPORATIONS: 

what  are 9 

RAILROADS: 

freights  and  tariffs,  general  assembly  may  regulate 5 

bonus  or  rebates  prohibited  6 

returns  of  receipts,  etc.,  to  be  made  for  tax 7,  8 

'liability  of,  for  injuries  to  person  or  property 19 

charters,  amendment  of,  proceedings   27,  28 

REAL  PROPERTY: 

foreign  corporations  owning  certain  amount  to  reincorporate 10 


IXDEX  TO  GEORGIA.  35 

REBATES:  „ 

.,        ,                                     .  Page, 

railroad  company  not  to  give P 

RENEWAL: 

of  corporate  existence,  petition  for j j 

may  be  granted  before  expiration ]2 

proceedings  npon  grant  of -jo 

of  charter  granted  by  special  act,  petition  for 26 

fee  to  be  paid  upon 0(5 

certificate  of,  to  be  granted 07 

continuance  after  <>7 


SAVINGS  BANK: 

manufacturing  or  mining  company  may  liave  charter  for 23 

petition  for  charter   2.'} 

certificate  to  be  issued 2'A 

copy  of  petition  and  certificate  to  be  recorded 2'i 

powers  to  receive  deposits   2;{ 

provisions  regulating  business 2.'5.  24 

SEAL,  COMMON: 

corporation  may  have   14 

SERVICE: 

of  process  on  corporations   11),  22 

on  companies  leasing  railroad   20 

perfected  by  publication,  when   20 

SPECIAL  TERMS: 

of  superior  court,  grant  of  charters  by 24 

STOCK: 

corporation  not  to  be  authorized  to  purchase (j 

pledgee  of,  rights  of 17 

deemed  personal  property 17 

issue  of  new,  belongs  to  remainderman 17 

transfer  of,  by  foreign  executor,  administrator  or  guardian 17.  18 

sale  of,  under  execution 18 

capital,  ten  per  cent,  must  be  paid  in  before  beginning  business 11 

STOCKHOLDER: 

of  bank,  transferring  stock,  when  relieved  from  liability S,  28 

liability  of,  to  creditors 11 

lien  on  shares,  by-laws  may  provide  for 10 

suits  against,  to  recover  corporate  debts .• 18 

judgment  against,  when  judgment  against  corporation  is  returned  unsatisfied 20 

names,  etc.,  statement  to  plaintiff 21 

may  defend  suits  against  corporations 21 

liability,  an  asset  of  corporation  2S 

list  ef.  to  be  kept  for  information  of  creditors 28 

creditors  to  be  permitted  to  inspect 28 

STREET  RAILWAY: 

general  assembly  not  to  authorize  construction  with  consent  of  local  authorities 5 

SUCCESSION: 

corporation  to  have   ^-^ 

SUB  AND  BE  SUED: 

corporations  may    13 

SUITS.    (See  Actions.) 

TANATION: 

of  corporations,  power  not  to  be  surrendered 6 

property  liable  to   ^ 

moneyed  or  stock  corporations  liable  to ' 

of  railroads  and  other  corporations   ' 


36  IKDEX  TO  GEORGIA. 

TAXATION— (Continued):  Page. 

returns  of  certain  corporations  7 

to  be  itemized  7 

failure  to  make,  issue  of  execution 7.  8 

forfeiture  of  charter  for  failure  to  make  8 

TELEGRAPH  COMPANIES: 

amendment  of  charters 27,  28 

TRUSTS: 

to  regulate  prices  or  prevent  competition,  illegal  28,  29 

forfeiture  of  charter  for  entering   29 

WILL: 

corporations  may  receive  by  14 


IDAHO. 


TABLE  OF  CONTENTS. 


CONSTITUTIONAL,  PROVISIONS.  Page. 

Art.  I.  Declaration  of  rights   5 

III.  Legi.slative  department .......'.'.'..'.'.'.'...'.'...'.'..       5 

V 1 1.  lie  veuue   ...........'.'.'..'..'.'.'.'.'.'.......'.       5 

VIII.   I'ublic  indeljtedness  and  sifbsidies   .....................[.........[       5 

XI.  Corporations ....'.'.'.'.'..'.'.'...'...'..'.'.'.       G 

REVISED  STATUTES. 

General  Provisions.     Part  First.     Political. 

TITLE    1.      PIBLIC   OFFICERS. 

Cb.  5.  Of  tlio  governor   8 

6.  Of  tiie  secretary   of  the  territory    j . .       g 

TITLE   VI.      PIULIC  ^VAYS. 

Ch.  2.  Highways    8 

TITLE  X.     REVENUE. 

Ch.  1.  I'roperty  lialjlo  to  taxation 8 

4.  Assessment    '. 8 

Part  Second.     Civil  Code. 

TITLE   IV.      CORPORATIONS. 

Ch.  1.  General  provisions 9 

Part  Third.     Remedial. 

CODE   OF   CIVIL   PROCEDURE. 

Part  II.     Civil  Actions. 

TITLE   \.      COMMENCEMENT   OF   ACTIONS. 

TITLE    VI.      PLEADINGS. 

Ch.  6.   Verification   19 

T1TI,E  VII.      PROVISIONAL  REMEDIES. 

Ch.  5.  Receivers  19 

TITLE    XIV.       MISCELLANEOUS    PROVISIONS. 

Ch.  6.  Costs -0 

Part  III.     Special  Proceedings. 
TITLE  VI.      VOLUNTARY  DISSOLUTION   OF    CORPORATIONS. 

Part  Fourth.     Penal. 

PRELIMINARY   PROVISIONS. 

Part  I.     Of  Crimes   and  Punisliments. 

TITLE    XII.      OP    CRIMES    AGAINST    PROPERTY. 

Ch.     4.  Forgery  and  counterfeiting   -y 

10.   Frauds  in  management  of  corporations   -l 

Part  II.     Of  Criminal  Procedure, 


TITLE    X.      MISCELLANEOUS    PROCEEDINGS. 

Ch.  9.  Proceedings  against  corporations - 

LEGISLATIVE    ACTS    PASSED    SUBSEQUENTLY  TO  REVISED  STATUTES  OF 

1887. 


IDAHO. 


00:NSTITUTJ0E'  of  IDAHO-1880. 


PROVISIONS  RELATING  TO  CORPORATIONS. 


ARTICLE  I. 

Declaration  of  Rights. 

Sec.  16.  Laws    Impairing    obligation    of    contracts 
not  to  be  passed. 

ARTICLE  III. 

Legislative  Department. 

Sec.  19.  Local   or  special   laws   not   to   be  passed 
In   certain   cases. 

ARTICLE  VII. 

Revenue. 

Sec.  2.  Corporations  to  be  taxed. 

8.  Power  to  tax  corporations  shall   never  be 
relinquished. 

ARTICLE  VIII. 
Public  Indebtedness  and  Subsidies. 
Sec.  2.   State  not  to  loan  its  credit  to,  or  become 
a  stockholder  in  any  corporation. 

ARTICLE  XI. 

Corporations. 

Sec.  1.  Charters  under  which  corporations  not 
organized  at  adoption  hereof  shall  have 
no  validity. 

2.  Corporations  must    hereafter  be    created 

under  general  laws. 

3.  Legislature    may  alter,    revoke  or    annul 

any  charter. 

4.  Election     of     directors,    how    to   be     con- 

ducted. 

5.  Railroads  shall  be  highways.     Transporta- 

tion companies  shall  be  common  car- 
riers. Rates  may  be  regulated.  Rail- 
roads may  connect  with  or  cross  others. 

6.  Unreasonable   discrimination    in    facilities 

or  rates  by  common  carriers  prohibited. 

7.  Existing    corporations   may   have    benefit 

of  future  legislation,  how. 

8.  Right  of  eminent  domain,  or  police  power 

of  the  State,  not  to  be  abridged. 

9.  Stocks  or  bonds  not  to   be   issued  except 

for  value  actually  received.  Fictitious 
Increase  of  stock  or  indebtedness  void. 

10.  Foreign   coi-poration   may   do   business   in 

this  State  upon  certain  conditions. 

11.  No   street   or    other   railroad    to   be     con- 

structed within  municipality  without 
consent  of  local  authorities. 

12.  Restrictions  upon  laws  for  benefit  of  cor- 

porations. 

13.  Telegraph  or  telephone  lines  may  be  con- 

structed subject  to  reasonable  regula- 
tions. 

14.  Consolidation   of    domestic   with     foreign 

corporation  does  not  constitute  foreign 
corporation. 

15.  Legislature  shall  not  permit  alienation  of 

franchises  so  as  to  release  liabilities. 

16.  Term  "  corporation  "  construed. 

17.  Personal  liability  of  stockholders. 

18.  Trusts  and  combinations   prohibited. 


ARTICLE  I. 
Declaration  of  Rights. 
?  It).  No    •     '     •    law  iaipairiug  tbe  obli- 
gation of  contracts,  shall  ever  be  pas.sed. 


Xo   retroactive   law 


See  Const.,   art.    XI,    §   3. 
shall  be  passed.     Id.,  §  1'2. 

ARTICLE  III. 

Legislative   Department. 

§  19.  The  legislature  shall  not  pass  local 
or  special  laws  in  any  of  the  following  enu- 
merated ca.ses,  that  is  to  say: 

31.  Creating  any  corporation. 

See  Const.,  art.  XI,  §  2;  Gen.  L.,  §  2373  et  seq. 

ARTICLE  VII. 

Revenue. 

§  2.  The  legislature  shall  provide  such  rev- 
enue as  may  be  needful,  by  levying  a  tax  by 
valuation,  so  that  every  person  or  corpora- 
tion sliall  pay  a  tax  in  proportion  to  the 
valtie  of  his,  her,  or  its  property,  except  as  in 
this  article  hereinafter  otherwise  provided. 
The  legislature  may  also  impose  a  license 
tax  (both  upon  natural  persons  and  upon 
corporations,  other  than  municipal,  doing 
business  in  this  State);  also  a  per  capita  tax: 
Provided,  The  legislature  may  exempt  a  lim- 
ited amount  of  improvements  upon  land 
from  taxation. 

See  §  1401  et  seq. 

§  8.  The  power  to  tax  corporations  or 
corporate  property,  both  real  and  personal, 
shall  never  be  relinquished  or  suspended, 
and  all  corporations  In  this  State  or  doing 
business  therein,  shall  be  subject  to  taxa- 
tion for  State,  county,  school,  municipal,  and 
other  purposes,  on  real  and  personal  prop- 
erty owned  or  used  by  them,  and  not  by 
this  Constitution  exempted  from  taxation 
within  the  territorial  limits  of  the  authority 
levying  the  tax. 

See  §  1401  et  seq. 

ARTICLE  VIII. 
Public  Indebtedness  and   Subsidies. 
§  2.  The  credit  of  the  State  shall  not,  in 
any  manner,  be  given,  or  loaned  to,  or  in  aid 


IDAHO. 


Corporations  —  Const.,  Art.  xi,  §§  1-9. 


of  any  intliviclual,  association,  municipality 
or  corporation:  nor  shall  the  State  directly 
or  indirectly,  become  a  stockholder  in  any 
association  or  corporation. 

ABTICLE  XI. 
Corporations. 

§  1.  All  existing  charters  or  grants  of 
special  or  exclusive  privileges,  under  wliich 
the  corporators  or  grantees  sliall  not  have 
organized  or  commenced  business  in  good 
faith  at  the  time  of  the  adoption  of  this  Con- 
stitution, shall  thereafter  have  no  validity. 

§  2.  No  charter  of  incorporation  .shall  be 
gvanted,  extended,  changed  or  amended  l)y 
special  law,  except  for  such  municipal,  chari- 
table, educational,  penal  or  reformatory  cor- 
porations as  a.re  or  may  be,  under  the  control 
of  the  State;  but  the  legislature  shall  provide 
by  general  law  for  the  organization  of  corpo- 
rations hereafter  to  be  created:  Provided, 
That  any  such  general  law  shall  be  subject 
to  future  repeal  or  alteration  by  the  legis- 
lature. 

See  §  2575  et  seq.;  Const.,  art.  Ill,  §  19. 

[Certain  conditions  in  legislative  charter  held 
not  to  be  conditions  precedent  to  corporate  exist- 
ence.    Canal  Co.  v.  Pinkham,  1  Idaho,  790  (1880).] 

§  3.  The  legislature  may  provide  by  law 
for  altering,  revoking,  or  annulling  any  char- 
ter of  incorporation  existing  and  revocable 
at  the  time  of  the  adoption  of  this  Constitu- 
tion, in  such  manner,  however,  that  no  in- 
justice shall  be  done  to  the  corporators. 

See  Const.,  art.  I,  §  16,  and  Gen.  L.,  §  26^1. 
Proceedings  against  corporations.  §§  8222-8229. 
Voluntary  dissolution.     §§  5185-5191. 

§  4.  The  legislature  shall  provide  by  law 
that  in  all  elections  for  directors  or  manag- 
ers of  incorporated  comi)anies,  every  stocli- 
holder  shall  have  the  riglit  to  vote  in  person 
or  by  proxy,  for  tlie  number  of  shares  of 
stocli  owned  by  him,  for  as  many  persons  as 
there  are  directors  or  managers  to  be  elected, 
or  to  cumulate  said  shares,  and  give  one  can- 
didate as  many  votes  as  the  numljer  of 
directors  multiplied  by  the  number  of  his 
shares  of  stock,  shall  equal,  or  to  distribute, 
them  on  tlie  same  principle  among  as  many 
candidates  as  he  shall  think  fit,  and  such 
directors  shall  not  be  elected  in  any  other 
manner. 

See  S  2594. 

§  5.  All  railroads  shall  be  public  highways, 
and  all  railroad,  transportation,  and  express 
companies  shall  be  common  carriers,  and 
subject  to  legislative  control,  and  the  legis- 
lature shall  have  power  to  regulate  and 
control  by  law,  the  rates  of  charges  for  the 
transportation  of  passengers  and  freight  by 
such  companies  or  other  common  carriers 
from  one  point  to  another  in  the  State.    Any 


association  or  corporation  organized  for  the 
purpose,  shall  have  the  right  to  constrtict  and 
operate  a  i-ailroad  between  any  designated 
points  within  tliis  State,  and  to  connect 
within  or  at  the  State  line  with  i-ailroads 
of  other  States  and  territories.  Every  rail- 
road company  sliall  have  tlie  right  witli  its 
road,  to  intersect,  connect  with,  or  cross  any 
otlier  railroad,  under  such  regulations  as 
may  be  prescribed  by  law,  and  upon  making 
due  compensation. 

§  G.  All  individuals,  associations,  and  cor- 
porations, similarly  situated  shall  have  equal 
rights  to  have  persons  or  property  trans- 
ported on  or  over  any  railroad,  transporta- 
tion, or  express  route  in  this  State,  exce]Jt 
that  preference  may  be  given  to  perisliable 
property.  No  undue  or  unreasonable  dis- 
crimination slinll  be  made  in  cliarges  or 
facilities  for  transportation  of  freight  or  pas- 
sengers of  the  same  class,  by  any  railroad,  or 
transportation,  or  express  company,  l)etween 
persons  or  places  within  the  State;  but  ex- 
cursion or  commutation  tickets  may  be 
issued  and  sold  at  special  rates,  provided 
such  rates  are  the  same  to  all  persons.  Xo 
railroad,  or  transportation,  or  express  com- 
pany shall  be  allowed  to  charge,  collect  or 
receive,  under  penalties  which  the  legislature 
shall  prescribe,  any  greater  charge  or  toll 
for  the  transportation  of  freight  or  passen- 
gers, to  any  place  or  station  upon  its  route 
or  line,  than  it  charges  for  the  transportation 
of  the  same  class  of  freight  or  passengers  to 
any  more  distant  place  or  station  upon  its 
route  or  line  within  this  State.  Xo  railroad, 
express  or  transportation  company,  nor  any 
lessee,  manager,  or  otlier  employe  thereof, 
shall  give  any  preference  to  any  individual, 
association,  or  corporation,  in  furnishing 
cars  or  motive  power  or  for  the  transporta- 
tion of  money  or  other  express  matter. 

§  7.  Xo  corporation  other  than  municipal 
corporations  in  existence  at  the  time  of  tne 
adoption  of  this  Constitution,  shall  have  the 
benefit  of  any  future  legislation,  without 
first  filing  in  tlie  ottice  of  the  secretary  of 
State  an  acceptance  of  the  provisions  of  this 
Constitution  in  binding  form. 

§  8.  The  right  of  eminent  domain  shall 
never  be  aliridged,  or  so  construed  as  to  pre- 
vent the  legislature  from  taking  the  prop- 
erty and  franchise  of  incorporated  com- 
panies, and  subjecting  them  to  public  use, 
the  same  as  property  of  individuals;  and  the 
police  powers  of  the  State  shall  never  l)e 
abridged  or  so  construed  as  to  permit  cor- 
porations to  conduct  tlieir  business  in  sucli 
manner  as  to  infringe  tlie  equal  rights  of  in- 
dividuals, or  the  general  well-being  of  the 
State. 

§  9.  No  corporation  shall  issue  stocks  or 
bonds,  except  for  labor  done,  services  per- 
formed, or  money  or  property  actually  re- 
ceived; and  all  fictitious  increase  of  stock 
or  indeljtedness  shall  be  void.  The  stock 
of  corporations  shall  not  be  increased  except 
in  pursuance  of  general  law,  nor  without  the 


IDAHO. 


Corporations  —  Const.,  Art.  xi,  §§  10-18. 


consent  of  the  persons,  holding  a  majority 
of  the  stoclv.  tirst  obtained  at  a  meeting,  held 
after  at  least  thirtj-  days'  notice  given  in 
pursuance  of  law. 

§  10.  Xo  foreign  corporation  shall  do  any 
business  in  this  State  without  having  one 
or  nil  ire  known  places  of  business,  and,  an 
authorized  agent  or  agents  in  the  same,  upon 
whom  process  may  be  served,  and  no  com- 
p:iny  or  corporation  formed  under  the  laws 
of  any  other  country.  State,  or  territoiy, 
shall  liave  or  be  allowed  to  exercise  or  en- 
joy, within  tliis  State  any  greater  rights  or 
privileges  than  those  possessed  or  enjoyed 
by  corporations  of  the  same  or  similar 
character  created  under  the  laws  of  this 
State. 

See  §  2653. 

§  11.  No  Street,  or  otlier  railroad,  shall 
be  constructed  within  any  city,  town,  or 
incorpornted  village  without  the  consent  of 
the  local  authorities  liaving  the  control  of 
the  street  or  highway  proposed  to  be  occu- 
pied l)y  sucli  street  or  otlier  railroad. 

§  12.  The  legislature  shall  pass  no  law  for 
the  benefit  of  a  railroad,  or  other  corpora- 
tion, or  any  in<lividual  or  association  of  in- 
dividuals retroactive  in  its  operation,  or 
which  imposes  on  the  people  of  any  county 
or  municipal  subdivision  of  the  State,  a  new 
liability  in  respect  to  transactions  or  con- 
siderations already  past. 

See  Const.,   art.   I,   §  IG. 

§  13.  Any  association  or  corporation,  or 
the  lessees  or  managers  thereof,  organized 
for  the  purpose,  or  any  individual,  shall 
have  the  right  to  construct  and  maintain 
lines  of  telegraph  or  telephone  within  this 
State,  and  connect  the  same  with  other 
lines;  and  the  legislature  shall  by  general 
law  of  uniform  operation  provide  reason- 
able regulations  to  give  full  effect  to  this 
section. 

§  14.  If  any  railroad,  telegraph,  express,  or 
other  corporation,  organized  under  any  of  the 
laws  of  this  State  shall  consolidate  by  sale 


or  otherwise  with  any  railroad,  telegraph, 
express,  or  other  corporation  organized  un- 
der any  of  the  laws  of  any  other  State  or 
territory,  or  of  the  United  States,  the  same 
shall  not  tliereby  become  a  foreign  cor- 
poration, but  the  courts  of  this  State  shall 
retain  jurisdiction  over  that  part  of  the 
corporate  property  within  the  limits  of  the 
State  in  all  matters  that  may  arise,  as  if 
said  consolidation  had  not  taken  place. 

§  15.  The  legislature  shall  not  pass  any 
law  permitting  the  leasing  or  alienation  of 
any  franchise  so  as  to  release  or  relieve 
the  franchise  or  property  held  thereunder 
from  any  of  the  liabilities  of  the  lessor  or 
grantor,  or  lessee  or  grantee,  contracted  or 
incurred  in  the  operation,  use,  or  enjoyment 
of  such  franchise,  or  any  of  its  privileges. 

§  16.  The  term  "  corporation  "  as  used  in 
this  article,  shall  be  held  and  construed  to 
include  all  associations  and  joint-stock  com- 
panies having  or  exercising  any  of  the 
powers  or  privileges  of  corporations  not 
possessed  by  individuals  or  partnerships. 

See  Gen.  L.,   §  2575. 

§  17.  Dues  from  private  cori)orations  shall 
be  secured  by  such  means  as  may  be  pre- 
scribed by  law,  but  in  no  case  shall  any 
stockholder  be  individually  liable  in  any 
amount  over  or  above  the  amount  of  stock 
owned  by  him. 

§  18.  That  no  incorporated  company,  or 
any  association  of  persons  or  stock  company, 
in  the  State  of  Idaho,  shall  directly  or  in- 
directly combine  or  make  any  contract  with 
any  other  incorporateil  company,  foreign  or 
domestic,  through  their  stockholders  or  the 
trustees  or  assignees  of  such  stockholders, 
or  in  any  manner  whatsoever,  for  the  pur- 
pose of  fixing  the  price  or  regulating  the 
production  of  any  article  of  commerce  or 
of  produce  of  the  soil,  or  of  consumption  by 
tlie  people;  and  that  the  legislature  be  re- 
quired to  pass  laws  for  the  enforcement 
thereof,  by  adequate  penalties,  to  the  extent, 
if  necessary  for  that  purpose,  of  the  for- 
feiture of  their  property  and  franchise. 


8 


IDAHO. 


Public  oflioois:  highways;  revenue  -  R.  S.,  §§  180,  191,  196,  901,  1401,  1429,  1440,  1442. 


REVISED  STATUTES  OF  IDAHO  "1887/ 


GENERAL   PROVISIONS   APPLICABLE    TO  ALL  THE  CODES. 


Sec.  10.  Certain  terms  defined. 

§  10.    ♦     *     *    The  -^vord  person  includes 
a  corporation  as  well  as  a  natural  person: 


See  §  6301. 

Part  First. 


Political  Code. 


TITLE    I.      PI  HLIC    OFFICERS. 

CHAPTER  V. 
Of  the  Governor. 
Sec.  180.  Powers  and  duties  of  governor. 

§  180.  In  addition  to  those  prescribed  by 
the  congress  the  governor  has  the  power, 
and  may  perform  the  duties  prescribed  in 
this  and  the  following  sections: 

6.  He  may  require  the  attorney-general,  or 
district  attorney  of  any  county  to  inquire 
into  the  affairs  or  management  of  any  coi^po- 
ratiou  existing  under  the  laws  of  this  ter- 
ritory. 

CHAPTER  VI. 

Of  the  Secretary  of  the  Territory. 

Sec.  ini.  Duties. 
196.  Fees. 

§  191.  It  is  the  duty  of  the  secretary  of 
the  territory: 

3.  To  record  in  proper  books  all  *  *  * 
articles  of  incorporation  filed  in  his  office. 

§  19G.  The  secretary  of  the  territory,  for 
services  performed  in  lus  office,  may  charge 
and  collect  the  following  fees: 

3.  For  filing  articles  of  incorporation,  five 
dollars. 

4.  For  recording  articles  of  incorporation, 
twenty  cents  per  folio. 

5.  For  issuing  each  certificate  of  incorpo- 
ration, three  dollars. 

TITLE   VI.      PLBLIC   AVATS. 

CHAPTER  II. 

Highways. 

ARTICLE  V. 
Sec.  901.  Employer  responsible  for  highway  labor 
assessed   to  employes. 

§  901.  Corporations  or  other  employers  of 
residents   in   any  highway  district,  are  re- 


(Note.—  The  Revised  Statutes  of  1887  of  the  Ter- 
ritory of  Idaho  are  still  in  force  in  the  State  of 
Idaho,  except  as  amended  by  legislative  enact- 
ments.) 


sponsible  for  the  road  poll-tax  assessed 
against  their  employes,  and  a  notice  to  the 
employer  or  managing  agent  requiring  the 
payment  of  the  road  poll-tax  of  tlie  employe, 
chai'ges  such  employer  or  corporation  with 
such  road  poll-tax. 


TITLE  X.     REVENUE. 

CHAPTER  I, 
Property  Liable  to   Taxation. 

Sec.  1401.  Property    exempt   from   taxation. 

§  1401.  The  following  property  is  exempt 
from  taxation: 

Sixth.  Capital  stocli  of  corporations  where 
the  property  of  the  corporation  has  been 
assessed; 

CHAPTER  IV. 

Assessment  of  Property. 

Sec.  142!).  Assessor   to   require   statement   contain- 
ing what. 
1440.  Holders  of  stock  in  firm  or  corporation. 
1442.  Property    of     firm     or   corporation     as- 
sessed,  where  situated. 

§  1420.  (As  amended  March  9,  1895.)  He 
(ihe  assessor)  must  exact  from  each  person  a 
statement,  under  oath,  setting  forth  specific- 
ally all  the  real  and  personal  property  owned 
by  such  person,  o!'  in  liis  possession  or  un- 
der his  control  at  twelve  o'clock,  M.,  on  the 
second  Monday  in  April  and  as  to  property 
not  within  the  State  on  that  day,  on  the 
day  of  the  assessment.  Such  statement 
sliall  be  in  writing,  showing  separately: 

3.  All  property  belonging  to,  claimed  by, 
or  in  the  possession,  or  under  tlie  control  or 
management  of  any  coiiJoration  of  which 
sucli  person  is  president,  secretary,  cashier 
or  managing  agent. 

§  1440.  The  owner  or  holder  in  any  firm  or 
corporation,  the  entire  capital  or  property 
wliereof  is  assessed,  must  not  be  asessed  in- 
dividuallj'  for  his  stock  in  such  firm  or  cor- 
poration. 

§  1442.  The  property  of  every  firm  and 
corporation  must  be  assessed  in  tlie  county 
wliere  the  property  is  situate,  and  must  be 
assessed  in  the  name  of  the  firm  or  corpo- 
ration. 


IDAHO. 


Definitions:  articles  of  incorporation  —  R.  S.,  §§  2575-2580. 


Part  Second.     Civil  Code. 

TITLE  IV.      CONCERMXG  CORPORATIONS. 

CHAPTER  I. 


General   Provisions. 

Sec.  2575.  CoriJorations,   public  or  private. 

2576.  I'rlvate   corporations,    how    formed. 

2577.  For  any   lawful   purpose. 

2578.  Articles  of  incorporation. 

2579.  Same,  what  to  contain. 

2580.  Same,   further  facts. 

2581.  Same,    how   executed,    and    by    whom. 

2582.  Prerequisites  in  filing  articles. 

2583.  Subscription    and    payment    before    cer- 

tificate. 

2584.  Articles,   where  filed,   certificate. 

2585.  Copy  of  articles  evidence. 

2586.  Stoc'kholders  and  members. 

2587.  Articles  filed,   in  what  counties. 

2588.  By-laws,     when,    how     and     by    whom 

adopted. 

2589.  Directors,   election   of. 

2590.  By-laws,    for   what   may   prOTide. 

2591.  Same,  recording  and  amending. 

2592.  Directors,  how  many  and  who  to  be. 

2593.  Same,   elected  at  first  meeting. 

2594.  Election,   how   conducted. 

2595.  Organization  of  board. 

2596.  Dividends,   only   from   surplus  profits. 

2597.  Directors,  removed  from  office. 

2598.  Justice  of  the  peace  may  order  meet- 

ing, when. 

2599.  Majority  of  stock  must  be  represented. 

2600.  Stock  of  minors,  etc. 

2601.  Election  postponed. 

2602.  Complaints  and     proceedings  regarding 

elections. 

2603.  False  certificates,  reports  or  notices. 

2604.  Meeting  by  consent. 

2605.  Proceedings  binding. 

2606.  Meetings,   where  held. 

2607.  Where  no  provision,  how  called. 

2608.  Change  of  principal  place  ot  business. 

2609.  Stockholders,  liable  for  debts. 

2610.  Certificates,  how  and  when  issued. 

2611.  Transfer  of  shares. 

2612.  Same   held  by  married   women,   etc. 

2613.  Non-resident  stockholders. 

2614.  Assessments,   when  may  be  levied. 

2615.  Limitation  of  assessments. 

2616.  Levy  of  asses-sment. 

2617.  What  order  shall   contain. 

2618.  Notice  of  assessment. 

2619.  Same,  service  and  publication   of. 

2620.  Delinquent   notice. 

2621.  Same,   contents  of. 

2622.  Same,   publication  of. 

2623.  Jurisdiction   acquired,   how. 

2624.  Sale,  how  conducted. 

2625.  Purchases. 

2626.  When  corporation  may  purchase. 

2627.  Stock  purchased  by  corporation. 

2628.  Postponement  of  sale. 

2629.  Assessment  not  invalidated. 

2630.  Action  to  recover  stock  sold. 

2631.  Proof  of  publication. 

2632.  Waiver  of  sale,  action  for  assessment. 

2633.  Powers  of  corporations. 

2634.  Note   to  emit  paper  money. 

2635.  Misnomer. 

2636.  To  organize  within  year. 

2637.  Increasing     and     diminishing 

stock. 

2638.  Acquisition  of  real  property. 

2639.  Records  of  corporations. 

2640.  Same. 

2641.  Right    of   repeal    reserved. 

2642.  Franchise  sale  of,   under  execution. 
2643    Purchaser  may  conduct  business. 
2644!   Same,   mav   recover   penalties,    etc. 

2645.  Effect  of  sale. 

2646.  Redemption  of  franchise. 

2647.  Sale,   where  made. 

2648.  On  dissolution,  directors  as  trustees  for 

creditors. 

2649.  Mav   extend   time  of  existence. 


capital 


Sec.  2650.  Existing  corporations  may  continue  un- 
der this  title. 

2651.  Same. 

26.52.  Application  of  this  chapter. 

2653.  Foreign  corporations  to  designate  per- 
son upon  whom  service  may  be  made. 

§  2575.  Coi-porations  are  either  public  or 
private.  Public  corporations  are  formed  or 
organized  for  the  government  of  a  portion 
of  the  territory;  all  other  corporations  are 
private. 

"  Corporation  "   defined.     Const.,   art.    XI,    {   16. 

§  2576.  Private  corporations  may  be 
formed  by  the  voluntary  association  of  any 
five  or  more  persons  in  the  manner  pre- 
scribed in  this  title.  A  majority  of  such 
persons  must  be  boua  fide  residents  of  this 
territoiy. 

§  2.577.  Private  corporations  may  be  formed 
for  any  purpose  for  which  individuals  may 
lawfully  associate  themselves. 

How  corporation  formed  prior  to  adoption  of 
Constitution  may  have  benefit  of  future  legisla- 
tion.    Const.,  art.  XI,  §  7. 

§  2578.  The  instrument  by  which  a  private 
corporation  is  formed,  is  called  "Articles  of 
Incorporation." 

§  2579.  Articles  of  incorporation  must  be 
prepared,  setting  forth: 

First.  The  name  of  the  corijoration ; 

Second.  The  purpose  for  which  it  is 
formed ; 

Third.  The  place  where  its  principal  busi- 
ness is  to  be  transacted; 

Fourth.  The  term  for  which  it  is  to  exist, 
not  exceeding  fifty  years; 

Fifth.  The  number  of  its  directors  or  trus- 
tees; and  the  names  and  residence  of  those 
Avho  are  appointed  for  the  first  year:  Pro- 
vided. At  any  time  during  the  existence  of 
the  corporation,  the  number  of  the  directors 
may  be  increased,  in  corporations  for  profit, 
by  a  majority  of  the  stocliholders  of  the 
corporations,  to  any  number  not  exceeding 
eleven,  who  must  be  members  of  the  corpo- 
ration, whereupon  a  certificate,  stating  the 
number  of  directors,  must  be  filed,  as  pro- 
vided for  the  filing  of  original  articles  of 
incorporations; 

Sixth.  The  amount  of  the  capital  stock, 
and  the  number  of  shares  into  which  it  is 
divided; 

Seventh.  If  there  is  a  capital  stocli,  the 
amount  actually  subscribed,  and  by  whom. 

See  Const.,  art.  XI,  f  9. 

§  2580.  The  articles  of  incorporation  of 
any  railroad,  wagon  road  or  telegraph  or- 
ganization must  also  state: 

First.  The  kind  of  road  or  telegraph  In- 
tended to  be  constructefl: 

Second.  The  place  from  and  to  which  it  is 
intended  to  be  run,  and  all  the  intermediate 
branches: 

Third.  The  estimated  length  of  the  road  or 
telegraph  line. 


10 


IDAHO. 


Articles;  filing;  by-laws  — R.  S.,  §§  2581-2591. 


§  2581.  The  articles  of  incorporation  must 
be  subscribetl  by  five  or  more  persons,  a 
majority  of  wliom  must  be  resident  free- 
holders of  this  territory,  and  acknowledge<l 
by  each  before  some  officer  authorized  to 
talce  and  certify  aclinowledgments  of  con- 
veyances of  real  property. 

§  2582.  Each  intended  railroad,  wagon 
road  or  telegraph  corporation,  before  filing 
articles  of  incorporation,  must  have  actually 
subscribed  to  its  capital  stock,  for  each  mile 
of  the  contemplated  work,  the  following 
amount,  to  wit: 

First.  One  thousand  dollars  per  mile  of 
railroads; 

Second.  One  hundred  dollars  per  mile  of 
telegraph  lines; 

Third.  Three  hundred  dollars  per  mile  of 
wagon  roads. 

§  2583.  Before  the  secretary  of  the  terri- 
tory or  the  recorder  of  the  county  issues 
to  any  such  coi-poratiou  a  certificate  of  the 
tiling  of  articles  of  incorporations,  there 
must  be  filed  in  his  office  an  affidavit  of  the 
president,  secretary  or  treasurer  named  in 
the  articles  that  the  amount  of  the  capital 
stock  thereof  required  by  law  has  been  ac- 
tually subscribed. 

§  2584.  Upon  filing  the  articles  of  incorpo- 
ration in  the  office  of  the  t-ounty  recorder 
of  the  county  in  which  the  principal  business 
of  the  company  is  to  be  transacted,  and  a 
copy  thereof,  certified  by  the  county  re- 
corder, with  the  secretaiy  of  the  territoiy. 
and  filing  the  affidavit  mentioned  in  the  last 
section,  when  such  affidavit  is  required,  the 
secretaiy  of  tlie  territory  or  such  county  re- 
corder must  issue  to  the  corporation,  over 
his  official  seal,  a  certificate  that  a  copy  of 
the  articles,  containing  the  required  state- 
ment of  facts,  has  been  filed  in  his  office; 
and  thereupon  the  persons  executing  the  ar- 
ticles and  their  associates  and  successors 
shall  be  a  body  politic  and  corporate,  by 
the  name  stated  in  the  articles,  and  for  the 
term  of  fifty  years,  unless  it  is  in  tlie  articles 
of  IncoiiJoratiou  otherwise  stated,  or  by  law 
otherwise  specially  provided. 

[Defects  in  organization  cannot  be  taken  ad- 
vantage of  in  a  collateral  proceeding,  but  only 
in  direct  proceedings  by  the  State.  Canal  Co.  v. 
Pinkham,  1  Idaho,  790.] 

§  2585.  A  copy  of  any  articles  of  incoi*po- 
ration  filed  in  pursuance  to  this  title  and  cer- 
tified by  the  secretary  of  the  territory,  or 
the  recorder  of  the  proper  county,  must  be 
received  in  all  courts  and  other  places  as 
prima  facie  evidence  of  the  facts  therein 
stated. 

§  2586.  The  owners  of  shares  in  a  corpora- 
tion which  has  a  capital  stock,  are  called 
stockholders.  If  a  corporation  has  no  capi- 
tal stock,  tlie  corporators  and  their  succes- 
sors are  called  members. 

§  2587.  No  corporation  formed  under  the 
provisions  of  this  title,   shall  purchase^  lo- 


cate, or  hold,  property  in  any  county  of  this 
territoiy,  without  filing  a  certified  copy  of 
its  articles  of  incorporation  in  the  office  of 
the  county  recorder  of  the  county  in  which 
such  property  is  situated,  within  sixty  days 
after  such  purchase  or  location  is  made,  and 
every  corporation  now  in  existence  must, 
within  ninety  days  after  the  passage  of  this 
title,  file  a  certified  copy  of  its  articles  of 
incorporation,  as  provided  in  this  section. 
Any  corporation  failing  to  comply  with  the 
provisions  of  this  section,  must  not,  while 
so  in  default,  maint^iin  or  defend  any  action 
or  proceeding  in  relation  to  such  property. 

§  2588.  Every  corporation  formed  under 
this  title  must,  within  one  month  after  filing 
articles  of  incorporation,  adopt  a  code  of  by- 
laws for  its  government  not  inconsistent 
with  the  laws  of  congress  and  of  this  ter- 
ritory. The  assent  of  stockliolders  represent- 
ing a  majority  of  all  the  su1)scril)ed  capital 
stock,  or  a  majority  of  the  members,  if 
there  be  no  capital  stock,  is  necessary  to 
adopt  by-laws,  if  tliey  are  adopted  at  a  meet- 
ing called  for  that  purpose;  and  if  such  meet- 
ing be  called,  two  weeks'  notice  of  the  same 
by  advertisement  in  some  newsiiaper  pub- 
lished in  the  county  in  wliicli  the  principal 
place  of  business  of  the  corporation  is  lo- 
cated, or,  if  none  be  publislied  tlierein,  then 
in  a  paper  published  at  the  capital  of  tlie 
territory,  must  be  given  by  order  of  the  act- 
ing president.  The  written  assent  of  the 
Iiolders  of  two-thirds  of  the  stock  subscribed, 
or  of  two-thirds  of  the  members,  if  there  be 
no  capital  stock,  shall  be  effectual  to  adopt 
a  code  of  by-laws  without  a  meeting  for 
that  purpose. 

§  2589.  The  directors  of  a  corporation  must 
be  elected  annually  by  the  stockholders  or 
members,  and  if  no  provision  is  made  in  the 
by-laws  for  the  time  of  the  election,  the  elec- 
tion must  be  held  on  the  first  Tuesday  in 
June.  Notice  of  such  election  must  be  given, 
and  the  right  to  vote  determined  as  pre- 
scribed in  the  last  preceding  section. 

§  2.~)90.  A  corporation  may,  by  its  by-laws, 
where  no  other  provision  is  specially  made, 
provide,  among  other  things,  for: 

First.  The  time,  place,  and  manner  of 
calling  and  conducting  its  meetings; 

Second.  The  number  of  stockholders  or 
members  constituting  a  quorum; 

Third.  The  mode  of  voting  by  proxy; 

Fourth.  The  time  of  the  annual  elections 
of  directors,  and  the  mode  and  manner  of 
giving  notice  thereof; 

Fifth.  The  duties  and  compensation  of 
officers; 

Sixth.  The  manner  of  election,  and  the 
terms  of  office  of  all  officers  other  than  the 
directors;  and 

Seventh.  Suitable  penalties  for  violation  of 
by-laws,  not  exceeding,  in  any  case,  one 
hundred  dollars  for  any  one  offense. 

§  2591.  All  by-laws  adopted  must  be  cer- 
tified by  a  majority  of  the  directors  and  the 
secretary  of  the  corporation,  and  copied  in 


IDAHO. 


n 


Directors;  dividends  —  R.  S.,  §§  2592-2597. 


a  legible  band  in  some  book  kept  in  the  prin- 
cipal office  of  tlie  corporation  in  tills  terri- 
tory, to  be  known  as  the  "  Book  of  By-laAA's," 
and  no  by-law  shall  take  effect  until  so 
copied,  and  the  book  shall  be  open  to  the  in- 
spection of  the  public  during  office  hours  of 
each  day,  except  holidays.  The  by-laws 
may  be  repealed  or  amended,  or  new  by- 
laws may  be  adopted,  at  the  annual  meeting 
of  the  stockholders  or  members  called  for 
that  purpose  by  the  directors,  by  a  vote  rep- 
resenting two-thirds  of  the  subscribed  stock, 
or  tAvo-thirds  of  the  members  when  there  is 
no  capital  stock,  or  the  power  to  repeal  and 
amend  the  by-laws,  and  adopt  new  by-laws, 
may,  by  a  similar  vote  at  any  such  meeting, 
be  "delegated  to  the  board  of  directors.  This 
power,  when  so  delegated,  may  be  revoked 
by  a  similar  vote  at  any  regular  meeting  of 
the  stockholders  or  members.  Whenever 
any  amendment  or  new  by-law  is  adopted 
it  sliall  be  copied,  in  the  book  of  by- 
laws with  the  original  by-laws,  and  im- 
mediately after  them,  and  shall  not  take 
effect  until  so  copied.  If  any  by-law  be  re- 
pealed, the  fact  of  repeal,  with  the  date  of 
the  meeting  at  which  the  repeal  was  en- 
acted, must  be  stated  in  the  said  boolc,  and 
until  so  stated  the  repeal  must  not  take 
effect. 

§  2592.  The  corporate  powers,  business  and 
property  of  all  coi-porations  formed  under 
this  title  must  be  exercised,  conducted  and 
controlled  by  a  board  of  not  less  than  fivel 
nor  more  than  eleven  directors,  to  be 
elected  from  among  the  holders  of  stock,  or 
when  there  is  no  capital  stock,  then  from 
among  the  members  of  such  coi*poration.  A 
majority  of  the  directoi-s  must  be,  in  all 
cases,  citizens  and  actual  bona  fide  I'esidents 
within  this  territory.  Directors  of  corpora- 
tions for  profit  must  be  holders  of  stock 
therein,  in  an  amount  to  be  fixed  by  the  by- 
laws. Directors  of  all  other  corporations 
must  be  members  thereof.  Unless  a  major- 
ity is  present  and  acting,  no  business  per- 
formed or  act  done  by  the  board  of  directors 
is  valid  as  against  the  corporation.  When- 
ever a  vacancy  occurs  in  the  office  of  direct- 
ors, unless  otherwise  provided  by  the 
by-laws,  such  vacancy  must  be  filled  by  the 
board. 

[The  president  and  secretary  of  a  mining  cor- 
poration cannot  appoint  an  attorney  in  fact  to 
sell  the  property  without  authority  from  the  di- 
rectors.    Johnson  v.  Sage,  44  Pac.   Rep.  G41.] 

§  2.593.  At  the  first  meeting  at  which  the 
by-laws  are  adopted,  or  at  such  subsequent 
meeting  as  may  be  then  designated,  directors 
must  be  elected,  to  hold  their  offices  for  one 
year,  and  imtil  their  successors  are  elected 
and   qualified. 

§  2594.  All  elections  of  directors  must  be 
by  ballot,  and  a  vote  of  stockholders  repre- 
senting a  majority  of  the  subscribed  capital 
stock,  or  of  a  majority  of  the  members,  if 

21 


there  be  no  capital  stock,  is  necessary 
to  a  choice.  If  there  be  capital  stock 
in  the  corporation,  each  stockholder  is 
entitled  to  one  vote  for  each  share 
held  by  him  at  all  such  elections,  and  at  all 
elections  at  other  meetings  of  stockholders. 

See  Const.,  art.  XI,  §  4.  Directors  to  be  elected 
annually.     §  2589. 

§  2595.  Immediately  after  their  election, 
the  directors  must  organize  by  the  election 
of  a  president,  who  must  be  one  of  tlieir 
number,  a  secretai-y  and  a  treasurer.  They 
must  perform  the  duties  enjoined  on  tliem 
by  law  and  by  the  by-laws  of  the  corpora- 
tion. A  majority  of  the  directors  Is  a  sutti- 
cient  niimber  to  form  a  board  for  the  trans- 
action of  business,  and  every  decision  of  a 
majority-  of  the  directors  forming  such  board, 
made  when  duly  assembled,  is  a  valid  cor- 
porate act,  as  though  made  by  a  majority 
of  all  the  directors  of  the  coi'poration. 

§  2596.  The  directors  of  corporations  must 
not  make  dividends,  except  from  the  surplus 
profits  arising  from  the  business  thereof; 
nor  must  they  divide,  withdraw,  or  pay  to 
the  stoclvholders,  or  any  of  them,  any  part 
of  the  capital  stock;  nor  must  they  reduce 
or  increase  the  capital  stock,  except  as  in 
this  title  specially  provided.  For  a  violation 
of  the  provisions  of  this  section,  the  direct- 
ors, under  whose  administration  the  same 
may  have  occurred,  (except  those  who  may 
have  caused  tlieir  dissent  therefrom  to  be 
entered  at  large  on  the  minutes  of  directors 
at  the  time,  or,  when  not  present,  when  the 
same  did  occur)  are,  in  their  individual  and 
private  capacity,  jointly  and  severally  liable 
to  the  corporation,  and  to  the  creditors 
thereof,  in  the  event  of  dissolution,  to  the 
full  amount  of  the  capital  stock  so  divided, 
withdrawn,  paid  out,  or  reduced.  There 
may,  however,  be  a  division  and  distribu- 
tion of  the  capital  stock  of  any  corporation 
which  remains  after  the  payment  of  all 
its  debts,  upon  its  dissolution  or  the  expira- 
tion of  its  term  of  existence. 

Violation  of  above  provision  is  also  a  misde- 
meanor.    §  7117. 

§  2597.  No  director  can  be  removed  from 
office  unless  by  a  vote  of  the  stockholders 
holding  two-thirds  of  the  capital  stock,  or 
of  two-thirds  of  the  members,  where  there 
is  no  capital  stock,  at  a  general  meeting 
held  after  previous  notice  of  the  time  and 
place,  and  of  the  intention  to  propose  such 
removal.  Meetings  of  stockholders  or  mem- 
bers for  this  purpose  may  be  calletl  by  the 
president,  or  by  a  majority  of  the  directors, 
or  by  members  or  stockholders  holding  at 
least  one-half  of  the  votes.  Such  calls  must 
be  In  writing  and  addressed  to  the  secre- 
tarv,  who  must,  thereupon  give  notice  of 
the*  time,  place,  and  object  of  the  meeting, 
and  by  whose  order  it  is  called.     If  the  sec- 


12 


IDAHO. 

Meetings;  elections  -  R.  S.,  §§  259S-2G08. 


retary  refuses  to  give  the  notice,  or  if  there 
is  none,  the  call  may  be  addressed  directly 
to  the  members  or  stoclcholders,  and  be 
^ erred  as  a  notice,  in  -which  case  it  must 
specify  the  time  and  place  of  meeting.  The 
notice"  must  be  given  in  the  manner  pro- 
vided in  section  2588  of  this  title,  unless 
other  express  provision  has  been  made  there- 
for in  the  by-laws.  In  case  of  removal,  the 
vacancy  may  be  filled  by  election  at  the 
same  meeting. 

§  2508.  Whenever,  from  any  cause,  there 
is  no  person  authorized  to  call  or  to  preside 
at  a  meeting  of  a  corporation,  any  justice 
of  the  peace  of  the  county  where  such  cor- 
poration is  established,  may,  on  written 
application  of  three  or  more  of  the  stock- 
holders, or  of  the  members  thereof,  issue  a 
warrant  to  one  of  the  stockholders  or  mem- 
bers, directing  him  to  call  a  meeting  of  the 
corporation,  by  giving  the  notice  required, 
and  the  justice  may  in  the  same  warrant 
direct  such  person  to  preside  at  such  meet- 
ing until  a  secretary  is  chosen  and  qualified, 
if  there  is  no  officer  present  legally  author- 
ized  to   preside  thereat. 

§  2599.  At  all  elections  or  votes  had  for 
any  purpose,  there  must  be  a  majority  of 
the  subscribed  capital  stock,  or  of  the  mem- 
bers, when  tlieri>  is  no  capital  stock,  repi'e- 
sented  either  in  person,  or  by  proxy,  in 
writing.  Every  person  acting  therein  in  per- 
son, or  by  proxy,  or  by  representative,  must 
be  a  member  thereof,  or  a  bona  fide  stock- 
holder, having  stock  in  his  own  name  on  the 
stock-boolvs  of  the  corporation,  at  least  ten 
days  prior  to  the  election.  Any  vote  or 
election  had  otherwise  than  in  accordance 
witli  the  provisions  of  this  title,  is  voidable 
at  the  instance  of  absent  stockholders  or 
members  and  may  be  set  aside  by  petition 
to  tlie  district  court  of  the  county  where 
the  same  was  held  or  to  the  judge  of  said 
court  at  his  chambers.  Any  regular  or  call 
meeting  of  the  stockholders  or  members  may 
adjovu'n  from  day  to  day,  or  from  time  to 
time,  if  from  any  reason  there  is  not  present 
a  majority  of  the  subscribed  stock  or  mem- 
bers, or  no  election  or  majority  vote  had. 
Such  adjournment  and  reasons  thereof  being 
recorded  in  the  journal  of  proceedings  of 
the  board  of  directors. 

§  2(!(»0.  The  sliares  of  stock  of  an  estate 
of  a  minor,  or  insane  person,  may  be  repre- 
sented by  his  guardian,  and  if  a  deceased 
person  by  his  executor  or  administrator. 

§  2G01.  If  from  any  cause  an  election  does 
not  take  place  on  the  day  appoint(>d  in  the 
by-law.  it  may  be  held  on  any  day  there- 
after, as  may  be  provided  for  in  such  by- 
laws, or  to  which  sucli  election  may  be  ad- 
journed or  ordered  by  the  directors.  If  an 
election  has  not  been  held  at  the  appointed 
time,  and  no  adjourned  or  otlier  meeting 
for  the  pun)Ose  has  been  ordered,  a  meeting 
may  be  called  by  the  stockholders,  as  pro- 
■  vided  in  section  2597  of  this  title. 

§  2602.  Upon  the  application  of  any  per- 


son, or  body  corporate,  aggrieved  by  any 
election  held  by  any  corporate  body,  or  any 
proceedings  relating  to  any  such  election, 
the  district  judge  of  the  district  in  wliich 
such  election  is  lield.  must  proceed  forthwith 
summarily  to  hear  the  allegations  and  proofs 
of  the  parti(»s.  or  otlierwise  inciuire  into 
the  matters  of  complaint,  and  thereupon 
confirm  the  election,  order  a  new  one.  or 
direct  sncli  other  relief  in  the  premises  as 
accords  with  right  and  justice.  Before  the 
proceedings  are  had  under  this  section,  five 
days'  notice  thereof  must  be  given  to  the 
adverse  party,  or  to  those  to  lie  affected 
thereby,  if  found  within  the  territory. 

§  200;}.  Any  officer  of  a  corporation,  wlio 
wilfully  gives  a  certificate,  or  wilfully  makes 
an  olficial  report,  public  notice,  or  entry  in 
any  of  the  records  of  the  books  of  the  corpo- 
ration, concerning  the  corporation  or  its 
business,  which  is  false  in  any  material 
repi-esentation.  is  liable  for  all  the  damnges 
resulting  therefrom  to  any  person  injured 
thereby:  and  if  two  or  more  officers  unite 
or  participate  in  the  commission  of  any  of 
the  acts  herein  designated,  they  are  jointly 
and  severally  so  liable. 

§  2G04.  When  all  the  stockholders  or  mem- 
bers of  a  corporation  are  present  at  any 
meeting,  however  called  or  notified,  and 
sign  a  written  consent  tliereto  on  the  record 
of  such  meeting,  the  doings  of  such  meeting 
are  as  valid  as  if  at  a  meeting  legally  called 
and  notified. 

§  2605.  The  stockholders  or  members  of 
such  corporation,  when  so  assembled,  may 
elect  officers  to  till  all  vacancies  then  exist- 
ing, and  may  act  upon  such  other  business  as 
might  lawfully  be  transacted  at  regular 
meetings  of  the  corporation. 

§  2606.  The  meetings  of  the  stockholders, 
members  and  board  of  directors  of  a  corpo- 
ration must  be  held  at  its  office,  or  principal 
place  of  business. 

§  2607.  When  no  provision  is  made  in  the 
by-laws  for  regular  meetings  of  the  direct- 
ors, and  the  mode  of  calling  special  meet- 
ings, all  meetings  must  be  called  by  special 
notice  in  writing,-  to  be  given  by  the  secre- 
tary to  each  director,  if  within  the  territory, 
on  the  order  of  the  president,  or  if  there  be 
none,  on  tlie  order  of  two  directors. 

§  2608.  Every  corporation  that  has  been 
or  may  be  created  under  the  general  laws 
of  this  territory  may  change  its  principal 
place  of  business  from  one  place  to  anotlier 
within  this  territory.  Before  such  change 
is  made,  the  consent,  in  Mriting,  of  the 
holders  of  two-thirds  of  the  capital  stock,  or 
of  two-thirds  of  the  members,  Avhen  tliere 
is  no  capital  stock,  must  be  obtained  and 
tiled,  notice  of  such  intended  removal  or 
cliange  must  be  publislied.  at  least  once  a 
week,  for  three  successive  weeks,  as  pro- 
vided in  section  2.588,  giving  tlie  name  of 
the  county  where  it  is  situated,  and  that  to 
which  it  is  intended  to  remove. 


IDAHO. 


13 


Liability  of  stockholders;  transfers  —  R.  S.,  §§  2G09-2611. 


§  2G00.  rAs  amended  March  11,  1891.) 
Each  stockholder  of  a  corporation  is  iudi- 
vidually  and  personally  liable  for  its  debts 
and  lisibilities  to  the  full  amount  unpaid 
upon  the  par  or  face  value  of  the  stock  or 
shares  owned  by  him.  Any  creditor  of  the 
corporation  may  institute  actions  ajiainst 
any  of  its  stockholders  jointly  or  severally, 
and  in  such  action  the  court  must  determine 
the  amount  unpaid  upon  the  stock  held  or 
owned  by  each  defendant,  and  a  several 
judgment  must  be  entered  ajjainst  him  for 
a  sum  not  exceedinj?  such  amount;  and 
nothinjr  in  this  title  must  l)e  construed  to 
render  any  stockholder  individually  or  per- 
sonally liable,  as  such  stockholder,  for  debts 
or  liabilities  of  the  corporation,  either  at 
the  suit  of  a  creditor  or  for  assessments  or 
calls,  to  an  amount  exceeding  the  balance 
unpaid  upon  his  stock,  or  the  difference 
between  the  amount  that  has  been  actually 
paid  upon  his  stock  and  the  par  or  face 
value  thereof,  except  when  so  liable  on  the 
ground  of  fraud  or  misrepresentation,  or 
concealment,  or  for  neglect  or  misconduct 
as  an  otiicer,  agent,  stockholder,  or  member 
of  the  corporation;  and  no  corporation  shall 
issue  any  stock  as  paid  up,  in  whole  or  in 
part,  or  credit  any  amount,  assessment  or 
call  as  paid  upon  any  of  its  stock,  except 
for  money,  property,  labor  or  services 
actually  received  by  the  corporation,  or 
actually  paid  upon  the  Indebtedness  of  the 
corporation  as  provided  in  this  section,  to 
the  full  value  of  the  amount  credited  upon 
such  stock.  If  any  stockholder  of  any  in- 
solvent corporation  pays  the  full  amount 
unpaid  upon  the  stock  held  by  him.  as 
above  defined,  upon  the  overdue  debts  of 
the  corporation,  inciu'red  while  he  Avas  such 
stockholder,  he  is  relieved  from  any  further 
personal  lial)ility  upon  his  stock,  but  not 
tvom  any  liability  for  fraud,  neglect  or  mis- 
conduct. The  liability  of  each  stockholder 
is  determined  by  the  amount  of  stock  or 
shares  owno<l  by  him  at  the  time  the  debt 
or  liability  Avas  incurred  by  the  conioration; 
and  such  liability  is  not  released  or  dis- 
charged by  any  subsequent  transfer  of 
stofk.  AVlien  such  liability  does  not  arise 
upon  contract  it  shall  be  deemed  to  be  in- 
curi-ed  when  judgment  therefor  is  obtained 
against  the  corporation.  The  term  stock- 
holder, as  used  in  this  section,  applies  not 
only  to  such  persons  as  appear  by  the  books 
of  the  corporation  to  be  such,  but  also  to 
every  equitable  owner  of  stock,  although 
the  same  appears  on  the  books  in  the  name 
of  another;  and,  also,  to  every  ijcrson  who 
has  advanced  the  Installments  or  purchase 
money,  or  subscribed  for  stock,  in  tlie  name 
of  a  minor,  so  long  as  the  latter  remains  a 
minor:  and.  also,  to  every  guardian  or  trus- 
tee who  voluntarily  invests  any  trust  funds 
in  the  stock.  Trust  funds  in  the  hands  of  a 
guardian  or  trustee  are  not  liable  under 
the  provisions  of  this  section,  by  rea.son  of 
any  such  investment;  nor  is  the  person  for 


whose  benefit  such  investment  is  made  re- 
sponsible in  respect  to  the  stock  until  he 
becomes  competent  and  able  to  control  the 
same;  but  the  responsibility  of  the  guardian 
or  trustee  making  the  investment  continues 
until  that  period,  or  while  the  investment 
continues.  Stock  held  as  collateral  se- 
curity, or  by  a  trustee  who  is  not  the  bene- 
ficial owner,  or  in  any  other  representative 
capacity  without  a  benelicial  interest,  does 
not  make  the  holder  thereof  a  stockholder 
within  the  meaning  of  this  section,  except 
in  the  cases  above  mentioned,  so  as  to 
charge  him  with  the  debts  or  liabilities  of 
the  corporation,  but  the  pledgor,  or  person, 
or  estate  rei)rcsented  is  to  be  deemed  the 
stockholder.  sl<.  respects  such  liability. 
Members  of  corporations  not  organized  for 
profit  and  having  no  capital  stock  are  not 
individually  or  iiersoually  lialile  for  its 
debts  or  liabilities,  imless  such  liabilities 
imposed  by  the  by-laws  of  the  corporation 
and  then  only  to  the  extent  so  imposed; 
any  such  liability  may  be  enforced,  to  the 
extent  imposed  by  the  by-laws,  by  joint  or 
several  actions  against  members,  as  before 
provided.  The  liability  of  each  stockholder 
of  a  corporation  not  formed  under  the  laws 
of  this  State,  but  doing  business  within 
the  State,  is  the  same  as  the  lial)ility  of 
stockholders  of  cori)orations  organized  un- 
der the  laws  of  this  State. 

§  2.  That  all  corporations  doing  business 
in  this  State,  whether  organized  mider  the 
laws  of  this  State,  or  some  other  State, 
desiring  to  avail  themselves  of  the  provi- 
sions of  this  act,  shall  cause  to  be  written 
or  ])rinte^d  after  the  corporate  name,  on  its 
stock  certificates,  letter  and  bill  heads,  and 
all  its  official  documents  the  word  "  limited;" 
also  after  the  corporate  signature  to  all 
official  or  puljlic  documents  the  word  "  lim- 
ited." 

fAhove  scotion  constriicrl.  Sparks  v.  t)itch  Co., 
2  Tflaho,  1030;  s.  c.  29  Tac.  Rep.  134;  Jones  v. 
Woolley,  2  Idaho,  790;  s.  c,  26  I'ac.  Rep.  120.] 

§  2610.  All  corporations  for  profit  must 
issue  certificates  for  stock  when  fully  paid 
up.  signed  1)y  the  president  and  secretary, 
and  may  provide  in  their  by-laws,  for  is- 
suing certificates  prior  to  the  full  payment, 
under  such  restrictions  and  for  such  pur- 
poses as  their  by-laws  may  provide. 

§  2611.  "Whenever  the  capital  stock  of 
any  cori)oration  is  divided  into  shares,  and 
certificates  therefor  are  issued,  such  shares 
of  stock  are  personal  property,  and  may  be 
transferred  by  endorsement  by  the  signature 
of  the  proprietor,  or  his  attorney,  or  legal 
representative,  and  delivery  of  the  certifi- 
cate; but  such  transfer  is  not  valid  except 
between  the  jiarties  thereto,  until  the  same 
is  so  entered  upon  the  books  of  the  corpora- 
tion as  to  show  the  name  of  the  parties  by 
and  to  whom  transferred,  the  number  and 
designation  of  the  shares,  and  the  date  of 


14 


IDAHO. 


Assessments  —  R.  S.,  §§  2612-2619. 


the  entry.  Corporations  may,  by  by-laws, 
provide  that  no  transfer  of  its  stoclc  shall 
be  made  upon  its  books  until  all  indebted- 
ness to  the  corporation  of  the  person  in 
whose  name  the  stock  stiinds.  Avhother  for 
assessments,  calls,  or  otherwise  is  paid. 

[A  transfer  of  stock  under  provisions  of  above 
section  is  not  valid,  except  as  between  the  parties, 
until  entered  upon  corporation  books  in  conform- 
ity therewith.  Aulbach  v.  Dahter,  43  Pac.  Rep. 
322.] 


§  2612.  Shares  of  stock  in  corporations, 
held  or  owned  by  a  married  woman,  may 
be  transferred  by  her,  her  agent  or  attorney, 
without  the  sig-nature  of  her  husband,  in 
the  same  manner  as  if  sucli  married  woman 
were  a  feme  sole.  All  dividends  payable 
upon  any  shares  of  stock  of  a  corporation 
held  by  a  married  woman,  may  be  paid  to 
sucli  married  woman,  lier  agent  or  attorney, 
in  the  same  manner  as  if  she  were  unmarried, 
and  -it  is  not  necessai-y  for  her  husband 
to  join  in  a  receipt  therefor;  and  any  proxy 
or  power  given  by  a  maiTied  woman  touch- 
ing any  shares  of  stock  of  any  corporation, 
owned  by  her,  is  valid  and  binding  without 
the  signature  of  her  husband,  the  same  as 
If  she  were  unmarried. 

§  2613.  "When  shares  of  stock  in  a  corpora- 
tion are  OAvned  by  a  non-resident  of  the  ter- 
ritoiy,  the  president,  secretary,  or  directors 
of  the  coiiJoration,  before  entering  any  trans- 
fer of  the  shares  on  its  books,  or  issuing  cer- 
tificate therefor  to  the  transferee,  may 
require  satisfactory  evidence  that  the  non- 
resident owner  was  alive  at  the  date  of  the 
transfer,  and  if  such  satisfactory  evidence 
be  not  furnislied,  may  require  a  bond  of 
Indemnity,  with  two  sureties,  satisfactory  to 
the  officers  of  the  corporation,  or  approved 
by  the  judge  of  the  district  court  of  the 
district  in  which  the  principal  office  of  the 
corporation  is  situate,  conditioned  to  pro- 
tect the  corporation  against  any  liability  to 
the  heirs  or  legal  representatives  of  the 
owner  of  the  shares,  in  case  of  his  or  hec 
death  before  the  transfer;  and  if  such  evi- 
dence or  bond  be  not  furnished  when  re- 
quired, as  herein  provided,  neither  the 
corporation  nor  any  officer  thereof  is  liable 
for  refusing  to  enter  the  transfer  on  the 
books  of  the  corporation. 

§  2614.  The  directors  of  any  corporation 
formed  or  existing  under  the  laws  of  this 
territory,  after  one-fourth  of  its  capital 
stock  has  been  subscribed,  may,  for  the  pur- 
pose of  paying  expenses,  conducting  busi- 
ness, or  paying  debts,  levy  and  collect 
assessments  upon  the  subscribed  capital 
stock  thereof,  in  the  manner  and  form,  and 
to  the  extent  herein  provided. 

[Corporation  orfranized  for  irrigation  purposes 
held  authorized  to  make  assessments  on  paid-up 
stock.     Hall  v.  Water  Co.,  51  Pac.  Rep.  110.] 

§   2615.  No  one   assessment   must   exceed 


ten  per  cent,  of  the  amount  of  the  capital 
stoclc  named  in  the  articles  of  incorpora- 
tion, except  in  the  cases  in  this  section  otlier- 
wise  jtrovided  as  follows: 

First.  If  the  wliole  capital  of  a  corpora- 
tion lias  not  Ijeen  paid  up.  and  tlie  cor- 
poration is  unable  to  meet  its  liabilities  or  to 
satsfy  the  claims  of  its  creditors,  the  as- 
sessment may  be  for  the  full  amount  impaid 
upon  tlie  capital  stock;  or  if  a  le.ss  amount 
is  sufficient,  then  it  may  be  for  such  a  per- 
centage as  will  raise  that  amount; 

Second.  The  directors  of  railroad  cor- 
porations may  assess  tlie  cai)ital  stock  in 
installments  of  not  more  than  ten  per 
centum  per  month,  unless  in  the  articles 
of  incorpoi'ation  it  is  otherwise  provided; 
Third.  The  directors  of  fire  insurance  cor- 
porations may  assess  such  a,  percentage  of 
the  capital  stoclc  as  they  deem  proper. 

§  2616.  No  assessment  must  be  levied 
while  any  portion  of  a  previous  one  remains 
unpaid,    unless: 

First.  The  power  of  the  corporation  has 
lieen  exercised  in  accordance  with  the  ]>ro- 
visions  of  this  title  for  the  pvuiiose  of  col- 
lecting   such    previous    assessment; 

Second.  The  collection  of  the  previous  as- 
sessment has  been  enjoined;  or, 

Third.  The  assessment  falls  within  the 
provisions  of  one  of  the  subdivisions  of  the 
last  preceding  section. 

§  2617.  The  order  levying  the  assessment 
must  specify  the  amount  thereof,  when,  to 
whom  and  where  payable;  fix  tlie  day  sub- 
sequent to  the  full  term  of  publication  of 
the  assessment  notice,  on  which  the  unpaid 
assessments  Avill  be  delinquent,  not  less 
than  thirty  or  more  than  sixty  days  from 
the  time  of  making  the  order  levying  the 
assessment;  and  a  day  for  the  sale  of  de- 
linquent stock,  not  less  than  fifteen  nor  more 
than  sixty  days  from  the  day  the  stock  Is 
declared   delinquent. 

§  2618.  Upon  the  making  of  the  order  the 
secretary  must  cause  to  be  pubiislied  a 
notice   thereof,    in    the    following   form: 

(Name  of  corporation  in  full.  Location  of 
principal  place  of  business.)  Notice  is 
hereby  given  that  at  a  meeting  of  the  direc- 
tors held  on  the  (date)  an  assessment  of 
(amount)  per  share  was  levied  upon  the 
capital  stock  of  the  corporation,  payable 
(when,  to  whom,  and  where i  any  stock 
upon  which  this  assessment  remains  unpaid 
on  the  (day  fixed)  will  be  delinquent,  and 
advertised  for  sale  at  public  auction,  and 
unless  payment  is  made  before,  will  be  sold 
on  the  (day  appointed)  to  pay  the  delinquent 
assessment,  together  with  costs  of  advertis- 
ing and  expenses  of  sale.  (Signature  of 
secretaiy  with  the  location  of  ofllce.) 

§  2619.  The  notice  must  be  published  once 
a  week,  for  four  successive  weeks,  in  some 
newspaper  of  general  circulation  published 
at  the  place  designated  in  the  articles  of 
incoriioration  as  the  principal  place  of  busi- 
ness, and  also  in  some  newspaper  pubhshed 


IDAHO. 


15 


Assessments;  sale  of  stock  —  R.  S.,  §§  2620-2630. 


iu  the  county  in  which  the  woi'ks  of  the 
corporation  are  situated,  if  situated  iu  a  dif- 
ferent county  and  a  paper  be  published 
therein.  If  there  be  no  newspaper  published 
in  the  place  designated  as  the  principal  place 
of  business  of  the  corporation,  then  the  pub- 
lication must  be  made  iu  some  other  news- 
paper of  the  cotinty.  if  there  be  one,  and  if 
there  be  none,  then  in  a  newspaper  published 
at  the  capital  of  the  territory. 

§  2620.  If  any  portion  of  the  assessment 
mentioned  in  the  notice  remains  unpaid  on  i 
the  day  sijecitied  therein  for  declaring  the 
stock  delinquent  the  secretary  must,  unless 
otherwise  ordered  by  the  board  of  directors, 
cause  to  be  published  in  the  same  papers 
in  which  the  notice  heretofore  provided 
for  has  been  published,  a  notice  substan- 
tially   in   the   following   form: 

(Name  in  full.  Location  of  principal 
place  of  business.) 

Notice:— There  is  delinquent  upon  the  fol- 
lowing described  stock  on  account  of  assess- 
ment levied  on  the  (date),  (and  assessments 
previous  thereto,  if  any),  the  several 
amounts  set  opposite  the  names  of  the  re- 
spective shareholders  as  follows:  (names, 
number  of  certificate,  number  of  shares, 
amount.)  And  in  accordance  with  law,  so 
many  shares  of  each  parcel  of  such  stock 
as  may  be  necessary,  will  be  sold  at  the  (par- 
ticular placH^).  on  the  (datei,  at  (the  hour)  of 
such  day,  to  pay  delinquent  assessments 
thereon,  together  with  the  cost  of  adver- 
tising and  expenses  of  the  sale.  (Name  of 
secretary,   with  location  of  otfice.) 

§  2021.  The  notice  must  specify  every  cer- 
tificate of  stock,  the  number  of  shares  it 
.•epresents  and  the  amount  due  thereon,  ex- 
cept when  certificates  may  not  have  been 
issued  to  parties  entitled  thereto,  in  which 
case  the  number  of  shares  and  amount  due 
thereon  must  be  stated. 

§  2(j22.  The  notice,  when  published  in  a 
daily  paper,  must  be  published  for  ten  days, 
excluding  Sundays  and  legal  holidays,  pre- 
vious to  the  day  of  sale.  When  published 
in  a  Avoekly  paper,  it  must  be  published  in 
each  issue  for  two  weelcs  px-evious  to  the 
day  of  sale.  The  first  publication  of  all 
delinquent  sales  must  be  at  least  fifteen  days 
prior  to  the  day  of  sale. 

§  2623.  By  the  public?  tion  of  the  notice 
the  corporation  acquires  jm'isdiction  to  sell 
and  convey  a  perfect  title  to  all  of  the  stock 
described  in  the  notice  of  sale,  upon  which 
any  portion  of  the  assessment  or  cost  of  ad- 
vertising remains  unpaid  at  the  hour  ap- 
pointed for  the  sale,  but  mvist  sell  no  more 
of  such  stock  than  is  necessary  to  pay  the 
assessment  due  and  costs  of  advertising  and 
sale. 

§  2624.  On  the  day,  at  the  place,  and  at  the 
time  appointed  in  the  notice  of  sale,  the  sec- 
retary must,  unless  otherwise  ordered  by  the 
board  of  directors,  sell,  or  cause  to  be  sold 
at  public  auction  to  the  highest  bidder,  for 
cash,  so  many  shares  of  each  parcel  of  the 


described  stock  as  may  be  necessary  to  pay 
the  assessment  and  charges  thereon,'  accord- 
ing to  the  terms  of  sale;  if  payment  is  made 
before  the  time  fixed  for  sale,  the  party  pay- 
ing is  only  required  to  pay  the  actual  cost 
of  advertising  in  addition  to  the  assessment. 

§  262.5.  The  person  offering  at  such  sale  to 
pay  the  assessment  and  costs  for  the 
smallest  number  of  shares  or  fraction  of  a 
share,  is  the  highest  bidder,  and  the  stock 
purchased  must  be  transferred  to  him  on 
tke  stoclv-books  of  the  coiiioration  on  pay- 
ment of  the  assessments  and  costs. 

§  2626.  If  at  the  sale  of  stock,  no  bidder 
offers  the  amount  of  the  assessment  and 
costs  and  charges  due,  the  same  may  be 
bid  in  and  purchased  by  tlie  corporation, 
through  the  secretary,  president  or  any  di- 
rector thereof,  at  the  amount  of  the  assess- 
ment, charges  and  costs  due;  and  said 
amount  must  be  credited  as  paid  in  full  on 
the  books  of  tlie  conioration,  and  entry  of 
the  transfer  of  the  stock  to  the  corporation 
made.  While  the  stock  remains  the  property 
of  the  corporation  it  is  not  assessable,  nor 
must  any  dividend  be  declared  thereon,  but 
all  assessments  and  dividends  must  be  ap- 
portioned upon  the  stock  held  by  the  stock- 
holders of  the  corporation. 

§  2627.  All  purchases  of  its  own  stock  made 
by  any  corporation,  vests  tlie  legal  title  to 
the  same  in  the  coiiioration;  and  the  stock 
so  purchased  is  held  subject  to  the  control 
of  the  stockholders,  AA'ho  may  make  such 
disposition  of  the  same  as  they  deem  fit 
in  accordance  with  the  by-laws,  on  vote  of  a 
majority  of  all  the  remaining  shares. 
Whenever  any  portion  of  the  capital  stock 
of  a  corporation  is  held  by  the  co^^)o^ation, 
it  shall  not  be  voted  upon,  but  a  majority  of 
the  remaining  shares  is  a  majority  of  the 
stock  for  all  purposes  of  election  or  voting. 

§  2628.  The  dates  fixed  in  any  notice  of 
assessment  or  notice  of  delinquent  sale,  pub- 
lished as  aforesaid,  may  be  extended  from 
time  to  time  for  not  more  than  thirty  days, 
by  order  of  the  directors,  entered  on  the 
records  of  tlie  corporation;  but  no  such  order 
is  eft'ectual  unless  notice  of  sucli  extension 
or  postponement  is  appended  to  and  pub- 
lished Avith  the  notice  to  which  the  order 
relates. 

§  2629.  No  assessment  is  invalidated  by  a 
failure  to  make  publication  of  the  notices, 
nor  by  the  nonperformance  of  any  act  re- 
quired in  order  to  enforce  the  payment  of 
the  same;  but  in  case  of  any  substantial  er- 
ror or  omission  in  the  course  of  proceedings 
for  collection,  all  previous  proceedings  ex- 
cept the  levying  of  assessfiient,  are  void, 
and  publication  must  begin  anew. 

§  2630.  No  action  must  be  sustained  to  re- 
cover stock  sold  for  delinquent  assessments, 
upon  the  ground  of  irregularity  in  the 
assessment;  irregularity  or  defect  in  the 
notire  of  sale  or  in  its  publication;  or  defect 
or  irregularity  in  the  sale;  unless  the  party 
seeking  to  maintain  such   action  first   pays 


16 


IDAHO. 

Sale  of  stock  for  assessments,  etc. —  R.  S.,  §§  2631-2637. 


or  tenders  to  the  corporation,  or  the  party 
holding  the  stock  sold,  the  sum  for  which 
the  same  was  sold,  together  with  all 
subsequent  assessments  which  may  have 
been  paid  or  may  be  due  thereon,  and  in- 
terest on  such  sums  from  the  time  they  were 
paid;  and  no  such  action  must  be  sustained 
unless  the  same  is  commenced  within  six 
months  after  such  sale  was  made. 

§  2631.  The  publication  of  notice  required 
by  this  title  may  be  proved  by  the  affidavit 
of  the  printer,  publisher,  foreman  or  princi- 
pal clerk  of  the  newspaper  in  which  the 
same  was  published;  and  the  affidavit  of  the 
secretary  or  auctioneer  is  prima  facie  evi- 
dence of  the  time  and  place  of  sale,  of  the 
quantity  and  particular  description  of  the 
stock  sold,  and  to  whom,  and  for  what  price, 
and  of  the  fact  of  the  purchase  money  being 
paid.  Such  affidavit  must  be  tiled  in  the 
office  of  the  coi-poration,  and  copies  of  the 
same,  certified  by  the  secretary  thereof,  are 
prima  facie  evidence  of  the  facts  therein 
stated.  Certificates  of  files  and  records  of 
the  conioration  in  his  office,  signed  by  the 
secretary,  and  under  the  seal  of  the  corpora- 
tion, are  prima  facie  evidence  of  their  con- 
tents. 

§  2632.  On  the  day  specified  for  declaring 
the  stock  delinquent,  or  at  any  time  subse- 
quent thereto,  and  before  the  sale,  the  board 
of  directors  may  elect  to  waive  further  pro- 
ceedings by  sale,  and  may  elect  to  proceed 
by  action  to  recover  the  amount  of  the  as- 
sessment and  the  costs  and  expenses  already 
incurred,  or  any  part  or  portion  thereof. 

§  2633.  Every  corporation,  as  such,  has 
power: 

First.  Of  succession,  by  its  corporate 
name,  for  the  period  limited;  and  when  no 
period  is  limited,  perpetually; 

Second.  To  sue  and  be  sued,  in  any  court, 
as  a  natural  person  may; 

Third.  To  make  and  use  a  common  seal, 
and  alter  the  same  at  pleasure; 

Fourth.  To  puiY-hase,  hold  and  convey  such 
real  and  personal  estate  as  the  purposes  of 
the  corporation  may  require,  not  exceeding 
the  amount  limited  by  this  title; 

Fifth.  To  appoint  such  subordinate  officers 
or  agents  as  the  business  of  the  corjwration 
may  require,  and  to  allow  them  suitable 
compensation; 

Sixth.  To  make  by-laws  not  inconsistent 
with  any  existing  law.  for  the  management 
of  its  business  and  property,  the  regulation 
of  its  affairs,  and  for  the  transfer  of  its 
stock ; 

Seventh.  To  admit  stockholders  or  mem- 
bers, and  to  sell  their  stock  or  shares  for  the 
payment  of  assessments   or   installments; 

Eighth.  To  enter  into  any  contracts  or  ob- 
ligations essential,  necessary  or  proper  to 
the  transaction  of  its  ordinary  affairs,  or 
for  the  purposes  of  the  corporation. 

Corporate  seal  may  be  an  Impression  upon  paper 
merely.      R.    S.,    §§    13,    3226.      Counterfeiting    or 


forging  corporate  seal  is  a  felony.  R.  S.,  §  730. 
By-laws  may  provide  what.  §  2590.  Adoption  and 
amendment  of  by-laws.  §  2591.  How  much  land 
may  be  held.  §  2038.  Certain  corporations  pro- 
hibited from  holding  land  in  Idaho.  See  Act  of 
1S!)1,  at  p.  23.  I'roceedings  against  corporations. 
§§  8222-8229.  Service  of  summons  on  corporation. 
§§  4144-4145.  Pleading.  §  4199.  Execution  and 
levy  upon  franchise.     §  2642  et  seq. 


[In  a  suit  agaiust  a  private  corporation  the  com- 
plaint is  fatallj-  defective  unless  it  contains  un- 
e(j[uivociil  averment  that  it  is  a  corporation.  Mil- 
ler V.  Min.  Co.,  2  Idaho,  1206;  s.  c,  31  Puc.  Rep. 
803.  Without  this  averment,  complaint  does  not 
state  facts  sufBcieut  to  constitute  cause  of  action, 
and  this  defect  is  never  waived.    Id.    (1892.) 

Individuals  cannot,  in  collateral  suits,  avail  them- 
selves of  any  defects  in  the  organization  of  a  cor- 
poration. This  may  be  done  only  by  the  power 
creating  them  in  a  direct  proceeding  instituted  for 
that  purpose.     Canal  Co.  v.  Pinkham,  1  Idaho.  790. 

A  cori)oration  "  to  mine,  smelt,  refine  and  ope- 
rate any  mining  property  "  has  not  the  power  to 
purchase  a  chose  in  action.  M.  &  S.  Co.  v.  Dunn, 
2   Idaho.   .3(1  (1882):  s.   c.   3  Pac.    Rep.   911. 

The  president  and  secretary  of  a  mining  corpo- 
ration cannot  appoint  an  attorney  in  fact  to  sell 
property  without  authority  from  directors.  John- 
son V.   Sage,  44  Pac.   Rep.   641.] 


§  2634.  No  t-orporation  shall  emit  paper 
money  or  create  or  issue  bills,  notes  or  other 
evidences  of  debt,  upon  loans  or  otherwise, 
for  circulation  as  money. 

§  2635.  The  misnomer  of  a  coi'poratiou  in 
any  written  instrument  does  not  invalidate 
the  instrument,  if  it  can  be  reasonably  as- 
certained from  it  what  corporation  is  in- 
tended. 

§  2636.  If  a  corporation  does  not  organize 
and  commence  the  transaction  of  its  busi- 
ness or  the  construction  of  its  Avorks  within 
one  year  from  the  date  of  its  incorporation 
its  corporate  powers  cease.  The  due  incor- 
poration of  any  company,  claiming  in  good 
faith  to  be  a  corporation  under  this  title, 
and  doing  business  as  such,  or  its  right  to 
exercise  corporate  powers,  shall  not  be  in- 
quired into,  collaterally,  in  any  private  suit 
to  which  such  de  facto  coiiiovation  uiay  be 
a  party;  but  such  inquiry  may  be  had  at  the 
suit  of  the  people  of  the  territory, 
on  the  information  of  the  district  attorney  of 
the  county  of  the  principal  plaee  of  busi- 
ness of  the  corporation. 

§  2637.  Every  corporation  may  increase  or 
diminish  its  capital  stock  as  in  this  section 
provided: 

First.  By  a  majority  vote  of  the  directors 
there  may  be  called  a  meeting  of  the  stock- 
holders, to  be  convened  for  the  purpose  of 
increasing  or  diminishing  the  capital  stock; 

Second.  Personal  notice  of  the  time  and 
place  of  such  meeting,  and  the  object  thereof 
must  be  served  on  each  stockholder  ivsident 
in  this  territory;  or,  in  lieu  thereof,  the 
notice  must  be  published  in  every  issue  of 
a  newspaper  published  in  the  county  where 
the  principal  place  of  business  is  located, 
for  foiu-  weeks  successively; 

Third.  The   notice  must  also  contain   the 


IDAHO. 


17 


Limit  of  real  property;  records,  etc.— R.  S.,  §§  2638-2045. 


amount  to  which  it  is  proposed  to  increase 
or  (liiniuisli  tlie  capital  stock; 

Fourtli.  The  capital  stock  must  in  no  case 
be  diminished  to  an  amount  less  than  the 
indebtedness  of  the  corporation  or  the  esti- 
matetl  cost  of  the  Avorks  which  it  may  be 
the  object  or  purpose  of  the  corporation  to 
construct; 

Fifth.  At  least  two-thirds  of  the  entire 
capital  stock  must  vote  in  favor  of  such 
increase  or  diminution  before  the  same  is 
effected; 

Sixth.  A  certificate  signed  and  verified  by 
the  chairman  and  secretaiy  of  the  meeting, 
must  be  made,  showing  a  strict  compliance 
with  all  the  requirements  of  this  section,  the 
amount  to  which  the  capital  stock  has  been 
increased  or  diminished,  the  amount  of  stock 
represented  at  the  meeting,  the  vote  by 
which   tlie  object  was  accomplished; 

Seventh.  This  certificate  must  be  sub- 
scribed by  a  majority  of  the  directors,  and 
duplicates  made,  one  to  be  filed  in  the  office 
of  the  county  recorder  and  one  in  the  office 
of  the  secretary  of  the  territory,  as  pro- 
vided for  original  articles  of  incorporation, 
and  thereupon  the  capital  stock  is  so  in- 
CTeased  or  diminished; 

Eighth.  The  written  assent  of  the  holders 
of  three-fourths  of  the  subscribed  capital 
stock  is  as  effectual  to  authorize  tlie  in- 
crease or  diminution  of  the  capital 
stock,  as  if  a  meeting  were  called  and  held; 
and  upon  written  assent,  the  directors  may 
procee<l  to  make  the  certificate  herein  pro- 
vided for. 

§  2038.  No  corporation  must  acquire  or 
hold  any  more  real  property  than  may  be 
reasonably  necessary  for  the  transaction  of 
its  l)usiness,  or  the  construction  of  its 
works,  except  such  right  of  way  or  other 
proi^erty  as  it  may  ac(iuire  under  the  laws 
of  congress,  or  as  may  be  otherwise  spec- 
ially provided.  A  corporation  may  acquire 
real  pi-o])erty,  as  provided  in  the  Code  of 
Civil  Procedure,  when  needed  for  any  of 
the    uses   and    purposes    there    mentioned. 

Certain  corporations  prohibited  from  holding 
hind  in  Idaho.     See  Act  of  1891,  at  p.  23. 

§  2039.  All  corporations  for  profit  are  re- 
quired to  keep  a  record  of  all  their  business 
transactions;  a  journal  of  all  meetings  of 
their  directors,  members,  or  stockholders, 
with  the  time  and  place  of  holding  the  same, 
whether  regular  or  special,  and  if  special, 
its  object,  how  authorized,  and  the  notice 
thereof  given.  Tlie  record  must  eud)race 
every  act  done  or  ordered  to  be  done;  who 
were  present,  and  who  absent  and,  if  re- 
quested by  any  director,  meud>er,  or  stock- 
holder, the  time  must  be  noteil  when  he 
entered  the  meeting  or  obtained  leave  of  ab- 
sence therefrom.  On  a  similar  request,  the 
ayes  and  noes  must  be  taken  on  any  proposi- 
tion, and  a  record  thereof  made.  On  similar 
request,  the  protest  of  any  director,   mem- 


ber, or  stockholder,  to  any  action  or  pro- 
posed action,  must  be  entered  in  full  —  all 
such  records  to  be  open  to  the  inspection  of 
any  director,  member,  stockholder,  or  credi- 
tor of  the  corporation. 

§  2040.  In  addition  to  the  records  required 
to  be  ke])t  by  the  preceding  section,  corpora- 
tions for  profit  must  keep  a  book,  to  be 
known  as  the  "  st(x-k  and  transfer  book," 
in  which  must  be  kept  a  record  of  all  stock; 
the  nanu'S  of  the  stockholders  or  members 
alphal>etically  arranged;  installments  paid 
or  unpaid;  assessments  levied  and  paid  or 
unpaid;  a  statement  of  every  alienation,  sale, 
or  transfer  of  stock  made,  "the  date  thereof, 
and  by  and  to  whom;  and  all  such  other 
records  as  the  by-laws  prescribe.  Corpora- 
tions for  religious  and  benevolent  pun)oses 
must  provide  in  their  by-laws  for  such  rec- 
ords to  be  kept  as  may  be  necessary.  Such 
stock  and  transfer  book  must  be  kept  open 
to  the  inspection  of  any  stockholder,  mem- 
ber, or  creditor. 

§  2641.  The  legislature  may  at  anv  time 
amend  or  repeal  this  title  or  any  cliapter,  ar- 
ticles or  section  thereof,  and"  dissolve  all 
corporations  created  thereunder;  but  such 
amendment  or  repeal  does  not,  nor  does  the 
dissolution  of  any  such  corporation  take 
away  or  impair  any  remedy  given  against 
any  such  corporation,  its  stockholders  or 
officers,  for  any  lialulity  which  has  been 
previously  incurred. 

See  Const.,  art.  XI,  §  3. 

§  2642.  For  the  satisfaction  of  any  judg- 
ment against  a  corporation  authorized  to  re- 
ceive tolls,  its  franchise  and  all  the  rights 
and  privileges  thereof,  may  be  levied  uix)n 
and  sold  under  execution  in  the  same  man- 
ner and  with  like  effect  as  any  other  prop- 
erty. 

§  2643.  The  purchaser  at  the  sale  must 
receive  a  certificate  of  piu'chase  of  the  fran- 
chise, and  be  immediately  let  into  possession 
of  all  property  necessary  for  the  exercise  of 
the  powers  and  the  receipt  of  the  proceeds 
thereof  and  must  thereafter  conduct  the 
business  of  such  corporation,  with  all  its 
powers,  and  privileges,  and  subject  to  all 
its  lial)ilities,  until  tlie  redemption  of  the 
same  as  hereinafter  provided. 

§  2044.  Tlie  purcliaser  or  his  assignee  is 
entitled  to  recover  any  penaJties  imposed  by 
law  and  recoverable  by  the  corporation  for 
an  injuiy  to  the  franchise  or  property 
thereof,  or  for  any  damages  or  other  <ause, 
occurring  during  the  time  he  holds  the  same, 
and  may  use  the  name  of  the  corporation 
for  the  purpose  of  any  action  necessary  to 
recover  tlie  same.  A  recovery  for  (lam- 
ages  or  any  penalties  thus  had,  is  a  bar  to 
any  subsequent  action  by  or  on  liehalf  oC 
the  cori)oration  for  the  same. 

§  2645.  The  corporation  whose  franchi.se 
is  sold,  as  in  this  title  provided,  in  all  other 
respects  retains  the  same  powers,  is  bound 


18 


IDAHO. 

Dissolutiou;  foreign  corporations—  R.  S.,  §§  2646-2G53. 


to  discharge  tbe  same  duties,  and  is  liable 
to  the  same  penalties  and  forfeitures  as  be- 
fore such  sale. 

§  2tUc>.  The  corporation  may,  at  any  time 
within  one  year  after  such  sale,  redeem  the 
franchise  by  paying  or  tendering  to  tlie  pur- 
chaser thereof  tlie  sum  paid  therefor,  with 
ten  por  cent,  interest  thereon,  but  without 
any  allowance  for  the  toll  which  he  may 
in  the  meantime  have  received;  and  upon 
such  payment  or  tender,  the  franchise  and 
all  the  rights  and  privileges  thex-eof  revert 
and  belong  to  the  corporation,  as  if  no  such 
sale  had  Ihvu  made. 

§  20)47.  The  sale  of  any  franchise  under 
execution  must  be  made  in  the  county  in 
which  the  corporation  has  its  principal  place 
of  business. 

§  2iUS.  Unless  other  iici*sons  are  appointed 
by  the  court,  the  directors  or  managers  of 
tiu"  affairs  of  such  conioration  at  the  time 
of  its  dissolution  are  trustees  of  the  credi- 
tors and  stockholders,  or  members  of  the 
corporation  dissolved,  and  have  full  power 
to   settle   the   affairs   of   the   corporation. 

§  2(>4'.>.  Eveiy  corporation  formed  for  a 
period  less  than  fifty  years  may,  at  any 
time  prior  to  the  expiration  of  tbe  term  of 
its  corporate  existence,  extend  such  term  to 
a  periotl  not  exceeding  fifty  years  from  its 
formation.  Such  extension  may  be  made  at 
any  meeting  of  the  stockholders  or  members 
called  by  the  directors  expressly  for  con- 
sidering the  subject,  if  voteil  by  stockholders 
representing  two-thirds  of  the  capital  stock, 
or  by  two-thirds  of  the  members:  or  may 
be  made  upon  the  written  assent  of  that 
number  of  stockholders  or  members.  A 
certliicate  of  the  proceedings  of  the  meeting 
upon  such  vole,  or  upon  such  assent,  must 
be  signed  by  the  chairman  and  secretaiT 
of  the  meeting  of  a  majority  of  the  directors 
and  be  filed  in  the  office  of  the  county  re- 
corder, where  the  original  articles  of  iucoi-- 
poration  were  filed,  and  a  certified  coiiy 
thereof  in  the  ottice  of  the  secretary  of  the 
territory,  and  thereupon  the  term  of  the 
coritoration  for  the  sp<?cified  period. 

§  2G50.  Any  existing  corporation  formed 
under  any  law  of  this  territory  may  con- 
tinue luider  this  chapter,  or  under  the  pi'o- 
visions  of  any  subsetpient  chapter  par- 
ticularly applicable  thereto,  by  the  unani- 
mous vote  of  all  its  directors,  or  its  election 
so  to  continue  may  be  made  at  any  an- 
nual meeting  of  the  stockholders,  or  mem- 
bers or  at  any  meeting  called  by  the  direc- 
tors expressly  for  considering  the  subject, 
if  voted  by  stockholders  representing  a  ma- 
jority of  tiie  capital  stock,  or  by  a  majority 
of  the  members,  or  may  be  made  by  the 
directors  tipon  the  written  consent  of  that 
number  of  such  stockholders  or  members. 
A  certificate  of  the  action  of  the  directors, 
signed  by  them  and  tlieir  secretary,  when 
the  election  is  made  by  their  unanimous 
vote  or  upon  the  written  consent  of  the 
stockholders  or  members,  or  a  certificate  of 


the  proceedings  of  the  meeting  of  the  stock- 
holders or  nuMubers.  when  such  election  is 
made  at  any  such  meeting  signed  by  the 
chairman  and  socrotary  of  the  meeting  and 
a  majority  of  the  directors,  must  be  filed  in 
the  office  of  the  recorder  of  the  county  where 
the  original  articles  of  incorporation  are 
filed,  and  a  certifietl  copy  thereof  must  be 
filed  in  the  office  of  the  secretary  of  the 
territory,  and  thereafter  the  corporation 
must  contintie  its  existence  under  tlie  pro- 
visions of  the  title,  which  are  applicable 
thereto;  and  must  possess  all  the  rights  and 
IKJwers,  and  be  subject  to  all  the  obligations, 
restrictions  and  limitations  prescribed 
thereby. 

§  2C>ol.  No  corporation  formed  or  existing 
before  twelve  o'clock,  noon,  of  the  day  upon 
which  this  title  takes  effect,  is  affected  by 
the  provisions  of  this  title  unless  such  cor- 
poration elects  to  continue  its  existence 
tinder  it  as  provided  in  the  last  section,  but 
the  laws  under  whiih  such  corporations  were 
formeil  and  exist  are  applicable  to  all  such 
corporations,  and  are  repealed  subject  to  the 
provisions  of  this  section. 

§  2r>52.  The  provisions  of  this  chapter  are 
applicable  to  every  corporation,  unless  such 
corporation  is  exempted  from  its  operation, 
or  unless  a  special  provision  is  made  in  re- 
lation thereto  inconsistent  with  some  pro- 
vision in  tliis  chapter,  in  which  case  the 
special  provision  prevails. 

§  2(».");>.  Every  corporation  not  created 
under  the  laws  of  this  territory,  doing  busi- 
ness in  this  territory,  must  within  three 
!  months  after  the  passage  of  this  title,  or 
from  the  time  of  commencement  to  do  busi- 
ness in  this  territory,  designate  some  per- 
son residing  in  the  counts'  in  which  the 
principal  place  of  business  of  such  corpora- 
tion, in  tliis  territory,  is  conducted,  upon 
whom  process  issued  by  atithority  of,  or 
under  any  law  of  this  territory,  may  be 
served,  and  Mithin  the  time  aforesaid  must 
file  such  designation  in  the  office  of  the 
secretary  of  the  territory,  and  in  the  office 
of  the  clerk  of  the  district  court  for  such 
county,  and  a  copy  of  such  designation  certi- 
fied by  either  of  said  officers  must  be  evi- 
dence of  such  appointment;  and  it  is  law- 
ful to  serve  on  such  person,  so  designated, 
any  process  issueil  as  aforesaid,  and  such 
service  must  be  deemetl  a  valid  service 
thereof. 

p]very  such  corporation  which  fails  to 
comply  with  the  provisions  of  this  section 
shall  be  denied  the  l>enefit  of  the  statutes  of 
this  territory  limiting  the  time  of  the  com- 
mencement of  civil  actions,  and  any  limita- 
tions in  such  statutes  shall  only  run  in  favor 
of  any  such  coiixtration  during  such  time  as 
sluill  be  within  tlie  territory  such  per- 
son duly  designated  as  aforesaid,  upon  whom 
such   service  can  be  made. 

Provided,  further.  That  such  foreign  corpo- 
rations complying  with  the  provisions  of  this 
.section  shall  have  all  the  rights  and  privi- 


I 


IDAHO. 

Process;  pleading;  receivers  —  R.  S.,  §§  4144,  4145,  4199,  4329,  4330. 


19 


leges  of  like  domestic  corporations,  including 
the  right  to  exercise  the  right  of  eminent  do- 
main, and  shall  be  subject  to  the  laws  of 
this  territoiy  applicable  to  like  domestic 
corpoi'ations. 

("Act  of  February  10,  18S7,  in  effect 
June  1,  1887.") 

See  Const.,  art.  XI,  §  10.  Liability  of  stock- 
holder in  foreign  corporation.  See  §  2G09.  Cor- 
poration whose  stockholders  are  aliens  prohibited 
from  holding  laud.    Act  of  IS'Jl,  at  p.  -3. 

[If  a  foreign  corporation  has  no  resident  attor- 
ni'v,  notice  of  appeal  may  be  served  f)n  the  resi- 
dent agent  having  power  to  accept  service.  Loan 
A:  Trust  Co.  V.  McGregor,  .'>l  I'ac.   Ilep.   10:i.] 

Part  Third.     Remedial. 

CODE   OF    CIVIL   PROCEDURE. 

Part  II.     Civil  Actions. 

TITLE  V.      OF   THE   MAXXER   OF   C03I- 
3IEXCIXG    CIVIL    ACTIONS. 

Sec.  4144.  Summons,  how  served  on  corporations. 
4145.  Publication    when   defendant   is   a   for- 
eign corporation  having  no  agent,  etc. 

§  4144.  (As  amended  March  3,  1897.)  The 
summons  must  be  served  by  delivering  a 
copy  thereof,  as  follows: 

1.  If  the  suit  is  against  a  corporation 
formed  under  the  laws  of  this  State  to  the 
president  or  other  head  of  the  corporation, 
secretary,  cashier  or  managing  agent 
thereof. 

2.  If  the  suit  is  against  a  foreign  corpora- 
tion, or  a  non-resident  joint-stock  company 
or  association  doing  business  and  having 
a  managing  or  business  agent,  cashier  or 
secrctaiy  within  this  State  to  such  agent, 
cashier  or  secretary,  or  to  any  station, 
tioliet  or  other  agent  of  such  corporation 
transacting  business  thereof  in  the  county 
wiiere  the  action  is  commenced,  and  if  there 
is  no  such  agent  in  said  coimty,  then  ser- 
vice may  be  had  upon  any  such  agent  in  any 
other  county. 

3.  And  wlienever  any  foreign  corporation 
or  non-resident  joint-stock  company  or  as- 
sociation, doing  business  witliin  tlie  State 
of  Idalio.  sliall  not  liave  any  designated  per- 
son actually  residing  in  the  county  in  wliich 
said  corporation  or  joint-stock  comjiany  shall 
be  doing  business  within  this  State  upon 
wliom  process  issued  by  authority  of  or 
under  any  law  of  this  State  may  be  served 
as  provided  in  section  2053  of  the  Revised 
Statutes  of  Idaho,  or  when  ajiy  such  cor- 
poration or  joint-stock  company  having  ap- 
pointed such  i^orson  or  agent  as  provided  in 
said  section  2().")3,  and  said  agent  or  person 
so  designated,  shall  have  removed  from,  or 
ceased  to  be  a  resident,  or  be  absent  for 
more  than  thirty  (30)  days  from  said  county, 
then  the  auditor  of  said  county  sliall  be  and 
is  hereby  designated  as  the  authorized  agent 
of  said  corporation  or  joint-stock  company 


upon  whom  process  issued  by  authority  of 
or  under  any  law  of  this  State,  may  be 
served  with  like  effect  as  though  .said  service 
were  made  upon  the  agent  or  person  ap- 
pointed or  designated  as  provided  in  section 
2053  of  the  Revised  Statutes  of  Idaho. 
******** 

§  4145.  When  the  person  on  whom  the  ser- 
vice is  to  be  made  *  *  *  is  a  foreign  cor- 
poration having  no  managing  or  business 
agent,  cashier,  or  secretary  within  the  terri- 
tory', and  the  fact  appears  by  affidavit  to 
the  satisfaction  of  the  court  or  a  judge 
thereof,  or  a  probate  judge,  and  it  also  ap- 
pears by  such  attidavit,  or  by  the  verified 
complaint  on  file  that  a  cause  of  action 
exists  against  the  defendant  in  respect  to 
whom  the  service  is  to  made,  or  that  he 
is  a  necessary  or  proper  party  to  the  ac- 
tion, such  court  or  judge  may  make  an  order 
that  the  service  be  made  by  the  publication 
of  the  summons. 

TITLE  VI.      OF  THE   PLEADIXGS   IX  CIVIL 
ACTIONS. 

CHAPTER  VI. 

Verification  of  Pleadings. 

Sec.  4199.     Verification   by  corporation. 

§  4199.  *  *  *  When  a  corporation  is  a 
party,  the  verification  may  be  nmde  by  any 
officer  thereof. 

TITLE  VII.     Oh'  PROVISIONAL  REMEDIES. 

CHAPTER  V. 

Receivers. 

Sec.  4329.  Appointment    of   receivers. 

4330.  Appointment  of  receivers  upon  dissolu- 
tion of  corporations. 

§  4329.  A  receiver  may  be  appointed  by  the 
court  in  which  an  action  is  pending  or  has 
passed  to  judgment,  or  by  the  judge 
thereof : 

5.  In  the  case  when  a  corporation  has  been 
dissolved,  or  is  insolvent,  or  in  imminent  dan- 
ger of  insolvency,  or  has  forfeited  its  cor- 
porate rights: 

U.  In  all  other  cases  where  receivers  have 
heretofore  been  appointed  by  the  usages  of 
cotuts  of  equity. 

[A  court  is  authorized  by  this  section  to  appoint 
a  receiver,  when  necessary,  to  take  charge  of 
propertv  of  an  insolvent  corporation.  Sav.  &  Tr. 
Co.  V.   Piper,  40  Pac.   Rep.  144.] 

§  4330.  Upon  the  dissolution  of  any  cor- 
poration, the  district  court  of  the  county 
in  which  the  corporation  carries  on  its  busi- 
ness, or  has  its  principal  place  of  business, 
on  application  of  any  creditor  of  the  cor- 
poration, or  of  any  member  or  stockholder 
thereof,  may  appoint  one  or  more  persons  to 
be  receivers  or  trustees  of  the  corporation. 


20 


IDAHO. 


Costs;  vohmtary  dissolution  —  R.  S.,  §§  4915,  5185-5191. 


to  take  chargre  of  the  estate  and  effects 
thereof,  and  to  collect  the  debts  and  prop- 
erty due  and  belonging  to  the  corporation, 
and  to  pay  the  outstanding  debts  thereof, 
and  to  divide  the  moneys  and  other  property 
that  shall  remain  over,  among  the  stock- 
holders or  members. 


TITLE   XIV.      OF    MISCELLANEOUS   PRO- 
VISIOXS. 

CHAPTER  VI. 

Costs. 

Sec.  4915.  Security   for   costs   required   of  foreign 
corporations. 

§  4915.  When  the  plaintiff  in  an  action  re- 
sides out  of  the  territory,  or  is  a  foreign 
corpoi'ation,  security  for  the  costs  and 
charges,  which  may  be  awarded  against 
such  plaintiff  may  be  requh'ed  by  the  de- 
fendant. When  required,  all  proceedings  in 
the  action  must  be  stayed  until  an  under- 
taking, executed  by  two  or  more  persons, 
is  filed  with  the  clerk  to  the  effect  that  they 
will  pay  such  costs  and  chai'ges  as  may  be 
awarded  against  the  plaintiff  by  .iudgmont, 
or  in  the  progress  of  the  action,  not  ex- 
ceeding the  sum  of  three  linndred  dollars. 
A  new  or  additional  undertaking  may  be 
ordered  by  the  court  or  judge  upon  proof 
that  the  original  undertaking  is  sufficient  se- 
curity, and  proceetlings  in  the  action  stayed 
until  such  new  or  additional  undertaking 
is  executed  and  filed. 


Part  III.     Special  Proceedings. 

TITLE  VI.      A'OLIX'TARY  DISSOLITIOX   OF 
CORPORATIOXS. 

Sec.  518.5.  How  dissolved. 

5186.  Application,    what   to  contain. 

5187.  Application,   how  signed  and  verified. 

5188.  Filing   application   and     publication     of 

notice. 
5180.  Objections  may  be  filed. 
5100.  Hearing  of  application. 
5191.  Judgnient-rolls  and  appeals 

§  5185.  A  corporation  may  be  dissolved  by 
the  disti'ict  court  of  the  county  where  its 
office  or  principal  place  of  business  is  sit- 
uated, upon  its  vountary  application  for  that 
purpose. 

[Under  §§  5185-5187,  the  trustees  and  stockhold- 
ers may  sue  to  dissolve  an  insolvent  corporation. 
Sav.  &  Tr.  Co.  v.  Piper,  40  Pac.  Ilep.  144.  And 
a  court  is  authorized  to  appoint  a  receiver,  when 
necessarj',  to  take  charge  of  corporate  property. 
Id.] 

§  5186.  The  application  must  be  in  writ- 
ing and  set  forth: 

1.  That  at  a  meeting  of  the  stockholders 
or  members  called  for  that  purpose,  the  dis- 
solution   of    the    corporation    was    resolved 


upon  by  a  two-third  vote  of  all  the  stock- 
holders or  members; 

2.  That  all  claims  and  demands  against 
the  corporation  have  been  satisfied  and  dis- 
ciiarged. 

§  5187.  Tlie  application  must  be  signed  by 
a  majority  of  the  board  of  tnistees,  directors, 
or  other  officers  having  the  management  of 
the  affairs  of  the  coiijoratiou,  and  must  be 
verified  in  the  same  manner  as  a  complaint 
in  a  civil  action. 

§  5188.  If  the  judge  is  satisfied  that  the 
application  is  in  conformity  witli  this  title, 
he  must  order  it  to  be  filed  with  the  clerk, 
and  that  the  clerk  give  not  less  than  thirty 
days'  notice  of  tlie  application,  by  publica- 
tion in  some  newspaper  published  in  the 
county,  and  if  there  are  none  such,  then  by 
advertisements  posted  up  in  three  of  the 
principal  public  places  in  the  county. 

§  5189.  At  any  time  before  the  expiration 
of  the  time  of  publication,  any  person  may 
file  his  objections  to  the  application. 

§  5190.  After  the  time  of  publication  lias 
expired,  the  court  may,  upon  five  days'  no- 
tice to  the  persons  who  have  filed  objections, 
or  witliout  further  notice,  if  no  objections 
have  been  filed,  proceed  to  hear  and  deter- 
mine the  application;  and  if  all  the  state- 
ments herein  made  are  shown  to  be  true, 
he  must  declare  the  corporation   dissolved. 

§  5191,  The  application,  notices,  and  proofs 
of  publication,  objections  (if  any),  and 
declaration  of  dissolution,  constitute  the 
judgment-roll,  and  from  the  judgmcTit  an 
appeal  may  be  taken  as  from  judgments  of 
the  county  courts. 

Part  Fourth.     Penal. 
PRELIMINARY   PROVISIONS. 

Sec.  6301.  Certain  terms  defined. 

§.6301.  The  following  words,  have  in  this 
Code  the  signification  attached  to  them  in 
this  section,  unless  otherwise  apparent 
from  the  context: 

Seventh.  Whei'e  the  Avord  "  person "  is 
used  in  this  Code  to  designate  the  party 
whose  property  may  be  the  subject  of  any  of- 
fense, it  includes  *  *  *  all  public  and 
private  corporations  or  joint  associations,  as 
well  as  individuals. 

See  §  16. 

Part  I.      Of   Crimes   and   Punishments. 

TITLE    XII.      OF    CRIMES    AGAINST    PROP- 
ERTY. 

CHAPTER  IV. 

Forgery  and  Counterfeiting. 

Sec./70.S0.  Forgerv  of  corporate  seal. 
7031.  Penalty. 

§  7030.  Every  person  who,  with  intent  to 
defraud  another,  forges,  or  counterfeits  the 


IDAHO. 


21 


Forgery;  frauds  — R.   S.,   §§   7031,  7114-7122. 


seal     of    *    *     *    any    corporation,    *    *    * 
is  guilty  of  forgeiy. 

§  7031.  Forgery  is  punishable  by  imprison- 
ment in  the  territorial  prison  for  not  less 
than  one  nor  more  than  fourteen  years. 

CHAPTER  X. 

Frauds   in    the    Management    of    Corpora- 
tions. 1 

Sec.  7114.   Frauds    in    subscriptions    for    stock    of  ] 
corporations.  ' 

7115.  Frauds  in   procurinfr  orj^anization.  I 

7116.  Unautliorized    use    of     name'     In     pros- 

pectus,   etc.  , 

7117.  Misconduct    of   directors    of    stoclj    cor-  : 

poration. 

7120.  Frauds  in  keeping  accounts  in  books  of 

corporation. 

7121.  Officer   of   corporation    publishing   false 

reports. 

7122.  Officer   of   a   corporation    to    permit    an 

inspection. 

7123.  Director  of  a   corporation   presumed   to 

liave  knowledge  of  affairs. 

7124.  Directors    present     at     meeting,     wben 

presumed    to    hare   assented    to    pro- 
ceedinss. 

7125.  Director    absent    from    meeting,    when 

presumed    to    have    assented    to    pro- 
ceedings. 

712<i.  Foreign   corporations. 

7127.  "  Director  "   defined. 

§  7114.  Every  person  who  signs  the  name 
of  a  fictitious  person  to  any  subscription  for 
or  agreement  to  talve  stocli  in  any  corpora- 
tion existing  or  proposed,  and  every  per- 
son who  signs  to  any  subscription  or  agree- 
ment the  name  of  any  person,  knowing  that 
such  person  has  not  means  or  does  not  in- 
tend in  good  faith  to  comply  with  all  the 
terms  thereof,  or  under  any  understanding 
or  agreement  that  the  terms  of  such 
subscription  or  agreement  are  not  to  he  com- 
plied Avith  or  enforced,  is  guilty  of  a  mis- 
demeanor. 

§  711. J.  Evei-y  oflBcei',  agent  or  cleric  of  any 
corporation,  or  of  any  persons  proposing  to 
organize  a  coi"poration,  or  to  increase  the 
capital  stock  of  any  corporation,  who 
knowingly  exhibits  any  false,  forged  or  al- 
tered book.  pai>er,  voucher,  security  or  other 
instrument  of  evidence  to  any  public  otticer 
or  board,  with  intent  to  deceive  such  othcer 
or  board  in  respect  tljereto,  is  guiltj-  of  a 
misdemeanor. 

§  711  <j.  Every  person  who,  Avithout  being 
authorized  so  to  do,  subscribes  the  nam-i  of 
another  to  or  inseils  the  name  of  another  in 
any  prospectus,  circular  or  otlier  advertise- 
ment, or  annouuceinont  of  any  corporation 
or  joint-stock  association,  existing  or  in- 
tended to  be  formed,  with  intent  to  per- 
mit the  same  to  be  published,  and  thereby 
to  lead  persons  to  believe  that  the  person 
whose  name  is  so  subscribed  is  au  othcor, 
agent,  member  or  promoter  of  such  corpora- 
tion or  association,  is  guilty  of  a  misde- 
meanor. 

§   7117.   Even-  director  of  any  stock  cor- 


poration who  concurs  in  any  vote  or  act  of 
tlie  directors  of  such  coiijoration  or  any  of 
them,   by   which   it  is  intended,  either: 

1.  To  make  any  dividend,  except  from  the 
suri)lu9  profits  arising  from  the  business  of 
the  corporation;  and  in  the  cases  and  man- 
ner allowed  by  law;  or. 

2.  To  divide,  withdraw,  or  in  any  man- 
ner, excei»t  as  provided  by  law.  pay  to  tlie 
stockholders  or  any  of  them,  any  part  of 
the  capital  stock  of  the  corporation;  or, 

3.  To  discount  or  receive  any  note  or  other 
evidence  of  debt  in  i)ayment  of  any  install- 
ment actually  called  in  aurl  required  to  l>e 
paid,  or  with  the  intent  to  provide  the 
means  of  making  such  payment;  or. 

4.  To  receive  or  discount  any  note  or  other 
evidence  of  debt,  with  the  intent  to  enable 
any  stockholder  to  withdraw  any  part  of 
the  money  paid  in  by  him  or  hisstock;  or, 

5.  To  receive  from  any  othor  stock  corpora- 
tion, in  exchange  for  the  shares,  notes,  bonds 
or  other  evidences  of  deiit  of  their  own  cor- 
poration, shares  of  the  capital  st«x-k  of  siK-h 
other  corporation,  or  notes,  bonds,  or  other 
evidence  of  debt  issued  by  such  otlier  cor- 
poration,   is   guilty   of  a   misdemeanor. 

Personal  liability  for  declaring  illegal  dividend. 
§  2596. 

§  7120.  Every  director,  offic-er.  or  agent  of 
any  corporation  or  joint-stock  association 
who  Ivnowingly  receives  or  possesses  himself 
of  any  property  of  such  corporation  or  as- 
sociation otherwise  than  in  payuK-n:  of  a 
just  demand,  and  who.  with  intent  to  de- 
fraud, omits  to  make,  or  to  cause  or  direct 
to  bo  made,  a  full  and  true  entry  thereof  in 
tlie  books  or  accounts  of  such  corporation  or 
association,  and  every  director,  oflicer.  agent 
or  member  of  any  corporation  or  joint-stock 
associ.ition  who.  witli  intent  to  defraud,  de- 
stroys, alters,  multilates  or  falsifies  any  of 
the  books,  papers,  writings  or  securities 
belonging  to  such  cori>oration  or  as- 
sociation, or  makes  or  concnr.s  in  mak- 
ing, any  false  entries,  or  omits  or  eon- 
curs  in  omitting  to  make  any  material  entry 
in  any  book  of  accounts,  or  other  record  or 
document  kept  Ity  such  corporation  or  as- 
sociation, is  punishable  by  imprisonment  in 
the  teiTitorial  prison  not  less  than  three 
nor  more  than  ten  years,  or  by  imprisonment 
in  a  county  jail  not  exceeding  one  year,  or 
a  fine  not  exceeding  five  hundred  dollars, 
or  by  both  such  fine  and  imprisonment. 

§  7121.  Every  director,  officer  or  agent  of 
any  con^oration  or  joint-stock  association, 
uho  knowingly  concurs  in  making  or  pub- 
lishing any  written  report,  exhibit  or  state- 
ment of  its  affairs  or  pecuniary  condition, 
containing  any  material  statement  which  is 
false,   is  guilty  of  a   misdeineaaor. 

S  7122.  Eveiy  ofticer  or  agent  of  any  cor- 
poration, having  or  ke<^ping  an  office  within 


22 


IDAHO. 


Frauds  in  management;  miscellaneous  —  R.  S.,  7123-7127    8222-8229 


this  territoiT,  who  has  in  his  custody  or 
control  any  book,  paper  or  document  of  such 
corporation,  and  who  refuses  to  give  to  a 
stockholder  or  member  of  such  corporation, 
lawfully  demanding,  during  otHce  hours,  to 
inspect  or  take  a  copy  of  tlie  same,  or  any 
part  thereof,  a  reasonable  opportunity  so 
to  do,   is  guilty  of  a  misdemeanor. 

g  7123.  Every  director  of  a  ■corporation  or 
joint-stock  associntiou,  is  deemed  to  possess 
su«.h  a  knowledge  of  the  alfairs  of  his  cor- 
poration, as  to  enable  him  to  determine 
whether  any  act,  proceeding  or  omission  of 
its  directors  is  a  violation  of  this  chapter. 

§  7124..  Eveiy  director  of  a  corporation  or 
joint-stock  association,  who  is  present  at  a 
meeting  of  the  directors  at  which  any  act, 
proceeding  or  omission  of  such  directors  in 
violation  of  this  chapter  occurs,  is  deemed 
to  have  concun-ed  therein,  unless  he  at  the 
time  causes,  or  in  writing  requires  his  dis- 
sent therefrom  to  be  entered  in  the  minutes 
of  the  directors. 

§  7125.  Ever}'  director  of  a  corporation  or 
joint-stock  association,  although  not  pres- 
ent at  a  meeting  of  the  directors  at  which 
any  act,  proceeding  or  omission  of  such  di- 
rector's in  violation  of  this  chapter  occurs,  is 
deemed  to  have  concurred  therein,  if  the 
facts  constituting  such  violation  appear  on 
the  records  or  minutes  of  the  proceedings  of 
the  board  of  directors,  and  he  remains  a 
director  of  the  same  company  for  six  months 
there^nfter,  and  does  not  within  that  time 
cause,  or  in  writing  require,  his  dissent  from 
such  illegality  to  be  entered  in  the  minutes 
of  the  directors. 

§  7126.  It  is  no  defense  to  a  prosecution 
for  a  violation  of  the  provision  of  this  chap- 
ter that  the  coiiDoration  was  one  created 
by  the  laws  of  another  territory,  State, 
government,  or  country,  if  it  was  one  cairy- 
ing  on  business  or  keeping  an  office  therefor 
within  this  territory. 

§  7127.  The  term  "  director,"  as  used  in 
this  chapter,  embraces  any  of  the  persons 
having  by  law  the  direction  or  management 
of  the  affairs  of  a  coi-poratiou,  by  what- 
ever name  such  persons  are  described  in  its 
charter  or  known  bv  law. 


TITLE    X.      MISCEI.I.ANEOrS    PROCEED- 
INGS. 

CHAPTER  IX. 

Proceedings  against  Corporations. 

Sec.  8322.  Summons  ujion  inforiiin1i(3n,  etc  , 
asainst;  1)y  whom  issued  and  wlien 
rcturnablo. 

S223.   Form  of  snnimons. 

8554.  When  and  how  served. 

8225.  Examination   of  charRO. 

8226.  Cortifioato   of     magistrate,    and     return 

thereof   with   depositions. 


Sec.  8227.  If  magistrate  certif.r  that  there  is  snffl- 
oooo     .  '-''^"^  cause,  grand  jury  to  investigate. 
8228.  Appearance  and  plea. 
8220.  Fine  on  conviction,  how  collected 

§  8222.  JJpon  an  information  or  present- 
ment against  a  corporation,  the  magistrate 
must  issue  a  summons  signed  by  him,  with 
his  name  of  office,  requiring  the  corporation 
to  appear  before  him  at  a  specified  time  and 
pla<-o,  to  answer  the  charge,  the  time  to 
be  not  less  tlian  ten  days  after  the  issuing 
of  the  summons. 

§  8223.  The  summons  must  be  substan- 
tially in  the  following  form: 

County  of  (as  the  case  may  be): 

The  Territoiy  of  Idaho  to  the  (naming  the 
coi'poration): 

You  are  hereby  summoned  to  appear  be- 
fore me  at  (naming  the  place),  on  specifying 
the  day  and  hour),  to  answer  a  charge 
made  against  you  upon  the  information  of 
A.  B.  (or  the  presentment  of  the  grand  jury 
of  the  county,  as  the  case  may  be),  for 
(desfgnating  the   offense   generally). 

Dated  at  the  city  or  precinct  of  , 

this    day    of    ,    eighteen 

hundred  and 

G.  H.,  Justice  of  the  Peace. 

(Or  as  the  case  may  be.) 

§  8224.  The  summons  must  l>e  served  at 
least  five  days  before  the  day  of  appearance 
fixed  therein,  by  delivering  a  copy  thereof 
and  showing  the  original  to  the  president 
or  other  head  of  the  corporation,  or  to  the 
secretary,  cashier  or  managing  agent 
thereof. 

§  8225.  At  the  appointed  time  in  the  sum- 
mons the  magistrate  must  proceed  to  in- 
vestigate the  charge  in  the  same  manner  as 
in  the  case  of  a  natural  person,  so  far  as 
these  proceedings  are  applicable. 

§  8226.  After  hearing  the  proofs,  the 
magistrate  must  certify  upon  the  deposi- 
tion, either  that  there  is  or  is  not  sufficient 
cause  to  believe  the  corporation  guilty  of 
the  offeiase  charged,  and  must  return  the 
deposition  and  certificate  to  the  clerk  of  the 
district  court  of  the  county. 

§  8227.  If  the  magistrate  returns  a  certifi- 
cate that  there  is  sufficient  cause  to  believe 
the  coriwration  guilty  of  the  offense  charged, 
the  grand  jury  may  proceed  thereon  as  in 
case   of   a   natural   person   held   to   answer. 

§  8228.  If  an  indictment  is  foiuid.  the  cor- 
poration may  appear  by  counsel  to  answer 
the  same.  If  it  does  not  thus  appear,  a  plea 
of  not  guilty  must  be  entered,  and  the  same 
lirocoediugs  had  thereon  as  in  other  cases. 

§  8220.  When  a  fine  is  imposed  upon  a 
corporation  on  conviction,  it  may  be  col- 
lected by  virtue  of  the  order  imposing  it  by 
the  sheriff  of  the  county,  out  of  its  real  and 
personal  property,  in  the  same  manner  as 
uiion  an  execution  in  a  civil  action. 


IDAHO. 


23 


Miscellaneous  — Acts  of  1891,  1893. 


LEGISLATIVE  ACTS  RELATING  TO  CORPORATIONS 
SUBSEQUENTLY  TO   1887. 


ENACTED 


1.  Prohibiting   certain     agreements    between     em- 

ployers and  employes. 

2.  Restricting  right  of  corporations  to  hold  lands 

3.  Pi'oiiibiting  employment  of  aliens. 

4.  Creating  State  boards  of  arbitration. 


Act  1. 

AN  ACT  making  it  unlawful  for  employers 
to  enter  into  agreements  with  their  em- 
ployes, or  persons  about  to  enter  their 
employment,  not  to  become  or  continue  as 
members  of  labor  organizations;  and  pre- 
scribing a  penalty  therefor. 

Be  is  enacted  by  the  legislature  of  the 
State  of  Idaho: 

Section  1.  It  shall  be  unlawful  for  any  per- 
son, firm,  or  corporation  to  make  or  enter 
Into  any  agreement,  either  oral,  or  in  writ- 
ing, by  the  terms  of  which  any  employe  of 
such  person,  firm  or  coiiDoration,  or  any 
person  about  to  enter  the  employ  of  such 
person,  firm  or  corporation,  as  condition  for 
continuing  or  obtaining  such  employment, 
shall  promise  or  agree  not  to  become  or 
continue  a  member  of  a  labor  organization. 

§  2.  \ny  person  or  persons  or  corporation 
violating  the  provisions  of  section  1  of  this 
act  shall  be  guilty  of  a  misdemeanor  and 
upon  conviction  thereof  shall  be  fined  in  a 
sum  not  less  than  fifty  or  more  than  thi-ee 
hundred  dollars  or  be  imprisoned  in  the 
count^^  jail  for  not  more  than  six  months,  or 
by  both  stich  fine  and  imprisonment. 

§  3.  This  act  shall  take  effect  and  be  in 
force  from  and  after  its  passage  and  ap- 
proval. 

(Approved  March  6,  1893.) 

Act  2. 

AN  ACT  restricting  aliens,  corporations  and 
associations  in  their  right  to  acquire  and 
hold  real  estate. 

Be  Is  enacted  by  the  legislature  of  the 
State  of  Idaho: 

Section  1.  No  person  other  than  a  citizen  of 
the  United  States,  or  who  has  declared  his 
intention  to  become  such,  nor  any  associa- 
tion or  corporation,  except  railway  corpora- 
tions, whose  members  are  not  exclusively 
citizens  of  the  United  States,  or  persons 
who  have  declared  their  intention  to  become 
such,  shall  hereafter  acquire  any  land,  or 
title  thereto,  or  interest  therein,  other  than 
mineral  lands,  or  such  as  ma.v  be  necessary 
for  the  actual  working  of  mines  and  the 
reduction  of  the  products  thereof:     Provided, 


Tliat  no  person  not  eligible  to  become  a 
citizen  of  the  United  States  shall  acquire 
title  to  any  land  or  rial  property  within 
this  State,  except  as  hereinafter  provided: 
I'rovided,  further,  This  act  shall  not  prevent 
the  holders  (whether  aliens  or  non-residents, 
corporations  or  associations)  of  liens  uik)U 
real  estate,  or  any  interest  therein,  hereto- 
fore or  hereafter  aeciuired  from  holding  or 
taking  a  valid  title  to  the  real  estate  in  the 
enforcement  of  such  lien;  nor  shall  it  pre- 
vent any  sucli  alien,  association  or  corpora- 
tion from  enforcing  any  lien  or  judgment 
for  any  debt  or  lial)ility  now  existing,  or 
which  may  be  hereafter  created,  nor  from 
becoming  a  purchaser  at  any  sale  made  for 
the  puri>ose  of  collecting  or  enforcing  the 
collection  of  such  debt  or  judgment;  nor 
from  preventing  widows  or  heirs  who  are 
aliens,  or  who  have  not  declared  their  in- 
tention to  become  citizens,  from  holding 
lands  by  inheritance;  but  all  lands  acquired 
as  aforesaid  sliall  be  sold  within  five  years 
after  the  title  thereto  shall  be  perfected  in 
sucli  alien,  association  or  corporation,  and 
In  default  of  such  sale,  within  such  time, 
such  real  estate  shall  revert  and  escheat  to 
the  Sta*-e  of  Idaho.  The  provisions  of  this 
act  shall  not  be  construed  in  any  way  to 
l)rovent  or  interfere  with  the  ownership  of 
mining  land,  or  land  necessary  for  the  work- 
ing of  mines  or  the  reduction  of  the  products 
thereof. 

§  2.  An  emergency  exists,  therefore  this 
act  shall  take  effect  and  be  in  force  imme- 
diately after  its  passage. 

(Approved  February  26,  1891.) 

Act  3. 

AN  ACT  to  discourage  the  further  increa-se 
of  alien  population  in  this  State. 

Be  It  ena'C'ted  by  the  legislature  of  the 
State  of  Idalio: 

Section  1.  It  shall  hereafter  be  luilawful 
for  any  county  government  or  municipal  or 
private  corporation  organized  imder  the  laws 
of  this  State,  or  organized  under  the  laws 
of  another  State  or  territory  or  in  a  foreign 
country  and  doing  business  in  this  State 
to  give  employment  in  any  way  to  any  alien 
who  has  failed,  neglected,  or  refused,  prior 
to  the  time  such  employment  is  given,  to  be- 
come naturalized  or  declare  his  intention  to 
become  a  citizen  of  the  United  States. 

§  2.  Whenever  employment  has  been  inno- 
cently given  to  any  alien  by  any  county  gov- 
ernment, municiiial  or  private  corporation 
mentioned    in    section    1    of    this    act,    and 


24 


IDAHO. 


Employment  of  aliens  —  xVcts  of  1897. 


complaint  shall  be  made  in  writing  by  any 
person  to  the  officers  of  the  county  govern- 
mont,  or  municipal  corporation,  or  general 
manager,  superintendent,  foreman,  or  other 
agent  of  the  private  corporation,  having 
charge  or  superintendeucy  of  the  labor  of 
such  alien  employe,  that  such  employe  is 
an  alien  he  shall  forthwith  discharge  such 
employe  from  employment  unless  said  em- 
ploye shall  produce  his  declaration  to  be- 
come a  citizen  or  a  certificate  of  naturaliza- 
tion, or  a  duly  certified  copy  thereof. 

§  3.  Any  public  officer  or  any  county  gov- 
ernment, or  municipal  corporation,  or  any 
general  manager,  superintendent,  foreman, 
or  other  agent  of  any  private  corporation,  or 
any  contractor  or  agent  of  any  company  en- 
gaged in  public  Avork,  who  shall  violate  any 
of  tlie  provisions  mentioned  in  this  act,  who 
shall  knowingly  give  employment  to  any 
alien  or  who  having  innocently  given  such 
employment  shall  on  complaint  being  made 
to  him  by  any  person  fail  or  refuse  to  dis- 
charge any  such  employe  forthwith  on  the 
failure  or  refusal  of  such  employe  to  pro- 
duce for  his  inspection  and  the  inspection 
of  the  complainant  his  declaration  of  inten- 
tions to  become  a  citizen,  or  certificate  of 
naturalization  as  provided  in  section  2  of 
this  act,  shall  be  deemed  guilty  of  a  misde- 
meanor. 

§  4.  Whereas  an  emergency  exists  this  act 
shall  t^ike  effect  and  be  in  force  from  and 
after  its  passage. 

(Approved  February  IS,   1897.) 


Act  4. 

AN  ACT  to  provide  for  a  State  lx)ard  of  ar- 
bitration for  the  settlement  of  differences 
between  employes  and  their  employers  and 
to  provide  for  local  boards  of  arbitration 
subordinate  tliereto. 

Be  it  enacted  by  the  legislature  of  the 
State  of  Idaho: 

Section  1.  The  governoi',  with  the  advice 
and  consent  of  the  senate,  shall,  on  or  be- 
fore the  fourth  day  of  March,  eighteen 
hundred  and  ninety-seven,  appoint  three 
competent  persons  to  serve  as  a  State  board 
of  arbitration  and  conciliation  in  the  man- 
ner hereinafter  provided.  One  of  them  shall 
be  an  employer  or  selected  from  some  asso- 
ciation representing  employers  of  labor;  one 
of  them  shall  be  selected  from  some  labor 
organization  and  not  an  employer  of  labor: 
the  third  shall  be  appointed  upon  the  recom- 
mendation of  the  other  two;  Provided,  how- 
ever. That  if  the  two  appointetl  do  not  agree 
on  the  third  man  at  the  expiration  of  thirty 
tlays.  he  shall  then  be  appointed  by  the  gov- 
ernor. On  or  before  the  fourth  day  of 
March,  eighteen  hundred  and  ninety-seven, 
the  governor,  with  the  advice  and  consent  of 


the  senate,  shall  appoint  three  members  of 
said  lx)ard  in  the  manner  above  provided; 
one  to  serve  for  six  years;  one  for  four 
years;  and  one  for  two  years;  or  until  their 
respective  succest<ors  are  appointetl;  and  on 
or  before  the  fourth  day  of  IVIarch  of  each 
year  during  which  the  legislatiire  of  this 
State  is  in  its  regular  biennial  session  there- 
after, the  governor  shall  in  the  same  manner 
appoint  one  member  of  said  board  to  succeed 
the  member  whose  term  then  expires  and 
to  serve  for  the  term  of  six  years  or  until 
his  successor  is  appointed.  If  a  vacancy 
occurs  at  any  time,  the  governor  shall  in 
the  same  manner  appoint  some  one  to  serve 
out  the  unexpired  term;  and  he  may  in  like 
manner  remove  any  member  of  said  board. 
Each  member  of  said  board  shall,  before  en- 
tering upon  the  duties  of  his  office,  be  sworn 
to  a  faithful  discharge  thereof.  They  shall 
at  once  organize  by  the  choice  of  one  of  their 
members  as  chairman.  Said  board  shall 
choose  one  of  its  members  as  secretary  and 
may  also  appoint  and  remove  a  clerk  of  the 
board,  who  shall  receive  pay  only  for  time 
during  which  his  services  are  actually  re- 
quired and  that  at  a  rate  of  not  more  than 
four  dollars  per  day  during  such  time  as  he 
may  be  employed. 

§  2.  The  board  shall,  as  soon  as  possible 
after  its  organization,  establish  such  rules 
of  procedure  as  shall  be  approved  by  the 
governor  and  senate. 

§  3.  ^^'heuever  any  controversy  or  differ- 
ence, not  involving  questions  whicli  m;iy 
be  the  subject  of  a  suit  at  laAV  or  bill  in 
equity,  exists  between  an  (Muployer,  whether 
an  individual,  copartnership  or  corporation, 
and  liis  employes  if  at  the  time  he  employs 
not  less  than  twenty-fi\'e  persons  in  the 
same  general  line  of  business  in  hiiy  city 
or  town  or  village  or  county  in  this  State, 
the  board  sliall  upon  the  ai)plication  :is  here- 
inafter provided,  and  as  soon  as  pra<-ticable 
thereafter,  visit  the  locality  of  the  dispute 
and  make  careful  inquiry  into  tlio  cause 
thereof,  hear  all  persons  interested  therein 
who  may  come  before  them,  advise  the 
respective  parties  what,  if  anything,  ought 
to  be  done  or  submitted  to  by  either  or  both 
to  adjust  said  dispute,  and  make  a  written 
decision  thereof.  This  decision  shall  at 
once  be  made  ptiblic,  shall  be  recorded  upon 
proper  books  of  record  to  be  kept  by  the 
secretary  of  said  board,  and  a  sliort  state- 
ment thereof  published  in  the  annual  re- 
port hereinafter  provided  for.  and  the  said 
board  shall  catise  a  copy  thereof  to  be  tiled 
with  the  county  recorder  of  the  countj' 
where  such  business  is  carried  on. 

§  t.  Said  application  sliall  be  signed  by 
said  employer  or  by  a  majority  of  his  em- 
ployes in  the  department  of  the  business  in 
which  the  controversy  or  difference  exists, 
or  their  duly  authorized  agent  or  by  both 


IDAHO. 


25 


Arbitration  —  Acts  of  1897. 


parties  and  shall  coutaiu  a  concise  statement 
of  the  grievance  coniplaind  of,  and  a  prom- 
ise to  continue  in  the  business  or  at  worlc 
without  any  lockout  or  stnke  until  the  de- 
cision of  said  board  if  it  shall  be  made  in 
three  Aveeks  of  the  date  of  tiling  said  appli- 
cation, when  an  ai)plication  is  signed  by  an 
agent  claiming  to  represent  a  majority  of 
such  employes,  the  board  shall  satisfy  itself 
that  such  agent  is  duly  authorized  in  writing 
to  reiiresent  such  employes,  but  the  names 
of  the  employes  giving  such  authority  shall 
be  kept  secret  by  said  board.  As  soon  as 
may  be  after  the  receipt  of  said  application, 
the  secretary  of  said  board  shall  cause  pul)- 
lic  notice  to  be  given  of  the  time  and  place 
for  the  hearing  thereof;  but  public  notice 
need  not  lie  given  when  both  parties  to  the 
controversy  join  in  the  application  and  pre- 
sent therewith  a  Avritten  request  that  no 
public  notice  be  given.  When  such  request 
be  made,  notice  shall  be  given  to  the  parties 
interested!  in  such  manner  as  the  board  may 
order  and  the  board  may,  at  any  stage  of  the 
proceedings,  cause  public  notice  to  be  given, 
notwithst.a.nding  such  reipiest.  Should  the 
petitioner  or  petitioners  fail  to  perform  the 
promise  made  in  said  application,  the  board 
shall  proceed  no  further  thereupon  without 
the  Avritten  consent  of  the  adverse  party. 
The  board  shall  have  the  power  to  summon 
as  witness  any  operator  in  the  departments 
of  business  affected,  and  any  person,  who 
keejis  the  records  of  Avages  earned  in  those 
departments  and  to  examine  them  under 
oath  and  to  require  the  production  of  books 
containing  the  record  of  wages  paid.  Sum- 
mons may  be  signed  and  oaths  administered 
b}'  any  member  of  the  board. 

§  5.  Fpon  the  receipt  of  such  application 
and  after  such  notice,  the  board  shall  pro- 
ceed as  before  provided  and  render  a  Avritten 
decision  Avhich  shall  be  open  to  public  in- 
spection, shall  be  recorded  upon  the  records 
of  the  board  and  pul>lished  at  the  discretion 
of  the  same,  in  an  annual  report  to  be  made 
to  the  governor  of  the  State  on  or  before  the 
first  day  of  February  of  each  year. 

§  G.  Said  decision  shall  be  binding  upon 
the  parties  Avho  join  in  said  application  for 
six  months,  or  until  either  party  has  given 
the  other  notice  in  Avriting  of  his  intention 
not  to  be  bound  by  the  same  at  the  expira- 
tion of  sixty  days  therefrom.  Said  notice 
may  be  given  to  said  employes  by  posting 
the  same  in  three  conspicuous  places  in  the 
shop  or  factory,  mill  or  at  the  mine  Avhere 
they  Avork  or  are  employed, 

§  7.  The  parties  to  any  controversy  or 
difference  as  described  in  section  3  of  this 
act  may  submit  the  matters  in  dispute,  in 
writing  to  a  local  board  of  arbitration  and 
conciliation,  such  board  may  be  either 
mutually  agreed  upon,  or  the  employer  may 


designate  one  of  the  arbitrators,  the  em- 
ployes or  their  duly  authorized  agent,  an- 
otiier.  and  the  tAvo  arbitrators  so  designated 
may  choose  a  third  who  shall  be  chairman 
of  the  board.  Such  board  shall  in  respect  to 
the  matters  referred  to  it,  have  and  exercise 
all  the  i>OAvers  which  the  State  board  might 
have  and  exercise,  and.  its  decision  shall 
have  Avhatever  binding  effect  may  be  agreed 
by  the  parties  to  the  controversy  in  the 
Avritten  submission.  The  jurisdiction  of 
such  l>oard  shall  he  exclusive  in  respect  to 
the  matters  submitted  to  it,  but  it  may  ask 
and  receive  the  advice  and  assistance  of  the 
State  board.  The  decision  of  such  board 
shall  be  rendered  within  ten  days  of  the 
close  of  any  hearing  held  by  it;  such  de- 
cision shall  at  once  be  filed  with  the 
recorder  of  the  county  in  which  the  contro- 
versy or  difference  arose,  and  a  CDpy  thereof 
shall  be  forAvarded  to  the  State  board.  Each 
of  such  arbitrators  shall  be  entitled  to  re- 
ceive from  the  treasury  of  the  county  in 
Avhich  the  controversy  or  difference  that  is 
the  subject  of  the  arbitration  exists,  if  such 
payment  is  approved  in  Avriting  by  the 
board  of  commissioners  of  such  county,  the 
sum  of  three  dollars  for  each  day  of  actual 
service,  not  exceeding  ten  days  for  any  one 
arbitration,  Avhenever  it  is  made  to  appear  tu 
the  mayor  of  a  city  or  the  board  of  com- 
missioners of  a  county  that  a  strike  or  lock- 
out, such  as  described  in  section  8  of  this 
act  is  seriously  threatened  or  actually  oc- 
curs, the  mayor  of  such  city  or  tlie  board  of 
commissioners  of  such  county  shall  at  once 
notify  the  State  board  of  the  facts. 

§  8.  Whenever  it  shall  come  to  the  knoAvl- 
edge  of  the  State  board,  either  by  notice 
from  the  mayor  of  a  city  or  the  board  ot 
commissioners  of  a  county,  as  provided  in 
the  preceding  section  or  otherwise,  that  a 
strike  or  lockout  is  seriously  threatened  or 
has  actually  occurred  in  any  county  or  town 
of  the  State  involving  an  emploj-er  and  his 
present  or  past  employes,  if  at  the  time  he  is 
employing,  or  up  to  the  occurrence  of  the 
strike  or  lockout  was  employing  not  less 
than  twenty-tive  persons  in  the  same  general 
line  of  business  in  any  county  or  town  in  the 
State,  it  shall  be  the  duty  of  the  State 
board  to  put  itself  in  communication  as 
soon  as  may  be  with  such  employer  and 
employes,  and  endeavor  by  mediation  to 
effect  an  amical)le  settlement  between  them, 
or  to  endeavor  to  persuade  them;  Provided, 
That  a  strike  or  lockout  has  not  actually 
occurred  or  is  not  then  continuing,  to  submit 
the  mattei's  in  dispute  to  a  local  board  of 
arbitration  and  conciliation,  as  above  pro- 
vided, or  to  the  State  board:  and  said  State 
]u)ar(l  may,  if  it  deems  it  advisable,  investi- 
gate the  cause  or  causes  of  such  controversy, 
and  ascertain  which  party  thereto  is  mainly 
responsible  or  blameworthy   for  the  exist- 


26 


IDAHO. 


Arbitration  —  Acts  of  1897. 


ence  or  continuance  of  the  same,  and  may 
make  and  publish  a  report  finding  sucli 
cause  or  causes  and  assigning  such  respon- 
sibility or  blame.  The  board  shall  have  the 
same  powers  for  the  foregoing  purposes  as 
are  given  it  by  section  3  of  this  act. 

§  9.  Witnesses  summoned  by  the  State 
board  shall  be  allowed  the  sum  of  fifty  cents 
for  each  attendance,  and  the  sum  of  twenty- 
five  cents,  for  each  hour  of  attendance  in  ex- 
cess of  two  hours  and  shall  be  allowed  five 
cents  a  mile  for  travel  each  way  from  their 
respective  places  of  employment  or  business 
to  the  place  where  the  board  is  in  session. 
Each  witness  shall  certify  in  writing  the 
amount  of  his  travel  and  attendance,  and 
the  amount  due  him  shall  be  paid  forthwith 


by  the  board,  and  for  such  purpose  the  board 
shall  be  entitled  to  draw  from  the  treasury 
of  the  State  for  the  payment  thereof  any  of 
the  unappropriated  moneys  of  the  State. 

§  10.  The  members  of  said  board  shall  be 
paid  six  dollars  per  day  for  each  day  that 
they  are  actually  engaged  in  the  perform- 
ance of  their  duties,  to  be  paid  out  of  the 
treasury  of  the  State,  and  they  shall  be  al- 
lowed their  necessary  traveling  and  other 
expenses,  which  shall  be  paid  out  of  the 
treasurj'  of  the  State. 

This  bill  having  remained  with  the  governor 
to  exceed  ten  (10)  days  (Sundays  excepted)  after 
the  legislature  adjourned,  becomes  a  law  this 
twentieth  (20th)  day  of  March,  A.  D.,  1897. 


MDEX  TO  IDAHO. 


ACTIONS:  Page. 

commencement  of,  against  corporation  jg 

pleadings,  how  verified   39 

AGENTS: 

power  to  choose  ]  8 

ALIENS: 

corporations  containing,  not  to  acquire  lands 23 

not  to  be  employed 23 

AMENDMENT: 

of  corporation  act 17 

ARBITRATION: 

state  board  of,  organization 24 

controversie<j  settled  by 24 

strikes  and  lock-onts,  to  examine  into 25 

ARTICLES  OF  INCORPORATION: 

fees  for  filing  and  recording 8 

what  deemed   9 

contents   of 9 

of  railroad,  wagon  road  or  telegraph 9 

amount  of  capital  subscribed  before  filing 10 

subscribed  by  whom 30 

filing  of,  in  oflSce  of  county  recorder  and  secretary  of  state 10 

certificate  issued  upon  filing   10 

copy  of,  when  recorded,  as  evidence 10 

filing  in  counties  where  property  is  owned 10 

ASSESSMENT  FOR  TAXATION    (See  Taxes): 

of  property  of  corporations  8 

statements  by  corporation  for  purpose  of 8 

stock   when  not  subject  to H 

ASSESSMENTS  UPON  CAPITAL  STOCK: 

how  made    14 

notice  of    1-1 

publication   !•* 

extension  of  time  specified 15 

unpaid,  sale  of  stock  for 15 

sale,  how  conducted   15 

corporation,  when  to  purchase  15 

extension  of  time  of 15 

invalidated,  when   15 

ASSESSORS    (See  Taxes):  ( 

statements  as  to  corporations  made  to 8 

BOOKS: 

stock  and  transfer,  contents 17 

inspection  unlawfully  refused   21.  22 

BUSINESS: 

powers  of  corpor^ition  cease,  if  not  begun 16 

right  to  do,  nol  ^a  be  inquired  into  collaterally » 16 


28  .  INDEX  TO  IDAHO. 

BY-LAWS:  Page. 

M-hen  adopted   10 

notioo  of  meetings  to  adopt 10 

stockholders'  consent  necessary   10 

what  to  provide    10 

to  prescribe  penalties   10 

certified  and  recorded    10,  11 

amendment  or  repeal  of 11 

transfer  of  stock,  regulations  as  to 14 

power  of  corporation  to  make 16 

CAPITAL  STOCK: 

exempted  from  taxation,  Avhen  8 

amount  of,  articles  to  state 9 

assessments  upon,  directors  may  impose 14 

notice  of,  and  publication  14 

sale  of  stock  upon 15 

increase  or  decrease  of,  proceedings  for  16 

certificate  of,  to  be  filed 17 

assent  of  three-fourths  of  stockholders 17 

fraudulent  subscriptions  to   21 

withdrawal  of,  by  directors   21 

CERTIFICATE  OF  INCORPORATION: 

fees  for  issuing   8 

when   issued    10 

CERTIFICATES: 

false,  liability  of  officers  for 12 

CHARTERS: 

existing  at  time  of  adoption  of  constitution 6 

special,  not  to  be  passed  by  legislature 6 

COMBINATION: 

for  fixing  prices,  prohibited 7 

COMMON  CARRIERS: 

right  of  legislature  to  regulate 6 

undue  discriminations  by  6 

CONSOLIDATION: 

of  corporations,  effect  of   7 

CONSTITUTION: 

existing  corporations  to  accept 6 

CONTRACTS: 

laws  impairing  obligations  of   5 

power  of  corporation  to  make 16 

CORPORATION: 

term,  as  defined  in  constitution 7 

person  includes 8 

governor  to  direct  inquiry  as  to 8 

private,  how  formed   9 

corporate  existence  extended 18 

continued  under  general  laws 18 

charges  against,  summons  upon  22 

service  of  summons   22 

investigation  of,  by  magistrate   22 

certificate  of  magistrate 22 

grand  jury  to  investigate   22 

fine,   how   collected 22 

COSTS: 

security  for,  by  foreign  corporation 20 

CUMULATIVE: 

voting  for  directors   6 


IN'DEX  TO  IDAHO.  29: 

DEBTvS:  Page. 

lial)ilit.v  of  stockholders  for  13 

DECREASE: 

oi  capital  stock,  proceedings  for 16 

certificate  of,  to  be  filed 17 

DIRECTORS: 

election  of,  legislature  to  provide  for 6 

articlofl  of  incorporation  to  state  names  and  residences  of 9 

number  of,  may  be  increased  9 

election  of,  when  held 10 

by-laws  to  regulate 10 

corporation  managed  by 11 

majority  must  be  residents   11 

stockholders,  must  be   11 

vacancies,  how  filled  11 

first,  when  elected  11 

election  of,  to  be  by  ballot 11 

organization  of  board  of   11 

dividends,  to  be  made  from  profits 11 

illegal,  liability  for 11,  21 

removal  from  office  11 

meetings  of,  whete  held  12 

proceedings  to  be  kept 17 

assessments  levied   by    14 

trustees  for  creditors  and  stockholders 18 

certificate  of  extension  of  corporate  existence 18 

corporations  continued  under  general  law   18 

voluntary  dissolution,  application  for   20 

false  papers,  records,  etc.,  by 21 

illegal  dividends,  voted  by  21 

withdrawal  of  capital  stock 21 

discount  of  notes,  when  illegal   21 

issue  of  stock  to  other  corporations 21 

receiving  property  of  corporation  21 

false  entries,   etc 21 

statements  in  reports,  etc 21 

knowledge  assumed  by  22 

deemed  to  have  concurred   22 

dissent,  how  to  be  evidenced 22 

DISCRIMINATION: 

unreasonable,  by  common  carriers 6 

DISSOLUTION: 

proceedings  for,  application  for  appointment  of  receiver 19 

voluntary,  application  for 20 

application,  contents  of   20 

to  be  signed  by  directors 20 

publication  of  notice  of 20 

objections  to,  to  be  filed 20 

judgment-roll   in    20 

DIVIDENDS: 

declared  from  profits    11 

illegal,  liability  of  directors  for  11 

directors  declaring  illegal,  misdemeanors  21 

DOCUMENTS: 

inspection  unlawfully  refused   21,  — 


ELECTIONS: 

of  directors,  when  held  10 

must  be  by  ballot   


11 


30  INDEX  TO  IDAHO. 

ELECTIONS  —  (Continued):  Page. 

by-laws  to  regulate  10 

majority  of  stock  represented  at 12 

postponement  of 12 

proceedings  upon  complaint  as  to 12 

EMINENT  DOMAIN: 

right  of,  preserved 6 

EMPLOYES: 

agreements  not  to  belong  to  labor  organizations 23 

aliens,  not  to  be  23 

controversies  settled  by  state  board  of  arbitration 24 

ENTRY. 

false,  liability  of  officers  for 12 

EVIDENCE: 

copy  of  articles  of  incorporation  as 10 

EXECUTION: 

levy  upon  franchise  of  corporation  authorized  to  receive  tolls 17 

sale  of  franchise  under , 17 

rights  of  purchaser  17 

redemption  after  sale  18 

sale,  where  made •» 18 

EXISTENCE: 

corporate,  term  of  9 

extension  of,  how  made   18 

certificate  to  be  filed   18 

continued  under  general  law   18 

EXPRESS  COMPANIES: 

common   carriers    6 

legislature  to  regulate  charges   6 

undue  discriminations  by  6 

consolidation  of    7 

FALSE: 

papers,  records  and  entries   21 

entries  of  transactions  by  directors  and  oflScers 21 

statements  in  reports,  etc   21 

FEES: 

for  filing  articles  of  incorporation   8 

for  recording 8 

for  certificate  of  incorporation 8 

FOREIGN  CORPORATIONS: 

privileges  of,  under  constitution    7 

place  of  business  and  person  designated  for  service  of  process 7 

designation  of  person  for  service  of  process  18 

effect  of  failure  to  make   18 

commencement  of  actions  against  1" 

security  for  costs  in  actions  by 20 

FORGERY: 

of  corporate  seal   20 

FRANCHISE: 

laws  permitting  leasing,  etc.,  limited • 

of  corporation  authorized  to  receive  tolls,  judgment  against 17 

sale  under  levy   17 

where  made 18 

rights  of  purchaser  • 17 

redemption  of,  after  sale •  •  •  18 

FRAUDS: 

in  management  of  corporations  21 


INDEX  TO  IDAHO.  31 

GOVERNOR:  Page, 

management  of  corporations,  may  direct  attorney-general  as  to 8 

HIGHWAYS: 

taxation  of  corporations  for 8 

INCORPORATION: 

powers  cease  after  one  year,  unless  business  transacted 16 

INCORPORATORS: 

number  necessary   9 

INCREASE: 

of  capital  stock,  proceedings  for 1(5 

certificate  of,  to  be  filed 10  17 

INDICTMENT: 

against  corporation,  proceedings   22 

INSPECTION: 

of  books,  papers,  etc.,  unlawfully  refused  21,  22 

JOURNAL 

of  meetings  of  directors  and  stockholders 17 

JUSTICE  OF  THE  PEACE: 

meetings  of  stockholders,  when  called  by 12 

LABOR  ORGANIZATION: 

agreements  not  to  belong  to,  prohibited 23 

LAWS: 

impairing  obligations  of  contract 5 

creating  corporations,  not  to  be  passed 5 

general,  for  organization  of  corporations  5 

LIABILITY: 

of  officers  for  false  certificates,  etc I'J 

of  stockholders  for  debts 13 

LOCK-OUTS: 

state  board  of  arbitration's  powers  as  to 25 

MARRIED  WOMAN: 

transfer  of  stock  by 14 

dividends  payable  to 14 

proxies  valid  14 

MEETINGS: 

of  stockholders,  to  adopt  by-laws 10 

to  amend  or  repeal  by-laws 10 

for  election  of  directors 10 

by-laws  to  appoint  time  and  place 10 

quorum  at  ^0 

removal  of  directors H 

justice  of  the  peace,  when  to  call 12 

majority  of  stock  represented  at  1^ 

when  voidable    12 

adjournment  of l2 

illegal,  ratification  of  ^2 

proceedings  to  be  kept 1^ 

extension  of  corporate  existence 1^ 

MISNOMER: 

of  corporation,  not  to  invalidate  1^ 

MONEY: 

paper,  corporation  not  to  emit 1^ 

NAME: 

of  incorporation,  articles  to  state 9 

right  of  succession  by  corporate 1^ 

wrong  use  of,  not  to  invalidate ^^ 


32  IN'DEX  TO  IDAHO. 

NOTICE:  Page. 

false,  liability  of  oflBcers  for  12 

publication  of,  how  proved 16 

of  assessment  of  stock  to  be  published 15 

of  sale  of  stock  15 

OFFICERS: 

by-laws  to  regulate  election  of 10 

to  determine  compensation   10 

liability  of,  for  false  certificates,  etc 12 

power  to  choose  and  fix  compensation 16 

false  papers,  records,  etc 21 

unauthorized  use  of  names  as  21 

receiving  property  of  corporation 21 

false  entries 21 

false  statements  in  reports  21 

refusing  inspection  of  books,  etc   21,  22 

PAPERS: 

inspection  unlawfully  refused 21,  23 

PERSONAL   ESTATE: 

corporation  may  hold  and  convey 16 

PLACE  OF  BUSINESS: 

change  of,  how  made   12 

PLEADINGS: 

verification  of,  by  corporations 19 

POLICE  POWERS: 

not  to  be  abridged  as  to  corporations 6 

POWERS: 

of  corporations,  generally   16 

cease,  if  business  not  begun 16 

PRESIDENT:  .      .  - « , . 

election  of 11 

PRICES: 

combines  for  fixing  prohibited   7 

PROPERTY: 

articles  filed  in  county  where  owned 10 

PROXY:  .      ..  .    .  ° 

right  to  vote  by,  legislature  to  provide  for 6 

voting  by,  by-laws  to  provide  for  ................ 10 

of  married  women  valid 14 

PUBLICATION:  ,\[' 

of  notices,  how  proved    • 16 

RAILROADS: 

right  of  legislature  to  regulate  ...';..'...';.';..'.. 6 

undue  discriminations  by 6 

may  connect  with  or  cross  each  other 6 

in  streets,  consent  for  construction 7 

laws  for  benefit  of,  not  to  be  passed 7 

consolidation  of 7 

articles  of  incorporation  of 9 

amount  subscribed  before  filing  .....;...... 10 

REAL  ESTATE: 

corporation  may  hold  and  convey 16 

amount  may  bo  acquired   17 

acquisition,    proceedings    for 17 

corporations  consisting  of  aliens  not  to  acquire  23 

RECEIVERS: 

dissolution  proceedings,  appointment  of 19 

application  for  appointment  of,  in  19 


INDEX  TO  IDAHO.  33 

RECORDS:  Page. 

of  corporate  proceedings,  to  be  kept 17 

REPEAL: 

of  corporation  act  17 

REPORTS: 

false,  liability  of  officers  for 12 

SALE: 

of  stock  for  unpaid  assessments 17 

corporation,  when  to  purchase 15 

action  to  recover  stock  sold  at,  for  irregularity 15 

evidence  of,  what  is 16 

SEAL,  COMMON: 

corporation  may  make  and  use 16 

forgery  of,  how  punished   20,  21 

SECRETARY    (See  Officers): 

election  of  11 

sale  of  stock  by,  for  unpaid  assessments 15 

affidavit,   proof   of    16 

SECRETARY  OF  STATE: 

articles  of  incorporation  recorded  by  8 

fees   therefor    8 

SERVICE  OF  PROCESS: 

foreign  corporation  to  designate  place  and  person   7 

upon  foreign  corporation 18,  19 

STOCK: 

issued  for  labor,  services  and  money  . 6 

increase  of,  in  pursuance  of  general  laws 6 

of  minor  or  insane  voted  at  meetings 12 

certificates,    issue    of 1 .....  .' 13 

transfer  of,  how  made  13 

when  owned  by  married  woman 14 

by  nonresidents 14 

sale  of,  for  failure  to  pay  assessments 15 

notice   of,    publication    15 

how  conducted  15 

corporation,  when  to  purchase 15 

action  for  recovery  of,  when  not  to  be  maintained 15 

proof  of,  by  affidavit 16 

fraudulent  subscriptions  to   21 

capital,  when  exempted  from  taxation   8 

articles  to  state  amount  of 9 

assessment  upon 14 

no  part  to  be  paid  to  stockholders 11 

increase  or  decrease  of,  proceedings  for  16 

certificate  of,  to  be  filed 17 

assent  of  three-fourths  of  stockholders 17 

STOCK  AND  TRANSFER  BOOK: 

contents  of    17 

STOCKHOLDERS: 

right  to  vote,  legislature  to  provide  for 6 

liability  of,  limited  by  constitution   7 

owners  of  shares  deemed   10 

by-laws  adopted  by   10 

directors,  removal  of   H 

meetings  of,  justice  of  the  peace,  when  to  call 12 

journals  of,  to  be  kept   -^ ' 

majority  of  stock  represented  at 12 

when  voidable   ^ 


34  INDEX  TO  IDAHO. 

STOCKHOLDERS  —  (Continued):  Page. 

meetings  of,  adjournment  of 12 

minor  or  insane  person  represented  12 

illegal,  ratification  of  12 

when  held  12 

how  called,  when  by-laws  do  not  provide 12 

change  of  place  of  business,  may  consent  to 12 

debts,  when  liable  for 13 

married  women,  rights  of,  as 14 

nonresident,  transfer  of  stock  by 14 

assessments  upon  stock  14 

notice  of   14 

effect  of  failure  to  pay 15 

notice  of  sale  of  stock 15 

increase  or  decrease  of  capital  stock,  consent  of 17 

extension  of  corporate  existence  18 

certificate  to  be  filed 18 

STRIKES: 

state  board  of  arbitration's  powers  as  to 25 

SUBSCRIBERS:  . 

unauthorized  use  of  names  as  21 

SUBSCRIPTIONS: 

to  capital  stock  fraudulent,  a  crime 21 

SUCCESSION: 

right   of    16 

SUE: 

and  be  sued,  right  of  corporation 16 

SUMMONS: 

against  a  corporation   22 

form  of 22 

service  of 22 

TAXES: 

legislature  may  impose,  on  corporations   5 

corporations  subject  to 5 

on   corporations   for  highways   8 

exemptions  of  capital  stock,  when  8 

TELEGRAPH  LINES: 

right  to  construct,  etc 7 

consolidation  of  corporations   7 

corporation,  articles  of  incorporation   9 

TBLEPHONH  LINES: 

right  to  construct,  etc 7 

TRANSFER: 

of  stock,  how  made  13 

when  owned  by  married  woman   14 

by   nonresidents    14 

TREASURER    (See  Officers): 

election  of   , 11 

TRUSTS: 

prohibited  by  constitution  7 

WAGON  ROADS:  j 

corporation,  articles  of  incorporation 9 

amount  subscribed  before  filing 10 


ILLINOIS. 


TABLE  OF  CONTENTS. 


CONSTITUTIONAL  PROVISIONS.  Page 

Art.    II.  Bill  of  rights  5 

IV.  Legislative  department   a 

IX.  Revenue _ 

XI.  Corporations    -, 

Separate  sections  o 

REVISED  STATUTES. 

Ch.  11.  Attachments  g 

In  courts  of  record   9 

32.  Corporations  g 

For  pecuniary  profit  10 

General  provisions 37 

Voluntary  dissolution   37 

Changing  name,  place  of  business,  etc 38 

Consolidation   40 

Acting  by  attorney  41 

Foreign  corporations  41 

Involuntary  dissolution 42 

38.  Criminal  Code  43 

Div.  1.  Crimes 43 

Conspiracy 43 

Embezzlement    43 

Forgery  and  counterfeiting   43 

Fraudulent  stock    43 

Trusts,  pools,  combines,  etc 44 

Trusts  and  conspiracy  against  trade 46 

i8.  Employment  -16 

Truck  system  47 

Weekly  payment  of  wages  -18 

Child  labor  49 

51.  Evidence  and  depositions  49 

74.  Interest    49 

77.  Judgments,  decrees  and  executions  50 

79.  Justices  and  constables  51 

Summons  51 

110.  Practice   51 

112.  Quo  wajranto 52 

120.  Revenue  53 

LEGISLATIVE  ACTS  OF  1897. 


ILLINOIS. 


COIs^STlTUTIOX  OF  ILLmOIS- 1870. 


PROVISIONS  RELATING  TO  CORPORATIONS. 


ARTICLE  II. 

Bill  of  Rights. 

Sec.  13.  Private    property   not   to   be   taken    with 
out   compensation. 
14.  Laws  Impairing    oblifffition   of    contracts, 
or  mailing  Irrevocable  grants  prohibited. 

ARTICLE  IV. 

Legislative  Department. 

Sec.  20.  Public   credit    not    to    be    loaned    to    cor 
porations. 

22.  Special  legislation  prohibited. 

23.  Indebtedness    of    corporations    not    to    be 

released. 

ARTICLE  IX. 

Revenue. 
Sec.  1.  Taxation  shall  be  uniform. 

ARTICLE  XI. 

Corporations. 

Sec.     1.  Organization    of   corporations. 

2.  Existing  charters. 

3.  Election  of  directors. 

4.  Construction   of   street   railroads. 

14.  Power  of  general  assembly  over  existing 

companies. 

15.  Freight  and  passenger  tariffs  regulated. 

Separate  Sections. 

1.  Municipalities    not    to     become     subscribers     to 

capital  stock. 

2.  State  credit  not  to  be  given  In  aid  of  railroads 

and  canals. 

ARTICLE  II. 

Bill  of  Rights. 
§  13.  Private  property  shall  not  be  taken 
or  damaged  for  public  use  without  just 
compensation.  Such  compensation,  when 
not  made  by  the  State,  bball  be  a.scertained 
by  a  jury,  as  shall  be  prescribed  by  law. 
The  fee  of  land  taken  for  railroad  tracks, 
without  consent  of  the  owners  thereof, 
shall  remain  in  such  owners,  subject  to  the 
use  for  which  it  is  taken. 

See  Const.,  art  XI,  §  14. 

[No  distinction  between  corporation  and  indi- 
viduals In  right  to  take  property.  Ry.  Co.  v. 
Lake,  71  111.  333;  Peterson  v.  I.  L.  &  L.  Co.,  6 
Brad.  2.57:  R.  R.  Co.  v.  Bloomlngton,  76  111.  447. 

Words  "  or  damaged  "  not  In  Constitution  of 
1848.     RIgney  v.    City,   102   III.   64. 

This  section  refers  solely  to  exercise  of  power 
of  eminent  domain  and  not  to  taxing  i)0wer. 
White  v.  People,  94  111.  604.  And  it  merely 
limits  power  of  eminent  domain,  which  is  at- 
tribute of  State.  Lake  Shore,  etc.,  Ry.  Co.  v. 
Chicago,  etc.,  R.  R.  Co.,  97  111.  506. 

Right  to  recover  compensation  for  private  prop- 


erty taken  or  damaged  for  public  use,  is  given  by 
Constitution  Independent  of  statute.  Eltrln  v. 
Eaton,   83   111.    535. 

Under  this  section,  apart  from  statute,  damage 
to  property  not  taken  cannot  be  recovered  where 
its  value  after  construction  of  work  Is  not  less 
than  before.  U.  R.  Co.  v.  Francis, -70  111.  238: 
Eberhart  v.   R.   R.   Co.,   id.   347. 

This  section  does  not  affect  owner's  duty  to 
fence,  under  statute.  R.  R.  Co.  v.  Pence.  68 
III.  524. 

Under  Constitution,  owner  whose  land  Is  taken 
for  public  use  must  be  paid  its  value  In  monev, 
without  any  deductions  for  benefits  to  his  remain- 
ing property,  any  statute  to  the  contrary  notwith- 
standing.    Carpenter  v.  Jennings,  77  III.  2.50. 

Expediency  or  necessity  of  exercise  of  right  of 
eminent  domain  is  a  political  question,  not  a  judi- 
cial one,  and  when  power  has  been  delegated  to 
a  corporation  equity  will  not  Interfere  with  Its 
exercise  on  ground  of  lack  of  necessity.  Chicago 
V.  Wright,  69  111.  318.  Courts  cannot  inquire  into 
the  necessity  or  propriety  of  exercise  of  the  right. 
R.  R.  Co.  V.  Lake,  71  III.  333;  L.  S.,  etc.,  Ry.  Co. 
r.  Chi.,  etc.,  R.  R.  Co.,  97  id.  506;  Smith  v.  Same, 
105  id.  511.  But  may  inquire  as  to  whether  the 
use  is  to  be  public  or  private.  Dunham  v.  Hyde 
Park,  75  111.  371. 

Railroad  not  limited  to  first  condemnation. 
Fisher  v.  R.  R.  Co.,  104  111.  323. 

Corporation  de  facto  may  exercise  power  of 
eminent  domain.  McAuley  v.  R.  R.  Co.,  83  III. 
348. 

Easement  acquired  by  this  right  Is  protected  as 
property  to  same  extent  as  any  other  property. 
R.  R.  Co.  V.  Village,  14  111.  App.  615. 

Property  and  franchise  of  corporation  may  be 
condemned  like  property  of  an  individual.  R.  R. 
Co.  V.  Lake,  71  111.  333;  Met.  R.  Co.  v.  Chi.,  etc., 
R.  Co.,  87  Id.  317;  St.  L.,  etc.,  Co.  v.  Springfield, 
etc.,  R.  Co.,  96  id.  274.  But  not  so  as  to  destroy 
value  of  franchise.  Cent.  R.  Co.  v.  F.  C.  R.  Co., 
81  111.  523. 

Injury  to  property  must  be  physical;  Injury  to 
market  value  cannot  be  shown.  R.  R.  Co.  v. 
Hall,  8  111.  App.  021;  Mo.ses  v.  R.  R.  Co.,  21  III. 
516;  Chicago  v.  Rumsey,  8  id.  348;  Transp.  Co.  v. 
Chicago,  99  U.   S.  635. 

Power  of  eminent  domain  Is  Inherent  In  the 
sovereign.  Johnson  v.  R.  R.  Co.,  23  111.  202;  and 
Is  derived  wholly  from  the  state.  U.  C.  R.  Co. 
V.  Chi.,  etc.,   R.   Co.,  87  Id.   317. 

Art.  2,  §  13,  cited.  Mitchell  v.  R.  R.  Co.,  68  III. 
286;  L.  S.,  etc.,  R.  Co.  v.  Chi.,  etc.,  R.  Co.,  100 
id.  21;  Bross  v.  R.   R.  Co.,  9  111.   App.  363. 

Mode  prescribed  by  law  for  exercise  of  right  of 
eminent  domain  must  be  strictly  pursued.  Iron 
Works  V.  Ry.  Co.,  141  111  491;  s.  c,  30  N.  E.  Rep. 
1050. 

Whether  power  of  eminent  domain  may  be  exer- 
cised Is  a  question  for  the  legislature.  R.  R.  Co. 
V.  Chicago,  141  111.  586;  s.  c,  30  N.  E.  Rep.  1044.] 

§  14.  No  ex  post  facto  law,  or  law  Im- 
pairing the  obligation  of  contracts,  or  mak- 
ing any  in-evtH-able  grant  of  special  privi- 
leges or  immunities,  shall  be  passed. 

Special  legislation  prohibited.  Art.  IV,  9  22. 
Set  cL.  32,   :  9. 


ILLINOIS. 


Loixislature;  revenues  —  Const.,  Art.  iv,  §§  20,  22.  23;  Art.  ix,  §  1. 


[Charter  of  private  corporation  Is  a  contract. 
Repeal  or  alteration  thereof  without  consent  of 
corporation  Is  prohibited.  Bruffett  v.  R.  R.  Co., 
25  111.  353;  Ruggles  v.  People,  91  id.  25G. 

Exemption  of  corporation  from  taxation  by  char- 
ter is  binding  on  State.  People  v.  Soldiers'  Home, 
95  111.  5G1;  R.  R.  Co.  v.  Goodwin,  94  id.  2G2. 

But  corporation  is  still  subject  to  statutes  passed 
In  exercise  of  police  power.  Ruggles  v.  People, 
supra;  R.  R.  Co.  v.  liaggerty,  07  111.  113.  Such 
laws  must,  however,  relate  to  the  health  and 
safety  of  the  communnity,  and  must  not  be  op- 
pressive.   R.   R.  Co.  V.  .Tacksonville,  G7   111.  37. 

As  to  whether  necessity  for  such  laws  is  a  poli- 
tical or  a  judicial  question.  Id.  Instances  of  its 
exercise.  R.  R.  Co.  v.  iMcClelland,  25  111.  140; 
Ry.  Co.  V.  Deacon,  63  Id.  91;  R.  R.  Co.  v.  Hag- 
gerty.  67  id.  113;  C.  A.  &  R.  Co.  v.  People,  id. 
11;  R.   R.   Co.  V.   People,  95  id.   313.] 

ARTICLE  IV. 

Legislative  Department. 

§  20.  The  State  shall  never  pay,  assume 
or  become  responsible  for  the  debts  or  lia- 
bilities of,  or  in  any  manner  give,  loan  or 
extend  its  credit  to  or  in  aid  of  any  pub- 
lic or  other  corporation,  association  or  in- 
dividual. 

See  Const.,   separate  sections.    §  2. 

[Under  Constitution  of  1848.  an  act  authorizing 
a  county  to  subscribe  to  stocli  of  a  railroad  com- 
pany was  held  not  to  lend  credit  of  the  State. 
County  V.  People,  58  III.  456.] 

§  22.  The  general  assembly  shall  not  pass 
local  or  special  laws  in  any  of  the  follow- 
ing enumerated  cases,  that  is  to  say:  for 
*    *    « 

Granting  to  any  corporation,  association 
or  individual  the  right  to  lay  down  railroad 
tracks,  or  amending  existing  charters  for 
such  purpose; 

Granting  to  any  corporation,  association 
or  Individual  any  special  or  exclusive  privi- 
lege, immuuitj'  or  franchise  whatever. 

See  art.  II,  §  14.  Construction  of  railroads.  Art. 
XI.   §  4. 

[By  this  section,  the  Constitution  has  reversed 
the  old  policy  of  granting  exclusive  privileges  to 
corporations  of  any  kind.  People  v.  Chi.  G.  T. 
Co..  i;W  111.  297:  s.  c,  22  N.  E.   Rep.  798. 

Statute  for  dissolution  of  insurance  companies, 
for  insolvency,  which  applies  to  all  insurance  com- 
panies, is  not  special  law  within  prohibition  of 
this  section.    Ins.  Co.  v.  Auditor,   101  111.  82. 

Legislature  has  no  power  to  exempt  certain  cor- 
porations from  the  effect  of  a  general  penal  law. 
Swigart  v.   People,  50  111.   App.  182. 

No  law  making  irrevocable  grants  of  special 
privileges  or  immunities  can  under  our  Constitu- 
tion be  passed.  Ry.  Co.  v.  Chicago,  62  111.  App. 
502.1 

§  23.  The  general  assembly  shall  have  no 
power  to  release  or  extinguish,  in  whole  or 
in  part,  the  indebtedness,  liability,  or  obli- 
gation of  any  corporation  or  individual  to 
this  State  or  to  any  municipal  coi-poration 
therein. 

Laws  Impairing  obligation  of  contracts  pro- 
hibited.    Const,  art.  II,   §   14. 

[Debts  incurred  by  a  corporation  cannot  be  re- 
leased or  transferred  by  act  of  legislature.  Bruf- 
fett  V.   R.   R.  Co.,  25  111.   353.] 


ARTICLE  IX. 
Revenue. 

Section  1.  The  general  assembly  shall  pro- 
vide such  revenue  as  may  be  needful  by  levy- 
ing a  tax,  by  valuation  so  that  every  person 
and  corporation  shall  pay  a  tax  in  propor- 
tion to  the  value  of  his,  lier  or  its  property — 
such  value  to  be  ascertained  by  some  per- 
son or  persons,  to  be  elected  or  appointed 
in  such  manner  as  the  general  assembly 
shall  direct,  and  not  otherwise;  but  the  gen- 
eral assembly  shall  have  power  to  tax  *  *  * 
toll  bridges,  ferries,  insurance,  telegraph  and 
express  interests  or  business,  *  *  *  and  per- 
sons or  corporations  owning  or  using  fran- 
chises and  privileges,  in  such  manner  as 
it  sliall  from  time  to  time  direct  by  gen- 
eral law,  uniform  as  to  the  class  upon  which 
it  opei'ates. 

See  ch.  120,  §  1,  and  cross-reference. 

[As  to  principles  governing  the  taxation  of  the 
tangible  property  and  capital  stock  of  corporations, 
see  Hotel  Co.  v.  Lieb,  83  111.  602. 

This  provision  is  violated  by  assessing  property 
of  railway  company  higher  than  other  property  in 
county  although  at  less  than  its  real  value. 
County  V.  R.  R.  Co.,  44  111.  229;  R.  R.  Co.  v. 
County,  id.  240. 

Power  of  State  board  of  equalization  to  make 
rules  for  assessment  of  capital  stock  of  corpora- 
tions is  not  unconstitutional.  Porter  v.  R.  R.  Co., 
76  111.  .561:  Gas  Co.  v.  Higby,  134  id.  562;  s.  c, 
25  N.   E.    Rep.   660. 

Railway  property  acquired  by  perpetual  lease  is 
taxable  as  property  of  company.  Huck  v.  R.  R. 
Co.,  86  III.   352. 

Assessment  of  railway  property  at  two-thirds 
of  actual  value,  and  other  property  at  one-tliird, 
invalid.  R.  R.  Co.  v.  Livingstone  Co.,  68  111.  458. 
Same  also  as  to  bank  stock.  Darling  v.  Gunn,  50 
111.   424. 

As  to  corporations,  above  section  only  requires 
that  law  under  which  they  are  taxed  shall  be 
general,  and  uniform  as  to  class  upon  which  it 
operates.    Porter  v.  R.  R.   Co.,  supra. 

Tax  on  foreign  insurance  companies,  not  imposed 
on  domestic  ones,  does  not  contravene  above  re- 
quirement. Hughes  V.  Cairo,  92  III.  339.  Nor  does 
a  provision  imposing  same  burdens  on  foreign  in- 
surance company  doing  business  in  Illinois  that 
are  imposed  on  Illinois  companies  doing  business 
in  foreign  State.    Ins.  Co.  v.  Swigert,  104  111.  653. 

Legislature  in  imposing  taxes  may  discriminate 
against  foreign  In  favor  of  domestic  corporation. 
Ducat  V.  Chicago,  48  111.  172.  And  may  prescribe 
different  rule  for  taxation  of  railway  companies 
from  that  of  taxation  of  individuals,  but  rule 
must  be  uniform  as  to  all  railway  companies. 
State   R.    R.    Tax   Cases,   92   U.    S.   575. 

Capita]  stock  may  be  taxed  against  the  corpora- 
tion instead  of  against  shareholders.  Glass  Co. 
v.   McCaleb,   81   111.   556. 

Constitution  requires  franchise  of  corporation  to 
be  taxed.  Id.;  Porter  v.  R.  R.  Co.,  supra;  R.  R. 
Co.  V.  Chicago,  90  111.  573. 

Assessment  and  taxation  of  capital  stock  of  cor- 
poration, and  also  of  its  tangible  property,  is  not 
double  taxation,  and  its  collection  will  not  be 
enjoined.  B.  &  T.  Co.  v.  Parks,  88  HI.  170; 
Hotel  V.  Lieb,  83  id.  602;  Mfg.  Co.  v.  Parks,  88 
Id.  463;  Porter  v.  R.  R.  Co.,  76  Id.  561;  Ins.  Co. 
V.  Pollak,  75  Id.  292;  Hopkins  v.  Taylor,  87  Id. 
436. 

Excess  of  capital  stock  over  tangible  property 
may  be  taxed  where  it  is  found,  by  board  of 
equalization,  to  exist.  R.  R.  Co.  v.  Siders,  88 
III.  320. 

Legislature  may  tax  capital  stock  of  gas  com- 
panies, while  it  "exempts  stock  of  purely  manu- 
facturing companies.  Williams  v.  Rees,  9  Biss. 
(U.  S.)  405. 

State  law  directing  taxation  of  shares  of  national 


ILLINOIS. 


Corporations  —  Const.,  Art,  xi,  §§  1-4,  14. 


bank  at  place  where  bank  is  located  is  not  un- 
coii.stltutional.  Tappan  v.  Bauk,  8G  U.  S.  (19 
Wall.)  490. 

Franchises  and  tangible  property  must  be  as- 
Bes.sed  against  corporation  not  against  share- 
holders.   Porter  v.  R.  R.  Co.,  supra. 

Imposing  on  railway  companies  expense  of  bury- 
ing persons  who  die  on  cars  is  unconstitutional, 
as  being  in  nature  of  special  tax.  R.  R.  Co.  v. 
Lackey,   77  111.   55,    semble. 

Legislature  may  tax  residents  of  this  State  on 
shares  of  stock  M-hich  they  own  in  corporations 
created  by  laws  of  other  States.  W.  U.  Tel.  Co. 
V.   Lleb,    76   111.    172. 

The  power  to  Impose  a  tax  on  the  capital  stock 
of  a  corporation  Is  not  confined  to  the  first  clause 
of  this  section  of  the  Constitution.  The  second 
clause  enumerates  some  corporations,  and  is  not 
confined  to  occupations  merely.  It  applies  to  ele- 
ments of  property  and  of  property  rights  and 
values.  Gas  Co.  v.  Hlgby,  134  111.  564;  s.  c,  25 
N.   E.  Rei).  660. 

The  rule  of  uniformity  applies  to  the  class  —  not 
to  all  corporations  alike.  Id.  562;  Coal  R.  C.  Co. 
V.  Flnlen,  124  111.  668;  s.  c,  17  N.  E.  Rep.  11. 
R.  R.  Co.  V.  Donahue,  127  111.  29;  s.  c,  18  N.  E. 
Rep.   827. 

Constitution  does  not  prohibit  legislature  from 
placing  speclfled  corporations  in  one  class  and 
certain  others  in  another  class,  to  be  assessed  by 
different    methods.    Gas    Co.    v.    Hlgby,    supra.] 

AKTICLE  XI. 
Corporations. 
Section  1.  No  corporation  sliall  be  created 
by  special  laws,  or  its  charter  extended, 
changed  or  amended,  except  tliose  for  char- 
itable, educational,  penal  or  reformatory 
piu'posos,  which  are  to  be  and  remain  under 
the  patronage  and  control  of  the  State,  but 
the  general  assembly  shall  provide,  by  gen- 
eral laws,  for  the  organization  of  all  cor- 
porations  hereafter  to   be   created. 

See  Const.,  art.  IV,  §  22.  What  corporations 
may  be  formed.  Ch.  32,  §  1.  Legislative  powers 
reserved.    Ch.  32,   §  9. 

[Private  corporations  are  subject  to  legislative 
control.  Ward  v.  Farwell,  97  111.  593;  People  v. 
Nelson,  133  id.  579;  s.  c.  27  N.  E.  Rep.  217.  And 
subject  to  the  police  power.  Assn.  v.  R.  R.  Co., 
121  111.  203;   s.   c,   12  N.   E.   Rep.  536. 

The  acceptance  of  an  amendment  to  the  charter, 
under  any  general  law,  makes  it  subject  to  the 
power  of  the  legislature.  Gulliver  v.  Roelle,  100 
111.  141. 

The  new  Constitution  does  not  repeal  the  statute 
relating  to  corporations.  Meeker  v.  Steel  Co.,  84 
111.  276. 

The  legislation  of  a  State  bordering  on  this  can- 
not have  the  least  effect  in  creating  a  corporation 
in   this   State.    Bridge  Co.   v.    County,   88   111.   615. 

What  necessary  to  create  a  corporation  under 
a  general  law.    Blgelow  v.  Gregory,  73  111.  197. 

This  section  has  reversed  the  old  policy  of  grant- 
ing exclusive  privileges  to  corporations  of  any 
kind.  People  v.  Chicago  G.  T.  Co.,  130  111.  297: 
s.   c.   22  N.   E.   Rep.   798. 

The  manifest  intention  of  this  section  Is  to  re- 
quire not  only  the  creation  of  corporations,  but 
amendments  to  charters  of  those  existing,  to  be 
made  by  general  laws.  Special  acts,  applying  to 
particular  corporations  only,  fall  under  prohibi- 
tion of  this  section.  Coal  Co.  v.  People.  147  111. 
66;  s.  c,  .35  N.  E.  Rep.  62.  Act  restricting  right 
of  corporation  to  contract  is  necessarily  such  an 
amendment.    Id. 

Legislature  has  same  power  to  validate  Irregu- 
larlv  organized  corporations  as  It  has  to  create  a 
new  one.    Mitchell  v.  Deeds,  49  111.  416. 

Reservation  In  charter  that  it  may  be  altered 
or  repealed  by  legislature,  undoubtedly  gives  legis- 
lature power  to  change  It.  Butler  v.  Walker,  80 
111.  345. 


A  statute  requiring  passenger  trains  to  stop  at 
county  seats  Is  valid.  R.  R.  Co.  v.  People,  105 
111.  657.] 

§  2.  All  existing  charters  or  grants  of 
special  or  exclusive  privileges,  under  which 
organization  shall  not  have  taken  place,  or 
which  shall  not  have  been  in  operation 
within  ten  days  from  the  time  this  Consti- 
tution takes  effect,  shall  thereafter  have  no 
validity  or  effect  whatever. 

Quo  warranto  on  forfeiture.    Ch.   112,  §  1. 

[An  organization  followed  by  public  grants  of 
rights  and  the  acceptance  thereof  prior  to  the 
Constitution  of  1870,  and  the  performance  of  other 
corporate  acts  is  not  abrogated  by  the  above 
section.    M'Cartney  v.  R.  R.  Co.,  112  111.  624. 

Above  section  cited.  Ry.  Co.  v.  Rv.  Co.,  105  111. 
110;  Anthony  v.  Bank,  93  Id.  225;  People  v. 
Loewenthal,    id.    191.] 

§  3.  The  general  assembly  shall  provide, 
by  law,  that  in  all  elections  for  directors 
or  managers  of  incorporated  companies, 
every  stockholder  shall  have  tlie  riglit  to 
vote,  in  pei-son  or  by  proxy,  for  the  number 
of  shares  of  stock  owned  by  him,  for  as 
many  persons  as  there  are  directors  or  mau- 
ag«i"s  to  be  elected,  or  to  cumulate  said 
shares,  and  give  one  candidate  as  many 
votes  as  the  number  of  directors  multiplied 
by  the  number  of  his  shares  of  stock  shall 
equal,  or  to  distribute  them  on  the  same 
principle  among  as  many  candidates  as  he 
shall  think  fit;  and  such  directors  or  man- 
agers shall  not  be  elected  in  any  other 
manner. 

See  ch.  32,  §  3. 

§  4.  No  law  shall  be  passed  by  the  gen- 
eral assembly  granting  the  right  to  con- 
struct and  operate  a  street  railroad  within 
any  city,  town  or  incorporated  village, 
without  requiring  the  consent  of  the  local 
authorities  having  the  control  of  the  street 
or  highway  proposed  to  be  occupied  by  such 
street  railroad. 

Location  of  street  railroad.  Ch.  32,  §  28.  Special 
legislation    prohibited.    Art.    IV,    §    22. 

§  14.  The  exercise  of  ihe  ix)wer,  and  the 
right  of  eminent  domain,  shall  never  be  so 
construed  or  abridged  as  to  prevent  the  tak- 
ing, by  the  general  assembly,  of  the  prop- 
erty and  franchises  of  incorporated  com- 
panies already  organized,  and  subjecting 
them  to  tlie  public  necessity  the  same  as  of 
individuals.  Tlie  right  of  trial  by  jury  shall 
be  held  inviolate  in  all  trials  of  claims  for 
compensation,  when,  in  the  exercise  of  the 
said  right  of  eminent  domain,  any  incor- 
porated company  shall  be  interested  either 
for  or  against  the  exercise  of  said  right. 

See  Const.,  art.  II,   §  13,  and  note. 

[Statutory  sanction  to  justify  an  injury  by  a 
corporation  to  private  property  without  compen- 
sation or  the  owner's  consent  must  be  express  or 
given  bv  clear  and  unmistakable  implication. 
Snell  v.  Buresh,  123  III.  155;  s.  c,  13  N.  E.  Rep. 
856. 


8 


ILLINOIS. 


Corporations  —  Const.,  Art.  xi,  §  15,  (1),  (2). 


A  corporation  has  no  power  to  sell  or  transfer  Its 
franchise  or  any  property,  essential  to  Its  exercise, 
which  It  acquired  by  condemnation.  Fletsam  v. 
Hnv,  122  111.  204;  s.  c,  13  N.  B.   Rep.  501. 

Leg-islature  can  authorize  taking  of  property,  al- 
ready applied  to  one  public  use,  In  hands  of  one 
person  and  giving  It  to  another,  only  for  dif- 
ferent public  benefit.  Lake  Shore,  etc.,  v.  Chicago, 
etc.,    Co.,    97   111.    506;    100   Id.    21.] 

§  15.  The  general  assembly  shall  pass  laws 
to  correct  abuses  and  prevent  unjust  dis- 
crimination and  extortion  in  the  rates  of 
freight  and  passenger  tariffs  on  the  differ- 
ent railroads  in  this  State,  and  enforce  sucli 
laws  by  adequate  penalties,  to  the  extent, 
if  necessary  for  that  purpose,  of  forfeiture 
of  their  property  and  franchises. 

Laws  impairing  obligations  of  contracts  pro- 
hibited.   Art   II,  §  14. 

[Above  section  applies  only  to  unjust  discrimina- 
tion. C.  &  A.  R.  Co.  V.  People,  67  111.  11.  Statute 
working  a  forfeiture  of  franchise  on  first  convic- 
tion  for  violation,   unconstitutional.    Id.] 

Separate  Sections. 
(1)  No  county,  city,  town,  township  or 
other  municipality,  shall  ever  become  sub- 
scriber to  the  capital  stock  of  any  railroad 
or  private  corporation,  or  make  donation  to 
or  loan  its  credit  in  aid  of  such  corpora- 
tion: Provided,  however,  That  the  adoption 
of  this  article  shall  not  be  construed  as  af- 
fecting the  right  of  any  such  municipality 
to  make  such  subscriptions  where  the  same 
have  been  authorized,  under  existing  laws, 
by  a  vote  of  the  people  of  such  municipali- 
ties prior  to  such  adoption. 

See  art.  IV,  §  20. 

[Section  applied.    Maxcy  v.  County,  72  111.  207. 


Article  of  Constitution  of  1870,  prohibiting  munic- 
ipal aid  to  corporations,  rendered  inoperative  all 
prior  laws  authorizing  the  voting  of  aid  to  cor- 
porations.   "Wade  v.  LaMoille,  112  111.  79. 

Above  section  took  effect  July  2,  1870,  and  such 
subscriptions  not  voted  prior  thereto  are  void. 
Wright  v.  Bishop,  88  111.  302;  Concord  v.  Bank, 
02  U.  S.  625;  County  v.  Bank,  id.  631;  County  v. 
Post,  93  Id.  502;  Fairfield  v.  County,  100  id.  47; 
Walnut  V.  Wade,  103  id.  683;  Louisville  v.  Bank, 
104  id.  460;  Walnut  v.  Wade,  105  Id.  1. 

Since  above  section  went  Into  effect,  municipal 
bonds  in  aid  of  railroad  corporations  are  prima 
facie  invalid,  putting  burden  of  proof  on  party 
who  affirms  their  validity.  Prairie  v.  Lloyd,  97 
111.  170. 

Municipal  subscriptions  authorized  by  popular 
vote  prior  to  adoption  of  Constitution,  is  invalid, 
by  above  section,  unless  such  vote  was  taken  in 
pursuance  of  a  law  existing  at  time  of  such  vote. 
R.   R.   Co.  V.  Morris,  84  111.  410. 

Where  vote  taken  and  subscription  made  prior 
to  adoption  of  above  section,  the  former  Constitu- 
tion governs,  though  bonds  were  not  issued  until 
afterward.     Decker  v.   Hughes,  68  111.   33. 

A  State  Constitution  cannot  Impair  obligation  of 
prior  contract.    County  v.   Bank,   92  LT.    S.   631. 

Bonds  issued  after  above  section  took  effect,  in 
pursuance  of  contract  made  and  partly  performed 
before  It  took  effect,  are  valid.  County  v.  Society, 
104  U.  S.  570. 

"  Under  existing  laws  "  relates  to  time  of  adop- 
tion of  Constitution  and  not  to  time  when  vote  of 
the  people  was  taken.  Jonesboro  v.  R.  R.  Co., 
110  U.  S.  192;  4  Sup.  Ct.  Rep.   67.] 


Canal. 
(2)  *  *  *  The  general  assembly  shall 
never  loan  the  credit  of  the  State,  or  make 
appropriations  from  the  treasury  thereof, 
in  aid  of  railroads  or  canals:  Provided,  That 
any  surplus  earnings  of  any  canal  may  be 
appropriated  for  its  enlargement  or  ex- 
tension. 


See  art.  IV,  §  20. 


ILLINOIS. 

Attachinout;   corporations  —  R.   S.,    §    1. 


EEYISED  STATUTES  OF  ILLINOIS- 1895. 


CHAPTER  XI. 

Attachments. 
Sec.  1.  Grounds   of  attachment. 

In.  Courts  of  Record. 

AN  ACT  iu  regard  to  attachments  in  courts 
of  record.  [Approved  December  23,  1871; 
in  force  July  1,  1872.] 

Section  1.  Be  it  enacted  by  the  People  of 
the  State  of  Illinois,  represented  in  the 
general  assembly,  That  in  any  court  of 
record  having  competent  jurisdiction,  a 
creditor  may  have  an  attachment  against 
the  property  of  his  debtor,  or  that  any  one 
or  more  of  several  debtors,  -when  the  in- 
debtedness exceeds  $20,  in  any  one  of  the 
following  cases: 

First.  Where  the  debtor  is  not  a  resident 
of  this  State. 

Execution.    Ch.  77,  §§  52  et  seq. 

[Shares  of  stock  of  a  corporation,  which  are 
liable  to  be  taken  on  execution,  are  subject  to 
be  taken  also  on  attachment.  Thompson  v.  Wells, 
57  111.    App.   436. 

Foreign  corporation  liable  to  attachment.  R.  R. 
Co.  V.   Keep,  2'2.  111.   9. 

It  is  no  defense  that  both  parties  are  non-resi- 
dents.   Glvens  v.   Bank,   84  111.   442.] 

CHAPTER  XXXII. 

Corporations. 
For  Pecuniary  Profit. 

Sec.  1.  Formed  for  all  lawful  purposes,  except,  etc. 

2.  License,   how  obtained. 

3.  Meeting  to  organize. 

4.  Organization    completed. 

6.  Powers  —  restrictions  as  to  real  estate. 

6.  Directors  —  officers  —  by-laws. 

7.  Stock — installments  —  compelling  payment. 

8.  Transfer  of  stock  —  liability  of  stockholder. 

9.  Legislative  powers  reserved. 

10.  Continuance  after  expiration   of  charter. 

11.  Rights   after   expiration    of   charter. 

12.  Remedies  not  affected  by  dissolution. 

13.  Books   of    account  —  inspection    of. 

14.  Failure   to   elect   officers   not   to   dissolve. 
1.5.  Assessments,   etc. 

16.  When  directors  and  officers  liable  for  debts. 

17.  Annual  statonicnt  of  real  estate. 

18.  Assuming  corporate   powers    without   com- 

plving  with  this  act. 

19.  Dividends  of  insolvent  company  —  liability. 

20.  Meeting   of  officers. 

21.  False    reports,    etc.  —  liability. 

23 


Sec. 22.  Stockholders'  meetings. 

23.  Executors,    etc.  —  liability. 

24.  Executor,   etc.,   may    vote. 

25.  Suits     in     equity     against     stockholders  — 

powers  of  courts  of  equity. 

26.  Foreign  corporations  —  real  estate. 

27.  Certified    copy    of   charter  —  evidence. 

28.  Location    of   street   railroads  —  consent. 
28  1-2.  Reincorporation. 

General  Provisions. 

Sec.  48.  Prior   acts    repealed    as    to    future    organi- 
zation. 
49.  Repeal  —  saving. 

Voluntary  Dissolution  of  Corporations. 

Sec.  49a.  Dissolution  —  vote  of  stockholders. 
49b.  Meeting  of  stockholders  —  notice. 
49c.  Meetings  —  how  conducted. 
49d.  Meeting    of    stockholders  — dissolution — 
record    to    be    filed  —  notice    of    dis- 
solution. 
49e.  When  deemed  dissolved— corporate  name. 

Changing  Name  and  Place  of  Business; 
Increasing  and  Decreasing  Capital  Stock 
and  Number  of  Directors  —  Consolida- 
tion. 

Sec.  50.  Meeting  of  stockholders  —  restrictions. 

51.  Notice  of  meeting  to    stockholders    and 

others.' 

52.  Manner  of  voting  —  two-thirds  necessary. 

53.  Certificates  of  votes  filed,  change  accom- 

plished, etc. 

54.  Notice  of  change  to  be   published. 

55.  Provisions  extended  to  corporations  other 

than  stock. 

56.  Rights    reserved. 

57.  Consolidation     of     railroad     companies  — 

notice. 

58.  Emergency. 

Amendatory  Act  of  1877. 

Sec.  59.  Meetings     of     stockholders     to     change 
number  of  directors  of,  in  certain  cases. 

60.  How    special    meetings    for   that   purpose 

may  he  called. 

61.  ^fanner   of    voting  —  proxies. 

62.  If  a  change  voted,  certificate  to  be  filed  — 

effect. 

63.  Repeal. 

64.  Emergency. 

Consolidation. 

Sec.  65.  Consolidated  company  liable  for  debts  of 
original  companies. 

Corporations  Acting  by  Attorneys. 

Sec.  66.  What  agents  appointed  by  letters  of  at- 
torney may   do. 


10 


ILLINOIS. 


Corporations,  formation  —  R.  S.,  ch,  xxxii,   §§  1.  2. 


Loans  on  Ileal  Estate  by  Foreign  Corpora- 
tion. 

Sec.  G7.  Foreign  corporations  may  loan  money  in 
this  State  on  same  terms,  etc.,  as  do- 
mestic —  may  also  buy  in  real  estate  — 
when  same   is  to  be  sold. 


Manufacturing,  etc.,  Compnnies  May  Hold 
Stock  of  Railroad  Companies. 

Sec.  148.  May  purchase  and  hold  stock  of  railroad 
—  when. 


Corporations  —  Dissolution  of. 

Sec.  149.  Dissolution  of  —  proceedings  for. 

150.  Proceedings  —  how   commenced. 

151.  Prooeodings  —  notice. 

152.  Attorney-general  —  atfidavlt. 

153.  Practice  —  chancery. 

154.  Separate    docket. 

155.  Upon    the   hearing — resolution. 

156.  Costs. 


AN    ACT    concerning    corporations.       [Ap- 
proved April  18,  1872;  in  force  July  1,  1872] 

For  Pecuniary  Profit. 

Section  1.  Be  it  enacted  by  the  People  of  the 
State  of  Illinois,  represented  in  the  general 
assembly:  That  corporations  may  be  formed 
in  tlie  manner  provided  by  this  act  for  any 
lawful  purpose  except  banking,  insurance, 
real  estate  brokerage,  the  operation  oC  rail- 
roads and  the  business  of  loaning  mone.v  : 
Provided,  That  horse  and  dummy  railroads, 
and  organizations  for  the  purchase  and  sale 
of  real  estate  for  burial  purposes  only,  may 
be  organized  and  conducted  under  tlie  pro- 
visions of  this  act:  And  provided  further. 
That  corporations  formed  for  the  purpose  of 
constructing  railroad  bridges  shall  not  be 
held  to  be  railroad  corporations.  (As 
amended  April  19,  1879;  in  force  July  1, 
1879.) 

■| 
Consolidation.     §   Go.     See   p.    40.      lools,    trusts 

and  comliine.s  prohibited.     Ch.  38,  §§  2G9a  et  seq. 

Corporation  not  to  be  created   by   special  laws. 

Const.,   art.  XI,   §  1.    Assuming  corporate  powers 

without  complying  with  this  act.    §  18,  post. 

[General  law  does  not  apply  to  corporations  un- 
der special  cliarter.  Wincock  v.  Turpin,  96  111. 
135. 

A  corporation  for  pecuniary  profit  is  one 
organized  for  (ho  pecuniary  profit  of  its  stock- 
holders or  members.  Fem.  Acad.  v.  Sullivan,  116 
111.  .^S0:  p.  c,  6  X.   E.   Rep.   183. 

A  franchise  is  the  right  or  privilege  of  being  a 
corporation  and  of  doing  such  things  only  as  are 
authorized  by  charter.  Fietsam  v.  Hay,  122  111. 
294;  s.  c,  13  X.  K.  Rep.  501:  People  v.  O'Hnir, 
128  111.  22:  s.  c,  21  X.  E.  Rep.  211;  Bushnell  v.  Ice 
M.  Co.,  37  111.  App.  133.  And  is  vested  in  the 
corporators,  not  in  the  corporation.  Id.  All  cor- 
porations accept  their  franchise  subject  to  regula- 
tion under  the  police  power.  Cone.  C.  Assn.  v. 
R.  R.  Co..  121  111.  203;  s.  c.  12  X.  E.  Rep.  .536. 
And  are  the  creatures  of  legislative  power.  Peo- 
ple V.  Xelson.  i:!3  111.  579;  s.  c.  27  X.  E.  Rep.  217. 

It  follows  that  tlie  determination  as  to  what 
shall  be  their  constitution,  objects  and  powers  is 


wholly  within  the  legislative  discretion,  absolutely, 
except  in  so  far  as  the  Constitution  limits  the 
exorcise  of  that   discretion.    Id. 

If  the  general  .scheme  is  one  which  is  calculated 
to  promote  the  object  for  which  a  corporation  is 
created  and  if  the  subsidiary  provisions  of  the 
act  creating  it  are  calculated  to  promote  and  fur- 
ther the  general  scheme,  the  provisions  of  the 
act  cannot  be  foreign  to  the  general  subject  em- 
braced in  tbi>  title.    Id. 

The  charter  of  a  corporation  formed  under 
general  incorporation  act  consists  of  its  articles 
of  association  taken  in  connection  with  the  law 
under  which  the  companv  is  organized.  People 
V.  Chicago  T.  Co.,  VM  III.  285;  s.  c,  22  N.  E. 
Rep.   708. 

The  provisions  of  the  law  enter  into  and  form 
a  part  of  the  charter.    Id. 

The  word  "  unlawful,"  as  applied  to  the  pur- 
poses and  acts  of  a  corporation,  is  not  used  ex- 
clusively in  the  sense  of  malum  in  se  or  malum 
prohibitum.    Id. 

This  word  is  also  used  to  designate  powers  which 
corporations  are  not  authorized  to  exercise,  con- 
tracts they  are  not  empowered  to  make  or  acts 
which  they  may  not  do.  In  other  words,  acts, 
contracts   and   powers   ultra   vires.    Id. 

An  agreement  to  form  a  corporation  is  such  a 
joint  undertaking  as  that  each  would  be  liable 
for  expenses.     (Jriffen  v.   Cooper.  50  111.   App.  258. 

If  contracts  and  grants  the  tendency  of  which 
is  to  create  monopolies,  are  void  at  common  law, 
then  where  a  corporation  is  formed  under  a  general 
law,  a  provision  in  its  declaration  of  corporate 
purposes,  the  necessary  eft'ect  of  which  is  to  create 
a  monopoly,   is  also  void.    Id. 

Words  of  permission  in  the  charter  of  a  corpora- 
tion, if  tending  to  promote  the  public  benefit,  are 
obligatory.  In  such  case  a  provision  that  a  cor- 
poration "  may  enjoy  "  the  same  privileges  as 
those  awarded  under  the  general  law,  is  to  be 
construed  to  mean  "  shall  enjov  "  such  privileges. 
Snell  V.  Chicago,  133  111.  437;  s.  c,  24  X.  E.  Rep. 
532. 

A  corporation  is  itself  a  franchise  belonging  to 
its  members.  The  corporation  being  a  franchise 
it  may  hold  other  franchises,  as  rights  and  fran- 
chises of  the  corporators.    Id. 

Such  franchise  is,  in  its  nature,  incommunicable 
by  act  of  the  parties,  and  incapable  of  i)assing 
by  assignment.  Id.  And  cannot  descend  to  heirs. 
Id. 

A  franchise  is  a  particular  privilege  conferred  by 
grant  from  a  sovereign  or  government  and  vested 
in  individuals  or  a  corporation.  Chicago  M.  G. 
L.  Co.  V  Lake,  130  111.  .53;  s.  c.  22  X.  E.   Rep.  616. 

The  franchises  of  a  corporation  organized  under 
the  general  incorporation  law  are  to  be  ascer- 
tained from  the  objects  of  its  incorporation,  as 
stated  in  the  articles.    Id. 

A  purchaser  of  a  franchise  is  not  by  his  purchase 
constituted  a  corporation,  but  is  merely  vested 
with  the  right  to  organize  a  corporation.  Snell 
V.  Chicago,   133  III.  430;  s.  c,  24  X.  E.  Rep.  532. 

A  drainage  district  in  a  city  or  village  is  not 
a  private  corporation.  Springer  v.  Walters,  139 
111.  419;  s.  c,  28  N.  E.  Rep.  761.] 

§  2.  "Whenever  any  number  of  persons,  not 
less  tlian  three  nor  more  tliau  seven,  sliall 
pi'opose  to  form  a  corporation  under  tliis 
act,  they  shall  make  a  statement  to  that 
effect  under  their  hands,  and  duly  acknowl- 
edged before  some  otlicor  in  tlie  manner  pro- 
vided for  tlie  acknowledgment  of  deeds,  set- 
ting fortli  tlie  name  of  the  proposed  cor- 
poration, the  object  for  which  it  is  to  be 
formed,  its  capital  stock,  the  number  of 
shares  of  Mdiich  such  stock  shall  consist, 
the  location  of  the  principal  office,  and  the 
duration  of  the  corporation,  not  exceeding, 
however,  ninety-nine  years;  \\  hich  statement 
shall  l)e  lih'd  in  the  office  of  the  secretary 
of  State.    1"he  secretary  of  State  shall  there- 


ILLIis^OIS. 


11 


License;  corporate  name  — R.  S.,  ch.  xxxii,  §  2. 


upon  issue  to  such  persons  a  license  as 
commissioners  to  open  books  for  subscrip- 
tion to  tlie  capital  stoclv  of  said  corpora- 
tion, at  such  times  and  places  as  they  may 
determine;  but  no  license  shall  be  issued 
to  two  companies  havinj,'  the  same  name: 
Provided.  That  no  con^oration  shall  be  or- 
ganized luider  this  act  unless  the  persons 
named  as  incorporators  shall,  at  the  time 
of  filing  said  statement,  pay  to  the  seci-e- 
tary  of  State  the  sum  of  twenty-five  dollars 
('?25.0(M,  which  fee  shall  be  in  full,  and  iu 
lieu  of  all  other  fees  for  issuiuir  iucorpura- 
tion  articles.  (As  amended  by  act  approved 
June  17.  1803.) 

Assuming  corporate  powers  -without  authority. 
§  18,  post  Certified  copy  of  charter  evidence. 
§  27,  post.  Change  of  name,  increase  of  capital 
steels,  etc.  §  50  et  seq.,  post.  Voluntarj-  surrender 
of  charter.  §  49b,  post.  Proceedings  in  quo  war- 
ranto. Ch.  112,  §  1  et  seq.  Consolidation  of  fran- 
chise. §  Go,  post.  Corporation  continued  after 
expiration  of  charter.  §  10,  post.  Reincorporation. 
§  28  1-2,  post.  Assuming  corporate  name.  Ch.  38, 
§  220. 

[Certificate  of  president  of  corporation,  showing 
a  change  in  its  name,  etc.,  is  sufficient  under  the 
statute.    Anthony  v.   Bank,  93  111.   225. 

The  legality  of  a  corporation  cannot  be  at- 
tacked collaterally.  Rice  v.  R.  R.  Co.,  21  111.  93; 
Goodrich  v.  Reynolds  et  al.,  31  id.  490;  Thompson 
V.  Candor.  GO  id.  244;  R.  R.  Co.  v.  R.  R.  Co.,  75 
id.  113;  McCarthy  v.  Lavasche,  89  id.  270;  Osborn 
v.  I'eople.  103  id.  224;  Meeker  v.  Steel  Co.,  84 
id.  27G;  Gas  Co.  v.  Kerber,  5  111.  App.  132;  'Ward 
V.  Fiirweli.  97  111.  593;  Atty.-Gen.  v.  R.  R.  Co., 
112  id.  537;  Keigwin  v.  Conns..  115  id.  351;  s.  c, 
5  N.  E.  Reji.  575;  Lees  v.  Comrs.,  125  111.  40;  s.  c 
16  N.  K.  Rep.  015;  People  v.  Trustees,  111  111. 
173;  I'.rown  v.  Rv.  Co..  125  111.  GUU;  s.  c.  18  N. 
E.  Rep.  283;  Wingett  v.  Build.  Assn.,  128  111.  84; 
s.  c.  21  X.  E.  Rep.  12;  Bailev  v.  Bk.,  127  111.  340; 
s.  c.  19  X.  E.  Rep.  G95;  Fey  v.  Watch  Co.,  32 
111.  App.  631;  Bushnell  v.  Machine  Co..  138  III. 
67;  s.  c,  27  X.  E.  Rep.  596;  Curtis  v.  Tracy,  62 
111.  App.   40. 

And  this  is  likewise  true  as  to  a  foreign  corpora- 
tion.   Hudson    V.    G.    H.    Semin.,    113    111.    62G. 

But  subscriber  to  stock  being  sued  for  subscrip- 
tion may  require  strict  proof  that  corporation 
suing  is  such  de  jure.  Id.;  but  see  Fey  v.  Watch 
Co.,    supra. 

AVhen  a  company  incorporated  under  the  general 
law  omits  to  file  the  certificate  of  incorporation, 
yet  as  to  third  persons  it  is  a  corporation. 
Baker  v.  Backus,  32  111.  79;  Ice  Co.  v.  Backus, 
id.   lie. 

An  error  in  filing  a  certified  copy  of  articles  of 
association  with  the  proper  dei)ository,  instead 
of  a  duplicate,  followed  by  an  exercise  of  corporate 
functions;  there  is  a  corporation  de  facto.  Hud- 
son V.  G.  H.  Semin.,  supra. 

In  several  cases  expressions  have  been  used  lead- 
ing to  an  inference  that  quo  warranto  is  the  only 
mode  of  testing  the  legality  of  the  formation  of 
an  existing  de  facto  corporation.  The  cases  do 
not  so  decide  and  the  question  did  not  arise  in 
them.  Comrs.  v.  Griffin,  134  111.  342;  s.  c,  25  N. 
E.    Rep.   995. 

Where  an  appeal  from  a  justice  is  fallen  by  a 
party  as  a  corporation  its  appeal  bond  sufficiently; 
proves  its  corporate  existence.  L.  Gerl.  Co.  vT 
Labadie,   41   III.   App.   283. 

Under  the  Practice  Act  (§  28)  a  detendant  may 
plead  iiou  assumpsit  and  nul  tiel  corporation. 
When  the  latter  plea  is  interposed  the  burden  of 
proving  corporate  existence  is  cast  on  the  plain- 
tiff corporation.  Bailev  v.  Bk..  127  111.  340;  s.  c, 
19  X.    E.   Rep.   695. 


Where  partners  attempt  to  organize  a  corpora- 
tion but  fail  to  comply  with  the  law,  they  may 
be  held  liable  as  partners.  This  liability  rests  on 
estoppel,  but  a  creditor  who  has  dealt  with  the 
corporation  as  such  is  also  estopped  to  deny  Its 
corporate  existence.  Bushnell  v.  Machine  Co.,  138 
111.  67;  s.  c,  27  X.  E.  Ren.  596.  What  constitutes 
a  corporation  de  facto.    Id. 

In  case  of  a  question  of  the  duration  of  a 
private  corporation,  license,  and  not  the  prelimi- 
nary  agreement  of   corporators,    will    control.     Id. 

The  State  alone  can  complain  of  the  exercise  of 
corporate  franchise  beyond  the  period  for  which 
corporation   was  org-anized.    Id. 

The  law  confers  no  power  on  secretary  of  State 
to  revoke  the  lieen.se  to  organize  a  corporation, 
except  for  failure  to  complete  organization  within 
two  years.  Watch  Case  Co.  v.  Pearson,  140  111. 
423;  s.  c,  31  X.   E.   Rep.  400. 

Articles  of  association  certified  l)y  secretary  of 
State  are  prima  facie  proof  that  stock  has  already 
been  subscribed.  Wh.'ther  failure  to  have  stock 
fully  subscribetl  would  invalidate  organization, 
query.    Jewell    v.    I'aper    Co.,    101    111.    57. 

To  create  a  de  facto  corporation  lliere  must  be 
a  law  under  which  such  corporation  might  be  law- 
fully created,  together  with  a  user  under  such  law. 
Trust  Co.  V.  Minnesota  Co.,  157  111.  641;  s.  c,  42 
X.    E.   Rep.  1.".3. 

Mere  fact  that  corporations  of  dilTerent  States 
attempt  to  consolidate  under  a  law  authorizing 
consolidation  and  assume  to  act  as  a  consolida- 
ted corporation,  even  in  belief  that  they  were 
legally  incorporated,  will  not  constitute  "them  a 
corporation   de   facto.     Id. 

What  amounts  to  a  consolidation  of  corporations. 
Ry.  Co.  V.  Ashling,  160  III.  ;i73;  s.  c,  43  N.  E. 
Rep.  357.  The  general  rule  that'  consolidation 
works  dissolution  of  original  companies  is  subject 
to  exceptions.     Id. 

A  corporation  which  has  completed  its  organiza- 
tion, except  tlie  filing  of  its  final  certificate  of 
organization  for  record  in  the  county  where  its 
principal  office  is  located,  is  a  corporation  de  facto, 
and  its  stockholders  are  estopped  to  deny  its  ex- 
istence as  a  corporation.  Curtis  v.  Tracy,  62  111. 
App.  49.] 

XCorpornte  name.  The  use  of  a  particular 
name  b.v  a  corporation  will  not  be  Onjoined  unless 
it  be  shown  that  the  proposed  use  will  likely  re- 
sult in  injury  to  complainant.  Drum.  Tob.  Co.  v. 
Randle.    114   111.   434;   s.   c,   2  X.   E.    Rep.   536. 

There  is  no  provision  in  the  statute,  for  the  in- 
corporation of  companies  for  pecuniary  profit,  au- 
thorizing the  secretary  of  State  to"  reject  the 
proposed  name  and  substitute  another.    Id. 

A  corporation  of  Illinois  cannot  enjoin  the  forma- 
tion of  a  new  corporation  in  this  State,  under  a 
siinilar  name,  to  prevent  any  injury  to  the  trade 
of  a   foreign   corporation   in  this   State.     Id. 

A  domestic  corporation,  incorporating,  by  Its 
members,  in  a  sister  State,  keeping  up  its  organi- 
zation here  only  to  prevent  others  from  transact- 
ing the  same  business  cannot  enjoin  a  new  cor- 
poration by  a  similar  name,  when  its  trade-marks 
are  not  violated  or  to  be  used.     Id. 

A  corporation  is  entitled  to  the  same  protection 
of  its  name  as  an  individual  is  of  his  trade-mark. 
Merch.  Det.  Assn.  v.  Det.  Merc.  Ag.,  2o  III.  App. 
250. 

Equity  will  enjoin  threatened  acts  by  persons 
assuming  to  act  for  or  in  the  name  of  a  dead  cor- 
poration.    Atty.-Gen.  v.   R.   U.   Co..  112  III.  537. 

Also  to  restrain  one  incorporation  from  doing 
business  in  its  name  before  the  company  is  duly 
incorporated.  Curran  v.  Bradner,  27  111.  App. 
582. 

Appeal  to  the  supreme  court  lies  direct  from 
a  decree  dismissing  a  bill  to  enjoin  the  incorpora- 
tion of  a  company  by  a  designated  name,  adopted 
in  prefatory  steps  and  proceedings  —  it  Involves 
a   franchise.    Drum.   Tob.    Co.   v.    Randle,   supra. 

Mere  assumption  of,  or  advertising  in,  a  name 
appropriate  for  a  corporation  is  not  an  offense, 
unless  it  be  done  in  solicitation  of  business.  Ed- 
gerton  v.  Preston,  15  111.  App.  23.  But  in  an  ac- 
tion against  a  corporation  its  appearance  by  a 
name  importing  a  corporation  is  an  aamissiou  of 


12 


ILLINOIS. 

Meeting  to  organize  —  R.  S.,  ch.  xxsii,  §  3. 


its  corporate  existtMice.  L.  Gerl.  Co.  v.  Lnbadie, 
41  111  App.  283;  Supreme  Lodge,  etc.,  v.  Zuulke, 
30  id.  101. 

On  a  question  of  the  identifloation  of  a  corpora- 
lion  claiiulng  under  a  will,  claimant  may  prove 
every  fact  and  circumstance  surrounding  testator 
and  the  claimant,  which  will  aid  the  court  in 
reaching  a  conclusion  as  to  testator's  motives  and 
purposes  in  nsing  the  name  or  description  used. 
Miss.  So.  V.  Mead,  131  III.  33;  s.  c,  23  N.  E.  Rep. 
603.  ,.     ,      ,    , 

A  corporation  cannot,  except  as  authorized  by 
law,  change  its  own  name,  either  directly  or  by 
user.  It  mav  acquire  a  name  by  usage  or  reputa- 
tion if  no  name  is  given  to  it  at  its  organization 
bv  the  State.  It  cannot,  however,  having  a  cor- 
porate name  given  by  its  chartei-,  at  the  same 
time  have  a  different  name  l>y  usage  or  prescrip- 
tion. Svkes  V.  People,  132  III.  46;  s.  c,  23  N.  E. 
Rep.    301. 

The  provision  of  a  statute  fixing  the  name  of  a 
corporation  thereby  created  is  au  essential  part 
of  the  act.  It  Is  an  express  legislative  declaration 
that  the  corporate  name  shall  be  as  there  given. 
Id.  42. 

To  sustain  grants  to  or  by  a  corporation  sOme 
latitude  is  permitted  in  the  use  of  their  names,  it 
being  usually  suHicicnt  to  use  the  name  in  sub- 
stance, though  not  the  same  in  exact  words  and 
syllables  —  as  to  sustain  a  devise  to  a  corporation 
mistaiienly   named.     Id.    47. 

So,  when  a  corporation  conveys  by  a  wrong 
name,  it  cannot  avail  itself  of  its  own  wrong, 
after  receiving  full  consideration  for  the  convey- 
ance.    Id. 

When  a  corporation  is  the  prosecutor,  or  Is  so 
affected  by  the  crime  charged  that  its  name  is 
material  to  a  proper  statement  of  the  offense,  its 
name  must  be  correctly  given  and  proved  as  al- 
leged. A  variance  between  the  allegation  and 
proof  will  defeat  the  prosecution.    Id.  4S. 

The  fact  that  a  corporation  aneged  to  have  been 
defrauded  ha.s,  without  authority  of  law,  assumed 
and  done  business  under  the  name  alleged  in  the 
Indictment  does  not  change  the  rule.  If,  as  to 
its  name,  the  indictment  and  proof  are  variant 
the  prosecution  must  fail.     Id. 

The  effect  of  filing  an  information,  in  the  nature 
of  quo  warranto,  against  a  corporation  by  its  cor- 
porate name,  to  procure  a  forfeiture  of  its  charter 
or  to  compel  it  to  disclose  by  what  authority  it 
exercises  its  corporate  franchise,  is  to  admit  the 
existence  of  the  corporation.  If  an  information 
be  filed  against  a  corporation  by  its  corporate 
name  and  it  is  brought  in  and  pleads  in  the  same 
corporate  character  its  corporate  existence  can- 
not, afterward,  be  controverted.  I'eople  v.  Spring 
Valley,   129  111.   175;  s.   c,  21  N.   E.   Rep.   843. 

The  right  to  be  a  corporation  by  a  particular 
name  is  a  franchise.  Boiler  Co.  .v.  Trip.  B.  Co., 
137  111.  2;S2;  s.   c,  28  N.   E.   Rep.  248. 

The  right  to  be  a  corporation  b.v  a  particular 
name  and  the  right  to  use  a  franchise  in  trans- 
acting its  business  are  distinct  and  wholly  dif- 
ferent rights.  The  latter  can  exist  only  where 
there  is  distinct  and  specific  grant  or,  perhaps, 
right  by  prescription  authorizing  it.     Id. 

The  right  of  a  corporation  to  the  use  of  Its 
name  cannot  bo  greater  or  different  in  principle 
than  that  of  an  Individual.     Id. 

So,  a  corporation  may  acquire  a  right  to  use  Its 
name  as  a  trade-maric.  It  may,  however,  be  en- 
Joined  from  so  doing,  at  the  suit  of  one  who  has 
previously  acquired  the  right  to  use  it  as  a  trade- 
mark.    Id. 

A  bill  to  restrain  the  use  of  a  certain  name  as 
the  designation  of  a  corporation  involves  a  fran- 
chise, in  the  question  of  the  right  to  use  it.  Hazel 
B.  Co.  V.  Hazel  T.   B.   Co.,  37  111.  App.  310. 

Where  there  Is  not  such  a  resemblance  between 
the  goods  manufactured  by  two  corporations,  or 
their  circulars  or  advertisements,  as  would  de- 
ceive the  ordinary  mass  of  purchasers  an  injunc- 
tion will  not  issue  to  restrain  the  use  by  one  of 
them  of  the  name  bv  which  it  is  known.  Hazel 
B.  Co.  v.  Hazel  T.   B.  Co.,  40  111.  App.  436. 

The  words  "  Aetna  Iron  Works  "  import  a  cor- 
poration, and  there  can  be  no  property  by  a  co- 
partnership   in   a   name   as   a    "  trade-mark,"    the 


same  Importing  a  corporation.  Clark  v.  Iron 
Works,  44  111.   App.   510. 

Statute  prohibits  license  to  a  second  corporation 
of  substantially  the  same  name  as  another.  Hazel- 
ton  Boiler  Co',  v.  Tripod  Boiler  Co.,  142  111.  494; 
s.   c,   30  N.   E.   Rep.   339. 

A  foreign  corporation  cannot,  in  our  courts,  con- 
test the  right  of  a  domestic  corporation  to  the 
corporate  name  given  it  by  this  State.     Id. 

Fact  that  no  sign  is  displayed  at  otlice  will 
have  very  little  significance,  where  business  of 
corporation  involves  no  dealing  with  the  general 
public.  Rolling  Stock  v.  People,  147  111.  234;  s.  C, 
35   X.   E.    Rep.   608. 

"  Elgin  Creamery  Company  "  and  "  Elgin  But- 
ter Companv,"  not  the  same  name.  Issuance  of 
a  license  to  former  notwithstanding  previously 
licensing  the  latter,  does  not  violate  Corporation 
Act,  which  provides  that  the  secretary  of  State 
shall  not  issue  license  to  corporations  having  the 
same  name.  Elgin  Co.  v.  Elgin  Creamery  Co.,  155 
111.   127;  s.  c,  40  N.   E.  Rep.  G16. 

A  proceeding  against  a  corporation  by  its  cor- 
porate name  impliedly  admits  the  regularity  and 
legality  of  its  existence.  Distilling  Co.  v.  People, 
1.56  111.  448;  s.  c,  41  N.  E.  Rep.  188;  Nimmo  v. 
Jackman,  21  111.  App.  607.  And  appearance  of  de- 
fendant by  a  corporate  name  is  an  admission  of 
corporate  existence.  Leguard  v.  Crane  Co.,  54  111. 
App.   149.] 

§  3.  As  soon  as  may  be  after  the  capital 
stock  shall  be  fully  subscribed,  the  couunis- 
sioners  shall  couveue  a  meetiug:  for  sub- 
scribers .:or  the  purpose  of  electing  direct- 
ors or  managers,  and  the  transaction  of  such 
'otlun-  business  as  shall  come  before  them. 
Notice  thereof  shall  "De  given  by  depo;<iting 
in  the  post-office,  pioperly  addressed  to  each 
subscriber,  at  least  ten  (lays  before  the  time 
fixed,  a  -nritteu  or  printed  notice,  stating 
the  object,  time  and  place  of  such  meeting. 
In  all  elections  for  directors  or  managers 
of  coii)orations  organized  under  this  act, 
every  subscriber  or  stoclvholder  shall  have 
the  right  to  vote  in  person  or  by  pro.\:y,  for 
the  number  of  shares  ov\'ned  or  subscribed 
by  him,  for  as  many  persons  as  there  are 
directors  or  managers  to  be  elected,  or  to 
cumulate  such  shares  and  give  one  candi- 
date as  many  votes  as  the  number  of  di- 
rectors or  managers  multiplied  by  the  num- 
ber of  his  shares  of  stock  shall  equal,  or 
to  distribute  them  on  the  same  principle 
among  as  many  candidates  as  he  shall  think 
fit;  and  such  directors  or  managers  sliall 
not  be  elected  in  any  other  manner.  It  shall 
be  lawful  for  any  such  corporation,  by  reso- 
lution of  the  stockholders,  to  divide  its 
board  of  directors  or  managei*s  into  tliree 
classes,  numbered  consecutively,  the  term 
of  office  of  the  first  class  to  expire  on  the 
day  of  the  annual  election  of  said  com- 
pany then  next  ensuing;  the  second  class 
one  year  thereafter,  and  the  third  class  two 
yeai's  thereafter.  At  each  annual  election 
after  such  cla.ssification.  the  stockholders 
of  such  company  shall  elect,  for  a  term  of 
tliree  years,  a  number  of  directors  or  man- 
agers equal  to  tlie  number  in  the  class  wliose 
term  expires  on  the  day  of  such  election. 
All  other  vacancies  to  he  filled  in  accord- 
ance with  the  by-laws  of  the  corporation. 

See   Const.,   art.    XI,    §   3.     Meeting  of  ofl5cers, 
§    20,    post.       Executors,   etc.,   may   vote.       §    24. 


ILLmOIS. 


13 


Certificate  of  organization  —  R.  S.,  ch.  xxxii,  §§  4,  5. 


Failure  to  elect  directors.  §  14,  post.  Stockhold- 
ers' meetings.  §  22,  post.  Meetings  for  change 
of  number  of  directors,  manner  of  voting,  etc. 
§§  59  et  seq.,  post.  Meetings  for  dissolution. 
§§  49b-49d,  post.  Same  for  changing  name,  etc. 
§  50,  post.  Rights  of  purchasers  on  sale  by  exe- 
cution.    Ch.  77,   §  5G. 

[Fraudulent  organization,  constructed  linos  be- 
longed to  the  bona  fide  stockholders.  Terwilliger 
V.  Tel.   Co.,  59  111.  249. 

Right  to  vote  by  proxy.  People  v.  Crossley,  69 
111.   195. 

Where  property  assigned,  under  a  creditor's  bill, 
Includes  corporate  stock  the  court  may  order  de- 
fendant to  execute  such  power  as  ■vvill  enable  the 
assignee  to  vote  the  stock.  Atkinson  v.  Foster, 
27  111.   App.   G3.] 


§  4.  The  commissioners  shall  make  a  full 
report  of  their  proceedings,  including  therein 
a  copy  of  the  notice  provided  for  in  the 
foregoing  section,  a  copy  of  the  subscrip- 
tion list,  and  the  names  of  the  directors  or 
managers  elected,  and  their  respective 
terms  of  othce.  which  report  shall  be  sworn 
to  by  at  least  a  majority  of  tlie  commission- 
ers, and  shall  be  Sled  in  the  office  of  the 
secretary  of  State.  The  secretary  of  State 
shall  thereupon  issue  a  certificate  of  the 
complete  organization  of  the  corporation, 
making  a  part  thereof  a  copy  of  all  papers 
filed  in  lils  office  in  and  about  the  organiza- 
tion of  the  corporation,  and  duly  authenti- 
cated under  his  hand  and  seal  of  State,  and 
the  same  shall  be  recorded  in  a  book  for 
that  purpose,  in  the  office  of  the  recorder 
of  deeds  of  the  county  where  the  principal 
office  of  such  company  is  located.  TTpon  the 
recording  of  said  copy,  the  corporation  shall 
be  deemed  fully  organized  and  may  pro- 
ceed to  business.  Unless  such  company 
shall  be  organized  and  shall  proceed  to 
business  as  pi-ovided  in  this  act,  within  two 
years  after  the  date  of  such  license,  then 
such  license  shall  be  deemed  revoked,  and 
all  proceedings  thereunder  void. 

Charter  forfeited  for  failure  to  organize.  Const., 
art.  XI,  §  4.  As  to  future  organization.  §  48,  post. 
Organization  of  combinations  prohibited.  Ch.  38, 
§  269b;  see  §  53,  post. 

[Before  corporation  can  contract.  It  must  have 
a  full  and  complete  organization.  Gent  v.  Ins.  Co., 
107  111.  652;  see  Washburn  v.  Roesch,  13  111.  App. 
268. 

Until  the  certificate  of  secretary  of  State  of 
complete  organization  is  recorded  in  the  county 
there  is  no  corporation  in  esse,  capable  of  doing 
business  or  contracting  liabilities.  Cresswell  v. 
Oberly,   17  III.   App.  284. 

A  corporation  is  not  authorized  to  do  business 
until  record  of  the  secretary  of  State's  certificate 
of  complete  organization.  Curran  v.  Bradner,  27 
111.    App.    582. 

A  fraudulent  recording  of  certificate  of  com- 
plete organization,  contrary  to  the  agreement  of 
incorporators,   is  of  no  effect.     Id. 

The  mere  fact  that  a  court  is  required  to  find 
certain  essential  facts  preliminary  to  the  forma- 
tion of  a  corporate  body  does  not  make  that  body 
when  formed,  the  creature  of  a  court.  Huston  v. 
Clark,   112  111.  349. 

An  act  of  incorporation  being  declared  a  public 


act,  courts  take  Judicial  cognizance  thereof. 
Nimmo  v.  Jackman,  21  111.  App.  607. 

In  equity  a  corporation  is  a  trustee  for  the 
benefit  of  creditors  and  stockholders.  St.  L.,  etc., 
Co.  v.  Sandoval,  etc.,  Co.,  116  111.  172;  s.  o.,  5 
N.    E.    Rep.   370. 

Persons  composing  a  corporation,  under  the  laws 
of  Illinois,  becoming  incorporated  unaer  the  laws 
of  another  State;  the  two  corporations  are  sepa- 
rate and  distinct  —  one  cannot  form  an  integral 
part  of  the  other.  Drum.  Tob.  Co.  v.  Handle,  114 
111.   425;  s.   c,  2  N.    E.   Rep.   536. 

An  association  may  be  regarded  as  a  corporation 
when  there  is  a  law  authorizing  the  creation  of 
a  corporation  of  its  class  and  powers,  an  attempt, 
in  good  faith,  to  comply  with  the  law,  a  user  of 
the  rights  conferred,  and  but  a  technical  failure 
therein.  Hudson  v.  G.  II.  Semin.,  113  111.  625; 
Miami  P.   Co.  v.  Ilotchkiss,   17  111.   App.  626. 

A  statute  confirming  a  city  ordinance  granting 
rights  to  a  railway  company  is  a  legislative  recog- 
nition of  corporate  existence.  M'Cartney  v.  R. 
R.   Co.,   112  III.  624. 

A  statute  passed,  amending  a  charter,  clearly 
recognizing  corporate  existence,  confirming  ac- 
quisitions and  enlarging  powers  constituting,  in 
effect,  a  new  charter,  waives  prior  grounds  of  for- 
feiture. People  V.  Ottawa  Hydr.  Co.,  115  111.  285; 
e.   c,  3  N.   E.   Rei).  413. 

The  action  of  the  secretary  of  State  in  issuing 
a  license  and  certificate  of  organization  to  a  cor- 
poration is  ministerial.  People  v.  Chicago  G.  T. 
Co.,   130  111.  268;  s.  c,  22  N.   E.   Rep.   798. 

Failure  to  file  certificate  with  county  recorder 
does  not  detract  from  the  powers  of  the  corpora- 
tion or  lessen  the  obligation  of  stockholders. 
Neither  the  corporation  nor  its  otflcers  or  stock- 
holders can  be  heard  to  deny  the  corporate  exist- 
ence because  of  such  failure.  B.  <&  T.  Co.  v. 
Gade,  55  111.  App.  181. 

Powers  of  a  corporation  before  the  recording 
of  final  certificate.  B.  &  T.  Co.  v.  Gade,  55  111. 
App.  182. 

As  a  condition  precedent  to  the  right  of  cor- 
poration to  proceed  to  business,  certificate  of 
secretary  of  State  should  be  filed  in  office  of 
county  recorder  where  principal  office  is  located, 
In  order  that  persons  dealing  with  the  corporation 
may  have  an  easy  and  public  inspection  of  its 
basis  of  organization.  Loverin  v.  McLaughlin, 
46  111.   App.  373. 

Under  former  statute  requiring  certificate  of 
completion  of  organization  to  be  filed  with  secre- 
tary of  State,  omission  thereof  was  held  not  fatal 
to  organization.     Cross  v.   Mill  Co.,  17  111.  54. 

Omission  to  file  certificate  with  secretary  of 
State  does  not  prevent  corporate  action  nor.  make 
the  stockholders  liable  as  partners.  It  can  only 
be  raised  in  direct  proceedings.  Tarbell  v.  Page, 
24  111.  46;  Baker  v.  Admr.,  32  id.  79.  Quo  war- 
ranto is  necessary  where  corporate  body  assumes 
powers  which,  from  defective  organization,  it  can- 
not legally  exercise.  Scire  facias  is  proper  where 
a  legal  body  capable  of  acting,  abuses  its  powers. 
Id. 

Regularity  of  organization  cannot  be  questioned 
collaterally.     Thompson  v.   Candor,  60  111.  244. 

The  recoi'ding  of  the  certificate  of  complete  or- 
ganization as  required  by  above  section  is  a  con- 
dition precedent  to  the  right  to  do  business. 
Loverin  v.  McLaughlin,  44  N.  E.  Hep.  90.  And, 
independently  of  statute,  directors  who  exercise 
corporate  powers  without  performing  precedent 
conditions  are  personally  liable  as  partners.     Id.] 


§  5.  Corporations  formed  under  this  act 
shall  be  bodies  corporate  and  politic  for  the 
period  for  which  they  are  organized: 

[What  the  law  makes  a  corporation  it  is.  Bank 
V.   Godfrey,  23  111.  002. 

The  integral  parts  of  a  manufacturing  corpora- 
tion are  at  least  three  stockholders.  Stowe  v. 
Flagg,  72  111.  397. 

The  essence  of  a  corporation  exists  in  its  capac- 
ity (11  to  have  perpetual  succession,  under  a 
special  name  and  in  an  artificial  form;  (2)  to  take 


14 


ILLINOIS. 


Sue  and  be  sued  —  R.  S..  ch.  xxxii,  §  5,  (1). 


and  grant  property,  contract  obligations,  sue  and 
be  sued  bv  its  corporate  name,  as  an  individual; 
and  (3)  to"  receive  and  enjoy,  in  common,  grants 
of  privileges  and  immunities.  The  first  two  are 
the  franchises  of  the  corporators.  The  third  Is 
tlie  fninchise  of  the  con'oration.  Snell  v.  Chicago, 
13.3   III.   J30:   s.   c,   IM   N.    E.    Rep.   532. 

The  recognition,  bv  the  legislature  by  a  subse- 
quent act,  of  the  existence  and  right  to  act  of 
a  corporation  theretofore  orgiuiized  under  a  void 
charter,  and  which  relieves  such  corporation  of 
a  condition  imposed  on  it  by  the  invalid  charter 
and  refei-s  to  its  acts,  purges  tlie  illegality  of  cor- 
porate acts  theretofore  performed.  Snell  v. 
Chicago.   133  111.   421;  s.   c,  24  N.   E.   Rep.  532. 

The  alteration  of  the  symbol  "  &  "  from  a  busi- 
ness sign  and  the  labels  upon  the  bottles  used 
in  a  drug  store,  printed  in  small  letters,  is  not 
notice  that  a  copartnership  has  become  a  corpora- 
tion, the  place  of  business,  etc.,  remaining  the 
same.     Roof  v.  Morrlsson,  37   III.   App.   43.] 

(1)  May  sue  aud  be  sued; 

Service  of  summons  on  corporation.  Ch.  79, 
§  23.  Evidence.  Ch.  51,  §§  15-16.  Judgments  and 
executions.  Ch.  77,  §§  52  ct  seq.  Process,  how 
served.  Ch.  110,  §§  5-11.  Suits  against  stoclshold- 
ers.  §  25,  post.  Attachment.  Ch.  11,  §  1.  Pro- 
ceedings on  dissolution.  §  149  et  seq.,  post. 
Quo  warranto,  proceedings  In.  Ch.  112,  §§  1-7. 
After  expiration  of  charter,  may  prosecute  and 
defend  suits.  §  11,  post.  Copy  of  charter,  evi- 
dence. §  27,  post.  Change  of  name,  place  of 
business,  etc.,  not  to  affect  suits  pending.  §  56, 
post. 

[Corporation  may  institute  suits  in  the  courts  of 
other  States.  Banlv  v.  Montgomery,  2  Scam.  422. 
Before  corporation  can  contract,  it  must  have  a 
full  and  complete  organization.  Gent  v.  Ins.  Co., 
107  111.  652;  see  Washburn  v.  Roesch,  13  111.  App. 
26S.  Before  a  coriwration  can  be  made  a  gar- 
nishee, tlie  answer  must  be?  sworn  to.  Oliver  v. 
R.   R.    Co.,    17   111.    587. 

Wliere  corporation  refuses  to  discharge  an  obli- 
gation wliicli  the  law  imposes  it  may  be  held  liable 
civilly.  Seagrave«  v.  City,  13  111.  3G6;  R.  R.  Co. 
V.  Miller,  43  id.  199.  An  action  of  trespass  for 
assault  and  battery  will  lie  against  a  corporation. 
R.  R.  Co.  v.  Dalby,  19  111.  353.  And  for  tort. 
Harlefn  v.  Emmert,  41  id.  320.  And  for  malicious 
prosecution.  S.  E.  &  T.  Co.  v.  Green.  25  111.  App. 
106.  Corporation  liaijle  in  trespass,  trover  in  case 
for  malfeasance,  and  case  for  non-feasance.  Wolf 
V.    Boettcher,  W  111.  316. 

There  is  no  rule  of  law  which  prohibits  a  share- 
holder or  oflicer  of  a  company  from  suing  or 
being  sued  by  it.     Merriolc  v.  Coal  Co.,  61  111.  472. 

Mandamus  by  railway  company,  to  compel  the 
delivery  of  bonds,  proper.  Macoupin  Co.  v.  People, 
58  111.   191. 

A  i>iH  to  enjoin  tlie  organization  of  a  second 
corixiration  with  the  same  or  a  similar  name  as 
that  of  an  existing  corporation,  to  engage  in  the 
same  l)usiness  is  only  sustained  upon  evidence  — 
satisfactory  —  tliat  such  incorporation  will  injure 
the  prior  company.  Dnini.  Tob.  Co.  v.  Randle, 
114  111.  425;  s.  c.  2  X.   E.   Rep.   536. 

To  enforce  a  right  against  a  corporation,  the 
right  sought  being  against  the  stockholders  as  in- 
dividuals, they  are  necessary  parties.  Tel.  Co.  v. 
Gray,  23  111.   App.   72. 

Wherever  a  cause  of  action  lies  In  behalf  of  a 
corporation  ag.aJnst  Its  directors,  (ytc,  for  mal- 
feasance or  misfeasance,  and  the  conioration  re- 
fuses to  prosecute  such  suit,  a  stockholder,  for 
himself  and  others  similarly  situated,  may  main- 
tain suit.     Chicago  v.   Cameron,  22  III.  App.  91. 

Question  of  capacltj'  to  sue  must  be  raised  by 
demurrer  or  plea  in  abatement.     Id. 

A  ci^rporation  has  a  right  of  action  on  a  note 
payable  to  an  officer  thereof  not  named.  Frlcd- 
Une   V.   Trustees,  23  111.    App.   494. 


An  Information  which  attempts  to  set  out  per- 
sons' title  to  be  a  corporation,  and  when  taken 
in  connection  with  a  public  law  shows  such  title 
good,  is  bad  and  demurrable.  People  v,  Ottawa 
Hydr.  Co.,  115  111.  285;  s.  c,  3  N.    E.  Rep.  413. 

I>e  facto  existence  need  only  be  proved  as 
against  plea  of  nui  tiel  corporation.  Cozzens  v. 
Chicago  H.   P.   B.   Co.,  48  N.   E.   Rep.  7sS. 

A  de  facto  coriioration  may,  ordinarilv,  sue  or 
be  sued.  Sell.  DIr.  v.  Sch.  Dir.,  135  111.  470;  s.  c, 
2S  X.  E.  Rep.  49;  A.  L.  S.  C.  Co.  v.  Stock  Exch., 
41   111.   App.   151. 

A  foreign  cori>oration  may  maintain  an  action 
for  libel,  in  this  Stjite.  Jewelers'  M.  Agency  v. 
Douglass,  35  111.  App.  627. 

A  private  corporation  formed,  by  voluntary 
agreement,  for  private  purposes  Is  liable,  in  a 
civil  action,  for  its  negligence  or  tort.  JJlmore  v. 
Drain.  Com.,  135  111.  273;  .s.  c,  25  X.  E.  Rep.  1010. 

A  simple  contract  creditor  cannot  maintain  a 
bill  In  equity  to  obtain  a  judgment  against  a 
corporation.  Brabrook  T.  Co.  v.  Belding,  40  111. 
App.  329;  Taylor  Co.  v.  Woolverton,  37  111.  App. 
362. 

As  a  rule  the  creditors  of  a  corporation  must 
enforce  their  legal  claim  at  law.  They  can  ob- 
tain relief  in  equity  only,  after  their  legal  rem- 
edies have  been  exhausted.  Brabrook  T.  Co.  v. 
Belding,  supra. 

Judgment  by  confession  on  notes  executed,  with 
the  warrants  attached,  by  the  officers  of  a  cor- 
poration cannot  be  attacked,  in  equity,  in  the 
absence  of  injustice  and  fraud.  Henkleman  v. 
Peter.son.  40  111.  App.  541. 

In  such  cases  charges  of  fraud  and  conspiracy 
made  in  general  terms,  not  impeaching  the  bona 
fides  of  the  debts  on  which  the  notes  are  based, 
avail  naught.     Id. 

Where  nothing  appears  to  impeach  the  justice  of 
a  judgment,  it  will  not  be  set  aside,  in  equity, 
because  it  may  appear  that  the  oflicers  of  a  cor- 
poration for  which  the  note  was  made  were  not 
authorized  to  make  it.  Atwater  v.  Bank,  40  111. 
App.  503. 

It  is  no  more  necessary,  in  a  declaration,  to  al- 
lege that  a  corporation  knows  what  it  has  or  has 
not  done  than  to  allege  the  same  thing  of  a  natu- 
ral person.  The  acts  or  non-action  of  its  servants, 
within  the  sphere  of  their  dutv,  are  its  acts  or 
omissions.  R.  R.  Co.  v.  HInes,  132  111.  168;  s.  c, 
23  N.  E.  Rep.  1021. 

A  manufacturing  corporation  which  has  ceased 
to  transact  business  except  to  turn  over  to  other 
manufacturers,  for  a  commission,  any  orders  it 
may  receive,  has  no  ground  to  stand  upon  in 
seeking  to  restrain  a  former  stockholder  from  fol- 
lowing the  business  that  the  company  at  some 
time  did  on  his  own  account  and  from  stating  in 
his  advertisements  that  the  company  is  out  of 
business.  The  dormant  corporation  cannot  re- 
strain him  from  prosecuting  Ills  business.  Shonk 
V.   Shonk  T.   P.   Co.,   37  111.   App.  21. 

Where  a  bill  is  filed  against  a  corporation  and 
its  directors,  and  afterward  dismissed  as  to  di- 
rectors, the  result  is  same  as  if  they  had  not  been 
named  therein.  Tavlor  Co.  v.  Woolverton,  37  ni. 
App.  361. 

Stockholder  not  a  competent  witness  for  defend- 
ant corporation,  sued  for  negligently  causing 
death  of  intestate.  Ice  M.  Co.  v.  Keifer,  134  111. 
495;  s.   c,  25  X.   E.   Rep.  799. 

Xo  judgment  at  law  is  necessvary  to  determine 
that  parties  filing  a  bill  to  recover  under  .^li!  arc 
creditors.  They  may  establish  that  fact,  and  the 
amount  of  the  indebtedness,  by  an  original  bill 
in  chancery.  Woolverton  v.  Taylor  Co.,  43  111. 
App.  425. 

Where  no  plea  of  nui  tiel  corporation  has  been 
filed,  it  is  not  necessary  for  a  plaintiff  corpora- 
tion to  make  proof  of  its  existence.  Paper  Co.  v. 
K.   &  L.  Co.,  43  111.   App.  566. 

Appearance  of  defendant  by  a  corporate  name 
is  an  admission  of  corporate  existence.  Legnard 
V.  Crane  Co.,  54  111.  App.  149.  Appearance  by  a 
plaintllf  as  a  corporation  is  an  assertion  that  it 
is  a  corporation,  to  be  denied  only  by  a  special 
plea  of  nui  tiel  corporation.     Id. 

When  nui  tiel  corporation  is  not  a  proper  plea. 
Trogdon  v.  Stone  Co.,  53  111.  App.  206. 


ILLINOIS. 


15 


Sue  and  be  sued;  seal  —  R.  S.,  cli.  xxxii,  §  5,  (1),  (2). 


rroof  of  corporate  existence  not  necessary  when 
It  is  sliown  that  defendant  has  repeatedly  recog- 
nized corporate  existence  of  plaintiff.  Paint  Co. 
V.   Ruggles,   48  111.   App.   40U. 

A  corporation  may  not  recover  back  moneys 
paid  by  it  for  serTices  rendered  before  its  organi- 
zation, whether  in  a  direc^t  suit  or  by  way  of  set- 
off.    Lumber  (Jo.  v.  Scott,  40  111.  App.   '28'>. 

■\Vhen  stockholder,  either  individually  or  on  be- 
half of  himself  or  other  stockholders,  may  main- 
tain suit  against  wrongdoing  directors  or  officers. 
■yVhen  con)oration  is  necessary  party  to  such  suit. 
Bruschke  v.  Der  Xord,  etc.,  145  111.  433;  s.  c,  34 
N.    E.    Rep.   417. 

When  receiver  for  insolvent  national  bank  may 
maintain  an  action  on  a  note  payable  to  the  bank. 
Flre-Prooflng   Co.    v.    Bank,    155   111.   481. 

Demand  on  managers  of  a  corporation  to  bring 
suit  not  necessary  when  it  is  shown  that  such 
demand  would  have  been  unavailing.  Higgins  v. 
Lansingh.    154  111.  301;   s.   c.  4U  X.    E.   Rep.   3t;2. 

A  proceeding  against  a  defendant  corporation 
by  its  corporate  name  impliedly  admits  the  regu- 
larity and  legalitv  of  it-s  corporate  existence.  Dis- 
tilling Co.  V.  People,  156  111.  448;  s.  c,  41  N.  E. 
Rep.   188. 

Limitation  of  rule  that  existence  of  de  facto 
corporation  cannot  be  questioned  collaterally. 
Trust  Co.  V.  .Minnesota  Co.,  157  111.  641;  s.  c,  42 
N.  E.  Rep.  153. 

An  association  whose  name  implies  a  corporate 
body,  and  which  has  authenticated  its  acts  by 
a  common  seal  and  exercised  corporate  powers,  is 
estopped  to  deny  its  corporate  existence.  Fitz- 
patrick  v.  Rutter,  160  111.  :i82;  s.  c,  43  N.  E.  Rep. 
392. 

A  return  nulla  bona  of  an  execution  against  a 
corporation  is  not  essential  to  an  action  in  equity 
to  set  asiide  a  fraudulent  deed,  where  the  cor- 
poration is  insolvent  and  in  process  of  winding 
up.  Blair  v.  Steel  Co.,  159  111.  350;  s.  c,  42  N. 
E.   Rep.   895. 

When  officere  of  a  corporation  deal  wrongfully 
with  its  property  to  the  injury  of  stockholders, 
the  latter  may  maintain  a  bill  against  the  com- 
pany and  its  officers  for  relief.  Green  v.  Heden- 
berg,   1.59  111.   489;   s.   c,  42   X.   E.   Rep.   851. 

Where  there  is  a  reasonable  certainty  that  a  de- 
mand upon  the  officers  of  a  corporation  to  bring 
action  would  be  unavailing,  stockliolders  may  pro- 
ceed without  such  demand.     Id. 

A  pledgee,  as  collateral  security,  of  shares  of 
stock  in  a  corporation  may,  as  any  other  stock- 
holder, maintain  a  bill  against  the  company  and 
its  officers  for  relief  against  a  misappropriation 
of  corporate  funds,  by  which  its  security  is  im- 
paired.     Id. 

An  instrument  purporting  to  be  a  bill  of  sale 
from  a  cori)oration,  executed  by  its  vice-presi- 
dent, and  corporate  se«l  attached,  is  admissible 
to  show  the  transfer  of  the  property  therein  men- 
tioned, although  there  is  no  proof  that  the  vice- 
president  was  authorized  to  execute  it.  Springer 
V.  Bigford,  160  111.  495;  s.  c,  43  X.  E.  Rep.  751. 

A  corporation  which  has,  in  fact,  consolidated 
■with  another,  is  estopped  to  assert  that  tlie  pro- 
ceedings for  consolidation  were  not  in  accordance 
with  the  terms  of  the  statute,  in  an  action  against 
It  to  recover  the  amount  of  a  judgment  against 
the  other  corporations  on  the  ground  that  there 
was  a  consolidation.  Rv.  Co.  v.  Ashling,  160  111. 
373;   s.   c,   43  X.    E.    Rep.   357. 

The  actual  or  virtual  refusal  or  neglect  of  a 
corporation  to  protect  the  rights  of  a  stockholder 
entitles  him  to  relief  in  equity.  Farwell  v.  Tel. 
Co.,   101  111.   522;  s.   c,  44  X.   E.   Rep.   891. 

Stockholder  can  maintain  an  action  against  a 
receiver  and  the  corporation  and  others,  to  as- 
sert his  rights,  without  a  request  that  the  re- 
ceiver bring  such  suit,  and  his  refusal  to  do  so. 
Id. 

What  conduct  of  receiver  is  equivalent  to  re- 
fusal.     Id. 

A  corporation  as  such  acts  through  its  officers 
and  agents.  Its  appearance  in  legal  proceeding's 
may  be  entered  by  counsel,  and  when  done,  a 
presumption  of  authority  arises.  Ins.  Co.  v.  Ken- 
nedy, 57  111.   App.   1.30. 

Where  an  action  is  brought  against  an  insurance 


company  for  trespass  committed  by  its  agents, 
the  burden  of  proof  is  upon  the  plaintilS  to  show 
that  the  company  authorized,  contiaued  or  rjitl- 
fled  the  acts  of  the  agents.  Matthews  v.  Ins.  Co., 
64  111.   App.  280. 

President  of  a  corporation  has  no  aufhority  to 
execute  a  power  of  attorney  authorizing  the  con- 
fession of  a  judgment  against  it,  but  where  suit 
is  regularly  brought  against  corporation  and  ser- 
vice duly  had  upon  it,  if  claim  is  just  and  cor- 
poration has  no  defense  it  is  not  the  duty  of  the 
president  to  deny  its  justice  or  to  defend  it. 
Boston   V.    Fisher,   59   111.    App.   400. 

When  corporation  Is  sue<l,  president  has  power 
to  employ  au  attorney  to  look  after  its  interests. 
Id. 

Where  a  broker,  in  pursuance  of  a  contract  with 
u  syndicate,  made  a  sale  of  certain  street  car  lines 
to  a  railroad  company,  the  fact  that  company  was 
not  duly  incorporated  is  no  defense  to  a  suit  by 
broker  for  his  commission.  Smith  v.  Mayfleld, 
60  111.   App.  200. 

Judgment  confessed  against  a  corporation  upon 
a  note  signed  by  the  president  and  secretary,  but 
not  under  seal  of  the  corporation,  and  without 
proof  being  filed  with  a  cognovit  that  the  presi- 
dent and  secretary  had  authority  to  sign  any 
power  of  attorney  to  confess  a  judgment,  is  void. 
Bailey  v.   Snyder,  61  111.  App.  472. 

President,  treasurer  or  secretary  of  a  corpora- 
tion can  execute  a  power  of  attorney  and  confess 
a  judgment  against  the  corporation  only  where 
such  power  is  conferred  by  the  beard  of  directors. 
They  have  no  such  power "bv  virtue  of  their  office. 
Id. 

Corporations  become  liable  the  same  as  indi- 
viduals where  facts  exist  from  which  the  rule  of 
principal  and  agent  is  applied.  Loeb  v.  Stout,  61 
111.  App.  160. 

Proof  of  the  averment  that  the  defendant  Is  a 
corporation  is  not  necessary  under  our  practice 
unless  challenged  by  plea  of  nul  tiel  corporation. 
Where  defendant,  by  his  peculiar  form  of  plead- 
ing, admits  the  corporate  existence  of  plaintiff, 
he  cannot  afterward  deny  such  corporate  exist- 
ence.    Wheatley  v.  Chicago  Bank,  64  111.  App.  612. 

Where  a  party  litigant  deals  with  his  adversary 
as  a  corporation,  he  admits  its  corporate  character. 
Hickox  V.  Dawes,  64  111.  App.  630.J 


(2)  May  liave  a  comcioii  seal,  which  they 
may  alter  or  renew  at  pleasure; 

Records,  how  certified,  seal  affixed.  Ch.  51, 
!§  15-16. 

[Where  the  act  did  not  authorize  a  seal,  no 
seal    necessary.      Dennis   v.    Maynard,    15    111.   477. 

A  corporation  can  only  act  under  its  corporate 
seal,  and  by  its  president  and  secretary.  Ins.  Co. 
V.  Schettler,  38  III.  166;  Board,  etc.  v.  Green- 
baum,  39  id.  609;  R.  R.  Co.  v.  Johnson,  40  id.  35; 
R.  R.  Co.  V.  F.  L.  &  T.  Co.,  49  id.  331;  Bills  v. 
Stanton,  69  id.  52;  U.  S.  M.  Co.  v.  Gross,  93  id. 
483. 

A  corporation  may  adopt  any  seal  which  is  con- 
venient for  the  occasion.  Danv.  Sem.  v.  Mott, 
136  111.   294;   s.   c,   28  X.    E.    Rep.   .54. 

It  must,  however,  be  shown  to  have  been 
adopted.  So,  it  must  be  atlixed,  as  the  corporate 
seal,  by  au  officer  or  agent  authorized  to  affix 
It.     Id. 

The  common  seal  of  a  corporation  appearing 
affixed  to  an  instrument  and  the  signatures  of 
the  proper  officers  being  proved,  courts  are  to 
presume  that  the  officers  did  not  exceed  their 
authority.  The  seal  is  prima  facie  evidence  that 
it  was  affixed  bv  proper  authority.  .McDonald  v. 
ChishoViM,   131  111.  281;  s.  c,  23  X.  E.   Rep.  596. 

A  not*  of  a  corporation  properly  executed  and 
attested  by  the  corporate  seal,  and  as  to  the 
regularity  of  which  there  is  as  much  parol  evi- 
dence in  its  favor  as  against  it,  is  valid  prima 
facie.     Chisholm   v.   M'Donald,  30  111.   App.  180. 

A  deed  of  conveyance  of  land  by  a  corporation 
must  be  executed  in  the  corporate  name  and  at- 


16 


ILLINOIS. 

rower  to  hold  property  and  to  borrow  —  R.  S.,  ch,  xxxii,  §  5,  (3),  (4). 


tested    by    the    corporate    seal.      Danv.    Sem.    v. 

^The  eStlon  of  bonds,  by  U>e  president  and 
secretnrv  and  a  det'd  of  trust  to  secure  them 
under  the  corporate  seal  Is  prima  facie  evidence 
of  authority  to  execute  them  without  production 
of  a  resoluUon  of  authority.  Hank  v.  Schott,  13o 
Til     fiOtJ-   s    c  .  26   N.    E.    Rep.   640. 

A  lease  of  premises  "between  J  B.,  V^^/ty  ot 
the  first  part,  and  the  Rochester  Boot  and  bhoe 
compauv.  bv  N.  N.,  president,  party  of  the  second 
na""  the  "covenants  all  by  the  -party  of  the 
second  Dart  "  and  the  testimonium  clause  signed 
6«:oiKl.part  ,    ^^^^j^^,,^    ^.j^j^    ^p„,       Although    at 

the  time  of  the  execution  of  the  lease  the  com- 
panv  was  not.  in  fact,  organized,  and,  therefore, 
could  not  authorize  an  ajrent  in  the  absence  of 
apt  words  in  the  contract  to  bind  him.  N.  N.  is 
not  personally  bound  by  the  writing.  Neulan 
V.    Beidler,   37   111.    App.   34. 

Where  a  promissory  note  and  warrant  of  attor- 
ney are  executed  in  the  name  and  under  the  seal 
of  "a  corporation,  it  will  be  presumed  that  such 
Instruments  were  executed  by  authority  of  the 
companv.  M'Dnnald  v.  Chisholm,  131  111.  ^81, 
s    c.  2.3  X.   E.   Rep.   506. 

The  mode  of  authenticating  the  act  of  a  cor- 
porate bodv.  wliich  uses  a  seal,  is  to  affix  the  sea  . 
with  a  declaration  that  it  is  the  corporate  seal, 
verified  bv  the  signatures  of  the  president  and 
spcretarv.'  Mntt  v.  Danv.  Sem.,  129  111.  412;  S.  C, 
21    N.    E.    Rep.    027.  ^  ,         , 

The  doctrine  of  common  law  as  to  use  or  seai 
practicallv  obsolete.  Seal  now  necessary  only  in 
cases  where  one  is  required  of  an  individual. 
Green  v.  Blodgett.  55  111.  App.  556. 

tJorporate  seal  not  essential  to  validity  of  a  con- 
tract of  subscription  which  is  within  the  powers 
of  a  corporation  to  make.  Green  v.  Blodgett,  lo9 
111    160;   s.   c.   42  N.   E.   Rep.   176. 

Right  to  have  a  common  seal  is  necessarily  an 
Insepar.ible  incident  to  corporations,  regardless  of 
whether  or  not  such  right  is  given  by  charter  or 
act  of  incorporation.  Fireman  v.  Cramer,  60  111. 
App.  213.  .     ^ 

Seal  of  corporation  affixed  to  an  instrument  is 
prima  facie  evidence  of  assent  of  corporation  when 
signature  of  president  and  custodian  of  its  seal 
attached  to  the  instrument  is  shown  to  be  gen- 
uine.    Bailey  v.  Snyder,  61  111.  App.  472.] 

(3)  May  own.  possoss  aiul  enjoy  so  much 
real  and  personal  estate  as  shall  be  neces- 
sary for  the  transaction  of  their  business. 
and  may  sell  and  disjiose  of  the  same  when 
not  required  for  the  uses  of  the  corporation. 

Annual    statement   of   real   estate.     §    17,  post. 

Foreign     corporation,     real    estate.       §     26,  post. 

Loans  on  real  estate  by  foreign  corporation.  §  67, 
post. 

[Limit  of  the  right  to  acquire  and  hold  title  to 
real  estate.     Alexander  v.   Club,  110  111.   05. 

At  common  law  real  estate  of  a  corporation  re- 
verts to  the  owners  upon  dissolution,  but  equity 
will  distribute  it  for  the  benefit  of  its  creditors. 
Life  Assn.  v.  Fassett,   102  111.   315. 

Power  to  hold  real  estate  is  a  question  between 
the  corporation  and  the  State,  with  which  the 
grantor  has  no  concern.  Hoiiffh  v.  Cook  Co.. 
73  111.  23:  I'.arnpfi  v.  Suddard.  117  id.  2.39;  s.  c.  7 
N.  E.  Rep.  477;  Ilamsher  v.  Ilamsher,  132  111. 
2S6;   s.   c.  23  N.   E.   Rep.   1123. 

Power  of  acquiring  and  transferring  property 
sustained.     Reed  v.   Bradley.   17  111.  .321. 

Corporation  may  take  mortgages  on  real  estate 
as  security  for  debts.  Stevens  v.  Pratt.  101  III. 
200.  And  may  loan  money.  Id.  And  may  bor- 
row money  and  give  mortgage.  Thomas  v.  Ry. 
Co.,  104  111.  402.  The  same  powers  are  vested  in 
forelcrn  corporations.  Assurance  Co.  v.  Scammon, 
102  111.  40;  Buggy  Co.  v.  Graves.  10S  id.  4.">0. 

A  subsequent  general  law  will  limit  capacity  of 
corporation  to  acquire  and  hold  real  estate.  St.  P., 
etc.  V.   Germain,   104  111.  440. 


The  power  to  sell  securities  does  not  include 
(he  power  to  mortgage  them.  Morris  v.  Cheney, 
51  111.  451. 

Corporation  for  pecuniary  profit  may  acquire  and 
hold  real  estate  necessary  to  its  business.  Barnes 
V.   Suddard.   117  111.  23'.»:  s.  c,  7  N.   E.  Rep.  477. 

A  conveyance  of  lands  by  proper  officers  of  a 
land  company  to  trustees,  the  land  iiaving  been 
conveyed  to  "the  corporation  by  stockholders,  Is 
ratified  by  the  stockholders  becoming  stockholders 
in  a  new  corporation,  created  on  the  transfer. 
Hull  v.  Glover,  120  111.  123;  s.  c,  18  N.  E.  Rep. 
198. 

A  deed  of  a  corporation  not  authenticated  in 
the  mode  recognized  by  law  is  a  nullity,  and  con- 
fers no  rights  whatever.  Mott  v.  Danv.  Sem., 
129  111.   413;   s.   c,   21   X.    E.    Rep.   927. 

A  bill  of  sale  executed  by  the  vice-president 
under  the  corporate  seal  is  prima  facie  sufficient 
to  pass  the  property.  Springer  v.  Bigford,  55  111. 
App.  199. 

Corporation  making  a  purchase  from  its  presi- 
dent is  not  chargeable  with  his  knowledge  of 
infirmities  in  his  title  to  the  property.  Higglns 
V.   Lansiiigh.  1.54  111.  304;  s.  c,  40  N.   E.  Rep.  362. 

Corporation  may  purchase  its  own  stock  only 
when  creditors  are  not  injured.  Clapp  v.  Peter- 
son,   104    111.    26. 

A  note  and  mortgage  to  secure  an  existing  in- 
debtedness, executed  by  an  officer  of  a  corpora- 
tion under  authority  conferred  at  a  meeting  of 
its  board  of  directors,  not  regularly  convened 
in  accordance  with  its  by-laws,  the  repudiation  of 
it  has  not  been  authorized  by  the  directors  or 
stockholders  of  the  corporation,  becomes  valid  and 
binding  bv  acquiescence  and  ratification.  Ashley 
V.   Illinois,  60  111.   App.   180. 

A  proposition  by  a  board  of  stockholders  of  a 
corpoi'ation  as  to  the  sale  by  them  of  the  prop- 
erty of  a  corporation  to  the  other  stockholders 
and  accepted  by  them,  constitutes  a  valid  con- 
tract.    Green  v.  Sellers.  64  III.  App.  505. 

When  it  cannot  be  urged  against  the  validity 
of  a  mortgage  executed  by  a  corporation  that  It 
oon tains  special  provisions  not  contained  in  Ihe 
statutory  form  of  mortgage.  Ashley  Wire  Co. 
v.  Illinois  Steel  Co.,  45  X.   E.  Rep.  410. 

When  a  corporation  held  to  ratify  a  mortgage 
executed  by  its  board  of  directors.     Id.] 

^4)  They  may  borrow  money  at  legal 
rates  of  interest,  and  pledge  their  property, 
both  real  and  persou.'il,  to  secure  the  pay- 
ment thereof; 

Foreign  corporation  may  loan  money.  §  67,  post. 
Rate  of  interest,  corporation  not  to  plead  usury. 
Ch.  74.   §§  8-11. 

[Power  to  mortgage  regarded  as  an  incident  to 
the  power  to  hold  real  estate.  Agl.  Soc.  v.  Pad- 
dock.  SO  III.   203:   West  v.   Agl.   Board.   82  id.   205. 

(Corporation  cannot  avoid  liability  by  question- 
ing the  authority  of  persons  making  the  loan  to 
it.     R.  R.  Co.  V.  Murray.  15  111.  330. 

Power  "  to  borrow  money  and  to  mortgage  or 
lease  any  of  its  property  or  franchise  "  does  not 
give  authority  to  assign  and  transfer  any  of  its 
privileges  and  business.  Cliicago  Gas.  etc.,  Co. 
v.  People's  Gns,  etc.,  Co.,  121  111.  534;  s.  c,  13 
N.    E.    Rep.    169. 

Presumed  that  one  who  holds  a  corporate  bond 
payable  to  bearer  rightfully  owns  the  same,  in 
the  absence  of  proof  to  the  contrary.  Land  Co. 
V.   Peck,  112  111.  433. 

Unless  restricted  by  statute,  corporations  may 
contract  debts  to  the  extent  of  tneir  credit. 
AVoolverton  v.  Tavlor,  1.32  111.  206;  s.  c,  23  X.  E. 
Rep.    -1007. 

Xeither  is  it,  under  all  circumstances,  bad  man- 
agement in  a  corporation  to  contract  debts  in 
excess  of  its  capital   stock.     Id. 

In  mortgage  given  to  secure  bonds,  the  inser- 
tion of  covenant  implied  by  words  "  grant,  bar- 
gain and  sell  "  is  not  a  fraudulent  representation 
as  to  existing  incumbrances  on  part   of  director 


ILLIXOIS. 


17 


Xecessarj-  powers  —  R.  S.,  ch.  xxxii,  §  5,  (5). 


who  did  not  sip;n  mortgage,  to  preclude  his  claim 
on  a  prior  mortgage  of  the  company  held  by  him. 
Banlj  V.  Schott,  135  111.  070;  6.  c,  20  N.  E.  Uep. 
640. 

Kecording  of  resolutions  of  directors  authorizing 
an  is.sue  of  cori)orate  bonds  does  not  give  them 
the  character  of  a  deed  or  mortgage.  Bank  v. 
Schott,  34  111.   App.  509. 

Power  of  corporate  oUicers  to  execute  judgment 
notes  for  corporation  may  be  shown  by  fact.s  and 
circumstances.  Burch  v.  West,  134  111.  UOiJ;  s.  c, 
25   X.    K.    Kep.   058. 

Defective  execution  of  judgment  note  of  corpo- 
ration may  oe  cured  by  subsequent  action. 
M'Donald  v.  Chisholm,  131  111.  280;  s.  c,  23  N.  E. 
Kep.   500. 

Proper  rorm  of  execution  of  not«  of  a  private 
corporation.  Frunkland  v.  Johnson,  147  111.  520. 
Improperly  executed,  whether  binding  corporation 
or  officer  as  an  individual.     Id. 

A  private  corporation  has  implied  power  to  con- 
tract debts  when  necessary  or  convenient  in  fur- 
therance of  its  objects,  and  whenever  it  may  con- 
tract a  debt  it  may  borrow  money  to  pay  the 
same  and  execute  negotiable  iustruments  secured 
by  mortgage.     Ward  v.  Johnson,  1)5  111.  215. 


(5t  And  may  have  and  exercise  all  the 
powers  necessary  and  recjiiisite  to  carry  into 
effect  the  objects  for  which  they  may  be 
formed ; 

Powers  to  be  exercised  by  directors.  §  6,  post. 
Legislative  powers  reserved.  §  9,  post.  Assum- 
ing powers  without  complying  with  this  act.  §  18. 
post. 

[The  by-laws  of  a  corporation  are  binding  upon 
no  one  but  its  members  and  officers.  Ward  v. 
Johnson,  95  111.  215. 

Corporation  can  only  act  through  Its  officers,  or 
by  expressly  delegating  its  powers  to  others. 
Hopkins  v.   R.   C.   L.   Co.,   72  111.  373. 

Corporation  has  power  in  this  State  to  assign 
notes.     Mclntire  v.   Preston,  10  111.  48. 

Corporation  can  act  only  in  the  manner  pre- 
scribed by  the  act  of  incorporation.  Betts  v. 
Menard,  Breese,  395;  Petersburg  v.  Metzker,  21 
111.  205;  C.  F.  Col.  v.  Cooper,  25  id.  148;  Kinzie  v. 
Chicago,  3  111.  187;  Fitch  v.   Pinckard,  5  id.  69. 

Every  power  that  is  not  clearly  granted  to  a 
corporation  is  withheld,  and  any  ambiguity  in 
the  term  of  grant  must  operate  against  the  cor- 
poration in  favor  of  the  public.  Trust  Co.  v.  Min- 
nesota Co..  157  111.  041;  s.  c,  42  X.  E.  Rep.  153. 
And  it  can  exercise  only  such  powers  as  are  con- 
ferred, or  are  necessarilv  incident.  Caldwell  v. 
City.  :«  III.  416;  City  v.  Ruinpff,  45  id.  90;  People 
T.  Board  of  Trade,  id.  112;  Chicago  Gas,  etc.,  Co. 
V.  People's  Gas.  etc.,  Co.,  121  id.  534;  s.  c,  13  X. 
E.  Rep.  109:  People  v.  Chicago  Gas  T.  Co.,  130 
III.  283;  s.  c,  22  X.  E.  Rep.  798:  Mott  v.  Sem., 
129  111.  413;  s.  c,  21  X.  E.  Rep.  927;  Rockhold  v. 
Benev.  Soc,  129  III.  450:  s.  c,  21  X.  E.  Rep.  794; 
McCrory  v.  Chambers.  48  III.  App.  445.  And  par- 
ties dealing  with  it  are  chargeable  with  notice  of 
such   powers.    Durkee  v.   I'eople,   53  III.   App.   397. 

"All  the  power  incident  and  useful  to  corpora- 
tions." includes  power  to  give  chattel  mortgage. 
Badger  v.  B.  P.  Co.,  70  111.  302;  Ward  v.  Johnson, 
95  id.  215:  Ward  v.  Farwell.  97  id.  593;  N.  W.  F. 
Co.  V.  Hyde  Park.  70  id.  034. 

Corporation  has  all  the  powers  of  an  ordinary 
person  as  respects  its  contracts.  City  v.  Cor- 
with,  48  111.  423. 

Distinction  between  municipal  and  private  cor- 
porations in  their  power  to  contract  aebts.  Mar- 
shall Co.  v.  Cook.  38  111.  44. 

Corporation  is  estopped  from  denving  its  author- 
ity, when.  Bradley  v.  Ballard,  55"  III.  413;  C.  B. 
Soc.  V.  Crowell,  05  id.  453;  Ins.  Co.  v.  F.  S.  Mfg. 
Co.,  97  id.  537. 

Corporation  may  transact  all  business  relating 
to  the  legitimate  objects  of  its  existence.  Wood 
V.  Whelen,  93  111.   153. 


But  corporate  powers  must  be  warranted  by 
statute.     Webster  v.   People,  98  III.  343. 

I'owers  of  corporation  organized  under  the  laws 
of  Iowa.  Reichwald  v.  Hotel  Co.,  106  111.  439; 
Glover  v.  Wells,  40  111.  App.  353. 

Corporation  is  bound  by  parol  contract  if  acting 
within  the  scope  of  Its  authority.  R.  R.  Co.  v. 
F.  L.  &  T.  Co.,  49  111.  331.  And  by  implied  con- 
tracts.    Maher  v.   City,   38  III.   2G6;    R.    R.    Co.    v. 

j  F.  L.  &  T.  Co.,  49  id.  331;  Ry.  Co.  v.  Deitz,  50  id. 
210.      But   not   for   debts   created   before   organiza- 

j  tion.     Mfg.   Co.  V.   Cou.sley,  72  111.  531. 

I     Corporation  cannot  avoid  liability  by  questioning 

I  the  authority  of  the  persons  making  the  loan  to 
it.     R.   R.   Co.   V.   Murray,   15  111.  336. 

I  Officers  liable  for  wrongs  done  by  their  order. 
Peck  V.   Cooper,  112  111.   192. 

The  remedy  against  one  for  falsely  assuming 
to  act  as  an  agent  of  a  corporation  is  an  action 
on  the  case  and  not  on  the  contract  made  bv  him. 
Hancock  v.  Yunker,  83  111.  209. 

Equity  will  restrain  the  acts  of  an  existing  cor- 
poration in  excess  of  its  powers  or  sought  to  bo 
performed  under  invalid  grant  —  as  an  invalid  or- 
dinance.    Atty.-Gen.  v.  R.  R.  Co..  127  111.  538. 

I  Charter  being  permissive  only  —  not  impera- 
tive —  and    granting    no    exclusive    privilege,    the 

I  company  is  not  bound  to  execute  Its  franchise 
throughout   the  entire  territory   in    which   it   may 

,  operate.     Peop.   G.   &  C.   Co.   v.    Chicago  G.   &   C. 

!  Co.,  20  111.  App.  473. 

■     Any    private   contract   of  a   corporation    engaged 

I  in  business  in  which  the  public  is  interested.  In- 
jurious or  prejudicial  to  the  public  interests,  is 
void.  Chicago  Gas,  etc.,  Co.  r.  People's  Gas,  etc., 
Co.,   121  111.  534;  s.  c,   13  X.   E.   Rep.    169. 

Corporation  cannot  plead  ultra  vires  in  defense 
of  a  contract  fully  performed  by  the  other  party, 
to  its  benefit.  Bank  v.  Brooks,  22  111.  App.  238; 
I'eop.  G.  «&  C.  Co.  V.  Chicago  G.  &  C.  Co.,  supra. 
The  rule  that  contracts  in  partial  restraint  of 
trade  are  not  valid  does  not  apply  to  corporations 
engaged  in  a  public  business.  Chicago  Gas,  etc., 
Co.  V.  People's  das,  etc.,  Co.,  121  111.  534;  s.  c, 
13  X.   E.   Rep.   109. 

Under  a  general  law  a  company  is  formed  for 
the  purpose  of  carrying  on  a  "  lawful  business;  " 
tlie  law  must  determine  what  powers  may  be  ex- 
ercised as  incident  to  such  business.  People  v. 
Chicago  G.  T.  Co.,  130  111.  287;  s.  c,  22  X.  E.  Rep. 
798. 

Whether  the  articles  of  association  with  its  ac- 
companying parts,  including  all  papers  certified, 
do  or  do  not  confer  such  rights  and  powers  as 
the  law  authorizes,  is  a  judicial  question.  People 
V.  Chicago  G.  T.  Co.,  130  111.  280;  s.  c,  22  X.  E. 
Rep.   798. 

The  language  of  this  section  negatives  the  Idea 
that  a  corporation  can  buy  and  hold  stock  of  other 
companies.  Id.  To  determine  powers  of  a  cor- 
poration organized  under  general  law,  certificate 
of  promoters  is  to  be  looked  to.  One  created  by 
special  statute,  statute  is  looked  to.  Rockhold  v. 
C.  M.,  etc.,  Soc,  129  111.  455;  s.  c,  21  X.  E.  Rep. 
794. 

Implied  powers  are  presumed  to  exist  to  enable 
such  bodies  to  carry  out  the  express  powers 
granted,  and  to  accomplish  the  purposes  of  their 
creation.     People  v.  Chicago  G.  T.  Co.,  supra. 

An  incidental  power  is  one  that  is  directly  and 
immediately  appropriate  to  the  execution  of  the 
specific  power  granted.     Id. 

(.'orporation  publishing  a  newspaper  can  make 
certificate  of  publication  of  a  notice  required  by 
law  to  be  published.     Maass  v.  Hess,  41  111.  App. 

Corporation  having  entered  into  contract  and  en- 
joyed the  benefits  is  estopped  to  plead  defense 
of  ultra  vires.  Helms  B.  Co.  v.  Flannery,  137  111. 
318;  s.  c,  28  X.  E.  Rep.  248.  Unless  transaction 
is  criminal  or  against  public  policv.  Owens  v. 
Stapp.   ,32   111.    App.   0.58. 

Agreement  that  patentable  inventions  and  Im- 
provements developed  by  any  member  of  a  cor- 
poration "  shall  be  patented  in  the  name  and  for 
the  benefit  of  such  company,"  continues  no  longer 
than  corporation  exists.  Car  Co.  v.  Car  Line,  37 
111.  App.  290.  Or  than  person  continues  to  be  a 
member  of  such  corporation.     Id.  292. 


18 


ILLIXOIS. 


Sale  of  land;  directors  —  R.  S.,  ch,  xxxii,  §§  5,  G. 


Contracts   between    a    corporation    and    the    con- 
trollinir  majority  of  Its  own   stockholders  are   not  ! 
sanctioned   by   courts.      Rlgdon   v.    ^^  alcott,  43   111. 

A  sr'n'imer  contractinc  with  a  corporation  Is 
not  bound  to  take  notice  of  Its  by-laws.  Bath 
Co.  V.   Fan  Co.,  r.O  111.  App.  6S1. 

Contract  signed  by  vice-president  when  presi- 
dent  was  In   town,   validity   of.     Id. 

Corporation  authorized  to  conduct  a  lumber 
business  Is  lesally  Incapable  of  being  a  stock- 
holder in  a  telegraph  company.  Peshtigo  Co.  v. 
Tel.   Co..  50  111.   App.   024. 

A  cdntract  void  as  against  a  statute  or  public 
policy  cannot  become  valid  through  an  estoppel. 
Durkee  v.   People,   53  111.   App.   397. 

Contract  of  corporation  to  advertise  in  a  pub- 
lic newsi>aper  is  not  ultra  vires.  Green  v. 
Blodgett,  55  111.   App.  556. 

It  is  the  duty  of  a  corporation  to  use  ordinary 
care  to  make  its  works  and  appliances  reasonably 
safe  and  fit  for  their  intended  uses.  Mining  Co. 
V.  Adnir.,  48  111.  App.  Gltj. 

The  power  of  two  or  more  corporations  to  make 
contracts.  Kv.  Co.  v.  Ayres,  14U  111.  044;  s.  c,  30 
N.    E.    Kcp.    CS7. 

It  is  a  fundamental  principle  In  the  laws  of  cor- 
porations, that  a  majority  of  stockholders  shall 
control  policy  and  regulate  and  control  business, 
aud  to  this  each  stockholder  Impliedlv  agrees. 
Wheeler  v.  Iron  &  Steel  Co.,  143  III.  107;  s.  c,  3J. 
N.   E.   Itep.   420. 

A  court  of  equity  will  not  assume  to  control  a 
policy  or  business  methods  of  a  corporation,  al- 
though it  may  be  seen  that  a  wiser  policy  might 
be  adopted.     Id. 

Extent  of  Its  business  does  not  affect  the  char- 
acter of  a  corporation,  so  that  it  may  be  declared 
public.  Comm.  Co.  v.  Stock  Exchange,  143  111. 
210:   s.   C.   32   N.    E.    Rep.    274. 

It  is  well  settled  that  a  corporation  cannot  avail 
Itself  of  defense  of  ultra  vires  when  a  contract 
hiis  been  executed  and  it  has  had  the  full  benefit 
thereof.  Kadish  v.  L.  &  B.  Assn.,  151  111.  531; 
8.  c.  38  X.  E.  Rep.  2.30.  But  while  contracts 
ultra  vires  remain  executory,  courts  will  interfere 
and  prevent  their  enforcement  on  application  of 
a  shareholder,  or  other  authorized  person.  Id. 
Ihe  1)111  of  ultra  vires  should  not,  as  a  general 
rule,  prevail,  whether  interposed  for  or  against  a 
corporation,  when  it  will  not  advance  justice. 
Id. 

Corporations  may  become  members  of,  and  bor- 
row money  from,  building  and  loan  associations. 
Id. 

If  corporation  has  no  power  to  make  a  contract, 
it  has  not  i)ower  to  ratify  or  confirm  it.  Durkee 
V.  Peofile.  .-,3  III.  Am.  307;  155  111.  354;  s.  c,  40 
N.    E.    Rep-    •■«20. 

A  corporation  cannot  enter  a  partnership.  Bishop 
V.  American  Co.,  ^oi  111.  284;  s.  c,  41  N.  E.  Rep. 
765.  ^ 

A  corporation  organized  to  manufacture  and 
deal  in  merchandise  may  make  a  subscription  for 
the  purpose  of  securing  the  location  of  post-offlce 
adjoining  a  building  owned  by  it.  where  its  ef- 
fect will  be  to  bring  Its  business  prominently  be- 
fore the  public  and  increase  its  customers  and 
sales.  (;reen  v.  Blodgett,  159  111.  169;  s.  c,  42 
N.    E.    Rep.    176. 

Exercise  of  a  power  expressly  conferred  upon 
a  corporation  by  Its  by-laws,  cannot  be  questioned 
by  the  stockholders.  Pioneer  Co.  v.  Brockett,  58 
111.  Apr».  204. 

Ratification  by  a  corporation  of  a  contract  made 
In  Its  name,  whether  sealed  with  its  corporate 
seal,  or  not,  will  be  implied  bv  the  acts  of  the 
corporation  and  will  be  Inferred  from  facts  and 
circumstances  as  in  the  case  of  individuals.  Brew- 
ing Co.   V.   Ahlgren.   03  III.   App.   475. 

There  may  be  r;itiflcati(jn  by  acquiescence  and 
general  conduct  under  a  knowledge  of  the  facts, 
as  well  as  by  express  action.  Corporations,  like 
Individuals,  m:iy  be  bound  by  ;i  ratilieation  by 
Its  acts,  and  such  ratification  liccd  not  be  In  writ- 
ing, even  tliDUgli  it  be  a  ratification  of  an  act  done 
without  authority.  Greer  v.  Sellers,  04  111.  App. 
505. 


When  benefits  have  been  received  under  an 
ultra  vires  contract,  relief  Is  not  granted  upon 
the  basis  that  a  valid  or  merely  voidable  contract 
has  been  entered  into,  but  the  act  not  being 
malum  in  se,  the  parties'  will,  as  near  as  may 
be,  be  restored  to  their  original  conditloii.  Mc- 
Cormick   v.   Bank,   61   III.    App.   34. 

AA'hen  corporation  can  and  cannot  avail  Itself  of 
the  defense  of  ultra  vires.  McNulta  v.  Bank,  45 
N.  E.  Rep.  954.] 

Provided,  however.  That  all  real  estate, 
so  acquired  in  satisfaction  of  any  lialiility 
or  indel)tedne.ss.  unless  the  same  may  be 
necessary  and  suitable  for  the  business  OL' 
such  corporation,  shall  be  offered  at  pub- 
lic auction,  at  least  once  every  year,  at  the 
door  of  the  courthouse  of  the  county 
wlierein  the  same  may  be  situated,  or  on 
the  premises  to  be  sold,  after  givin.i?  notice 
thereof  for  at  least  four  consecutive  weelis 
in  some  newspaper  of  genoral  circulation 
published  in  said  county;  and  if  there  be  no 
such  newsi»ai)er  published  therein,  then  in 
the  nearest'  adjacent  county  where  such 
newspaper  is  published;  and  said  real  es- 
tate shall  be  sold  wlienever  the  price  of- 
fered for  it  is  not  less  than  the  claim  of 
sucli  cori)oration,  including  all  interest, 
costs  aud  other  expenses:  And,  provided, 
further.  That  in  case  such  coi'poration  shall 
not,  within  such  period  of  Ave  years,  sell 
such  land,  either  at  public  or  private  sale, 
as  aforesaid,  it  shall  be  the  duty  of  the 
State's  attorney  to  proceed  by  information, 
in  the  name  of  the  People  of  the  State  of 
Illinois,  against  such  corporation,  in  the 
circuit  court  of  the  county  within  which 
such  land,  so  neglected  to  be  sold,  shall  be 
situated,  and  such  court  shall  have  jurisdic- 
tion to  hear  and  determine  the  fact,  and  to 
order  the  sale  of  such  land  or  real  estate 
at  such  time  and  place,  sul)ject  to  such  rules 
as  the  court  shall  establish.  The  court  shall 
tax  as  the  fees  of  the  State's  attorney  such 
sum  as  shall  be  reasonable;  and  the  ]iro- 
ceeds  of  such  sale,  after  deducting  the  said 
fees  and  costs  of  proceedings,  shall  be  paid 
over  to  such  corpor.-ition.  The  provisions 
of  this  section  shall  a])i)ly  to  and  be  bind- 
ing npon  all  corporations  now  existing  by 
virtue  of  any  special  ciiarler  granted  by 
this  State. 

See  §  17,  post.  Real  estate  of  foreign  corpora- 
tions. §  26,  post.  Foreign  corporation  may  buy 
real  estate.     §  67,  post. 

§  G.  The  corporate  powers  shall  be  exei'- 
cised  by  a  board  of  diriK-tors  or  managers: 
I'rovided,  The  number  of  directors  or  man- 
agers shall  not  be  increased  or  diminisJied, 
or  their  term  of  ofhce  clianged,  without  the 
consent  of  the  owners  of  a  majority  of  the 
shares  of  stock.  The  officers  of  the  company 
shall  consist  of  a  president,  seci'etary  and 
treasurer,  and  such  other  officers  and  agents 
as  shall  be  determined  by  the  directors  or 
managers,  and  the  directors  or  managers 
may  adopt  by-laws  for  the  government  of 


ILLINOIS. 


19 


Directors  —  R.  S.,  ch.  xxxii,  §  6. 


the  officers  and  affairs  of  the  company: 
Provided,  They  are  not  inconsistent  witli 
the  laws  of  this  State.  The  directors  or 
managers  may  require  of  tlie  otticers  and 
agents  bonds,  ^Yitll  such  sureties  and  con- 
ditions as  tliey  sliall  deem  proper,  and  luay 
remove  any  oliicers  wlieu  tlie  Interest  of  the 
coi'poration  sliall  require.  The  officers  sliall 
hold  tlieir  respective  otiices  for  tlie  period 
provided  by  the  bj'-laws. 

Meeting  of  officers.  §  20,  post.  Failure  to  elect 
officers,  not  to  dissolve.  §  14,  post.  Personal  lia- 
bility of  directors  and  officers.  §§  IG,  19,  21, 
post.  Changing  number  of  directors.  §§  59  et 
seq.,  post.  Corporations  acting  by  attorney.  §  60, 
post. 

[Director.s. —  Persons  owning  a  majority  of  the 
stock  have  a  right  to  combine  and  secure  the  board 
of  directors.      Faulds  v.   Yates,   57  111.   41G. 

Directors  are  trnstcos  of  funds  for  stockholders. 
Holder  v.  Rv.  Co.,  71  111.  106;  Chetlaiu  v.  Ins. 
Co.,  86  id.  220;  Perrv  v.  Pearson,  135  id.  236; 
s.  c,  25  X.  E.  Rep.  636;  Ellis  v.  Ward,  137  111.  52U; 
S.    c.   25   N.    E.    Rep.   5.30. 

Powers  of  directors  to  purchase  Indebtedness, 
and  to  deal  with  the  property  of  the  coi-poration. 
Harts  V.  Brown,  77  111.  226. 

A  certificate  signed  by  persons  In  compliance 
with  the  statute,  with  certificate  of  tHe  county 
clerk  appended,  is  evidence  of  the  election  of  the 
directors.  Skinner  v.  Lake  View  Ave.  Co.,  57 
111.  151. 

Railroad  director  not  to  receive  compensation  for 
his  services,  unless  authorized  bv  law  or  resolu- 
tion. R.  R.  Co.  v.  Miles,  52  111.  174;  Merrick  v. 
Coal  Co.,  61  id.  472;  R.  R.  Co.  v.  Sage,  65  id.  328; 
Cheeney  v.  Lafayette  B.  &  M.  Ry.  Co.,  68  Id.  570; 
Grldley  v.   Ry.   Co.,  71  id.  200. 

The  same  rule  applies  to  other  private  corpora- 
tions.    Linen  Co.  v.   Hough,  91  111.  63. 

A  director  or  stockholder  may  deal  with  corpo- 
ration as  other  persons  may.  I'>each  v.  Miller,  23 
111.  App.  151;  Bank  v.  Schott,  34  111.  App.  508. 

Directors  of  an  insolvent  corporation  cannot  ap- 
ply its  assets  to  an  indebtedness  to  himself  to 
the  exclusion  of  other  creditors.  Adams  v.  C.  W. 
Print.  Co.,  27  111.  App.  313.  Directors  giiilty  of 
mismanagement  and  malfeasance,  court  may  ap- 
point a  receiver  and  order  him  to  sue  for  unpaid 
subscriptions  to  stock.  Tel.  Co.  v.  Gray,  122 
111.   6:',4;   s.  c.   14  N.    E.   Rep.   214. 

A  contract  for  the  sale  of  corporate  stock  be- 
tween eodirectors  of  the  company  does  not  so 
depend  on  trust  or  confidential  relations  between 
them  that  either  has  an  option  to  set  aside,  in- 
dependently of  the  question  of  fraud  in  the  trans- 
action. Perry  v.  Pearson,  135  111.  236:  s.  c.  25 
N.  E.  Rep.  6.36.  Directors  owe  a  fiduciary  duty 
to  stockholders  in  dealings  which  may  affect  the 
stock.    Id. 

Ergo,  they  may  not  so  manage  the  corporate 
business  or  deal  with  property  as  to  lessen  the 
value  of  the  stock  that  they  themselves  may 
purchase  it  at  a  low  value.  Perry  v.  Pearson, 
supra. 

In  the  absence  of  statutory  requirements  one 
who  is  not  a  stockholder  mav  be  a  director.  Fey 
V.  P.  Watch  Co.,  :V2  111.  App.  631. 

The  directors  and  officers  of  a  solvent  coi-pora- 
tion  are  trustees  and  agents  of  the  company  and 
its  stockholders  only.  They  owe  no  duties  or 
obligations  to  the  creditors  preventing  them  from 
dealing  with  the  corporation.  Bank  v.  Sohott,  135 
111.  672;  s.  c.  26  N.  E.  Rep.  (MO;  Roseboom  v. 
Whittaker.  1.32  III.  87:  s.  c.  23  N.  E.  Rep.  .3,39; 
Beach  v.  Miller,  ViO  111.  170;  s.  c,  22  N.  E.  Rep. 
464. 

An  officer  or  agent  may  deal  with  the  corpora- 
tion where  it  is  represented,  in  the  transaction,  by 
other  agents.     Matson  v.  Alley,  41  III.   App.  73. 

But  the  moment  a  corporation  beconuNS  insolvent, 
its  directors  occupy  a  different  relation.     The  a.s- 


sets  of  the  corporation  must  then  be  regarded  as 
a  trust  fund  for  the  payment  of  all  its  creditors 
and  the  directors  may  occupy  the  position  of  trus- 
tees. A  fiduciary  relation  then  existing  they  may, 
with  propriety,  be  prohibited  from  purchasing  the 
trust  property.  Roseboom  v.  Whittaker,  supra; 
Beach  v.  Miller,  supra;  Bank  v.  Burch,  40  111.  App. 
515;   Atwater   v.   Bank,   id.   50:i. 

Corporate  directors  are  trustees,  having  neither 
right  nor  power  to  appropriate  or  use  the  cor- 
porate funds  to  or  for  themselves,  or  to  destroy, 
waste,  misapply  or  give  them  away.  Ellis  v. 
Ward,  137  111.  ,520;  s.  c,  25  X.  K.  Rep.  530.  Di- 
rectors who  wrongfully  pay  an  outgoing  president 
a  salary  for  past  services,  not  agreed  to  be  paid 
for  until  after  their  performance  —  or  applv  cor- 
porate funds  to  discharge  their  own  indebtedness 
—  will  be  liable  to  creditors  of  corporation  for 
amount  of  money  misapplied.    Id. 

A  director  who  purchases  the  property  of  an 
insolvent  corporation  to  secure  his  own  debt  and 
takes  possession  thereof  will  take  such  property 
charged  with  a  trust  in  favor  of  other  creditors 
which  equity  will  enforce.  Beach  v.  Miller  130 
III.   173;   s.    c,   22  X.    E.    Rep.   464. 

This,  however,  will  not  authorize  another  judg- 
ment creditor  to  levy  his  execution  on  the  prop- 
erty in  possession  of  such  director  under  his  pur- 
chase.    Id. 

Director  who  holds  mortgage  on  corporate  prop- 
erty will  not  waive  his  priority  of  lien  bv  voting 
for  issue  of  bonds.     Bank  v.   Schott,   supra. 

On  trial  of  indictment  for  wrongfullv  cutting 
trees  upon  land  of  a  corporation,  verba"l  consent 
of-  two  trustees  not  admissible  in  evidence,  when 
authority  could  only  be  given  by  action  of  board 
at  a  meeting.  Mettler  v.  People,  36  111.  App.  325; 
s.  c,  i;:!5  111.  415;  s.  c,  25  X.  E.  Rep.  748. 

There  is  no  rule  of  law  to  compel  a  man  to  be 
a  director  of  a  private  corporation  against  his 
will,  and  if  elected  may  refuse  to  serve.  Oil  Co. 
v.  Morrison,  etc.,  54  111.  App.  531. 

Director  is  not  prohibited  from  lendhig  money 
to  his  corporation  and  taking  security  therefor. 
O'Donnell  v.  Steel  Co.,  53  111.  App.  314.  When 
such  a  loan  is  Invalid.     Id. 

Director  is  bound  to  manage  business  in  the  in- 
terest of  the  stockholders  alone,  and  not  for  his 
private  emolument.  Gas  Engine  Co.  v.  Charter, 
47  III.  App.  m.  Without  consent  of  stockholders 
he  cannot  become  a  contractor  with  the  corporation 
or  have  any  pecuniary  interest  in  a  contract  be- 
tween it  and  a  third  person.  Id.  But  he  may 
loan  monej-  to  the  corporation  and  take  securities 
therefor.      Id. 

Directors  authorized  to  sell  corporate  property 
cannot  become  its  purchaser.  Cab  Co.  v.  Yerkes, 
141  111.  320;  si  c,  30  X.  E.  Rep.  667.  Improper 
sale  of  corporate  property  by  directors,  how 
avoided.     Id. 

The  public  policy  of  this  State,  as  declared  by 
constitutional  and  statutory  law,  requires  that  a 
majority  of  directors  of  railroad  corporation  shall 
be  residents,  but  no  such  requirement  exists  in 
case  of  any  other  corporation.  Hence  no  ground 
of  forfeiture  of  charter  that  all  directors  and 
officers  of  a  corporation,  other  than  a  railroad  com- 
panv,  have  alwavs  been  and  still  are  non-residents. 
UolHni:  Stock  Co.  v.  People,  147  111.  234;  s.  c,  .35 
X.   E.   Rep.  608. 

Directors  have  no  right,  under  any  ciroum- 
stances.  to  use  their  otticial  position  for  their 
own  individual  benefit.  Hoffman  v.  Keichert,  147 
111.  274:  s.  c,  .35  X.  E.  Rep.  527.  If  corporatiun 
is  indebted  to  a  director,  he  will  have  same  rights 
and  remedies  as  any  other  director,  but  he  has 
no  right  to  avail  of  his  position  to  obtain  posses- 
sion of  corporate  projjerty.    Id, 

Rights  of  officers  or  directors  as  purchaser  of 
corporate  property  at  judicial  sale.     Id, 

Lease  made  by  a  corporation,  through  one  of 
its  directors,  on  the  one  part,  with  himself  aud 
another,  on  the  other  part,  not  void  so  as  to  be 
incapable  of  revocation.  Ry.  Co.  v.  Carson,  151 
111.  444:  s.  c,  ;}S  X.  E.  Rep.  140,  Such  lease  not 
void,  but  only  voidable.  Id.  Revocation  of  the 
aet  may  be  shown  aud  inferred  from  facts  and 
circumstances.    Id. 


20 


ILLINOIS. 

Directors;  oflScers  and  agents  — R.  S.,  ch.  xxxii,  §  6. 


\  contract  obtained  through  vote  of  nn  Inter- 
.sted  director  not  valid.  IliKgins  v.  Lansiugh,  loJ 
III.    an:   s?.    c.   40    N.    E.    Kep.    3tj2. 

Contract  of  n  corporation  made  byi  a  director 
with  himself  not  void,  hut  voidable.  Ky.  Co.  v. 
Car-;oii  ol  111.  App.  r>r)2.  And,  therefore,  such 
contract  niav  be  ratified  by  the  corponitiou.  Id. 
And  su<-h  ratification  need  not  be  in  writing.    Id. 

Directors  of  an  In.solvent  corporation  are  trus- 
tees for  all  creditors,  and  will  not  be  allowed  to 
aid  one  creditor  to  obtain  advantage  over  others. 
I'eterson  v.   Tailoring  Co.,  51  111.   App.  249. 

All  business  relating  to  legitimate  objects  of  the 
corporation  may  be  transacted  by  directors  with- 
out sanction  of  stockholders.  Wood  v.  Whelen,  93 
111.  lo3. 

E>irectors  of  a  railroad  must  be  stocliholders,  and 
must  be  elected  bv  stockholders.  Durkee  v. 
Askren.  1."..'.  III.  ...A:  s.  c,  40  N.  E.   Rep.  62(5. 

Notice  to  n  director  of  a  corporation  while  en- 
gaged in  its  business,  such  notice  being  concerning 
business  he  is  engaged  upon,  is  notice  to  corpora- 
tion.    IJartlett  v.  Bank.  57  111.  App.  425. 

[OfflftTs  and  nerentH.  Officers  will  have 
no  right  to  compensation  if  no  provision  is  made 
therefor.  Haider  v.  Uv.  Co.,  71  111.  10(3;  Gridley 
V.  IJv.  Co..  id.  200;  Ellis  v.  Ward,  187  id.  51S:  s.  c, 
25  N.  E.  Hep.  5;^o;  Invest.  Co.  v.  Hiddison,  4(5  111. 
.\pp.  •i^S^.  And  cannot  recover  for  services  upon 
an  imiilled  contract.  Barry  v.  C.  &  C.  Co.,  52  III. 
Aim.,    l.s:?. 

Where  evidence  falls  to  show  either  an  appro- 
priaticm  of  labor,  or  an  agreement  to  pay;  no 
ground  of  recovery.  Ins.  Co.  v.  Smith,  G5  111.  309; 
R.  R.   Co.  v.   Sage,  id.  328. 

A  person  occupying  the  position  of  superintend- 
ent, etc.,  will  be  presumed  to  have  been  duly  ap- 
pointed.    R.   R.   Co.   v.   Dalby,   19  111.  353. 

The  president  may  perform  all  acts  incident  to 
the  trust.     Mitchell  v.   Deeds,  49  111.  416. 

Contract  entered  into  by  agents  or  olScers  of  a 
private  corporation  if  ultra  vires  is  not  binding 
on  tlie  companv  so  long  as  it  remains  execu- 
tory.    R.   R.   Co.  V.  Thompson,   103  111.   187. 

Corporation  will  be  liable  for  acts  of  officers  and 
agents.  Lesher  v.  Wabash  Nav.  Co.,  14  111.  85; 
Hinde  v.  Same,  15  id.  72;  Rvan  v.  Dunlap,  17  id. 
40;  W.  S.  M.  Co.  v.  Boyington,  73  id.  534.  But 
not  for  acts  of  individual  members.  Bouton  v. 
McDonough  Co.,  84  111.  384;  Peterson  v.  I.  L.  & 
L.   Co.,  6  111.  App.  257. 

Tlie  president  can  sue  and  recover  for  advances. 
Merrick  v.   P.  C.  Co.,  01  111.  472. 

Corporation  loses  its  general  power  of  removal 
of  employes,  contained  in  its  charter,  if  it  makes 
a  specitic  contract.  Trustees  v.  Shaffler,  63  111. 
243. 

The  execution  of  a  lease  or  a  sealed  instrument 
bv  the  president,  a  good  execution  by  the  com- 
pany. N.  W.  D.  Co.  V.  Brant,  (59  111.  G.58'  But 
company  may  be  bound  by  contract  made  by  its 
agent,  though  not  under  seal.  Athens  v.  Thomas. 
82  111.  2.59. 

Corporation  not  liable  to  punitive  damages  for 
gross  negligence  of  its  servants.  R.  R.  Co.  v. 
Hammer.  72  111.   347. 

There  is  no  rule  of  law  which  prohibits  a  share- 
holder or  officer  from  dealing  with  the  company 
in  the  same  manner  as  a  stranger.  Merrick  v. 
Coal  Co.,  61  111.  472;  Beach  v.  Miller.  23  111.  App. 
151;  B.  &  T.  Co.  V.  Gade,  55  id.  181.  Or  from 
suing  or  being  sued  by   it.     Id. 

As  to  election  of  officers,  see  People  v.  Devin, 
17  111.  84.  As  to  their  powers,  see  Lark  v.  Woods, 
15  111.  256;  Dennis  v.  Maynard,  id.  479.  The  ma- 
jority may  act.     Id. 

Assignment  by  secretary  of  railroad  company,  of 
a  note  belonging  to  it,  is  prima  facie  the  act  of 
the  company.     Erye  v.   Tucker,  24  111.   181. 

Note  assigned  by  a  corporation  by  indorsement 
of  its  corporate  name;  held,  sufficient.  Temple- 
ton  V.  Hayward,  65  111.  178. 

Deed  executed  by  vice-president,  the  office  of 
president  being  vacant,  presumed  to  be  legallv 
done  and  binding.  Smith  v.  Smith.  62  111.  493: 
see  Sawyer  v.  Cox.  63  id.  130.  Contract  signed 
bv  vice-president  when  president  was  in  town, 
validity  of.  Bath  Co.  v.  Fan  Co.,  50  111.  App. 
681. 


A  secretarv  having  made  similar  contracts,  It 
was  inferred"  that  he  acted  with  the  knowledge 
of  the  directors.  Chicago  Bldg.  Society  v.  Crowell, 
65  111.   453. 

Officers  cannot  apply  property  of  the  corporation 
in  their  possession  to  the  payment  of  debts  due 
them.  Emporium  R.  E.  &  M.  Co.  v.  Enirie,  54 
III.   345. 

Ratification  of  acts  of.  what  so  regarded.  Reich- 
wald  V.   Hotel  Co.,   106  111.  4.39.       • 

Foreign  insurance  companies  doing  business  In 
this  State  will  be  bound  by  the  acts  of  their 
president  and  general  agent.  Ins.  Co.  v.  White, 
106  111.  67. 

Corporation  having  a  right  of  action  against  Its 
otncers  or  others,  for  wrongfully  dealing  with 
corporate  property  or  wrongful  exercise  of  cor- 
porate franchises,  and  actually  or  in  effect  re- 
fusing to  prosecute  a  suit;  action  may  be  main- 
tained by  a  stockholder  individually  or  for  the 
benefit  oif  all  similarly  situated,  always  —  in  such 
case  —  making  the  corporation  a  party.  Chicago 
V.  Cameron.   120  111.  451;  s.  c.   11  N.  E.   Rep.  899. 

Stockholders'  remedy  against  the  wrongful  acts 
of  corporate  officers  is  not  confined  to  the  preven- 
tion of  an  unlawful  act;  where  an  act  would  be 
enjoined  equity  may  declare  the  same  act,  if  con- 
summated, void.    Id. 

A\'here  an  action  may  be  maintained  by  stock- 
holders to  preserve  the  corporate  property  and  in- 
terests and  there  is  a  reasonable  certainty  that 
a  demand  on  the  corporation  to  sue  will  be  of  no 
avail,  demand  on  the  managing  body  will  not  be 
required.    Id. 

President  and  treasurer  have  no  implied  power 
to  confess  judgment  or  to  empower  another  to 
do  so.  They  must  receive  the  express  authority 
of  the  directors.  Elec.  L.  &  P.  Co.  v.  ingalls,  23 
111.  App.  45;  Adams  v.  C.  W.  Print.  Co.,  27  id.  313. 

While  acting  as  president  of  a  corporation,  a 
husband  cannot  be  deemed  to  be  the  agent  of  his 
wife,  other  than  as  he  is  agent  for  other  stock- 
holders. Booth  v.  Smith,  117  III.  371;  s.  c,  7  N. 
E.    Rep.   610. 

By-laws  of  a  corporation  for  profit  making  it 
the  president's  duty  generally  to  supervise  its 
business  and  placing  all  its  property  under  his 
control,  he  having  for  years  acted" as  its  attorney; 
this  evidences  his  authority  to  retain  proper  at- 
torneys. Wetherbee  v.  Fitch,  117  111.  69;  s.  c,  7 
N.   E.   Rep.   513. 

A  rule  of  directors  that  no  debt  be  incurred  or 
contract  entered  into  without  consent  ot  a  majority 
is  not  violated  by  the  president's  employment  of 
an  attorney,  a  majority  of  the  directors  consent- 
ing.    R.   R.   S.   Co.   V.   Bowman.   17  111.   App.    354. 

Notice  to  the  president  of  a  corporation  in  hands 
of  a  receiver  is  not  notice  to  the  corporation. 
Ins.  Co.  v.  Pennell,  19  III.  App.  212. 

Officer  of  a  corporation  is  personally  liable,  in 
damages,  to  one  who  is  injured  by  his  illegal  act, 
or  by  such  act  performed  by  a  servant  under  his 
control  and  by  his  flirection.  That  the  corporation 
is  also  liable  does  not  exonerate  him.  Peck  v. 
Cooper,   112  111.    194. 

(Jmnibus  company  incorporated.  President  order- 
ing the  drivers  to  exclude  colored  persons  and 
one  such  ejected  and  injured.  President  is  in- 
dividually   liable.    Id. 

Retaining  a  servant  in  the  employ  after  knowl- 
edge brought  home  to  the  otHce  or  agent  of  a 
corporation  of  his  misconduct,  resulting' in  injury 
to  another,  or  failing  to  discharge  him  for  negli- 
gence, is  evidence  as  to  the  animus  of  those  con- 
trolling the  company.    Id. 

In  action  against  a  corporate  officer,  for  injury 
done  by  a  servant,  under  his  direction,  the  only 
injury,  as  to  his  interest,  is  whether  he  had  con- 
trol of  the  management  of  the  company.  How 
much  stock  he  holds  is  immaterial,    ici. 

Notice  to  an  agent  of  a  corporation  on  whom  a 
duty  is  imposed,  of  matters  falling  within  the 
line    of    his    duty.    Is    notice    to    the    corporation. 

Sang.  C.  M.  Co.  v.  Wiggerhaus,  122  111.  281;  s.  c, 

13   N.   E.    Rep.   648. 

An  agent's  declarations  are  evidence  agalnsta 
company  only  when  they  are  res  gestae  of  some 
act  done  within  the  scope  of  his  autTiority.  Clti. 
G.   &  H.   Co.   V.   M'Nally,  15  111.   App.   ISI. 


ILLIXOIS. 


21 


Officers  and  agents  —  R.  S.,  cb.  xxxii,  §  6. 


Corporation  as  garnishee,  before  a  justice  of 
the  peace,  may  appear  by  agent.  Cornell  v.  Payne, 
115  111.   Go;   s.   c,  3  X.   E.    Kep.  718. 

The  remedy  against  one  for  falsely  assuming  to 
act  as  agent  of  a  corporation  is  an  action  on  the 
case  and  not  on  the  contract  made  by  him. 
Hancock   v.    Yunker,    S3   111.    209. 

AVhen  an  officer  of  a  corporation  seeks  to  recover 
for  salary,  he  must  show  his  right  of  recovery  by 
proving  that  he  was  an  officer  de  jure.  It  is  not 
enough  that  he  show  that  he  was  such  officer  de 
facto.    'Waterman  v.   R.   R.    Co.,   34   111.   App.    270. 

Director  may  invest  president  with  authority 
to  bind  corporation  by  deed  or  lease,  either  by 
express  resolution  or  by  an  acquiescence  in  his 
assumption  of  authority,  in  that  respect,  which 
would  justify  persons  who  deal  with  him  in  the 
inference  that  he  had  such  authority  in  fact.  So, 
if  the  act  is  one  Incident  to  the  execution  of  the 
trust  imposed  on  his  office  he  may  perform  it 
without  express  authority.  Koch  v.  Build.  Assn., 
35  111.  App.  468. 

In  the  absence  of  statutory  prohfbition  it  Is 
not  unlawful  for  officers  of  a  corporation  to  con- 
tract debts  in  excess  of  its  capital  stock.  Woolver- 
ton  V.  Taylor,  132  111.  206;  s.  c,  23  N.  E.  Rep. 
1007. 

Acts  done  by  president,  pertaining  to  business 
of  corporation,  will  be  presumed  to"  be  lawfully 
done,  unless  shown  to  bo  unauthorized.  Glover  v. 
Wells,  40  111.  App.  354;  Glover  v.  Lee.  140  111.  102; 
s.  c.  29  X.  E.  Kep.  6S0;  Hotel  Co.  v.  I.  M.  E.  .Co., 
140  111.  248;  s.  c,  29  X.  E.  Rep.  1044.  Only,  how- 
ever, in  absence  of  statute  or  by-law  touching 
subject-matter  of  the  particular  act  done.  Koch 
V.   Build.   Assn.,  supra. 

President  has  not,  merely  as  such,  authority  to 
execute  deeds,  mortgages  or  leases.  He  is  merely 
the  presiding  officer  at  meetings  of  directors.  Id. 
So,  he  ma.v  not  transfer  all  the  property  of  cor- 
poration, in  payment  of  its  principal  creditor, 
without  authoritv  of  directors.  Ragland  v. 
M'Fall.  137  111.  91:  s.  c,  27  X.  E.  Rep.  7.5.  But 
stockholders  may,  by  remaining  silent,  be  estopped 
from   repudiating  such   transfer.    Id. 

Corporation  will  not  be  heard  to  deny  authority 
of  its  managing  officer  when  it  has  deceived  the 
public  as  to  his  authority.  M'Donald  v.  Chisholm, 
131  111.  2.S2:   s.  c.  23  X.    E.    Rep.   596.  • 

Delegation  of  power  to  officers,  construction  of. 
Bank  v.  Burch,  40  111.  App.  512;  see,  also,  Matson 
V.  Alley.  41  id.  73. 

If  corporation  adopts  resolution  authorizing  presi- 
dent and  secretary  to  execute  a  deed  or  mortgage, 
presumption  is  that  secretary  records,  or  otherwise 
preserves,  such  resolution.  Bank  v.  Schott,  135 
111.  667. 

Sale  of  property  by  president,  though  invalid, 
may  be  ratified  by  directors.  Beach  v.  Miller,  130 
111.   174;  s.   c.  22  X.   E.   Rep.   464. 

Declarations  of  president,  though  wifhin  scope 
of  his  authority,  not  admissible  against  director  or 
stockholder  not  present  when  made.  Bank  v. 
Schott.  supra.  When  such  declarations  are  bind- 
ing.   R.   R.   Co.   V.   Ashling,   34  111.   App.   109. 

Corporation  made  liable  for  false  representation 
of  officers.    Schubart  v.   Gas  Co.,  41  111.  App.  18S. 

President  cannot  bind  corporation  by  giving  its 
note  to  pay  his  own  debt.  Kelly  v.  Post.  37  111. 
App.  397.  Xor  by  giving  its  check.  Malt,  etc., 
Co.  v.  Stern,  37  III.  App.  588. 

A  corporation  being  an  artificial  body  can  act 
only  through  agents.  Schultz  v.  Plankington  Bk., 
40  111.  App.  470;  Ins.   Co.   v.   Kennedy,  57  id.   136. 

Ergo,  affidavit  setting  forth  a  contract  entered 
into  with  a  corporation  must  set  forth  the  agent 
with  whom  it  was  made  and  the  special  facts  at- 
tending the   making   thereof.    Id. 

A  corporation  can  be  punished  for  contempt  only 
through  its  officers,  or  those  acting  in  aid  of  it. 
Sercomb  v.  Catlin,  128  111.  564;  s.  c,  21  N.  E.  Rep. 
606. 

The  acts  or  non-actions  of  its  servants,  within 
the  scope  of  their  dutv,  are  the  corporation's  acts 
or  omissions.  R.  R.  Co.  v.  Hines,  132  111.  168; 
s.   c.   23  X.   E.    Rep.    1021. 

Corporntion  not  liable  for  libel  written  by  an 
agent,  when.    Ins.  Co.  v.  Paul,  37  111.  App.  442. 

The  fact  that  a  note  is  signed  by  the  makers 
with   the   addition    of    "  Pres."    and    "  Sec."    does 


not  limit  their  liability  or  make  their  signatures 
those  of  agents  of  a  disclosed  principal;  there 
being  nothing  to  indicate  an  indebtedness  or 
promise  of  auj-  corporation.  Williams  v.  Miami 
P.    Co.,   36  111.   App.   114. 

Foreign  insurance  company  doing  business  in 
this  State  will  be  bound  by  acts  of  its  president 
and  general  agent.     Ins.   Co.  v.  White,  106  111.  67. 

The  right  of  one  stockholder  that  all  agents  of 
the  corporation  shall  act  wholly  in  the  interest 
of  the  corporation  is  as  great  as  that  of  all  the 
stockholders.    Rigdon  v.  Walcott,  43  ill.  App.  352. 

Power  of  president  to  execute  judgment  notes. 
Buggy  Co.  V.  Litchfield,  etc.,  Co.,  55  ill.  App.  98. 

Xotice  to  director  or  president  is  notice  to  the 
corporation.    Bartlett   v.    Bank,    57    111.    App.    425. 

Duty  of  a  corporation  in  employing  agents  is 
merely  to  take  ordinary  care,  and  appoint  for 
work  such  agents  as  are  competent  and  likely  to 
do  it  properly.  Mining  Co.  v.  Dieienthaler,  48 
111.  App.   616. 

Promissory  notes  may  be  executed  by  president 
and  secretary,  when  done  in  good  faith,  to  secure 
lawful  indebtedness  of  corporation.  Matson  v.  Al- 
ley,  141  111.  2S4:  s.   c,  31  X.  E.  Rep.  419. 

Powers  conferred  by  stockholders  on  president 
and  secretary  cannot  be  exercised  by  one  of  them 
only,  and  if  one  of  them  is  disqualified  neither  of 
them  can  act.  Cab  Co.  v.  Yerkes,  141  111.  320; 
s.    c,   30  X.   E.    Rep.   667. 

Proof  of  publication  of  a  notice  may  be  made 
by  agent  of  corporation.  Maass  v.  Hess,  140  111. 
576;   s.   c.  29   X.    E.   Rep.   887. 

Corporation  must  necessarily  act  by  or  through 
n gents.  Whom  to  be  regarded  as  such,  and  when 
corporation  is  chargeable  with  negligence.  Pressed 
Brick  Co.  v.  Sobkowiak,  148  111.  573;  s.  c,  36  X. 
E.  Rep.  572;  L.  S.  &  M.  S.  Ry.  Co.  v.  B.  &  O.  R. 
R.  Co..   149  111.  272;  s.   c,  37  X.   E.  Rep.  91. 

Admissions  of  president  are  admissions  of  cor- 
poration,  when.    Id. 

Xotice  to  managing  officer  or  agent  of  the  cor- 
poration may  usually  be  regarded  as  notice  to  the 
corporation  itself.  Koch  v.  Roth,  150  111.  212; 
s.   c,   37  X.   E.   Rep.   317. 

Xotice  given  by  a  corporation,  claiming  a  me- 
chanic's lien,  by  its  attorney,  not  under  the  cor- 
porate seal.  Lumber  Co.  v.  Fullenwider,  150  111. 
629;   s.   c,  37  X.   E.   Rep.   899. 

Power  given  officers  to  borrow  money  and  pur- 
I  chase   stock  and   material   should  be   strictly  con- 
I  strued.    Paper  Co.   v.   Robbins,   151  111.  588;  s.   c, 
38  X.   E.   Rep.   153. 

When  an  officer  purchasing  securuies  of  the 
'  corporation  at  a  discount  will  not  be  held  to  en- 
I  force  them  for  their  face  value.  Iliggins  v. 
'  Lansingh,  154  111.  301;  s.  c,  40  X.  E.  Rep.  362. 

Xote  and  mortgage  by  a  corporation  to  its  presi- 
1  dent,  to  secure  a  sum  advanced  to  him  in  payment 
,  of  stock  subscription  of  another  stociiholder,  are 
,  invalid.  Hodson  v.  Glass  Co.,  156  111.  397;  s.  c, 
I  40   X.    E.    Rep.   971. 

:      The    president    of    a    publishing    corporation    is 
j  its  agent,   and  a  proper  person   to  make  the  cer- 
tificate  of  the   publication   of  the   delinquent    list 
1  b.v    such   corporation,    within    meaning   of    section 
186  of  the  Revenue  Act.    Hertig  v.  People,  159  111. 
237;  s.  c,   42  X.   E.   Rep.   879. 

Fact  that  president  of  a  corporation  received,  as 
a  part  consideration  for  sale  of  its  property,  a 
r.ote,  the  proceeds  of  which,  when  paid,  he  used 
to  pay  debt  of  the  corporation  upon  which  he  was 
personally  liable,  is  not  such  an  appropriation  of 
its  funds  as  amounts  to  a  fraud  upon  other  credi- 
tors.   Parsons   v.    Hatton,   58   111.   App.    272. 

Vice-president  of  corporation  may  act  as  its 
agent,  and  if  he  is  by  it  recognized  and  treated 
or  held  out  to  the  world,  his  acts,  within  the 
scope  of  the  authority  given  to  him,  are  as  bind- 
ing as  those  of  any  other  agent.  Union  Assn.  v. 
Geer,  64  111.  App.  648. 

Information  given  to  president  of  a  bank  for 
purpose  of  transmission  made  through  his  bank, 
will  be  regarded  as  information  transmitted  to 
bank,  whether  president  in  fact  does  so  or  not. 
Bartlett  v.   Bank,   57  111.   App.   425. 

Persons  deal  with  agents  of  a  corporation  at 
their  peril,  when.  Bricklavers  v.  Fitzgerald,  59 
III.  App.  362. 


22 


ILLINOIS. 

Officers  aud  agents;  subscriptions  —  R.  S.,  ch.  xxxii,  §  7. 


tions 

the 

Biioh    otficers   as    af,'euts    oi    luc    tuipi/i"..."....  ■••-- 

not   ai.plv   to  secun.   the   payment   of  an   existing 

,l"bt   IhJo"  and   unpaid.    Asliley   v.    Illinois.   60    111. 

'^Neco'f^'tv  of  bu.<;incss  required  that  public  deal- 
ing with  officers  of  corporation  in  t'ood  taith  on 
strenKth  of  apparent  power,  should  be  protfCtod 
acainst  such  claims  as  merely  alleet  the  re-ularity 
of  callinf,'  of  meetings  of  board  of  directors.  I.K 
\  corporation  can  only  act  by  Its  agents,  the 
nets  of  whom,  within  the  scope  of  their  apparent 
nuthoritv.  are  acts  of  the  corporation.  U.  K.  Co. 
V    Carter,  l!2  111.   App.  018. 

A  contract  of  guarantee  made  by  an  executive 
officer  of  the  corporation,  in  the  absence  of  ex- 
press authority  of  board  of  directors,  does  not  bind 
the    corporation.    Dobson   v.    Moore,    62   111.    App. 

The    general    solicitor    of    a    corporation    is    not 
presumed   to  have  authority   to  make  agreements 
for  it,    save  in    matters    belonging   to   his   depart-  i 
ment.    Rv.   Co.   v.   Chicago,  62  111.   App.   502. 

A  notice  properly  served  upon  an  agent  who  1 
Is  a  manager  of  a  corporation  is  notice  to  the  i 
corporation.    Lyon  v.   Crew,   63  111.    App.   329.  , 

Strangers  to  a  corporation  dealing  in  good  faith 
with  its  officers  may  rely  on  their  acts  as  legally 
authorized.  Ashley  "Wire  Co.  v.  Illinois  Steel  Co., 
45   N.    E.    Rep.   410. 

Directors  cannot  vote  a  large  bonus  in  addition 
to  a  salary  to  one  of  their  number  as  president, 
when  he  takes  part  in  the  proceedings.  McNulta 
V.  Bank.  45  N.  K.  Rep.  !).54. 

A  guarantee  of  a  third  person's  note  by  a 
manager  of  a  corporation  without  special  authority 
is  invalid.  Dobson  v.  Moore,  45  N.  E.  Rep.  243. 
A  note  of  a  corporation  payable  to  "  B.,  presi- 
dent," is  payable  to  B.  individually.  Hately  v. 
rike,  44  N.   E.   Rep.  441.] 

[By-la-CT-s.  Corporation  may  make  such  by- 
laws as  are  consistent  with  its  charter.  Chandler 
v.  R.  R.  Co.,  IS  111.  190.  But  not  such  as  will 
impair  contracts.  111.,  etc..  Col.  v.  Cooper,  25 
111.  148.  They  will  be  binding  if  adopted  by  all 
parties  in  interest.  People  v.  Mfg.  Co.,  82  111.  457. 
A  stranger  contracting  with  a  corporation  is 
not  bound  to  take  notice  of  its  by-laws.  Bath  Co. 
V.  Fan  Co.,  50  111.  App.  681;  "Wait  v.  Smith,  92 
111.  385. 

The  by-laws  of  every  corporation  must  provide 
for  the  "calling  of  meetings  of  directors.  Stobo  v. 
Prov.  Co.,  54  111.  App.  440. 

Bv-laws  which  are  in  restraint  or  trade  are 
illegal  in  the  sense  that  the  courts  will  not  enforce 
them.  Comm.  v.  Stock  Exchange,  148  111.  210; 
S.   c.   .^2  N.   E.   Rep.   274. 

Power  of  a  corporation  to  make  by-laws.  Dur- 
kee  v.  I'eople,  53  111.  App.  396.  By-law  giving 
holders  of  bonds  the  right  to  vote  for  directors 
is  unconstitutional  and   void.    Id. 

Stockholders  are  jiresumed  to  have  knowledge 
of  the  by-laws.  Mandel  v.  L.  &  C.  Co.,  51  App. 
204.  Unreasonable  provisions  in  by-laws,  result  of. 
Id. 

A  by-law  authorizing  holders  of  railroad  bonds 
to  vote  at  stockholders'  meetings  is  void.  Durkee 
V.  Askren.  1.55  111.  354;  s.  c,  40  N.  E.  Rep.  626; 
53  111.    App.   396. 

Where  it  is  stipulated  by  the  certificate  of  stock 
that  the  by-laws  of  an  association  shall  be  a  part 
of  the  contract  between  the  association  and  the 
stockholders  the  latter  will  be  bouna  by  the  by- 
laws and  will  not  be  permitted  to  question  the 
legitimate  exercise  of  the  powers  conferred 
thereby  upon  the  association.  Pioneer  Co.  v. 
Brockett.   58   111.    App.   204. 

A  person  in  becoming  a  member  of  a  corpora- 
tion, agreeing  to  be  bound  by  its  laws,  does  not 
agree  to  submit  to  acts  violative  to  tiie  rules  bv 
which  he  and  all  other  corporators  are  bound. 
Nelson  V.   Board,  58  111.   App.  41I0. 

By-law  attempting  to  limit  the  future  action  of 
the"  stockholders  in  reference  to  the  increase  of 
stock,  and  the  right  to  sell  or  transfer  it,  is  void. 
McXulta  V.   Bank.  45  N.    E.   Rep.   954. 

By-law  authorizing  the  manager  of  a  corpora- 
tion to  sign  notes  and  checks  held  not  to  authorize 


a  guarantee  of  a  third  person's  note.    Dobson  v. 
Moore,   45  N.   E.   Rep.  243. 

By-laws  requiring  written  notice  of  special  meet- 
ings shall  be  held  in  a  specified  place,  considered. 
Ashley  Wire  Co.  v.  Illinois  Steel  Co.,  45  N.  E. 
Rep.  410.] 

§  7.  Tlie  shares  of  stock  shall  l>e  not  less 
than  ten  nor  more  tlmn  one  hundred  dol- 
lars each,  and  shall  lie  deemed  personal 
pioperty,  and  transferable  as  such  in  the 
manner  provided  by  the  by-laws,  and  sub- 
scriptions therefor  shall  be  made  payable 
to  the  eoriioration.  and  shall  be  payable  in 
such  installments  and  at  sucli  time  or  times 
as  shall  be  determined  by  the  directors  or 
managers,  and  an  action  may  be  maintained 
in  the  name  of  the  corporation  to  I'ecover 
any  installment  which  sliall  remain  duo  and 
unpaid  for  the  period  of  twenty  days  after 
jiersonal  demand  therefor,  or,  in  cases 
where  personal  demand  is  not  made,  within 
tliirty  days  after  a.  written  or  printed  de- 
mand has  been  deposited  in  the  post-oihce, 
properly  addressed  to  the  post-office  address 
of  the  stockholder.  The  directors  may.  by 
by-law,  prescribe  other  penalties  for  a  fail- 
ure to  pay  tlie  installments  that  may  from 
time  to  time  become  due,  but  no  penalty 
working  a  forfeiture  of  stock,  or  of  the 
amounts  paid  thereon,  shall  be  declared  as 
against  any  estate  before  distribution  shall 
have  been  made,  or  against  any  stock- 
holder before  demand  shall  have  been  made 
for  the  amount  due  thereon,  either  in  per- 
son or  by  a  written  or  printed  notice,  duly 
mailed  to  the  proper  address  of  such  stock- 
holder at  least  thirty  days  prior  to  the  time 
when  such  forfeiture  is  to  take  effect:  Pro- 
vided, That  proceeds  of  said  sale  over  and 
above  the  amount  due  on  said  shares  shall 
be  paid  to  the  delinquent  stockholder. 


Transfers  of  stock.  §  8,  post.  Assessments,  etc 
§  15,  post.  Suit  against  stockholders.  §  25,  post. 
Incre'ase  or  decrease  of  capital  stock.  §  50,  post. 
Fraudulent  transfers  of  stock.    Ch.   38,   §   119. 

[Stock  issued  in  violation  of  law  is  void.  I'eople 
V.  Mfg.  Co.,  82  III.  457.  Also,  stock  issued  to 
person  paying  nothing.    99  111.   222. 

Subscription  to  stock  not  invalidated,  if  the 
party  subscribing  does  not  pay,  ana  is  a  com- 
missioner.    Ryder  v.   R.   R.   Co.,   13  111.   516. 

Payment  of  subscriptions  to  stock  made  before 
organization  will  be  enforced,  if  organization  is 
afterward  perfected.  Cross  v.  Mill  Co.,  17  111. 
.54;  R.  R.  Co.  v.  McXeelv,  21  id.  71;  Goodrich  v. 
Reynolds  ct  al.,  31  id.  491. 

Ortificate  of  stock  need  not  be  given  to  enable 
the  company  to  recover  a  subscription.  (Chandler 
v.  R.  R.  Co.,  IS  111.  190;  R.  R.  Co.  v.  Elting,  17 
id.  429:  Sprague  v.  B.  R.  Co..  19  id.  174;  R.  E. 
Co.  v.  Zimmer,  20  id.  654;  Rice  v.  U.  R.  Co.,  21 
id.  95;  R.  R.  Co.  v.  Earp,  21  id.  291;  R.  R.  Co.  v. 
Beers,   27  id.    185. 

Corporation  cannot  be  enjoined  from  collecting 
installments  on  subscriptions  because  the  money 
may  be  expended  in  extending  the  road,  unless 
stipulated.    Dill  v.  R.  Ii;  Co.,  21  111.  91. 

Where  unity  of  interest  is  destroyed,  subscribers 
to  the  stock  will  be  released.  Supervisors  v.  R.  R. 
Co.,  21  111.  338. 

Company  under  no  obligation  to  make  a  demand. 
Goodrich  v.   Reynolds  et  al.,   31   111.   491. 


ILLI^^OIS. 


23 


Subscriptions  —  R.  S.,  ch.  xxxii,  §  7. 


Airreonieiit  that  a  subscribor  should  not  pay 
his  subscription,  until  all  the  stock  was  subscribed, 
is   fraud.     Foy    v.    IJlackstone,    31   111.   53U. 

Subscriber  for  stock  cannot  rescind  his  contract. 
Klein  v.  It.   R.  Co.,  13  111.  51.5. 

Subscriptions  to  stock  of  railroad,  to  be  paid 
when  the  sum  of  .?5.000  was  raised  is  a  condi- 
tional  contract.    Chase   v.    R.    R.   Co..   38   111.   215. 

Certificate  of  stock  not  necessary  to  constitute 
one  a  stockholder,  under  section  u  of  the  Act  of 
1857      Corwith   v.    Culver,    60    111.    502. 

Is.^uo  of  new  certificate  of  stock  to  a  purchaser: 
company  estopped  to  deny  the  stock  is  yalid.  Hall 
y.    U.    R.   Co.,  70  111.  G73. 

Suit  to  recover  for  a  subscription  to  corporate 
stock;  the  existence  of  the  corporation  and  its 
capacity  —  lawfully  —  to  issue  stock  are  conditions 
precedent  to  the  ripht  to  recover.  Hudson  v.  G. 
H.   Semiii.,  113  111.  620. 

Subscriptions  to  corporate  bonds  on  condition 
that  a  specified  number  be  subscribed  for  cannot 
be  enforced  before  condition  performed.  R.  R. 
Co.  v.  Eunor.  116  111.  50;  s.  c,  4  N.  E.  Rep.  762. 

Words  heading  a  sul)scription  paper,  "  assess- 
ments not  to  exceed  .?10  a  share,"  cannot  qualify 
an  express  promise  to  pav  in  the  body  of  the  con- 
tract. Tel.  Co.  y.  Gray,  122  111.  634;  s.  c,  14  X. 
E.   Rep.   214. 

Agreement  that  payment  of  stock  shall  not  be 
enforced,  but  made  up  by  dividends  —  if  lawful  — 
cannot  be  set  up  to  defeat  a  note  given  for  the 
stock  thereafter,  promising  unqualifiedly  to  pay. 
M'Dowell  y.  Chicago  Steer  Co.,  124  111.  494;  s.  c, 
16  X.   E.   Rep.  854. 

Secret  agreement  that  a  subscriber  to  stock  shall 
pay  out  a  part  of  his  subscription  is  void;  he  is 
bound  for  the  whole  amount.  R.  R.  Co.  y.  Ennor, 
116  111.  59;  s.  c.  4  X.   E.   Rep.  762. 

Equity  will  relieve  against  a  judgment  on  sub- 
scription for  bonds  and  stock  wiiich  plaintiff  can- 
not deliver  to  the  extent  of  the  value  of  the  bonds, 
etc..  when  the  company  put  it  out  of  its  power 
to  deliver.    Id. 

Where  notes  secured  by  mortgage  on  real  estate 
are  accepted  in  payment  for  shares  subscribed, 
this  will  constitute  a  good  consideration.  Ins.  Co. 
V.    Osgood,   93   111.   69. 

Verbal  agreement  to  take  stock  in  payment  of 
a  note  given  is  inadmissible  in  evidence  in  action 
on  the  note.  Mosher  t.  Rogers,  117  111.  449;  s.  c, 
5   X.    E.    Rep.    5f<i. 

Tender  of  stock  is  not  a  condition  precedent  to 
a  right  of  action  on  a  note  given  on  a  subscription 
to  the  capital  stock.  Wemple  v.  R.  R.  Co.,  120 
111.    197;   s.  c,   11   X.   E.    Rep.   906. 

Directors  have  no  power  to  release  the  obliga- 
tion of  a  subscriber  to  pav  his  subscription. 
Ronton  V.  Dement,  123  III.  145;  s.  c.  4  X.  E.  Rep. 
62;  Turner  v.  Ala.   M.   &  M.  Co.,  25  111.  App.   144. 

A  promise  to  issue  full-paid  stock  on  the  pay- 
ment of  40  per  cent,  will  not  limit  the  subscriber's 
liability;  the  remaining  60  per  cent,  may  be  col- 
lected after  stock  issued.  Tel.  Co.  v.  Gray,  122 
111.   6.34;   s.   c.   14  X.    E.   Rep.  214. 

If  stock  subscribed  for  cannot  lawfully  be  is- 
sued the  subscriber  being  sued  may  call  for  strict 
proof  that  the  corporation  suing  is  such  de  jure. 
Hudson  y.   G.  H.   Semin..   113  111.  626. 

If  the  amount  of  capital  stock  be  fixed,  there  is 
no  liabilit.v  on  a  subscription  for  stock  until  the 
whole  amount  of  stock  is  subscribed  for.  Temple 
V.   Lemon,   112   111.   54. 

In  such  case  a  subscriber  cannot  be  held  in- 
dividually liable  for  a  debt  of  the  corporation, 
unless  he  has  in  some  manner  estopped  himself 
from  alleging  the  non-subscription.    Id. 

Although  the  capital  stock  of  a  corporation  is 
fixed,  by  its  charter,  at  a  certain  sum  it  has  a 
right  to  perform  acts  necessary  to  perfect  its 
organization  and  to  prepare  for  entering  on  its 
regular  business  before  the  whole  capital  has  been 
subscribed.  People  v.  Xat.  Bk.,  129  111.  627;  s.  c, 
22  X.    E.    Rep.   28.S. 

A  charter  provided  "  before  said  corporation 
shall  commence  business,  the  stockholders  shall 
pay  the  several  amounts  subscribed  in  tull,"  etc. 
The  words  "  several  amounts  subscribed."  mean 
the  several  amounts  subscribed  which  together 
make  up  the  full  amount  of  the  capital  stock. 
If  less  than  the  amount  of  capital  stock  required 


I   the  company  may   not  proceed   to  do 
Id.   628. 


is   paid    ii 
I  business. 

'  Each  stockholder  has  a  vested  right  in  the  con- 
tract for  subscription  of  everv  other  stockholder. 
Winston  v.  Dorsett  P.  &  P.  Co.,  129  111.  71;  s.  c, 
21   X.    E.    Rep.  514. 

Unpaid  subscriptions  to  stock  of  a  corporation 
constitute  a  trust  fund  which  may  be  subjected 
to  the  payment  of  debts.  Id.;  Matson  v.  Alley, 
41  III.  App.  72.  ' 

Creditors  are  entitled  to  look  at  the  stock  as  It 
appears  upon  the  face  of  the  subscription  list. 
When  no  creditor  is  injured,  however,  stockholders 
may,  as  between  themselves,  agree  to  release  one 
of  them  from  liabilitj\  Winston  v.  Dorsett  P.  & 
P.    Co.,   supra. 

Semhle,  there  can  never  be  but  one  original  sub- 
scription for  the  whole  capital  stock  of  a  corpora- 
I  tion.  Tel.  Co.  v.  Bush,  35  111.  App.  zi-k. 
j  So,  one  who  subscribes  to  stock  after  the  whole 
I  has  been  taken  cannot  be  liable  to  lqc  company 
I  as   a   subscriber.    Id. 

I  Stock  which  has  been  isstied  to  or  passed  into 
the  ownership  of  outside  parties  cannot  be  sub- 
scribed for.  It  is  not  then  the  subject-matter  of 
subscription.  Bates  v.  Tel.  Co.,  134  111.  545;  s.  c, 
25   X.    E.    Rep.   .521. 

Xo  device  will  free  a  holder  of  corporate  stock 
from  his  obligation  to  pay  for  such  stock  its  money 
value  equal  to  the  par  of  the  stock.  Ailing  v, 
Wenzell.   .35  111.   App.   247. 

As  against  creditors,  no  contract  made  by  the 
company  can  be  allowed  to  stand,  which  attempts 
to  change  a  subscription  into  a  purchase  of  full- 
paid  stock,  or  to  diminish  the  amount  agreed  to 
be  paid  by  the  stockholder.  Bates  v.  Tel.  Co., 
supra.  * 

The  attempted  release,  by  the  directors  of  a 
corporation,  of  one  su)»scriber  to  its  capital  stock 
from  the  payment  of  the  price  thereof,  does  not 
release  another  subscriber,  who  has  not  agreed  to 
such  attempted  release,  from  payment  for  his 
stock.     Fey  v.  P.  Watch  Co.,  32  111.   App.   627. 

A  subscriber  to  the  capital  stock  of  a  corpora- 
tion who  claims  to  be  released  because  of  some 
fraud  in  inducing  him  to  become  a  member  of 
the  corporation  must  claim  his  release  at  the 
earliest  possible  moment.  The  burden  is  on  him, 
if  much  time  elapses,  to  show  that  he  had  no 
notice.    Id. 

A  certificate  of  stock  is  merel.v  one  of  the  evi- 
dences of  the  existence  of  the  relation  of  stock- 
holder. Bates  V.  Tel.  Co.,  134  111.  548;  s.  c,  25 
X.    E.    Rep.    .521. 

A  corporation  and  its  stockholders  are  not  one 
and  the  same.  Xat.  Bk.  v.  Waterman,  134  III. 
467:   s.   c.  29  X.   E.   Rep.   50.3. 

The  damages  for  the  conversion  of  a  certificate 
of  membership  in  a  corporation,  of  Infinitesimal 
value  per  se,  are  the  value  of  the  right,  interest 
or  property  of  which  the  paper  evidences  the 
title  at  the  time  of  conversion.  Olds  v.  Open  Bd., 
38  III.   App.   448. 

The  rights  of  a  shareholder  are  rights  of  con- 
tract or  choses  in  action.  Such  right  is  an  equi- 
table right  to  have  the  entire  property  managed  in 
accordance  with  the  charter  and.  after  the  dis- 
solution of  the  company,  to  have  the  assets  re- 
duced to  cash  and  distributed.  Bank  v.  Bvram, 
131  111.   100;   s.  c.  22  X.   E.   Rep.   842. 

The  property  of  a  stockholder  consists  of  his 
right  to  a  share  in  the  net  assets  of  the  corpora- 
tion, proportionate  to  the  number  of  shares  to 
which   he   has   title.    Id. 

Subscribers  dp  not  become  liable  to  pay  until  a 
full  assessment  has  been  made.  Tel.  Co.  v. 
Barker,  56  111.  App.  402.  And  assessments  must 
not  be  in  violation  of  contract  between  corpora- 
tion and  the  subscribers.    Id. 

Assessments  upon  stock  of  insolvent  corporation 
must  be  equitable.  Bennett  v.  Tel.  Co.,  53  III. 
App.   277. 

Subscription  for  stock  for  mere  purpose  of  en- 
abling corporation  to  procure  other  subscriptions, 
and  afterward  canceled,  will  not  be  permitted, 
and  such  subscriber  will  be  held  liable  to  credi- 
tors after  corporation  has  become  insolvent.  Tel. 
Co.  V.   Haight,  49  111.  App.  633. 


24 


ILLINOIS. 

Subscriptions;  assignment  before  payment  —  R.  S.,  ch.  xxxii,  §  8. 


his 

111 


Stoc.hoUler  estoppod  to  deny  ^he^.ood  ^faitb^o| 
is    M.bscnptlon    ,Bu>l.ne^n     ^^^ 

1.  {•<•;  s.  c,  li  >•  '^':  "^»      .,      nature  of  a  con- 
Subscriptlou  to  sto|;K  •-  »\^th.  nat^^^^^  ^^^ 

tlnulnj;  '>"'-' 'Zl\fZVbocom\us  incorporated,  ac- 
whcn  corporation,  afur  mcu        r,  ^     ^,^  _   j^q 

cepts   the  oner     Hote^i    \u.,    WU.    Acceptance  of 


of    otber    stocRUOKjc..,     -'^-^^    j^-.  6«7. 
Werkes.   141   111.  ^-  ' .  s.  J-  -^^        .,       corporation 
The  purchase  «^ '^.^  °;\."   ertv  even  though  done 

Sf,;S'5°epa°';,'  »n'.he"'S-iS?pre  o?  oon.,.y,  but 

"conditional   subscription   *«,  ^^P^^lhS""  isl'm: 

fhoW   cancellation    of   stock    subscription.    Id 
'court,  through  receiver,   ba«  bo  more  powei    to 

^^^^V^^^Z^^^t'^o  ^^'^^  ^en 

"^E^xcesslVe  Issue  of  stock  not  a  fraud  on  the  com- 
panv  itself.  Higgins  v.  Lansingh,  154  111.  rfOi, 
B    r     40  N    E.   Rep.   362.  .      ,   . 

Wiien  holders  of  preferred  stock  cannot  claim 
to  be  exclusive  stockholders.    Id.  ,.„.  .     <.,^.,- 

Assessment  of  stock  creating  an  equitable  title, 
inav  be  made  bv   moans  of  scrip  certihcates.    Id. 

Relation  of  stobkholders  to  corporation.  Scln-ader 
V.  Heinzclman,  51  111.  App.  32;  Tel.  Co.  v.  Barker, 

^^siatu1?"of  stockholder  after  forfeiture  of  his 
stock.    Mandel  t.   L.    &   C.    Co.,    51   111.    App.   204 

Subscription  to  capital  stock  cannot  be  canceled 
because  subscriber,  through  ignorance  of  la^\ , 
acted  under  mistaken  idea  that  she  was  purchas- 
ing stock  of  a  corporation  already  organized,  in- 
stead of  participating  in  the  organization  of  a 
new  corporation.  -WiHiams  v.  Electric  Co.,  IbO 
111.  526;   s.   c,  43  N.   E.    Rep.  595. 

In  absence  of  agreement  as  to  manner  of  pay- 
ment for  capital  ^stock,  other  than  mere  act  of 
subscription,  a  money  payment  may  be  enforced; 
but,  bv  special  contriict,  labor,  properly  or  other 
valuable  consideration  may  be  taken  as  such  pay- 
ment. Farwell  v.  Tel.  Co.,  161  111.  522;  s  c>r,  44 
N  E  Hop.  «•!.  I'.ut  the  valuation  of  such  prop- 
erty or  labor  must  be  made  in  good  faith.    Id. 

The  board  of  directors  of  a  corporation  have  no 
power  to  release  a  subscriber  to  the  capital  stock 
without  full  payment  of  his  subscription.  Stone 
V.    Coal   Co..   59  111.   App.   536. 

A  corporation  cancelling  a  stock  certificate,  and 
Issuing  another  to  an  assignee  under  a  forged 
assignment,  will  be  required  to  reissue  a  certifi- 
cate to  the  original  owner.  Chicago  Edison  Co. 
V.    Fav,   45   N.    E.    Rep.    534. 

Where  a  corporation  canceled  a  certificate  of 
stock  and  Issued  another  under  a  forged  assign- 
ment, the  assignee  is  not  a  necessary  party  to  a 
suit  by  the  owner  to  compel  the  issuance  of  an- 
other "certificate.    Id.] 


§  8.  Every  assignment  or  transfer  of 
stocks  on  which  there  remains  any  portion 
nnpaid  sliall  be  recorded  in  the  office  of  the 
recorder  of  deeds  of  tiie  comity  within 
Avhicli  the  principal  oliice  is  located,  and 
eacli  stockholder  sliall  be  liable  for  the  debts 
of  tlie  corporation  to  tlie  extent  of  the 
amonnt  that  may  bo  nnpaid  upon  the  stock 
lield  by  him,  to  be  collected  in  the  manner 
herein  provided.  No  assi-rnor  of  stocks  sliall 
bo  released  from  any  sucli  indebtedness  by 
reason  of  any  assignment  of  his  stock,  but 
shall  remain  liable  therefor,  jointly  with  the 
assignee,  until  the  said  stock  be  fully  paid. 
AVhenever  any  action  is  brought  to  recover 
any  indebtedness  against  the  corporation,  it 
shall  be  competent  to  proceed  against  any 
one  or  more  stockholdm-s  at  the  same  time, 
to  the  extent  of  the  balance  unpaid  by  such 
stockholders  upon  the  stoclv  owned  by  them, 
respectively,  whether  called  in  or  not,  as  in 
cases  of  garnishment.  Every  assignee  or 
transferee  of  stock  shall  be  liable  to  the 
company  for  tlie  amount  unpaid  thereon,  to 
the  extent  and  in  the  .same  manner  as  if 
ho  had  been  the  original  subscriber. 

See  §  7,  ante,  and  cross-references.  Suit  against 
stockholders.  §  25,  post.  Sale  of  stock  on  execu- 
tion. Ch.  77,  §§  52  et  seq.  Executor  holding  stock, 
liability  of.  §  23,  post.  Fraudulent  transfer  of 
stock.    Ch.  38,  §§  119  et  seq. 

[Corporation  may  purchase  its  own  stock  unless 
prohibited  by  its  charter.  Chetlain  v.  Ins.  Co., 
86  111.  220;  Ward  v.  Farwell,  97  id.  593;  Bank  v. 
Gridley,  91  id.  457;  Fraser  v.  Ritchie,  8  111.  App. 
554;  Clapp  v.  Peterson,  104  111.  26;  Ins.  Co.  v. 
Swigert,  135  id.  162;  s.  c,  25  N.  E.  Rep.  680. 
And  may  hold,  reissue  or  retire  the  same.  Id. 
But  not  where  it  ■\vill  injure  a  creditor.  Bk.  v. 
Burch,    40    111.    App.    513. 

Corporation  liable  in  case  for  refusing  to  trans- 
fer shares  of  its  capital  stock.  Ins.  Co.  v.  Osgood, 
93  111.   69;   Ins.    Co.   v.    Mfg.    Co.,   97  id;  537. 

Assignment  or  transfer  of  stock  when  not  en- 
tered on  the  books  of  the  company  passes  equi- 
table title  only.  Otis  v.  Gardner,  105  ill.  436.  As- 
signor can  have  no  relief  against  equitable  trans- 
fer of  stock.    Id. 

Transfers  do  not  affect  character  as  an  original 
subscriber.  Ramsey  v.  Ins.  Co.,  55  111.  311.  A 
corporation  cannot  become  a  stockholder  in  an- 
other corporation  unless  by  power  specifically 
granted  by  its  charter  or  necessarily  implied  in 
it.  People  V.  Chicago  G.  T.  Co.,  130  111.  2S4;  s.  c, 
22  N.  E.  Rep.  798.  And  on  this  point  the  General 
Incorporation   Act  is   silent.    Id. 

Stockholders  are  not  partners.  Baker  v.  Backus, 
32  111.  82. 

Under  the  Act  of  1857,  relating  to  private  cor- 
porations, stockholders  are  primarily  liable  to 
creditors.  Culver  v.  Bank,  64  111.  528;  Steel  v. 
Dunne.  65  id.  298. 

Amendment  of  charter,  as  affecting  liability  of 
stockholders.    Dows  v.    Naper.   91    111.    44. 

Depreciation  of  stock  no  excuse  for  not  paying 
subscription.  People  v.  Barnett,  91  111.  422.  Where 
niismanngeinent  of  affairs  of  corporation  will  not 
release  stockholder.  Chetlain  v.  Ins.  i^o.,  86  111. 
220.  And  the  fact  that  an  insurance  company  has 
purchased  an  expensive  building  and  stock  of  an- 
other is  no  defense  to  the  subscription.    Id. 

Where  a  charter  provides  that  "  each  stock- 
holder shall  be  liable  to  double  the  amount  of 
stock,"  each  stockholder  will  be  severally  and  in- 
dividiiallv  liable.  McCarthy  v.  Lavasche,  89  111. 
270;  Hull  v.   P.urtis,   90  id.   213. 

Stockholders  in  insurance  companies  liable  for 
the   debts  of   their   company,    to   the  full   amount 


ILLINOIS. 


25 


Unpaid  subscriptions,  liability  —  R.  S.,  ch.  xxxii,  §  8. 


of  their  respective  shares.  Butler  v.  Walker,  80 
111.  345:  Kipp  V.  Bell,  86  id.  577;  Tibballs  v. 
Llbby,  87  id.   142. 

For  various  points  as  to  subscription  to  the 
capit.il  stocli  of  insurance  companies  and  the  lia- 
bilitv  of  stockholders,  see  Melvin  v.  ins.  Co.,  80 
111.  44G. 

A  special  partnership,  with  agreeraent  that  it 
be  treated  as  a  corporation;  purchaser  acquired 
only  equitable  title  to  the  stock  in  tlie  company 
to  be  formed.    Land  Co.  v.  Aldrich,  86  111.  504. 

A  court  of  equity  will  require  assiRuee  of  stock 
to  pay  or  indemnify.  Kellogg  v.  Stockwell,  65 
111.  08. 

Corporation  could  not  make  release  of  subscrip- 
tion to  the  injury  of  its  creditors.  Zirkel  v.  Opera 
House   Co.,    79   111.    334. 

Sut)scriber  to  stock  is  solely  a  debtor  to  the  cor- 
poration; he  sustains  no  relation  of  trust  toward 
its  creditors.  Turner  v.  Ala.  M.  &  M.  Co.,  25  111. 
App.   144. 

All  subscriptions  to  capital  stock  are  entitled 
to  the  same  benefit  and  sulijoct  to  ilie  same 
burdens.    Ailing  v.  Wenzell,  27  111.  App.  511. 

Unpaid  subscriptions  are  a  trust  fund  for  the 
payment  of  corporate  debts;  the  corporation  is 
the  trustee.    Patterson  v.  Lynde,  lli:  111.  205. 

Acceptance  by  a  corporation  of  property  at  an 
Imaginary  value,  in  payment  for  one-third  of  its 
stock,  does  not  enable  the  holders  thereof  to  cast 
the  entire  burden  of  debt  on  subsequent  sub- 
scribers not  cognizant  of  the  transaction.  Ailing 
v.    Wenzell,    supra. 

No  right  of  stockholders  to  limit  their  liability 
to  creditors.  Ins.  Co.  v.  Mfg.  Co.,  97  111.  537. 
Changing  conditions  as  to  liability  by  subsequent 
legislation,  see  Weidenger  v.  Spruance,  lOl  111.  278. 

One  stockholder  may  have  contribution  from  the 
others  by  proceedings  in  equity.  Meisser  v. 
Thompson,  9  111.  App.  368.  The  general  assembly 
has  power  to  fix  the  mode  as  to  liability  of  stock- 
holders.   Diversey  v.   Smith,    103  111.   378. 

Charter  providing  for  the  individual  liability  of 
stockholders,  for  an  amount  equal  to  the  amount 
of  stock  lield  by  them  respectively  "  whenever 
default  shall  be  made,"  etc.,  the  liability  is  coeval 
with  that  of  tlie  corporation  and  stockholders  are 
bound  as  partners.  Fleischer  v.  Remtchler,  17  111. 
App.  404. 

Stockholders  "  held  individually  responsible  for 
an  amount  equal  to  the  amount  of  stock  held  by 
them  respectively,"  etc.,  are  liable  as  partners 
to  creditors.  Schalucky  v.  Field,  124  111.  619;  s.  c, 
16  N.    K.    Rep.  904. 

In  such  case,  when  a  debt  is  created,  the  stock- 
holders' liability  attaches,  and  they  are  primarilv 
liable  to  the  amount  of  stock  then  held.     Id. 

Stockholder  made  individually  liable  for  debts 
occupies  the  same  relation  to  creditors,  as  to  stat- 
utory limitations,  as  does  the  corporation.     Id. 

The  stockholders'  liability,  under  statute  of  1857, 
for  the  formation  of  manufacturing,  etc.,  corpora- 
tions, is  to  the  corporate  creditors  as  a  class  and 
not  to  the  individual  creditor;  the  remedy  to  en- 
force the  liability  is  in  equity.  Rounds  v.  M'Cor- 
mick.   114  111.  252;  s.   c,  29  N.  E.  Rep.  684. 

Creditor  seeking  merely  to  reach  indebtedness 
for  stock  need  only  bring  in  the  company  and  the 
stockholder  indebted.  Turner  v.  Ala.  M.  &  M.  Co., 
25  111.  App.  144. 

Creditors,  in  a  proper  case,  have  not  to  await 
the  winding  up  of  an  insolvent  corporation,  but 
may  proceed  to  subject  unpaid  subscriptions  to 
stock  to  payment  of  their  claims;  but  judgment  in 
a  State  court  and  execution  returned  nulla  bona 
Is  a  pre-requisite.    Patterson  v.  Lynde,  112  111.  204. 

Corporation  insolvent,  judgment  creditor  is  sub- 
rogated to  the  place  of  debtor  corporation  and 
proceeding  to  subject  unpaid  subscriptions  to  stock 
to  payment  of  the  debt  is  in  the  nature  of  an 
equitable  attachment.  Id.  And  if  it  be  a  foreign 
corporation  such  unpaid  subscriptions  can  be  col- 
lected wherever  the  stockholders  may  reside.    Id. 

Capital  stock  of  a  moneyed  corporation  is  a 
trust  fund  for  its  shareholders  and  creditors. 
Bouton  V.  Dement,  123  111.  145;  s.  c,  14  N.  E. 
Rep.   62. 

Agreement  to  sell  a  certain  number  of  corporate 
shares  at  a   price   certain,    if  taken   on   or  before 

24 


a  day  fixed.  In  futuro,  Is  a  prohibited  contract. 
Sneider   v.    Turner,   27   111.    App.    220. 

Shares  of  stock  are  not  subject  to  attachment. 
Rhea  v.  Powell,  24  III.  App.  77.  But  are  subject 
to  execution   and   levy.    See  ch.  77. 

Payment  to  a  stockholder,  by  a  corporation,  for 
advances  or  loans  made  by  him  to  it,  with  in- 
terest thereon,  by  the  transfer  of  notes  and  ac- 
counts is  but  a  preference  of  one  over  other 
creditors  and  not  in  fraud  of  them.  Bouton  v. 
Smith,  113  111.  488. 

Payment  by  an  insolvent  corporation,  to  a  stock- 
holder of  a  demand,  not  a  legally  subsisting  debt 
enforcible  by  suit,  is  fraudulent  as  to  its  bona 
fide   creditors.     Id. 

Creditors  have  priority  of  payment  over  stock- 
holders. St.  L.,  etc.,  v.  Sandoval,  etc.,  Co.,  116 
111.    172;  s.   c,   5  N.    E.    Rep.  370. 

In  action,  by  an  assignee  of  stock,  to  compel  a 
transfer  on  the  corporate  books  the  aeath  of  the 
original  holder  of  the  certificates  does  not  render 
the  assignee  incompetent  as  a  witness.  Firemen's 
Ins.   Co.   V.   Peck,  27  111.   App.  91. 

Sale  of  all  partnership  assets  to  a  corporation, 
composed  of  the  partners  and  others,  for  shares 
of  stock  to  be  issued  to  the  partners  in  a  certain 
proportion,  not  fully  consummated  before  the 
death  of  one  partner;  stock  issued  to  deceased  is 
not  firm  assets,  which  a  firm  creditor  can  have  ap- 
plied to  his  claim,  to  the  exclusion  of  individual 
creditors.  Singer  v.  Carpenter,  125  111.  119;  s.  c, 
17   N.   E.    Rep.   761. 

Fraud  and  deceit  in  the  sale  of  shares  of  cor- 
poration stock  by  tlie  company's  president,  to 
recover,  the  representations  must  be  proved,  also, 
that  the  party  was  the  authorized  agent  of  the 
company,  that  an  ordinarily  prudent  man  would 
rely  on  them  and  that  plaintiff  did  so  rely.  Hutch. 
F.  &  S.  C.  Co.  v.  Lyford,  123  111.  300;  s.  c,  13 
N.   E.   Rep.  844. 

Release  of  a  stockholder's  liability  for  stock  and 
surrender  of  his  note  given  therefor,  for  the 
worthless  obligation  of  an  irresponsible  person,  to 
the  prejudice  of  creditors,  is  not  to  be  tolerated. 
Bouten  v.  Dement,  123  111.  145;  s.  c,  14  N.  B. 
Rep.    62. 

One  who,  being  a  stockholder  in  an  insolvent 
corporation,  is  instrumental  in  organizing  a  new 
company,  and  induces  it  to  purchase  the  property 
of  the  prior  company  and  to  expend  much  money 
in  developing  its  resources  is  estoppea  to  assert 
an  interest  as  stockholder  in  the  old  compan;^ 
against  the  new  corporation.  St.  L.,  etc.,  Co.  v, 
Sandoval,  etc.,  Co.,  116  111.  172;  s.  c,  5  N.  E. 
Rep.   370. 

Stockholder  Is  not  liable  on  subscription  to  stock, 
until  the  whole  amount  of  stock  is  subscribed,  if 
the  amount  of  capital  stock  is  fixed.  Temple  v. 
Lemon,  112  111.  54. 

A  gift  to  a  wife,  of  bank  stock,  fraudulent  as 
to  creditors.  The  stock  held  by  an  innocent  Dur- 
chaser  without  notice;  it  cannot  be  decreed  to  be 
surrendered;  a  personal  judgment  against  the  wife, 
with  interest  from  decree,  is  proper.  Eads  v. 
Mason,  16  Hi.  App.  545. 

Stock  pledged  to  secure  a  loan;  pledgee  acquires 
title  thereto  only  by  sale,  for  non-payment,  con- 
ducted as  by  law  required  in  the  case  of  person- 
altv  pledged.  Travers  v.  Leopold,  124  111.  432; 
s.   c,  16  N.   E.  Rep.  902. 

Stockholders'  delay  of  eleven  and  one-half  years 
in  bringing  suit  to  cancel  bonds  wrongfully  de- 
livered for  other  than  corporate  purposes  and  to 
set  aside  a  trust  deed  securing  them  will  not  bar 
relief  where  no  attempt  has  been  made  to  enforce 
pavment.  Chicago  v.  Cameron,  120  HI.  451;  s.  c, 
11  "N.   E.   Rep.   899. 

Action  for  damages  for  causing  the  death  of 
plaintiff's  intestate;  a  stockholder  of  the  defendant 
corporation  is  not  .1  competent  witness  as  to 
events  occurring  prior  to  the  death.  Consol.  I.  31. 
Co.  V.  Klefer,  26  111.  App.  466. 

Action  by  assignee  of  stock  based  on  a  refusal 
to  transfer  the  shares  on  the  corporate  books. 
Plaintiff  is  a  competent  witness  for  himself,  al- 
though his  assignor  be  dead.  Ins.  Co.  v.  Peck, 
126  HI.  494;  s.   c,   18  N.   E.   Rep.  752. 

Parol  evidence  is  admissible  to  show  that  a 
transfer  of  stock,   absolute  in   form,    was   but  a 


26 


ILLINOIS. 


Existence  continued;  corporate  name,  etc. —  R.  S.,  eh.  xxxii,  §§  9-12. 


pledge.    Travers  v.  Leopold,  124  111.  432;  s.  c,  IG 
N.    E.    nen.    002. 

A  subscription  to  stock  made  with  nothing  done 
under   it    is   revocable,    with   the   consent   of   both 

Earties  before  the  corporation  commences  to  do 
usiuess  and  before  any  interest  of  third  persons 
to  be  nffecttd  bv  such  revocation  attaches.  Ailing 
V.   Wenz.'ll.   35  111.    App.  247. 

In  such  case,  persons  surrendering  their  stock 
are  not  assi^rnors  to  those  persons  who,  afterward, 
buv  the  stuck  from  the  corporation,  and,  there- 
fore, not  jointly  liable  with  such  purchasers.    Id. 

Assignment.  A  stockholder,  to  secure  a  cred- 
itor, assigned  his  certificate  thereof  by  a  separate 
writing,  not  indorsing  the  certificate  or  transfer- 
ring it  on  the  corporate  books,  but  retaining  Its 
possession.  A  creditor's  bill  having  been  filed,  the 
recei\  er  thereunder  seized  the  certificate.  The 
assignment  passed  no  title  as  against  the  creditors. 
Atkinson  v.  Poster,  134  111.  475;  s.  c,  25  N.  E. 
Rep.   528. 

A  pledgee  is  entitled  to  collect  a  cash  dividend 
on  stock  and  to  hold  it  as  he  does  the  stock 
itself.  Fairbanks  v.  Merch.  Nat.  Bk.,  132  111.  129; 
6.  c,  22  N.  E.  Rep.  524;  s.  c,  30  111.  App.  36. 

In  such  case,  if  he  omits  to  obtain  a  transfer 
upon  the  books  of  the  corporation,  the  corporation 
is  justified  in  paying  the  dividends  to  pledgor; 
the  latter  is,  however,  a  trustee  of  the  pledgee 
therefor  and  must  account  to  him.     Id. 

The  same  rule  applies  to  the  issue  of  new  stock 
at  less  than  its  value,  when  such  stock  is  issued 
as  a  privilege  to  then  existing  stockholders.     Id. 

A  pledge  of  corporate  stock  to  secure  the  pay- 
ment of  money  will  not  entitle  pledgee  to  receive 
any  dividends  on  such  stock  prior  to  the  pledge. 
Id. 

To  create  the  joint  liability  imposed  by  this 
statute  the  person  sought  to  be  charged  jointly 
with  the  stockholder  must  have  been  the  assignor 
of  the  stock.  A  return  of  stock  to  the  corporation 
and  its  repurchase  as  paid-up  stock  does  not  create 
a  joint  liability  of  the  corporation  and  stockholder 
who  surrenders  his  stock.    Ailing  v.  Wenzel,  supra. 

Rule  that  assignments  cannot  be  made  until 
entire  stock  has  been  subscribed,  not  practicable, 
when.     Mandel  v.  L.  &  C.  Co.,  51  111.  App.  204.] 

§  9.  The  general  assembly  shall,  at  all 
times,  have  power  to  proscribe  such  regu- 
lations and  provisions  as  it  may  deem  ad- 
visable, which  regulations  and  provisions 
shall  be  binding  on  any  and  all  corpora- 
tions formed  under  the  provisions  of  this 
act:  And,  provided,  further,  That  this  act 
shall  not  be  held  to  revive  or  extend  any 
private  charter  or  law  heretofore  granted 
or  passed  concerning  any  coriM>ration. 

See  Const.,  art.  II,  §  14. 

[Charter  of  a  private  corporation  is  a  contract 
with  which  the  legislature  cannot  interfere.  Bruf- 
fett  V.  R.  R.  Co.,  25  111.  353;  Neustadt  v.  R.  R. 
Co.,  31  id.  484.  The  charter  can  only  be  judicially 
forfeited  for  non-user.     Id. 

Private  corporations  are  subject  to  legislative 
control.     Ward  v.   Farwell,  97  111.  593. 

An  acceptance  of  an  amendment  to  the  charter, 
under  any  general  law,  makes  it  subject  to  the 
power  of  the  legislature.  Gulliver  v.  ftoelle,  100 
111.    141. 

A  corporation  is  subject  to  the  laws  ot  the  State, 
and  acts  of  incorporation  are  subordinate  to  gen- 
eral police  regulation.  R.  R.  Co.  v.  McClelland, 
25  111.  140:  Cone.  C.  Assn.  v.  R.  R.  Co.,  121  id.  203; 
s.    c,    12   N.   E.    Rep.   536. 

Debts  incurred  by  a  corporation  cannot  be  re- 
leased or  transferred  bv  legislative  enactment. 
Bruffett  V.   R.  R.  Co.,  25  111.  353. 

A  private  corporation  may  lose  its  franchises  by 
misuser  or  non-user,  and  they  may  be  resumed  by 
the  government  under  Information  in  the  nature 
of  quo  warranto,  but  not  by  mere  legislative  en- 
actment.  Board,  etc..  v.  Bakewell,  122  111.  340; 
8.  c,  10  N.  B.  Rep.  378. 


The  general  assembly  has  power  to  fix  the  mode 
as  to  liability  of  stockholders.  Dlversey  v.  Smith, 
103  111.  378.  Changing  the  conditions  as  to  lia- 
bility for  debts  of  corporation  by  subsequent  legis- 
lation, see  Weidenger  v.  Spruance,  101  111,  278. 

If  with  the  knowledge  and  consent  of  the  officers 
of  a  board  of  trade,  its  private  statistics,  etc.,  by 
the  manner  of  their  use  have  become  affected 
with  a  public  interest,  then  such  reports  are  sub- 
ject to  such  legislative  and  judicial  control  as 
will  prevent  injury  to  the  public  use.  Stock  Exch, 
V.  Bd.  of  T.,  127  III.  1G3:  s.  c,  19  X.  E.  Rep.  8.55. 

If  a  restriction  upon  the  right  of  certain  cor- 
porations to  contract  is  held  to  fall  within  power 
reserved  in  this  section,  it  must,  in  view  of 
the  constitutional  provision  (§  1  of  art.  XI).  be 
construed  as  reserving  the  power  to  prescribe  such 
regulations  and  provisions  as  legislature  may  deem 
advisable,  by  general  law,  applicable  to  all  cor- 
porations of  the  same  class.  Coal  Co.  v.  I'eople, 
147  111.   66:   s.   c,  35  N.   E,   Rep.  62. 

The  legislature  may  impose  new  duties  on  cor- 
porations, same  as  on  individuals,  in  absence  of 
special  exemptions.  R.  R.  Co.  v.  Bloomington,  76 
111.   447.] 


§  10.  All  corporations  organized  under 
this  law,  whose  powers  wiiiy  have  expired 
by  limitation  or  otherwise,  shall  continue 
their  corporate  capacity  during  the  term  of 
two  years,  for  the  purpose,  only,  of  collect- 
ing the  debts  due  said  corporation,  and  sell- 
ing and  conveying  the  property  and  effects 
thereof. 

Duration  not  to  exceed  ninety-nine  years.  §  2, 
ante.  Dissolution  of  corporation.  §  49e,  post. 
Same.     §  155,  post. 

[Stockholders  own  the  franchise,  property  and 
assets  of  the  company  remaining  after  liabilities 
discharged.  St.  L.,  etc.,  Co.  v.  Sandoval,  etc.,  Co., 
116  111.   172;  s.   c,  5  N.   E.   Rep.  370. 

Above  section  and  section  25,  and  other  provi- 
sions of  statutes,  show  the  settled  policy  of  this 
State,  so  far  as  relates  to  domestic  corporations, 
to  be  that  upon  dissolution  they  shall  be  deemed 
in  existence  for  purpose  of  settling  up  their 
affairs.  Life  Assn.  v.  Fassett,  102  111.  315.  Same 
doctrine  applies  to  foreign  corporations  having 
property  and  doing  business  within  this  State.    Id. 

Former  statutes  construed  to  have  same  effect 
with  this.     Ramsey  v.  Ins.  Co.,  55  111.  311.] 

§  11.  Such  corporations  shall  use  their 
respective  names  for  the  purpose  aforesaid, 
and  shall  be  capable  of  prosecuting  and  de- 
fending all  suits  in  law  or  equity. 

See  §  5,  subd.  1,  ante.  Remedies  not  affected 
by  dissolution.     §  12,   post. 

§  12.  The  dissolution,  for  any  cause  what- 
ever, of  any  coiiioration  created  as  afore- 
said, shall  not  tali^e  away  or  impair  any 
remedy  given  against  such  corporation,  its 
stockholders,  or  officers,  for  any  liabilities 
incurred  previous  to  its  dissolution. 

See  §  5,  subd.  1,  post,  and  cross-references.  Dis- 
solution of  corporation.  §§  49a-49e,  post.  Same. 
§§  149-156,  post. 

[After  dissolution  of  a  corporation  a  writ  of 
error  should  be  brought  by  the  receiver.  Life 
Assn.  v.   Fassett,  102  111.  315. 

After  dissolution  and  receiver  appointed,  corpora- 
tion has  existence  to  settle  affairs.     St.  L.  Co.  v. 


ILLIXOIS. 


27 


Principal  office;  assessments;  excessive  indebtedness  —  R.  S.,  ch.  xxxii,  §§  13-16. 


S.  C.  &  M.  Co.,  Ill  111.  39.     And  plea  of  nul  tiel 
corporation  not  applicable  in  its  .suit.     Id. 

After  corporation  has  ceased  to  exist,  equity 
will  talie  jurisdiction  to  wind  up  its  affairs.  Pat- 
terson V.  Lynde,  112  111.  205.] 


§  13.  It  shall  be  the  duty  of  the  directors 
or  trustees  of  every  f^tock  corporatiou  to 
cause  to  be  kept  at  its  principal  office  or 
place  of  business  in  this  State,  correct  books 
of  accounts  of  all  its  business,  and  every 
stockholder  in  such  corporation  shall  have 
the  right  at  all  reasonable  times,  by  himself 
or  by  his  attorney,  to  examine  the  records 
and  books  of  accounts  of  the  corporation. 

Records  of  corporation  as  evidence.     Ch.  51,  §  15. 

[Stockholders  are  entitled  at  all  reasonable  times 
and  in  a  reasonable  manner  to  inspect  the  books 
of  the  corporation,  but  if  by  it  denied,  such  de- 
nial not  ground  for  appointment  of  a  receiver. 
Natatorium  Co.  v.  Heissler,  50  111.  App.  406. 

Primary  object  of  this  section  (13)  is  to  protect 
the  rights  of  stockholders,  and  may  also  be  to 
aid  State  in  exercising  its  visitorial  power,  or  to 
enable  creditors  of  stockholders  to  ascertain  the 
number  of  shares  standing  in  the  names  of  each, 
so  as  to  levy  execution  or  attachment  thereon. 
Rolling  .^lock  Co.  v.  People,  147  111.  234;  s.  c,  35 
N.   E.    Kep.    608. 

Stockholder  may,  by  mandamus,  compel  cor- 
poration to  comply  with  law  which  guarantees  to 
him  right  to  examine  its  records  and  books  of 
accounts,  and  that,  too,  not  in  another  jurisdiction, 
but  at  the  principal  office  of  such  corporation  in 
this  State.     Crown  Co.  v.  Thomas,  60  111.  App.  234. 

Corporation  may  be  compelled  by  mandamus  to 
keep  its  records  and  books  of  accounts  in  its  prin- 
cipal oflice  or  place  of  business  in  this  State. 
Keeping  them  in  another  jurisdiction  is  a  viola- 
tion of  law.    Id. 

Books  and  records  of  an  incorporated  company 
do  not  belong  to  any  of  its  officers  and  agents 
as  such;  they  are  the  property  of  tne  company 
of  which  each  director  is  a  trustee,  and  bound 
to  serve  equally  the  interests  of  all  the  cestuis 
que  trust.  Stone  v.  Kellogg,  62  111.  App.  444;  s.  c, 
46  N.  E.   Rep.  222. 

Directors  and  stockholders  have  the  right  to 
know  what  the  records  show.     Id. 

Majority  of  board  of  directors  cannot  exclude 
minority  "from  knowledge  of  what  company  is  do- 
ing, nor  deny  access  to  its  files  and  records.     Id.] 

§  14.  A  failure  to  elect  directors,  trustees, 
or  officers  In  lieu  of  trustees  on  the  day 
named  and  designated  in  the  by-laws,  or  on 
the  day  for  which  notice  was  given  for  elec- 
tion, shall  not  have  the  effect  of  dissolving 
the  corporation;  but  such  election  may  be 
held  at  any  time  after  proper  notice. 

Dissolution.  §  49a,  post.  Same.  §  149,  post. 
See  §  3,  ante,  and  cross-references. 

[See  People  v.  Wren,  5  111.  269;  President,  etc., 
V.  Thompson,  20  111.  197.] 

§  15.  All  assessments  or  installments  of 
the  stock  of  any  stock  corporation  shall  be 
levied  by  the  directors  in  accordance  wifh 
the  provisions  of  the  by-laws,  but  any  as- 
sessment or  installment  required  to  be  paid 
shall  be  levied  pro  rata  upon  all  the  shares 
of  such  stock. 

See  §  7,  ante,  and  cross-references. 


[Liability  for  calls.  Banet  v.  R.  R.  Co.,  13  111. 
504;  Stone  v.  Oil  Co.,  41  id.  80. 

A  party  who  pays  the  installment  required  by 
the  charter,  before  the  books  are  closed;  held  to 
pay  the  residue.     Klein  v.  K.  R.  Co.,  13  111.  515. 

Payments  of  subscriptions  to  stock  made  before 
the  organization  of  a  company  will  be  enforced, 
if  the  organization  Is  afterward  perfected.  Cross 
v.  Mill  Co.,  17  111.  54;  R.  R.  Co.  v.  McXeely,  21 
id.  71;  Goodrich  v.  Reynolds  et  al.,  31  id.  491. 

Where  defendant  was  to  pay  in  certain  propor- 
tions, a  call  for  the  whole  is  not  justified.  Spang- 
ler  V.  Ry.  Co.,  21  111.  277. 

Subscriptions  not  payable  until  called  for  in  ac- 
cordance with  contract.  Ins.  Co.  v.  Moore,  84  111. 
575. 

Subscriptions  paid  In  Installments,  within  twenty 
days  after  call;  subscriber  entitled  to  twenty  days' 
notice.     Cole  v.  Opera  House  Co.,  79  111.  96. 

Subscription  to  stock  providing  for  payment  in 
Installments,  as  ordered  by  directors;  cause  of 
action  accrues  only  when  an  installment  is  as- 
sessed and  ordered  paid.  Tel.  Co.  v.  Gray,  122 
111.  634;  s.   c,   14  N.   E.   Rep.  214. 

Subscription  to  stock  payable  in  installments  as 
ordered  by  directors.  The  directors  failed  to  make 
an  order  as  to  balances  due,  but  later,  in  suit  by 
creditors,  equity  ordered  an  assessment  on  the 
subscription;  limitations  ran  only  from  the  order 
of  court.     Id. 

On  bill  by  a  stockholder  to  wind  up  a  corporation 
and  to  assess  unpaid  stock  to  pay  uebts  it  is 
proper  for  the  court,  by  decree,  to  reserve  the 
power  to  assess.  Winston  v.  Dorsett  P.  «S:  P.  Co., 
27  111.  App.  546. 

The  payment  of  an  assessment  levied  on  cor- 
porate stock,  with  knowledge  of  facts  which  would 
warrant  a  rescission  of  the  subscription  made 
therefor,  is  a  waiver  of  objections  to  the  subscrip- 
tion and  of  the  right  to  repudiate  it.  Tel.  Co.  v. 
Bush,   35  111.   App.  214. 

A  subscription  to  corporate  stock  bears  interest 
after  it  becomes  due.  As  the  installments  are 
called  for,  such  installments  bear  interest.  Fey 
V.   P.  Watch  Co.,  32  111.  App.  631. 

Is  a  contract  of  subscription  to  capital  stock 
of  a  corporatiou  the  same  as  that  of  the  maker  of 
a  promissorv  note  payable  on  demand?  Bennett  v. 
Tel.  Co.,  53  111.  App.  276. 

Assessment  upon  capital  stock  of  an  insolvent 
corporation  may  be  made  by  a  court,  but  such 
assessment  will  have  no  greater  effect  than  as  if 
made  by  directors.  Id.  277;  Tel.  Co.  v.  Barker, 
56  111.  App.  402. 

Assessment  upon  stock  of  an  insolvent  corpora- 
tion must  be  equitable.    Bennett  v.  Tel.  Co.,  supra. 

The  liability  of  stockholder  for  calls,  though 
dependent  upon  the  phraseology  of  the  statute,  is 
contractual,  and  will  ordinarily  be  enforced  by  the 
courts  of  another  jurisdiction,  unless  a  wrong 
would  be  done  to  the  citizens  of  such  jurisdiction, 
or  the  policies  of  its  laws  will  be  contravened  or 
impaired.  Mandel  v.  Land  Co.,  154  111.  177;  s.  c, 
4U  X.   E.   Rep.  462.] 

§  16.  If  the  indebtedness  of  any  stock 
corporation  shall  exceed  the  amount  of  its 
capital  stock,  the  directors  and  officers  of 
such  coii^oratiou  assenting  thereto,  shall 
be  personally  and  individually  liable  for  such 
excess  to  the  creditors  of  such  coi-poration. 

Dividends  of  insolvent  company,  liability.  §  19, 
post.  Liability  of  stockholder.  §§  8,  ante,  25,  post. 
False  reports,  etc.,  liability.     §  21,  post. 

[OflScers  of  corporation  who  assent  to  an  in- 
debtedness in  excess  of  capital  stock  are  made 
personally  liable.     Low  v.   Buchanan,  94  111.    <b. 

This  section  does  not  prohibit  the  contracting 
of  debts  in  excess  of  capital  stock,  nor  does  it, 
in  terms,  inflict  a  penalty  for  so  doing.  Only  a 
consequence  is  declared.  Woolverton  v.  Taylor, 
132  111.   206;   s.   c,   23   N.   E.    Rep.    lUUi. 

The  effect  of  the  statute  is  that  the  officers  as- 
senting to   increasing   corporate  indebtedness   be- 


28 


ILLINOIS. 


Land  statement;  liability  for  use  of  powers  —  R.  S.,  ch.  xxxii,  §§  17,  18. 


yond  the  limit  of  capital  are  to  be  held  guilty  of 
a  violation  of  their  trust.     Id. 

Ilenco,  so  far  as  the  excess  of  Indebtoduess  over 
stock  is  uccessarv,  such  officers  are  liable  to  make 
good   the  debts  of  the  creditors.     Id. 

This  liability  constitutes  a  fund  for  the  benefit 
of  all  creditors  entitled  to  share  it,  so  far  as 
may  be  necessary  to  pay  their  debts.  Id.  The 
reniedv  is  in  chancery.     Id. 

The"  liability  is  an  absolute  liabinty,  but  Is 
to  be  enforced  only  to  the  extent  that  the  corpora- 
tion fails  to  pay.  It  is  in  the  nature  of  security 
to  all  the  creditors.     Id. 

This  section  does  not  mean  that  oflicers  shall 
become  liable  only  for  one  act  of  assent  to  ex- 
cessive indebtedness  during  the  corporate  lite. 
The  excess  may  be  increased,  from  time  to  time, 
by  different  officers,  running  over  a  period  of 
years.  Id.  Hence,  officers  liable  to  all  creditors 
regardless  of  when  they  became  such.  Id.  The 
act  of  consent  to  an  excess  of  indebtedness  does 
not  give  separate  cause  of  action  to  one  creditor, 
but  a  collective  one  for  benefit  of  all.     Id. 

The  statute  of  limitations  begins  to  run,  as  to 
Buch  liability,  when  the  excess  of  indebtedness  is 
created  with  the  assent  of  the  persons  to  be 
charged,  without  regard  to  its  maturity  against 
the  corporation.     Id. 

Officers  of  a  stock  corporation  having  created  an 
Indebtedness  In  excess  of  the  capital  stock  issued 
notes.  More  than  five  years  after  such  Issue  but 
within  five  years  after  maturity  of  the  notes  a 
bill  was  filed  to  enforce  the  liability  of  the  cor- 
porate officers.  The  five  years  limitation  did  not 
begin  to  run  until  the  maturity  of  the  notes.     Id. 

A  corporation  incurring  an  Indebtedness  in  ex- 
cess of  its  capital  stock,  the  officers  assenting 
thereto  are  not  liable  to  be  proceeded  against  for 
the  excess  by  creditors  until  the  debts  have  been 
reduced  to  judgment  against  the  corporation.    Id. 

The  statutory  liability  of  such  officers  is  strict! 
Juris,  not  attaching  so  long  as  the  debt  can  be 
paid  from  the  company.     Id. 

To  enforce  the  liability  of  officers  for  debts  It 
does  not  follow  that  creditor  cannot  maintain 
a  bill  until  all  debts  against  the  corporation  are 
due.  On  a  proper  bill  by  one  creditor,  a  court 
of  equity  can  bring  before  It  the  corporation,  its 
officers  who  assented  to  excessive  indebtedness, 
and  all  its  creditors  and,  ascertaining  all  the  facts, 
may  determine  the  sum  to  be  recovered  from  the 
officers  and  apportion  it  among  the  creditors.     Id. 

Proceedings  under  this  section  not  a  suit  for 
recovery  of  a  penalty,  within  meaning  of  statute 
of  limitations.     Id.;  s.  c,   30  111.   App.  V4. 

Liability  under  this  section  is  not  predicated 
upon  a  mere  neglect  In  not  keeping  advised  of  the 
corporate  action  but  upon  an  assent  to  the  ex- 
clusive indebtedness.  Lewis  v.  Montgomery,  48 
111.  App.  282. 

Above  section  discussed  and  construed.  Lewis  v. 
Montgomery,  145  III.  30;  33  N.  E.  Rep.  880. 

Regardless  of  statute,  assignee  in  bankruptcy  of 
Insolvent  corporation  may  compel  stockholders  to 
pay  their  unpaid  subscriptions  to  stock.  Sanger 
V.  Upton,  91  U.  S.  56;  Webster  v.  Upton,  id.  65; 
Sawyer  v.   Hoag,  84  id.    (17  AVall.)  610. 

Personal  liability  of  officers  for  excessive  in- 
debtedness, who  may  complain.  Woolverton  v. 
Taylor,  157  111.  485;  s.  c,  42  N.  E.  Rep.  49.  A.s- 
slgnee  of  notes  for  collection  only  cannot.    Id. 

Liability  of  officers  for  excessive  indebtedness 
arising  on  accommodation  paper.    Id.] 

§  17.  The  president,  secretary  or  treas- 
urer of  any  stock  corporation  shall,  an- 
nually, within  twenty  days  from  the  first 
day  of  December,  make  a  statement  in 
writing,  setting  forth  a  description  of  all 
real  estate  to  Avhich  title  was  acquired  in 
securing  any  debt  or  liability  due  such  cor- 
poration, together  with  the  time  of  ac- 
quiring title  thereto;  which  statement  shall 
be  verified  by  the  oalh  or  affirmation  of 
such  iirf'sident,  secretary  or  treasurer,  and 
be  recorded  in  the  office  of  the  recorder  of 


the  county,   and   filed   in   the   office  of   the 
secretary  of  State. 

See  §  5,  subd.  3,  ante.  False  reports,  liability. 
§  21,  post. 

§  18.  If  anj^  person  or  persons,  being,  or 
pretending  to  be,  an  officer  or  agent  or  board 
of  directors  of  any  stock  corporation  or  pre- 
tended stock  corporation,  shall  assume  to 
exercise  coiijorate  powers,  or  use  the  name 
of  any  such  corporation  or  pretended  cor- 
lx)ration,  without  complying  with  the  pro- 
visions of  this  act,  before  all  stock  named 
in  the  articles  of  incorporation  shall  be  sub- 
scribed in  good  faith,  then  they  shall  be 
jointly  and  severally  liable  for  all  debts  and 
liabilities  made  by  them  and  contracted  in 
the  name  of  such  corporation  or  pretended 
corporation. 

See  S  1,  ante. 

[The  legality  of  a  corporation  cannot  be  at- 
tacked collaterally.     See  §  2,  note. 

Contract  made  with  a  de  facto  corporation, 
whether  creating  a  corporate  or  individual  liability. 
Hancock  v.   Yunker,  83  111.  208. 

Assumption  of  corporate  powers,  an  information 
geuerallj'  denying  the  individual's  right  is  suffi- 
cient to  put  them  to  their  justification.  People 
v.  Otta.  Hydr.  Co.,  115  111.  285;  s.  c,  3  N.  E.  Rep. 
41.-?. 

AVhen  creditor  is  at  liberty  to  proceed  under 
above  section.  Loverin  v.  McLaughlin,  40  111.  App. 
373. 

One  who  deals  wnth  a  corporation  as  such,  buy- 
ing from  It  and  executing  notes  to  it,  cannot  ques- 
tion its  corporate  existence.  Miami  P.  Co.  v. 
Hotchkiss,  17  III.   App.  624. 

A  plea  of  nul  tiel  corporation  interposed  In  an 
action  by  a  corporation  upon  a  written  agreement 
to  pay  money  does  not  impose  the  burden  of  prov- 
ing it  to  be  in  all  respects  a  legal  corporation. 
Hudson  V  .G.    H.    Semin.,   113  111.   625. 

In  an  action  by  a  corporation  on  a  written 
promise  to  pay  money,  the  execution  of  the  ob- 
ligation affords  sufficient  prima  facie  evidence  of 
corporate  existence,  de  facto.     Id. 

Mere  assumption  of  or  advertising  in  a  name 
appropriate  for  a  corporation  is  not  an  offense, 
unless  it  be  done  in  solicitation  of  business.  Ed- 
gerton  v.  Preston,  15  111.  App.  23. 

When  an  existing  corporation  abuses  any  of 
its  franchises  or  usurps  franchises  which  do  not 
belong  to  it,  an  information  in  the  nature  of  quo 
warranto  should  be  against  the  corporation  Itself. 
People  V.  Spring  Valley,  129  111.  175;  s.  c,  21  N. 
E.   Rep.  843. 

Aliter,  when  a  body  of  men  or  a  number  of  In- 
dividuals, unlawfully  assume  to  be  a  corporation. 
In  such  case  the  information  should  be  against 
them  as  individuals,  not  in  a  corporate  name.    Id. 

An  appeal  in  a  controversy  involving  a  franchise 
must  be  taken  to  the  supreme  court.  Bushnell 
V.  Cons.  Ice  M.  Co.,  37  111.  App.  133. 

A  franchise  is  as  much  involved  when  the  re- 
lief sought  Is  to  enjoin  a  company  from  acting  as 
a  corporation,  as  when  it  is  sought  to  enjoin  the 
corporation  of  a  company  by  a  given  name.     Id. 

Directors  who  assume  to  exercise  the  corporate 
powers  and  use  corporate  name  without  filing  final 
certificate  with  county  recorder  are  liable  under 
this  section.  B.  &  T.  Co.  v.  Gade,  65  111.  App. 
181.  When  certificate  of  complete  organization  is 
issued  by  secretary  of  State,  a  coi-poration  de 
facto  comes  into  existence.     Id. 

Officers  are,  under  above  statute,  liable  for  debts 
of  corporation  contracted  by  them  in  name  of 
corporation  before  the  certificate  of  its  complete 
organization  has  been  recorded  In  the  county  where 
the  principal  office  Is  located.  Loverin  v.  Mc- 
Laughlin, 161  111.  417;  s.  c,  44  N.   E.  Bep.  99. 


ILLINOIS. 

Dividends;  by-laws;  false  reports  —  R.  S.,  ch.  xxxii,  §§  19-22. 


29 


Jlembers  or  stockholders  of  a  corporation  ille- 
gally formed  are  liable,  as  partners,  for  its  acts 
or  contracts,  and  directors  and  agents  acting  in 
Its  name  render  themselves  liable,  independently 
of  the  statute.     Id. 

A  creditor  is  not  estopped  by  dealing  with  a 
corporation  as  being  such,  de  facto,  from  assert- 
ing the  liability  of  the  officers  or  directors  for 
debts  contracted  in  the  name  of  the  corporation 
without  the  statute  having  been  complied  with. 
Id. 

Filing  of  claim  against  corporation  with  Its  as- 
signee does  not  estop  a  creditor  from  afterward 
asserting  the  personal  liability  of  otScers  for  non- 
compliance with  the  statutes.     Id. 

An  action  at  law,  and  not  In  equity,  Is  the 
proper  remedy  for  enforcing  the  personal  liability 
of  ofHcers  or  directors  of  the  corporation  under 
statute.     Id. 

■Where  an  association  assumes  a  name  which 
Imports  that  it  is  a  corporation,  and  contracts 
with  persons  as  If  it  were  a  corporation,  it  cannot 
be  heard  to  deny  such  representations.  Fltzpatrick 
V.  Rutter,  58  111.  App.  532;  Fields  v.  Brother- 
hood. CO  id.   258. 

Action  to  enforce  personal  liability  of  directors 
under  above  section  should  be  at  law,  and  not  in 
equity.       Loverin   v.    McLaughlin,   44    N.    B.    Uep. 

By  dealing  with  directors  as  a  corporation,  a 
creditor  is  not  estopped  to  enforce  their  personal 
liability  for  corporate  debts  in  case  they  do  busi- 
ness without  complying  with  the  provisions  of  the 
statute.     Id. 

Under  above  section  directors  are  personally 
liable  if  they  transact  business  before  all  the  sub- 
scribed stock  has  been  paid  In  good  faith.     Id. 

A  creditor  held  not  estopped  to  enforce  personal 
liability  of  directors  who  failed  to  organize  a  cor- 
poration by  filing  a  claim  with  an  assignee  for  the 
creditors  of  the  pretended  corporation.    Id.] 


§  19.  If  the  directors,  or  other  oflScei-s  or 
agents  of  any  stock  corporation,  shall  de- 
clare and  pay  any  dividend  when  such  cor- 
poration Is  insolvent,  or  any  dividend  the 
payment  of  which  would  render  It  insolvpnt, 
or  which  would  diminish  the  amount  of  its 
capital  stock,  all  directors,  ofllcers  or  agents 
assenting  thereto  shall  be  jointly  and  sev- 
erally liable  for  all  the  debts  of  such  cor- 
poration then  existing,  and  for  all  that  shall 
thereafter  be  contracted  while  they  shall, 
respectivelj%   continue  in  office. 

When  directors  and  officers  liable  for  debt. 
5  16,  ante.  Liability  of  stockholder.  §§  8,  ante, 
25,  post.     False  reports,  etc.,  liability.     §  21,  post. 

rWhere  dividend  Is  declared.  It  belongs  to  per- 
son holding  the  stock  at  the  time  of  the  declara- 
tion whether  the  holder  be  a  life  tenant  or  a 
remainderman,  and  without  regard  to  the  source 
of  the  earnings  divided.  Waterman  v.  Alden,  42 
111.  App.  294.     Dividends  and  profits  defined.     Id. 

A  corporation  is  a  trustee  of  its  assets  primarily 
for  its  creditors.  Hill  v.  Gruell,  42  111.  App.  411. 
Who  are  to  be  regarded  as  creditors  of  Insolvent 
corporation.     Id. 

When  holders  of  preferred  stock  need  not  ac- 
count for  dividends.  Hlggins  v.  Lansingh,  154  111. 
801;   8.   c,  40  N.   B.   Rep.   362.] 

§  20.  The  by-laws  of  every  corporation 
shall  provide  for  the  calling  of  meetings  of 
the  directors,  trustees,  or  other  officers  cor- 
responding to  trustees;  and  when  all  such 
officers  shall  be  present  at  any  meeting, 
however  called  or  notified,  or  shall  sign  a 
written   consent   thereto   on   the   recoi'd   of 


such  meeting,  the  acts  of  such  meeting  shall 
be  as  valid  as  if  legally  called  and  notified: 
Provided,  That  the  action  of  any  meeting 
held  beyond  the  limits  of  this  State,  shall 
be  void,  unless  such  meeting  was  authorized, 
or  its  acts  ratified  by  a  vote  of  two-thirds 
of  the  directors,  trustees,  or  officers  cor- 
responding to  trustees,  at  a  regular  meet- 
ing. 

See  i  3,  ante.  Powers  to  be  exercised  by  di- 
rectors.    §  6,  ante. 

[Written  or  a  verbal  notice  of  meeting,  left  at 
place  of  business,  sufficient.  Williams  v.  Ins. 
Co.,  68  111.  387. 

The  by-laws  of  every  corporation  must  provide 
for  the  calling  of  meetings  of  directors.  StobO 
v.   Prov.   Co.,   54  111.  App.   440. 

When  all  directors  are  present  at  any  meeting, 
however  called  or  notified,  the  acts  of  such  meet- 
ing will  be  as  valid  as  if  legally  called  and  all 
directors  notified.  Id.  The  question  of  ulterior 
motive  in  the  calling  of  a  directors'  meeting  Is 
wholly  immaterial.     Id. 

Meeting  of  part  of  board  of  directors  not  a  law- 
ful meeting.  Buggy  Co.  v.  Litchfield,  etc.,  Co., 
55  III.  App.  98. 

A  by-law  of  a  corporation  which  requires  that 
regular  meetings  of  board  of  directors  shall  be 
held  at  the  home  office  of  the  corporation  does 
not  apply  to  special  meetings.  Ashley  v.  Illinois 
Steel  Co.,  60  111.  App.  180;  s.  c,  45  N.  B.  Rep. 
410. 

In  the  absence  of  a  prohibition  the  ordinary 
business  of  a  corporation  may  be  done  at  any 
place.     Id. 

Fact  that  signature  of  secretary  of  corporation 
to  a  notice  of  the  meeting  of  the  board  of  di- 
rectors was  made  with  a  rubber  stamp,  held  bv 
the  hand  of  the  president,  does  not  invalidate 
the  acts  done  at  the  meeting,  and  where  the  secre- 
tary attends  the  meeting  and  treats  the  notice  as 
valid.     Id. 

When  call  for  special  meeting  of  board  of  di- 
rectors need  not  specify  the  business  to  be  trans- 
acted.    Id.] 

§  21.  If  any  certified  report  or  statement 
made,  or  public  notice  glA^en  by  the  officers 
of  any  corporation,  shall  be  false  in  any 
material  representation,  all  the  officers  Avho 
shall  have  signed  the  same,  knowing  it  to 
be  false,  shall  be  jointly  and  severally  liable 
for  all  damages  arising  therefrom. 

See  §  16,  ante,  and  cross-references.  Annual 
statement  of  real  estate.     5  17,  ante. 

§  22.  The  stockholders  of  any  stock  cor- 
poration, owning  two-thirds  of  the  stock  In 
such  corporation  upon  which  all  assessments 
have  been  fully  paid  up,  may  call  a  meeting 
of  the  stockholders  of  such  corporation,  by 
signing  a  call  therefor  with  their  proper 
names,  stating  the  number  of  shares  held 
by  each  and  filing  the  same  with  the  presi- 
dent or  secretary  of  such  corporation,  and 
publishing  the  same  In  a  newspaper  in  this 
State  where  the  principal  ofllce  of  such  cor- 
poration is  kept,  and  at  the  seat  of  govern- 
ment, for  three  successive  weeks  pi-ior  to 
the  time  fixed  for  holding  such  meetings, 
and  mailing  a  copy  thereof  to  each  of  the 
directors  of  said  corporation  at  his  usual 
place  of  abode.  And  the  secretary  of  such 
corporation  shall  enter  such  call  upon  the 


30 


ILLINOIS. 

Liability  of  stockholders j  enforcement  —  R.  S.,  ch.  xxxii,  §§  23^25. 


records  thereof,  and  the  fact  of  such  pub- 
lication, and  mailing  such  notice,  giving  the 
name  of  such  paper,  Mith  the  dates  and 
places  of  publication,  which  shall  be  prima 
facie  evidence  thereof. 

Bee  {  3,   ante,  and  cross-references. 

[Publication  of  notice  in  a  newspaper  of  pro- 
posed meeting  of  Biockholders  Is  not  equivalent  to 
personal  notice,  or  notice  by  mall.  A  meeting 
can  be  held  after  Improper  notice  only  when  all 
Btockholders  are  present  and  consenting,  in  per- 
son or  by  proxy.  Gas  Engine  Co.  v.  Charter,  47 
111.   App.   36. 

Bondholders  cannot.  In  any  way,  be  given  the 
right  to  vote  at  meetings  of  stockholders.  Durkce 
V.  People,  53  111.  App.  396;  155  111.  354;  s.  c,  40 
N.   E.   Rep.   626. 

Proof  that  a  notice  of  a  stockholders'  meeting 
was  deposited  in  the  post-office,  properly  directed 
and  postage  paid.  Is  prima  fncle  evidence  that  it 
was  received  by  the  person  to  whom  it  was  ad- 
dressed.    Ashley  v.  Illinois,  60  111.  App.  180.] 

8  23.  No  person  holding  stock  In  any  cor- 
poration as  executor,  administrator,  con- 
servator, guardian  or  trustee,  and  no  person 
holding  such  stock  as  collateral  security, 
shall  be  personally  subject  to  any  liability 
as  stockholder  of  such  corporation;  but  the 
person  pledging  such  stock  shall  be  consid- 
ered as  holding  the  same,  and  shall  be  liable 
as  stockholder  accordingly,  and  the  estate 
and  funds  in  the  hands  of  such  executor, 
administrator,  conservator,  guardian  or  trus- 
tee, shall  be  liable  in  lilie  manner  and  to 
the  same  extent  as  the  testator  or  intestate. 
or  the  ward  or  person  interested  in  such 
trust  fund,  would  have  been  if  he  had  been 
living  and  had  been  competent  to  act  and 
held  the  stock  In  his  own  name. 

Liability  of  stockholders.  S  8,  ante,  and  cross- 
references. 

[If  shares  of  stock  are  held  by  one  as  trustee 
for  another,  the  legal  holder  of  the  shares  —  not 
the  equitable  owner  —  is  primarily  liable  to  the 
corporation  and  Its  creditors.  Winston  v.  Dor- 
sett  P.  &  P.  Co.,  129  111.  70;  s.  c,  21  N.  E.  Rep. 
514.] 

§  24.  Every  executor,  administrator,  con- 
servator, guardian  or  trustee  shall  rei>resent 
the  stock  In  his  hands  at  all  meetings  of 
any  stock  corporation,  and  may  vote  ac- 
cordingly as  a  stockholder,  and  every  pei'- 
son  who  shall  pledge  his  stock  may,  never- 
theless, represent  the  same  at  all  meetings, 
and  may  vote  accordingly  as  a  stockholdei*. 

See  S  3,  ante. 

§  25.  If  any  corporation,  or  its  authorized 
agents,  shall  do  or  refrain  from  doing  any 
act  which  shall  6ui)ject  it  to  a  forfeiture  of 
its  charter  or  coi-porate  [wwers,  or  shall  al- 
low any  execution  or  decree  of  any  court 
of  record  for  a  payment  of  money,  after  de- 
mand made  by  the  officer,  to  be  returned 
"  no  property  found,"  or  to  remain  unsatis- 
fied for  not  less  than  ten  days  after  such 


demand,  or  shall  dissolve  or  cease  doing 
business,  leaving  debts  unpaid,  suits  in 
equity  may  be  brouglit  against  all  persons 
who  were  stockholders  at  the  time,  or  liable 
in  any  way  for  the  debts  of  the  corporation, 
by  joining  the  corporation  in  such  suit;  and 
each  stockholder  may  be  required  to  pay 
his  pro  rata  share  of  such  debts  or  liabili- 
ties, to  the  extent  of  the  unpaid  portion  of 
his  stock,  after  exhausting  the  assets  of 
such  corporation,  and  if  any  stockholder 
shall  not  have  property  enough  to  satisfy 
his  portion  of  such  debts  or  liabilities,  then 
the  amount  shall  be  divided  equally  among 
all  tlie  remaining  solvent  stockholders;  and 
courts  of  equity  shall  have  full  power,  on 
good  cause  shown,  to  dissolve  or  close  up 
the  business  of  any  corporation,  to  appoint 
a  receiver  therefor  who  shall  have  authority, 
by  the  name  of  the  receiver  of  such  corpora- 
tion (giving  the  name),  to  sue  in  all  courts, 
and  do  all  things  necessary  to  closing  up 
its  affairs  as  commanded  by  the  decree  of 
such  court.  Said  receiver  shall  be  in  all 
cases  a  resident  of  the  State  of  Illinois,  and 
shall  be  required  to  enter  into  bonds,  pay- 
able to  the  People  of  the  State  of  Illinois, 
for  the  use  of  the  parties  interested,  in 
such  penalty  and  with  such  securifies  as 
the  court  may,  in  the  decree  or  order  ap- 
pointing the  same,  require.  In  Wl  cases  of 
suits  for  or  against  such  receiver,  or  the 
corporation  of  which  he  may  be  receiver, 
writs  may  issue  in  favor  of  such  receiver 
or  corporation,  or  against  him  or  it,  from 
the  county  where  the  cause  of  action  ac- 
crued to  the  sheriff  of  any  county  in  this 
State  for  service.  (As  amended  by  act  ap- 
proved May  22,  1877;  in  force  July  1,  1877.) 

Liability  of  stockholders.  §  8,  ante.  Remedies 
not  affected.  §  12,  ante.  Service  of  summons 
upon  receiver.     Ch.  110,   §  7a. 

[Under  the  statute  the  stockholders  are,  in  ef- 
fect, made  partners,  and  are  jointly  and  severally 
liable  for  an  amount  equal  to  their  stock.  Thomp- 
son V.  Meisser,  108  111.  359;  Peck  v.  Coal  Co., 
11  111.  App.  88. 

Shareholders  are  conclusively  charged  with  no- 
tice of  the  trust  chai'acter  which  attaches  to  the 
capital  stock.  As  to  it,  they  cannot  occupy  the 
status  of  Innocent  purchasers.  Clapp  v.  Peterson, 
104  111.  26. 

Effect  of  provision  In  the  charter  as  to  Indi- 
vidual liability.     Buchanan  v.  Meisser,  105  111.  638. 

In  an  action  by  a  creditor  against  a  stockholder 
to  enforce  Individual  liability,  stockholder  can- 
not plead  as  a  set-off  an  indebtedness  of  the  cor- 
poration to  himself,  as  such  debt  is  not  that  of 
the  party  suing.     Id. 

A  stockholder  who  pays  the  amount  of  his  In- 
dividual liability  thereby  acquires  an  equitable 
right  against  his  co-stockholders  for  contribution. 
Id. 

A  partnership  firm,  as  a  creditor  of  a  corpora- 
tion, cannot  maintain  an  action  at  law  against 
one  of  such  firm  to  enforce  his  individual  liability 
as  a  stockholder  to  the  creditors  of  the  corpora- 
tion, since  lie  cannot  be  both  a  plaintiff  and  de- 
fendant.    Id. 

Remedy  of  creditors  of  corporations  against 
stockholders,  since  the  act  of  1872,  is  in  equity. 
Richardson  v.   Akin,  87  111.    138. 

As  to  liability  of  stockholders  for  the  debts  of 
a  corporation,  see  Harper  v.  Mfg.  Co.,  100  111.  225. 


ILLINOIS. 


31 


Enforcement  of  liability  of  stockholders  —  R.  S.,  ch.  xxxii,  §  25. 


When  under  general  law,  the  party  subscribing 
will  incur  the  liability  imposed  by  the  general 
law.     Tibballs  v.   Libby,  87  111.  142. 

To  render  stockholder  liable  under  the  statute 
to  the  extent  of  his  unpaid  stock,  proceedings 
must  be  instituted  against  him,  at  the  same  time 
that  action  is  begun  against  the  corporation.  Peck 
V.  Coal  Co.,  3  111.  App.  G19;  but  see  Coalfield 
Co.  V.  Peck,  98  Id.  139;  Arenz  v.  Weir,  89  id.  25; 
see  Hull  v.   Burtis,  90  id.  213. 

Liability  to  creditors  of  a  bank;  when  suit  may 
be  brought.  Fuller  v.  Ledden,  87  111.  310;  Win- 
cock  V.  Turpin,  96  id.  135;  see,  also,  McCarthy 
V.  Lavasche,  89  id.  270;  Dows  v.  Naper,  91  id.  44. 

Stockholders  not  liable,  until  an  execution  shall 
be  returned  unsatisfied.  Cutright  v.  Stanford,  81 
III.  240. 

A  creditor  of  a  national  bank  may  proceed 
against  the  party  In  whom  the  legal  title  to  the 
stock  is  vested.  Wheelock  v.  Kost,  77  111.  296; 
Bromley  v.  Goodwin,  95  111.  118. 

Subscribers  are  not  liable  until  the  whole  capi- 
tal stock  is  subscribed.  Temple  v.  Lemon,  111 
111. 

Creditors  may  proceed  to  subject  the  unpaid 
subscriptions  to  the  payment  of  their  claims. 
Patterson  v.  Lynde,  112  111.  205. 

Directors  cannot  make  stockholders  liable.  Peck 
V.  Coal  Co.,  11  111.  App.  88. 

Defense  as  to  payment  of  stock.  Washburn  v. 
Roesch.  13  III.  App.  268. 

Proof  of  liability  of  corporation  is  necessary  to 
hold  a  stockholder  liable.  Chesnut  v.  Pennell, 
92  111.  55. 

Stockholders  not  liable  for  torts  of  corporation. 
Peck  V.  Cooper,  8  111.  App.  403. 

Stockholders  cannot  occupy  the  status  of  inno- 
cent purchasers.  Peterson  v.  I.  L.  &  L.  Co.,  6 
111.    App.  257. 

Priority  of  right  of  creditors  not  acquired  merely 
by  the  institution  of  suit.  Chicago  v.  Hall,  103 
111.  .S42. 

Capital  stock  a  fund  for  payment  of  creditors; 
equity  would  enforce  the  claims  of.  Clarkson  v. 
Dispatch,  6  111.  App.  284. 

Under  the  General  Incorporation  Law  a  stock- 
holder, by  garnishment,  may  be  made  to  pay  a 
balance  unpaid  on  stock  whether  such  stock  be 
called  in  or  not.  Robertson  v.  Noenmger,  20  111. 
App.   227. 

An  amount  for  which  stockholders  are  liable 
Is  a  fund  from  which  to  pay  costs  to  a  receiver; 
aliter  as  to  the  complainant's  solicitor.  Ailing  v. 
Wenzell,  27  HI.  App.  511. 

An  agreement,  operating  between  stockholders 
only,  to  apportion  their  stock  liabilities  is  neither 
contrary  to  law  or  public  policy.  Winston  v. 
Dorsett  P.  &  P.   Co..  27  111.   App.  546. 

Equity  may  take  jurisdiction  to  enforce  the  lia- 
bility of  stockholders,  at  the  suit  of  creditors,  on 
behalf  of  and  for  all  creditors  of  an  insolvent 
corporation.  Tunesma  v.  Schuttler,  114  111.  163; 
s.   c,   28  N.   E.  Rep.   605. 

The  expression  "  all  stockholders  "  is  regarded, 
In  the  absence  of  legislative  construction  as  to 
personal  liability,  as  including  all  who  were  such 
when  an  indebtedness  accrued:  as  well  as  those 
who  successively  stand  in  their  shoes  in  respect 
to  the  same  stock.  Root  v.  Sinnock,  120  111.  357; 
8.    c,    11   N.    E.    Rep.   339. 

Personal  liability  "  to  make  good  all  losses;  " 
on  bill  filed  to  charge  stockholders  it  is  error,  by 
decree,  to  charge  the  stockholders  with  the  full 
amount  due  at  the  time  of  suspension,  the  law 
providing  for  a  liabilitv  equal  to  the  amount  of 
stock  held.     Helmle  v.   Queenan,   18  111.   App.   103. 

Creditors  of  a  corporation  subject  to  the  statute 
of  1872,  in  pursuing  the  holders  of  stock  unpaid  — 
in  whole  or  In  part  —  must  follow  the  statute 
(section  25)  unless  in  case  of  a  transfer  made 
(section  8).     Curran  v.  Bardner,  27  111.  App.  582. 

To  enforce  the  liability  for  unpaid  stock  the  bill 
must  be  by  or  for  all  the  creditors  against  all  the 
stockholders.     Id. 

A  single  creditor  may  sue  any  stockholder  of 
an  insolvent  corporation  to  enforce  the  latter's 
linbilitv  under  its  charter.  Schalncky  v.  Field, 
124  HI.  619;   s.   c,   16  N.    E.   Rep.   904. 

Suit  against  stockholder  on  return  of  execution 
nulla  bona  must  be  in  equity,  and  liability  is  de- 


ferred until  the  corporate  assets  are  exhausted. 
Robertson  v.  Noeninger,  20  111.  App.  227. 

To  enforce  stockholder's  liability  for  unpaid 
stock  the  corporation  is  a  necessary  party.  If  it 
has  ceased  to  exist,  all  its  stockholders  and  cred- 
itors are  necessary  parties.  Patterson  v.  Lynde, 
112  111.  205. 

Corporation  ceased  to  exist;  its  assets  in  excess 
of  debts  belonging  to  stockholders  and  each  stock- 
holder is  liable  only  to  pay  his  pro  rata  share 
of  amounts  needed  to  pay  debts.  This  duty  ia 
upon  all  stockholders  and  courts  will  adjust  equi- 
ties between  them.     Id. 

A  subscriber  for  stock  who  has  paid  nothing  for 
stock  or  on  assessments,  and  whose  stock  is  there- 
for forfeited,  is  not  a  stockholder  to  object  to  a 
court's  action  in  distributing  assets.  St.  L.,  etc., 
Co.  V.  Sandoval,  etc.,  Co.,  116  111.  172;  s.  c-  5 
N.    E.    Rep.    370. 

A  decree  which  charges  a  single  stockholder,  and 
does  not  find  that  the  assets  of  the  company  are 
exhausted  is  to  be  reversed.  Curran  v.  Bradner, 
27  111.  App.  .582. 

Decree,  fully  adjudicating  and  settling  the  per- 
sonal liability  of  stockholders  of  an  insolvent  cor- 
poration, on  a  bill  by  creditors  for  themselves  and 
all  other  creditors,  is  binding  and  conclusive  on 
all  creditors,  becoming  parties,  in  all  collateral 
proceedings.  Tunesma  v.  Schuttler,  114  111.  163: 
s.   c,  28  N.   E.    Rep.  605. 

Creditor's  bill,  not  filed  on  behalf  of  creditors 
generally,  to  set  aside  a  fraudulent  conveyance 
and  enforce  a  shareholder's  liability  to  the  cor- 
poration; decree  for  a  sum  larger  than  will  satisfy 
the  claims  of  the  particular  complainants  is  er- 
roneous. Bouton  V.  Dement,  123  111.  145;  s.  c,  14 
N.   E.  Rep.  62. 

Where  judgment  is  obtained  to  the  extent  of 
the  stockholder's  liability,  and  the  judgment  has 
been  satisfied  for  a  sum  less  than  was  due,  in  a 
future  action  he  is  credited  with  the  amount  ac- 
tually paid.  Kunkelman  v.  Rentchler,  15  111.  App. 
271. 

Judgment  against  an  imperfectly-organized  cor- 
poration, as  between  plaintiff  and  the  corporation 
operates  as  an  estoppel  to  bar  such  plaintiff  from 
recovering  on  the  individual  liability  of  the  cor- 
porate members  as  partners  on  the  same  cause  of 
action.     Cresswell  v.  Oberly,  17  111.   App.  284. 

As  against  the  claim  of  creditors  of  a  corporation 
it  is  immaterial  what  private  arrangements  sub- 
scribers may  make  with  it  or  with  the  person  who 
procures  their  subscription  as  to  the  payment  of 
the  amount  subscribed.  Kern  v.  Chicago  Co-op. 
B.  Assn.,  40  111.  App.  358. 

If  the  directors  of  a  corporation  attempt  to  re- 
lease a  portion  of  the  stockholders  and  cancel 
their  sliares,  this  will  not  discharge  other  stock- 
holders from  the  obligations  of  their  contracts. 
Such  release  and  cancellation  is  wholly  void.  Fey 
V.   P.   Watch  Co.,  32  111.  App.  630. 

The  issue  of  certificates  of  stock  on  payment  of 
forty  per  cent,  of  their  subscription,  does  not  con- 
stitute the  subscribers  holders  of  fuii-paid  stock 
of  the  corporation  in  such  sense  that  they  cannot 
be  called  on  to  pay  the  remaining  sixty  per  cent, 
at  the  suit  of  creditors.  Bates  v.  Tel.  Co.,  134 
III.   548;   s.    c,  25  N.    E.    Rep.  521. 

Stockholders  cannot  defeat  their  liability  to  cor- 
porate creditors  by  subscribing  for  stock  and  then 
surrendering  it  to  the  company,  and  taking  it 
from  the  corporation  at  a  fraction  of  its  value. 
Ailing  V.  Wenzel.  35  111.  App.  247.  Any  amount 
paid  by  them  will,  in  eciuity,  be  treated  as  a  pay- 
ment on  the  stock,  and  they  will  be  held  liable 
for  their  pro  rata  share  to  the  creditors  of  an 
insolvent  corporation.  Id.;  s.  c,  133  111.  275;  s.  c, 
24   N.    E.    Rep.   551. 

In  such  case  the  stock  taken  will  be  held  as  Is- 
sued under  the  subscription  for  stock.     Id. 

Where  after  a  part  of  corporate  stock  has  been 
subscribed  for,  to  aid  the  organization  of  the  com- 
pany, one  subscriber  is  induced  by  iiie  others  to 
subscribe  for  the  balance  thereof  "  as  trustees," 
it  being  agreed  that  he  should  not  be  liable 
thereon,  but  that  each  should  assist  him  to  dis- 
pose of  the  shares;  (1)  he  will  be  liable  to  cred- 
itors on  such  stock;  (2)  he  will  not  ue  liable  to 
the    corporation   or    other   stockholders.      Winston 


32 


ILLINOIS. 


Euforcement  of  liability  of  stockholders  —  R.  S.,  cb.  xxxii,  §  25. 


T.  Dorsott  P.  &  P.  Co.,  129  III.  70;  s.  c,  21  N.  E. 
Rep.   514. 

In  the  absence  of  an  ngroeinont.  a  stockholder 
of  a  corporal  ion  Is  not  under  lejral  obligation  to 
pay  the  corporate  debts  from  his  individual  means. 
I'erry  v.  I'earson,  135  111.  235;  s.  c,  25  N.  E.  Rep. 

c;?t>. 

A  promise  by  a  stockholder  to  pay  the  debts 
of  a  corporation  Is  a  promise  to  pay  fhe  debt  of 
another.  Nat  l?k.  t.  Waterman,  134  111.  4C7;  s.  c, 
29   N.    E.    Rep.   503. 

The  capital  stock  of  a  corporation  Is  a  fund  set 
apart  for  the  payments  of  its  debts.  The  com- 
pany's directors  hold  It  In  trust  for  that  purpose. 
Alllnp  V.  Weuzel,  supra;  Nat.  Bk.  v.  Burch,  40 
III.  App.  513. 

The  nominal  capital,  besides  the  actual  assets. 
Is  a  fund  to  which  creditors  may  look  for  satis- 
faction. Thayer  v.  El  I'lomo  M.  Co.,  40  111.  App. 
346. 

Such  capital  Is,  In  effect,  a  warranty  by  each 
stockholder,  on  which  he  Is  responsible  to  the 
extent  that  his  stock  has  not  been  fully  paid,  that 
the  company  once  had,  either  the  full  payment 
or  the  binding  promise  of  a  stockholder  for  full 
payment  for  every  share  issued.     Id. 

Tlie  directors  maj'  not  give  away  or  misappro- 
priate the  capital  stock  to  the  prejudice  of  per- 
sons dealing  with  the  corporation.  Any  device  by 
which  members  of  a  corporation  seek  to  avoid 
their  legal  responsibilities  is  void  as  to  creditors, 
whether  binding  or  not  between  themselves  or 
between  them  and  the  company.  Ailing  v.  Wen- 
zell,  supra. 

The  shareholders  have  no  power,  by  private 
agreement  with  the  corporation,  to  make  shares 
non-assessable,  so  as  to  excuse  payment  for  such 
stock  at  par,  as  against  creditors. '   Id. 

The  shareholders  of  a  corporation  are  conclu- 
sively charged  with  notice  of  the  trust  character 
which  attaches  to  its  capital  stock.  As  to  it  thev 
are,  to  all  intents  and  purposes,  privies  to  the 
trust.     N.  Bk.  v.  Burch,  40  111.  App.  513. 

Ergo;  when  they  have  in  their  bands  any  of 
this  trust  property  they  hold  it,  cum  onere  —  sub- 
ject to  all  eciuities  which  attach  to  it.     Id. 

To  charge  a  holder  of  stock  with  individual  lia- 
bility it  is  not  enough  to  prove  that  the  stock 
was  paid  for  in  property,  and  that  an  over-valua- 
tion was  placed  on  the  property  through  a  mis- 
take or  error  of  judgment.  Mallin  Chem.  W.  t. 
Glass  Co..  34  111.  App.  413. 

In  such  case,  it  must  be  shown  that  the  pur- 
chase of  the  property  at  the  price  agreed  on  was 
In  bad  faith  and   fraudulent.     Id. 

The  statute  for  the  incorporation  of  companies 
for  profit  renders  stockholders  delinquent  in  pay- 
ment for  stock  liable  to  the  full  amount  unpaid 
on  their  stock,  when  this  becomes  necessary  be- 
cause of  the  insolvency  of  other  stockholders"  who 
are  also  delinquent  in  payment  for  their  stock.  Id. 

The  liability  of  a  stockholder  is  for  his  unpaid 
stock.  To  the  extent  it  is  unpaid  he  is  liable  for 
the  debts  and  obligations  of  the  company.  When 
this  liability  Is  once  discharged,  by  payment  to 
the  corporation,  a  subsequent  assignee  or  purchaser 
takes  the  stock  relieved  from  the  statutory  bur- 
den.    Ailing  v.  Wenzell,  supra. 

Where  in  a  former  proceeding  by  creditors  to 
reach  the  stockholders'  liability  on  unpaid  stock, 
some  creditors  were  not  made  parties,  such  cred- 
itors will  not  be  barred  of  their  suit  to  enforce  a 
like  liability  as  to  their  claims.  Wood  v.  Wood. 
40  111.  App.  183. 

In  such  case,  however,  stockholders  in  the  latter 
action,  who  were  not  parties  to  the  prior  suit, 
should  be  required  to  contribute  to  the  fund  in 
the  same  proportion  as  those  who  were  parties 
In  that  case  before  the  latter  are  required  to  make 
further  application.     Id. 

On  the  hearing  of  a  liill  to  enforce  the  liability 
of  stockholders  to  creditors  for  money  unpaid  for 
stock  in  an  Insolvent  company.  s\irviving  stock- 
holders are  competent  witnesses  for  complaint, 
altliough  their  testimony  tends  to  charge  tlie  rep- 
resentatives of  deceased  stockholders,  their  In- 
terests preponderating.  In  opposition  to  their 
testimony.  Thayer  v.  El  Plomo  M.  Co.,  40  111. 
App.  347. 


Creditor's  bill  to  enforce  the  liability  of  stock- 
holders for  unpaid  subscriptions.  The  decree  dis- 
solved the  corp<iration  having  long  ceased  to  act 
and  having  no  proiverty  or  assets.  Ailing  v.  Wen- 
zell, i:{3  111.  277;  s.  c,  24  N.   E.   Rep.  551. 

An  action  at  law  by  single  creditor  will  lie 
against  any  stockholder  of  an  insolvent  corpora- 
tion to  enforce  Individual  liability,  Lut  right  to 
sue  at  law  does  not  necessarily  exclude  jurisdic- 
tion of  court  of  equity.  Eames  v.  Doris,  102  111. 
350. 

Stockholder  does  not  become  liable  until  cor- 
poration has  failed  to  pay  its  debt.  Schradcr  v. 
Ileinzelraan,  51  III.   -Vpp.  33. 

The  amount  for  which  a  stockliolder  of  an  In- 
solvent corporation  Is  liable  is  as  much  a  fund 
for  security  of  creditors  as  the  assets  in  hands 
of  the  assignee.     Id. 

Stockholder  may  become  a  creditor  of  an  existing 
but  not  a  defunct  corporation.     Id. 

Ijiabilitv  of  stockholders  in  a  corporation  of  an- 
other State.  Tuttle  v.  Bank,  48  111.  App.  481; 
Pro.  Assn.  v.  Lloyd,  id.  429. 

What  is  a  proper  action  to  bring  in  this  State 
to  recover  under  Kansas  statute  the  personal  lia- 
bility of  a  stockholder.  Schertz  v.  Bank,  47  111. 
App.  124. 

Liability  of  stockholders  domiciled  in  this  State, 
of  corporation  organized  under  laws  of  another 
State.  Young  v.  Farwell,  139  111.  S2Q;  s.  c,  28 
N.  E.  Rep.  845.  And  jurisdiction  of  courts  of  this 
State  to  determine  such  liability.  Id.  Relations 
between  corporation  and  its  members  depen<lent 
upon  law  of  place  where  corporation  is  organized, 
and  liability  of  stockholders  must  be  determined 
bv  laws  of  such  State  and  by  the  courts  of  such 
State.    Id. 

Creditor  may  seek  satisfaction  of  his  judgment 
by  creditor's  bill  against  single  stockholder,  but 
the  latter  may  file  cross-bill  and  bring  otber  stock- 
holders before  the  court  and  enforce  contribution 
from  all  who  are  delinquent.  Young  v.  Farwell, 
139  111.  326;  s.   c.  28  N.  E.   Rep.  845. 

Upon  bill  filed  to  enforce  individual  liability  of 
stockholders,  court  holds  that  until  all  debts  are 
paid,  creditors  are  entitled  to  pursue  stockholders 
for  all  unpaid  subscriptions  —  solvents  making 
good  deficiencies  of  the  insolvents  — whatever 
number  of  assessments  may  become  necessary  in 
equalizing  the  burden  among  those  who  can  be 
made  to  pay.     Ailing  v.  Wenzell,  46  111.  App.  562. 

Capital  stock  is  a  trust  fund  which  cannot  be 
given  away  or  misappropriated  to  the  prejudice 
of  corporate  creditors;  and  any  device  by  which 
members  of  a  corporation  seek  to  avoid  liability 
imposed  by  law  is  void  as  to  creditors.  Howe  v. 
Agr.  Works,  46  111.  App.  85. 

Where  property  is  given  in  exchange  for  paid-up 
shares  of  stock,  which  property  is  overvalued  in 
the  exchange,  upon  corporation  becoming  insol- 
vent, shareholders  not  liable  to  creditors  unless 
the  overvaluation  was  fraudulent  and  made  with 
intent  to  evade  the  statute.  Car  Seat  Co.  v. 
Rankin,  45  111.  App.  226. 

Above  section  is  intended  to  afford  a  remedy  in 
the  nature  of  a  creditor's  bill,  and  is  assigned  to 
aid  creditors  in  the  collection  of  their  debts;  and 
a  court  of  equity,  in  a  suit  by  creditors,  has  full 
power,  for  cause  shown,  to  close  up  the  business 
of  a  corporation  or  dissolve  it.  Hunt  v.  Rink  Co., 
143  111.  118;  s.  c,  32  N.  E.  Rep.  525.  The  attorney- 
general  is  not  authorized  by  the  law  to  file  a  bill 
or  information  in  equity,  under  this  section,  for 
the  purpose  of  dissolving  corporation  for  a  for- 
feiture  of  charter.     Id. 

Where  special  remedy  Is  given  to  creditors  of  a 
corporation  against  its  stockholders,  liability  can- 
not be  enforced  in  another  State,  but  only  in 
State  in  which  corporation  exists.  Fowler  v. 
Lanison,  146  111.  472;  s.  c,  34  N.  B.  Rep.  232. 
Lial)ility  of  stockholders  for  debts  of  a  Kansas 
corporation.    Id. 

In  this  State  a  corporation  creditor  may,  after 
judgment  and  execution  returned  unsatisfied,  pro- 
ceed by  bill  against  one  or  more  delinquent  stock- 
holders, without  joining  all;  those  sued  have  the 
right  to  bring  in  all  others  bv  cross-bill.  Palmer 
V.   Woods,   149  111.   146;  s.  c.  .'55  N.   E.   Rep.  1122. 

Judgments  against  corporation  obtained  by  fraud 
by  officers  will  be  set  aside  on  the  bill  of  stock- 


ILLINOIS. 

Insolvency;  dissolution;  receiver  —  R.  S.,  ch.  xxxii,  §  25. 


33 


holders  and  creditors  filed  for  that  purpose.  Paper 
Co.  V.  Robbius,  151  111.  588;  s.  c,  38  N.  E.  Rep. 
153. 

Any  device  by  which  members  of  a  corporation 
seek  to  avoid  liability  for  the  full  value  of  theii* 
stock,  such  as  an  agreement  that  the  stock  shall 
be  "  fully  paid  up,"  Is  void  as  to  creditors  of  the 
corporation.  Coleman  v.  Howe,  154  111.  458;  s.  c, 
39  N.  K.  Rep.  725.  And  when  property  is  given 
in  payment  for  stock  its  valuation  must  be  made 
In  >co(id  faith.  Id.  A  consideration  presumptive  of 
bad  f:iith  arises  from  holders'  exaggerated  esti- 
mate of  the  value  of  such  property,  which  will 
be   conclusive  notice   rebutted.    Id. 

Purchaser  of  stock  with  notice  must  pay  bal- 
ance due  on  subscription.     Id. 

The  liability  of  a  stockholder  for  unpaid  stock 
is  several,  aiid  when  sued,  he  must  make  other 
stockholders  parties.     Id. 

Liability  of  stockholders  In  foreign  corporation 
must  be  determined  by  law  of  State  under  which 
such  corporation  was  created.  Wandel  v.  L.  & 
C.  Co.,  154  111.  177;  s.  c,  40  N.  E.   Rep.  462. 

Effect  of  Illinois  statute  upon  foreign  stock- 
holders' liability.     Id. 

AVhon  stockholder  cannot  show  payment  in  full 
on  his  stock  by  agreement  with  the  corporation 
to  accept  less  than  par  value.  Fehr  v.  Gasch,  44 
N.  E.   Rep.  724. 

Insolvency  —  Dissolution  —  Receiver. — 
Corporation  In  faillug  circumstances;  transfer  of 
personalty  In  payment  of  a  bona  tide  debt  d(ies 
not  evidence  fraud.  Beach  v.  Miller,  23  111.  App. 
151. 

A  creditor's  bill  against  an  insolvent  corporation, 
its  otHcer  and  stockholders,  may  seek  discovery 
not  only,  but  to  have  certain  payments  declared 
fraudulent  as  to  creditors.  Discovery  failing,  the 
bill  may  be  retained  as  to  the  further  relifef. 
Bouton  V.   Smith,  113  111.  487. 

(Jorporation  may  be  dissolved  if  It  be  insolvent, 
has  ceased  and  is  luiable  to  do  business,  and  has 
debts  unpaid.  St.  L.,  etc.,  Co.  v.  Sandoval,  etc., 
Co.,   IIG  111.    172;   s.   c,  5   N.   B.    Rep.   370. 

On  dissolution  a  court  of  equity  will  lay  hold  of 
the  corporate  property  to  distribute  it  for  the 
benefit  of  creditors  and  stockholders,     id. 

Civil  death.  Generally,  where  the  charter  of 
or  the  franchise  to  be  a  corporation  is  transferred 
or  sold  there  is  a  surrender  or  abandonment  of 
the  old  corporation  by  the  corporators.  The  ef- 
fect is  the  same  as  though  the  old  corporation  was 
dissolved  and  its  franchise  surrendered  to  the 
State.  Snell  v.  Chicago,  133  111.  430;  s.  c,  24  N. 
E.   Rep.   532. 

Unpaid  stock  liabilities  are  assets,  and  a  cor- 
poration is  not  insolvent  where  the  sum  liable  to 
call  on  stock,  held  by  solvent  stockholders,  ex- 
ceeds amount  of  its  debts,  though  it  has  no  tan- 
gible property.  Matson  v.  Alley,  41  111.  App.  72. 
In  the  absence  of  any  fraudulent  purpose,  it  Is 
competent  for  a  corporation  to  prefer  a  creditor, 
and  such  creditor  may  be  wife  of  the  president. 
Ragland  v.  M'Fail,  137  111.  90;  s.  c,  27  N.  E.  Rep. 
75. 

Stockholders  of  an  insolvent  corporation  will  be 
liable  to  creditors  unless  there  has  been  given 
for  the  stock  the  equivalent  in  money  or  money's 
worth.  Thayer  v.  El  Plomo  M.  Co.,  40  111.  App. 
347. 

AVhen  corporation  becomes  insolvent,  directors 
become  trustees  for  all  creditors,  and  can  neither 
give  away  assets  nor  use  them  to  exonerate  them- 
selves to  the  injurv  of  other  creditors.  Atwater 
V.  Bank,  40  111.  App.  503;  Roseboom  v.  Whittaker, 
132  111.  87;  s.  c,  23  N.  E.  Rep.  839;  Beach  v. 
ISIilier,  13l»  111.  170;  s.  c.  22  N.  E.  Rep.  464;  Bank  v. 
Burch,  40  111.  App.  515.  An  otHcer  or  director, 
having  loaned  money  to  and  taken  security  from 
a  solvent  corporation,  has  same  right  as  a  stranger 
to  recover  the  loans  and  enforce  the  securities 
upon  subsequent  insolvency.  Bank  v.  Schott,  135 
Hi.  673. 

The  right  of  a  creditor  to  obtain  a  preference 
over  other  creditors  of  an  insolvent  corporation 
is  expressly  recognized  in  Bureli  v.  West,  134 
111.  258;  Bank  v.   Burch,  40  111.   App.   51."). 

It  Is  proper  to  assume  that  auy  arrangement 
between   the   officers   of   an    insolvent    corporation 


and  their  Individual  creditors  that  the  property 
of  the  corporation  is  to  be  applied  to  the  payment 
of  the  private  debts  of  the  otfieers,  is  a  fraud  on 
the  corporation's  creditors.  Bank  v.  Moore,  id. 
339. 

The  officers  of  an  insolvent  corporation  may 
not  "  use  up  "  Its  assets  in  payment  of  their  own 
claims.  An  attempt  to  do  so  is  void,  as  against 
the  process  of  an  outside  creditor.  M'Neill  v. 
Lacey,  33  111.  App.  311;  Roseboom  v.  Whittaker, 
id.  443. 

The  insolvency  of  a  corporation  does  not,  per 
se,  put  an  end  to  power  of  company  to  manage  its 
assets  and  fix  the  liens  of  creditors.  Brabroolc 
T.  Co.  V.  Beldlng,  40  Hi.  App.  320. 

No  bill  to  administer  assets  of  an  insolvent 
corporation  can  be  maintained  against  it  alone, 
without  the  acquiring  of  an  equitable  lien  by  ex- 
hausting the  remedy  at  law.  Taylor  Co.  v. 
Woolverton,  37  111.  App.  362. 

After  aid  of  equity  has  been  invoked  and  court 
has  taken  assets  of  an  insolvent  corporation  into 
its  hands,  its  jurisdiction  is  exclusive  and,  ordi- 
narily, no  creditor  can  pursue  a  remedy  at  law 
in  such  way  as  to  obtain,  for  himself,  a  preference. 
Roseboom  v.   Whittaker,    supra. 

The  failure  in  a  creditor's  bill  against  an  insol- 
vent corporation  to  make  some  creditors  parties 
must  be  made  In  the  trial  court.  The  objection 
comes  too  late  on  appeal  to  the  supreme  court. 
Id.  Where  certain  creditors  hie  a  creditor's  bill 
they  will  not  be  entitled  to  priority  over  other 
creditors  not  having  judgments.  Taicoft  v.  G.  W., 
etc.,  Co.,   131  111.  253;  s.  c,  23  N.  E.  Rep.  403. 

When  sale  by  corporation  of  property  to  creditor 
is  attacked,  as  In  fraud  of  creditors,  it  is  com- 
petent to  prove  that  company  was  embarrassed 
or  insolvent.     Beach  v.  Miller,  supra. 

Section  25  construed.  Man.  Co.  v.  C.  C.  Co., 
55  111.  App.  381. 

Directors  of  a  corporation  so  utterly  insolvent 
as  to  have  abandoned  all  efforts  to  continue 
business  can  give  preference  to  creditors  having 
knowledge  of  its  condition.  Gottlieb  v.  Miller,  47 
111.  App.  588.  A  distinction  between  a  corporation 
so  Insolvent  as  to  have  stopped  business,  giving 
preferences,  and  one,  by  giving  a  preference,  in- 
capacitates itself  for  further  business.     Id. 

Right  of  Insolvent  corporation  to  prefer  cred- 
itors. Glover  v.  Lee,  140  111.  102;  s.  c,  29  N.  E. 
Rep.   680. 

Capital  stock  is  a  trust  fund  in  hands  of  direc- 
tors for  the  payment  of  the  corporate  debts,  and 
shareholders  are  conclusively  charged  with  notice 
of  the  trust  character  which  atta"ches  to  capital 
stock,  and  cannot  occupy  the  status  of  innocent 
purchasers.  Bank  v.  Burch,  141  111.  519;  s.  c,  31 
N.    E.    Rep.   420. 

Board  of  directors  of  an  Insolvent  corporation 
may  empower  president  and  secretary  to  make  as- 
signment to  a  creditor.     Id. 

Powers  of  court  to  wind-  up  affairs  of  an  in- 
solvent corporation.  Wheeler  v.  Iron  &  Steel  Co., 
143  111.   197:  s.  c,   32  N.   E.   Rep.   420. 

A  corporation,  unless  restricted  by  its  charter 
or  by  general  statutes,  may  make  assignment  for 
benefit  of  creditors  to  the  same  extent  that  an 
individual  may,  and  may  make  preference  for  one 
or  more  creditors,  or  class  of  creditors,  over 
others.  But  preference  l)y  directors  to  them- 
selves is  generally  fraudulent.  Warren  v.  Bank, 
149  111.  9.     Assets,  how  far  a  trust  fund.     Id. 

It  is  the  settled  law  of  this  State  that  a  cor- 
poration may  prefer  creditors.  Paper  Co.  v.  Rob- 
bins,  151  111.  588;  s.  c,  38  N.  E.  Rep.  153.  But  it 
must  be  done  in  the  utmost  good  faith.    Id. 

If  solvent,  corporation  may  make  preferential 
transfers  of  the  corporate  assets,  so  long  as  it 
acts  in  good  faith.  Peterson  v.  Tailoring  Co.,  150 
111.   290;   s.    c,   37   N.    E.    Rep.   242. 

Assets  of  an  insolvent  corporation  are  not 
strictly  a  trust  fund,  nor  are  the  officers  strictly, 
trustees.  At  most,  the  assets  are  a  quasi  trust 
fund,  and  officers  quasi  trustees,  under  some  cir- 
cumstances. Gottlieb  V.  Miller,  154  111.  44:  s.  c, 
39  N.  E.  Rep.  992.  And  In  absence  of  legislation 
to  the  contrary,  the  Insolvent  corporation  may 
make  a  preference  among  creditors,  sul)ject  to  the 
same  restrictions  that  apply  to  Individual  debtors. 
Id.    Directors  cannot  appropriate  assets  when  in- 


34 


ILLINOIS. 


Insolvency;  dissolution;  receiver  —  R.  S.,  ch.  xxxii,  § 


25. 


solvent.  Id.  Creditors  of  a  firm  whose  members 
were  directors  of  ft  corporation  hiive  no  standing 
to  iiupeacla  the  conduct  of  a  company,  its  directors 
and  ottlcers.   in   making  preferences.    Id. 

Assignment  of  corporation  for  benetit  of  cred- 
itors, what  is  not.  Peterson  v.  Tailoring  Co.,  51 
III.  App.  249. 

When  solvent  corporation  has  borrowed  money 
from  its  oflicers  or  directors,  Its  subsequent  lu- 
Bolveucy  will  not  affect  their  right  of  action  to 
recover  the  loan.  Steele  Co.  v.  O'Donnell,  156  111. 
624;  s.  c.  41  N.  E.  Rep.  185.  And  such  relation- 
ship will  not  prevent  an  Insolvent  corporation 
from  giving  such  creditor  ollicer  a  valid  security 
as   a   preference.    Id. 

Mere  allegation  that  corporation  has  "  ceased  do- 
ing business  "  not  enough  to  justify  appointment  of 
receiver  under  this  statute.  Brabrook,  etc.,  v.  Beld- 
ing,  40  111.  App.  329.  It  must  be  shown  that  such 
cessation  Is  more  than  an  interruption  of  the  ordi- 
nary course  of  business.  Id.  Appointment  of  re- 
ceiver Is  an  act  divesting  corporation  of  control 
of  Its  property,  suspending  Its  powers  and  likely 
to  result  In  Its  dissolution.  Hence  statute  au- 
thorizing It  must  be  strictly  construed.     Id. 

After  receiver  appointed,  corporation  still  exists 
to  exercise  any  of  Its  franchises  not  Interfering 
with  receiver's  performance  of  his  dutv.  Ry.  Co. 
V.  Russell.  115  III.  54;  s.  c,  3  N.  E.  Rep.  561. 
And  may  sue  any  person,  by  leave,  to  try  title  to 
property.  St.  L.,  etc.,  Co.  v.  S.  C.  &  M.  Co.,  Ill 
III.  39.  Receiver  may.  In  proper  case,  be  appointed 
before  jurisdiction    required    to   adjudicate.    Id. 

Equity  acquires  jurisdiction  to  appoint  a  re- 
ceiver of  corporate  assets  by  service  on  the  cor- 
poration. Bates  V.  Tel.  Co.,  134  III.  549;  s.  c,  25 
N.  E.  Kop.  521;  Tel.  Co.  v.  Gray,  122  Id.  634;  s.  c, 
14  X.  E.  Rep.  214.  In  action  by  receiver  to  col- 
lect unpaid  subscriptions  to  stock,  the  validity  of 
decree  appointing  him  cannot  be  questioned.  Id. 
Receiver  may  be  appointed  when  directors  are 
guilty  of  mismanagement  and  malfeasance,  and 
court  may  order  him  to  sue  for  unpaid  subscrip- 
tions to  stock.     Id. 

Receiver  can  sue  In  name  of  corporation  upon 
debts  due  to  It.  Ramsev  v.  Ins.  Co..  55  111.  311; 
see,  also,   Ins.  Co.  v.  Bank,  63  Id.  348. 

Appearance  by  a  receiver  of  an  Insolvent  cor- 
poration empowered  to  sue,  etc.,  at  the  time  of 
entering  a  deficiency  decree  In  foreclosure  waives 
notice  of  application  therefor.  Land  Co.  v.  Peck, 
112  III.  431. 

A  court  of  chancery  having  jurisdiction  of  the 
property  of  an  Insolvent  corporation  and  of  a  de- 
fendant claiming  It,  an  order  on  the  latter  to 
turn  the  same  over  to  a  receiver,  for  presenta- 
tion, however  erroneous,  must  be  obeved;  error 
will  not  justify  refusal.  Tolman  v.  Jones,  114 
III.    1.53:    s.   c,  28   N.    E.    Rep.   464. 

Receiver  is  regarded  as  representing  onlv  the 
corporation  itself  —  not  creditors  or  stockho'lders. 
For  purposes  of  litigation  he  takes  only  such 
rights  as  the  corporation  might  assert.  Ins.  Co. 
v.  Swigert.  135  111.  167:  s.  c.  25  N.  E.  Rep.  680. 
And  by  section  25  is  authorized  to  sue  in  all  courts, 
etc..  without  an  order  of  court  authorizing  him 
to  bring  suit.    Hanke  v.  Blatner,  34  III.  App.  .397. 

Bin  filed  by  stockholder  asking  for  a  receiver 
Is  bad,  on  demurrer,  if  it  does  not  allege  facts 
showing  any  of  the  causes  named  In  the  statute 
as  ground  of  equitable  Interference.  And  if  bill 
appeals  merely  to  the  general  chancery  powers  of 
the  court.  It  will  not  be  suflBcIent.  Whooler  v 
Iron  &  Steel  Co.,  143  111.  197;  s.  c,  32  N.  E.  Rep. 

Rule  that  a  foreign  receiver  will  not  be  allowed 
to  maintain  an  action  against  the  assets  of  an 
Insolvent  debtor  as  against  a  resident  creditor, 
does  not  apply  to  the  receiver  appointed  bv  the 
courts  of  this  State,  and  under  its  laws,  in  a  suit 
Uistltuted  by  a  non-resident  creditor.  Holbrook  v. 
Ford.  1.53  lill.  6.33;  s.  c,  39  N.  E.  Rep.  1691;  s.  c, 
50  III.  App.  547.  Receiver  of  property  of  a  foreign 
corporation  takes  no  title  to  debts  due  It -from 
debtors  in  another  State,  alhough.  In  the  ordinary 
course  of  business  of  corporations,  the  debts  would 
have  been  payable  in  the  State  of  his  appoint- 
ment.   Id.    The  locus  of  a  debt  is  the  domicile  of 


the   creditor,    which.    In   case  of  a   corporation,    is 
the   State   of  Its   creation.    Id. 

Creditors  of  an  Insolvent  corporation  may  pro- 
ceed with  all  legal  remedies  until  court  of  equity 
obtains  Jurisdiction  over  It.  Bank  v.  Bank,  53  III. 
App.  358. 

Insolvent  corporation  may  prefer  creditors. 
O'Donnell  v.  Steel  Co.,  53  111.  App.  314.  Rights 
of  director  creditors.    Id. 

"When  stockholders  are  necessary  parties  to  suit 
against  corporation.  Bennett  v.  Tel.  Co.,  53  111. 
App.  276;  Tel.   Co.  v.   Barker,  56  Id.  402. 

A  franchise  Is  Involved  in  a  suit  to  dissolve  a 
corporation  and  appoint  a  receiver.  O  Donnell  v. 
Steel  Co.,  supra. 

To  sustain  a  bill  which  seeks  appointment  of  re- 
ceiver and  winding  up  of  affairs  of  a  corporation, 
allegations  of  fraudulent  mismanagement  should 
be  specific  and  definite,  so  that  court  can  see  that 
charges  are  not  mere  conclusions  of  the  pleader. 
Wheeler  v.  P.   I.   &  S.   Co.,  43  111.  App.  626. 

Courts  proceed  with  caution  in  the  appointment 
of  receivers  to  take  the  property  of  a  corporation 
out  of  control  of  Its  officers  and  to  justify  such 
appointment  for  a  solvent,  prosperous  corporation, 
tue  circumstances  must  be  extraordinary,  and 
something  more  must  be  shown  than  past  miscon- 
duct and  a  mere  apprehension  based  thereon  of 
future  misdoing.  Natatorlum  Co.  v.  Helssler,  50 
111.  App.  406. 

Assessments  upon  stock  of  an  Insolvent  corpora- 
tion must  be  equitable.  Bennett  v.  Tel.  Co.,  53 
111.  App.  277. 

Corporation  not  dissolved  by  neglect  to  elect 
officers.     §  14,   and  note. 

Sale  of  property  of  a  corporation  does  not  dis- 
organize it.  Bruffett  V.  R.  R.  Co.,  25  111.  353; 
Relchwald  v.  Hotel,  106  id.  439.  Stockholders  not 
necessary  parties  to  a  creditor's  bill  to  dissolve 
Insolvent  corporation.  Bates  v.  Tel.  Co.,  134  111. 
549;  s.   c,  25  N.  E.   Rep.  521. 

A  judgment  declaring  a  forfeiture  of  franchises, 
rights  and  privileges  of  a  corporation,  where  there 
has  been  no  prior  waiver  of  the  right  of  forfeiture, 
will  operate  to  produce  a  dissolution  of  the  cor- 
poration. Danv.  Sem.  v.  Mott,  136  111.  292;  s.  c, 
28  N.   E.  Rep.  54. 

In  a  proceeding  to  wind  up  the  affairs  of  a  cor- 
poration at  the  Instance  of  creditors,  a  dissolu- 
tion of  the  company  decreed  cannot  work  injury 
to  the  stockholders  held  to  liability  on  the  unpaid 
balances  of  stock  held  by  them,  when  the  assets 
of  the  corporation  are  exhausted,  and  it  has  ceased 
to  do  business.  Ailing  v.  "Wenzell,  35  111.  App. 
247. 

Bill  by  stockholders  for  dissolution  and  assess- 
ment on  unpaid  stock  to  pay  debts.  In  absence  of 
injury  to  creditors  a  decree  is  not  erroneous  which 
omits  to  assess  one  who  suuscribed  as  trustee 
under  agreement  that  "  trustee  stock  "  should  be 
assessed,  the  other  stockholders  not  being  assessed 
in  excess  of  their  Indebtedness.  Winston  v.  Dor- 
set P.  &  R.  Co.,  129  III.  70:  s.  c,  21  N.  E.  Rep.  514. 

The  rule  Is,  that  In  the  absence  of  statutory 
provision,  courts  of  equity  have  no  jurisdiction  to 
decree  dissolution  of  a  corporation,  by  forfeiture 
of  Its  franchises,  either  at  suit  of  an  individual  or 
of  the  State.  Ins.  Assn.  v.  Hunt  127  III.  274; 
s.   c,   20  N.   E.   Rep.  55. 

An  Information  filed  In  a  court  of  equity,  for 
dissolution  of  a  corporation,  on  some  ground  enu- 
merated in  statute  of  its  creation,  is  not  a  crimi- 
nal proceeding.  It  Is  not  required  to  be  carried 
on  "  in  the  name  and  by  the  authority  of  the 
people,"  etc.  Chicago  M.  L.  Ins.  Assn.  v.  Hunt, 
127  111.  275;  s.  c,  20  N.   E.   Rep.  55. 

A  court  or  receiver  appointed  by  It.  under  bill 
filed  by  some  stockholders  of  a  corporation,  pray- 
ing, inter  alia,  for  dissolution  of  company,  its 
directors  only  being  named  as  deiendants.  ac- 
quires no  control  of  the  stockholders.  Robinson 
V.   Raulston,  33  III.   App.  166. 

The  title  of  a  corporation  to  property  owned  by 
It  ceases  when  the  corporation  itself  ceases  to 
exist.  Mott  V.  Danv.  Sem.,  129  111.  409;  9.  c.  21 
N.   E.   Rep.  927. 

Hence,  at  common  law,  on  dissolution  or  civil 
death  of  a  corporation,  all  Its  real  estate  remain- 
ing unsold  reverts  to  the  original  grantor  or  his 
heirs.    Id. 


ILLINOIS 


35 


Insolvency;  foreign  corporations  —  R.  S.,  ch.  xxxii,  §  26. 


The  rule  of  the  common  law  has  been  changed 
In  modern  times,  at  least  in  favor  of  corporations, 
for  pecuniary   profit.     Id. 

In  such  corporations  shareholders  are  the  origi- 
nal donors  of  the  corporate  property,  each  con- 
tributing to  the  capital  for  the  common  benefit. 
The  corporation,  so  long  as  it  is  solvent,  holds 
the  property  merely  as  trustee  for  its  sharehold- 
ers.    Id. 

When  such  corporate  body  is  dissolved  or  be- 
comes Insolvent,  equity  distributes  its  property: 
(1)  to  pay  its  debts,  and  (2)  among  its  stock- 
holders.    Id. 

Insurance  corporations.  Insolvent,  may  be  dis- 
solved at  the  suit  of  the  auditor,  ins.  Co.  v. 
The  Auditor,  101  111.  82. 

What  constitutes  "  good  cause "  for  dissolv- 
ing a  corporation.  Wheeler  v.  Iron  &  Steel  Co.. 
143  111.  197;  s.  c,  32  N.  B.  Rep.  420.  Disposition 
of  assets  on  dissolution.  Id.  Remedy  of  stock- 
holder for  mismanagement  and  fraud  in  affairs  of 
company.    Id. 

At  common  law  a  corporation  cannot  be  dis- 
solved at  instance  of  an  individual,  and  the  State, 
or  attorney-general,  is  a  necessary  party  to  any 
suit  to  dissolve.  But  legislature  may  provide 
by  statute  for  absolute  and  final  dissolution  of 
a  corporation  at  the  suit  of  an  individual.  Hunt 
V.  Rink  Co.,  143  111.  118;  s.  c,  32  N.  E.  Rep.  525. 
Without  statutory  authority  court  of  chancery  has 
no  jurisdiction  to  decree  the  dissolution  of  a  cor- 
poration, tb'-'  mode  of  procedure  would  be  by  scire 
facias  or  quo  warranto,  in  a  court  of  law.  Id. ; 
Wheeler  v.  Iron  &  Steel  Co.,  Id.  197;  s.  c,  32  N. 
E.   Rep.  4201. 

Mere  fact  that  domestic  corporation  has  kept 
Its  books  in  another  State,  when  such  books  have 
always  been  found  at  the  office  in  this  State  when 
needed  for  inspection,  not  sufficient  ground  for 
dissolving  the  corporation.  Roiling  Stock  Co.  v. 
People,  147  111.  234;  s.  c,  35  N.  E.   Rep.  608. 

Jurisdiction  of  a  court  of  equity  to  dissolve  a 
corporation  is  derived  entirely  from  section  25, 
and  forms  no  part  of  the  general  chancery  juris- 
diction. Steel  Works  v.  Steel  Co.,  153  111.  9;  s.  c, 
38  N.   E.   Rep.  10,33. 

Cessation  of  business  by  a  corporation  because 
of  the  levy  of  attachments  upon  its  property  is 
not  a  ceasing  to  do  business,  within  meaning  of 
statute  authorizing  its  dissolution  by  a  court  of 
equity  and  the  appointment  of  a  receiver,  on  a 
bill  by  a  single  stockholder,  to  which  only  part 
of  the  creditors  are  made  parties.  People  v. 
Weigley,   155  111.  491;  8.  c,  40  N.   E.   Rep.  300. 

Courts  of  chancery  are  without  jurisdiction  to 
decree  dissolution  of  corporation,  except  so  far  as 
such  jurisdiction  Is  conferred  by  section  25  of 
corporations  act,  and  can  dissolve  them  for  no 
causes  other  than  those  therein  mentioned.    Id. 

A  transfer  to  the  trustees  of  the  accounts  be- 
longing to  a  corporation,  duly  made  and  noted  on 
books  of  corporation  under  authority  of  board  of 
directors  and  accepted  by  trustee  in  writing,  with 
notice  from  him  to  the  parties  whose  accounts 
are  assigned,  and  also  to  the  persons  for  whom 
he  Is  acting  as  trustee,  is  sufficient  to  vest  in  the 
trustee  right  to  the  money  derived  from  the  ac- 
counts, although  subsequently,  on  the  same  day, 
a  bill  was  filed  for  a  receiver  and  to  wind  up 
corporation.  Trust  Co.  v.  Smith,  158  111.  417;  s.  c, 
41  N.    E.    Rep.    1076. 

A  preference  by  the  assignment  of  accounts 
made  by  a  corporation  Is  not  defeated  by  section 
25  of  act  of  corporation,  providing  for  winding 
up  all  business  of  corporations  by  suit  in  equity, 
although  such  suit  is  brought  Immediately  after 
assignment.    Id. 

Directors  may  give  preference  to  a  relative.  Blair 
V.  Steele  Co.,  159  111.  350;  s.  c,  42  N.  E.  Rep.  895. 
Preference  may  be  given  debts  guaranteed  by 
directors.  Id.  Stockholders  may  be  preferred 
creditors.    Parsons    v.    Hatton,    58    111.    App.    272. 

Corporation  may  prefer  one  creditor  from  an- 
other in  the  payment  of  its  own  debts,  and  no 
inference  of  fraud  can  be  brought  from  the  mere 
fact  that  such  a  preference  has  been  given  by  the 
execution  of  judgment  notes.  DIbblee  v.  Watson, 
60  HI.   App.  4.32. 

Courts  of  chancery  are  without  Jurisdiction   to 


decree  dissolution  of  corporations,  except  In  so 
far  as  that  jurisdiction  is  conferred  by  statute. 
Ward  V.   Segar,  60  III.  App.  424. 

An  agreement  between  an  insolvent  corporation 
and  holders  of  claims,  held  not  to  create  an  agree- 
ment not  to  sue  certain  stockholders  or  to  amount 
to  a  release.  Farwell  v.  G.  W.  Tel.  Co.,  44  N.  E. 
Rep.  891. 

An  order  of  an  assessment  against  stockholders 
on  petition  of  a  receiver  without  notice  was  void 
as  to  tliose  not  parties,  under  the  Corporation  Act 
of  1872.    Id. 

Where  a  holder  of  claims  against  an  insolvent 
corporation  agreed  with  certain  stockholders  to 
hold  them  harmless  so  far  as  his  interest  was 
concerned,  it  was  a  covenant  not  to  sue,  and  did 
not  release  such  stockholders  from  an  assessment. 
Id. 

A  stockholder  may  sue  the  corporation  and  others 
without  a  request  on  Its  receiver  to  bring  such 
suit,  where  what  was  equivalent  to  a  refusaj  bv 
the  receiver  to  do  so  Is  shown  in  the  bill.     Id.  " 

Creditors  of  a  corporation  are  not  necessary  par- 
ties to  a  bill  by  stockholders  brought  against  a 
receiver  of  the  corporation  to  undo  the  act  of 
the  court,  when  improperly  obtained,     lu. 

Rights  of  stockholders  "to  file  a  bill  of  review 
where  the  interest  of  the  receiver  of  the  cor- 
poration is  hostile  to  the  stockholders'  Interests. 
Id. 

Where  certain  claimants  had,  by  fraud  on  the 
court,  obtained  a  large  sum  belonging  to  an  in- 
solvent company,  held,  that  each  of  them  should 
be  compelled  to  account  for  the  amount  received 
by  him.     Id. 


§  26.  Foreign  corporations,  and  the  offi- 
cers and  agents  tliereof,  doing  business  in 
tills  State,  sliall  be  subjected  to  all  the  lia- 
bilities, restrictions  and  duties  that  are  or 
may  be  imposed  upon  corijorations  of  like 
cltaracter  organized  under  tlie  general  laws 
of  this  State,  and  shall  have  no  other  or 
greater  powers.  And  no  foreign  or  domestic 
corporation  estabished  or  maintained  in 
any  way  for  the  pecuniary  profit  of  its  stock- 
holders or  members,  shall  purchase  or  hold 
real  estate  in  this  State,  except  as  provided 
for  in  this  act. 

See  §  5,  ante,  notes,  and  cross-references.  Cor- 
poration acting  by  attorney.  §  66,  post.  Require- 
ments of  foreign  corporations.  See  Act  of  1897, 
at  p.  57. 

[Corporation  created  in  another  State  for  the 
purpose  of  buying  and  selling  lands  has  no  such 
power  in  this  State.    Carroll  v.   City,  67  111.   568. 

The  legislation  of  a  State  bordering  on  this,  can- 
not have  the  least  effect  in  a  creating  a  corpora- 
tion in  this  State.  Bridge  Co.  v.  County,  88  111. 
615. 

And  a  corporation  of  another  State,  which  can- 
not there  hold  title  to  real  estate,  is  incapable  of 
so  holding  in  this  State.  Starkweather  v.  A.  B. 
Soc,  72  111.  50;  U.  S.  T.  Co.  v.  Lee,  73  id.  142. 

Foreign  corporations  have  power  to  loan  money 
and  receive  mortgage  sectirlty,  and  may  acquire 
real  estate  in  satisfaction  of  debts  due  them.  As- 
surance Co.  V.  Scammon,  102  111.  46;  Buggy  Co. 
V.   Graves,  108  id.  459. 

Where  real  estate,  belonging  to  a  bank  of  an- 
other State,  was  attached  in  our  conrts,  it  af- 
forded no  ground  for  quashing  the  writ  of 
attachment.     Ins.  Co.  v.  Coml.   Bk.,  68  Hi.   .348. 

Corporation  having  power  to  take  and  hold  real 
estate,  a  deed  to  it  divests  grantor  of  his  title; 
whether  the  taking  is  ultra  vires  Is  a  question 
only  for  the  State.  Barnes  v.  Suddard,  117  111. 
239;  s.  c,  7  N.  E.   Rep.  477. 

Corporation  formed  under  laws  of  another  State 
with   capacity   to   hold   real   estate     may   acquire 


36 


ILLmOIS. 


Foreign  corporation;  evidence,  etc. —  R.  S.,  ch.  xxxii,  §§  27-28*^. 


such  property  here  as  Is  necessary  to  its  busi- 
ness.    Id.  ^  ,,  ,   J      * 

The  statute  does  not  necessarily  exclude  lor- 
eiCTi  corporntlous  carryluff  on  a  special  business, 
for  which  it  Is  organized  exclusively  in  another 
State,  from  receiving  lands  in  this  State  by  de- 
vise. S.  Clara  Fem.  Acad.  v.  Sullivan,  116  111. 
380:   s.   c,   6  N.   E.   Rep.    183. 

The  right  of  a  corporation,  created  in  one  State 
to  do  business  in  another,  is  based  upon  the  com- 
ity between  the  States.     Ducat  v.  City,  48  111.  172. 

Foreign  corporations  doing  business  in  this  State 
have  the  same  po'\\er,  no  greater,  than  a  domestic 
company.  Barnes  v.  Suddard,  supra.  And  are 
under  the  same  restrictions,  but  this  is  without 
reference  to  the  mode  of  organization  or  advent 
into  existence.  S.  Clara  Fem.  Acad.  v.  SulliTan, 
110  III.  380;  s.  c,  G  N.   E.   Rep.   183. 

Corporation  has  its  residence  where  its  business 
Is  done.  Bristol  t.  R.  R.  Co.,  15  111.  436;  R.  R. 
Co.  V.  Morgan  Co.,  14  id.  103. 

A  foreign  corporation  owing  debts,  If  still  In 
existence,  can  be  compelled,  by  mandamus  or  bill 
In  equity,  to  collect  its  unpaid  subscriptions,  wher- 
ever the  stockholders  reside.  If  it  has  ceased  to 
exist  a  receiver  should  be  appointed  and,  by 
comltr,  his  rights  will  be  respected  in  other 
States.     I'atterson  v.  Lynde,  112  III.  205. 

Foreign  Insurance  companies  doing  business  in 
this  State  will  be  bound  by  the  acts  of  their  presi- 
dent and  general  agents.  Ins.  Co.  v.  White.  106 
111.  67.  And  before  tailing  risks  in  this  State 
they  must  comply  with  the  laws  of  this  State 
and  receive  a  license.  Ins.  Co.  v.  Swigert,  120 
111.  37;  s.  c.  11  N.  E.  Rep.  410.  And  they  must 
be  organized  as  a  joint-stock  or  mutual  company. 
Id. 

A  corporation  may,  by  comity,  exercise  its  pow- 
ers outside  of  the  jurisdiction  in  which  it  Is 
created,  if  sucli  acting  be  not  Inconsistent  with 
the  laws  or  public  policy  of  the  State  in  which 
they  are  so  exercised.  S.  Clara  Fem.  Acad.  v. 
Sullivan,  116  111.  380;  s.  c.  6  N.  E.  Rep.  18.3.  But 
it  is  impossible  that  a  corporation  created  under 
the  laws  of  one  State  can  be  incorporated  into 
another  corporation  created  under  the  laws  of  a 
sister  State.  Drum  Tob.  Co.  v.  Randle,  114  111. 
427;  8.  c,  2  N.  E.  Rep.  536. 

The  authority  to  inquire,  by  quo  warranto, 
whether  a  corporation  do  facto,  organized  and 
acting  under  the  law  of  another  State  is,  in  all 
respects,  a  legal  and  valid  corporation,  belongs  to 
such  State  and  to  it  alone.  Hudson  v.  G.  H. 
Semln.,  113  111.  626.  A  special  statute  of  such 
State  is  admissible  to  show  a  de  facto  existence, 
though  such  an  act  by  Constitution  be  prohibited. 
Id. 

Foreign  corporation,  insolvent  and  owing  debts. 
If  still  existing,  it  may  be  compelled,  by  man- 
damus or  bill  in  equity,  to  collect  its  unpaid  sub- 
scriptions wherever  the  stockholders  reside.  If 
it  has  ceased  to  exist  a  receiver  should  be  ap- 
pointed; by  comity  other  States  will  recognize 
him.     I'atterson  v.  Lynde,  112  111.  200. 

Where  it  is  Impossible  to  acquire  jurisdiction  of 
the  corporation  and  non-resident  stockholders  have 
no  property  In  the  State,  a  bill  to  enforce  the  pay- 
ment of  unpaid  subscriptions  to  stock  is  vulner- 
able to  demurrer.     Id. 

Indebtedness  of  resident  stockholders  for  stock 
to  a  foreign  company  may  be  reached  by  attach- 
ment and  garnishment,  although  service  cannot 
be  had  on  the  corporation.  Turner  v.  Ala.  N.  & 
M.  Co.,  25  111.  App.  144.  But  a  creditor  must 
exhaust  his  remedy  at  law  here  by  execution  re- 
turned nulla  bona.     Id. 

Legal  existence  of  a  foreign  corporation  in  is- 
sue; such  existence  must  be  proved  by  proper 
evidence.     Bourton  v.  Rathbone,  23  111.  App.  654. 

Right  of  foreign  corporation  to  enter  this  State 
discussed.  Boiler  Co.  v.  Boiler  Co.,  142  111.  494; 
8.  c,  .30  N.  E.   Rep.  330. 

Foreign  corporations  on  same  footing  as  domestic 
as  to  powers,  duties,  liabilities  and  restrictions. 
Ins.  Co.  V.  Bauerle,  143  111.  459;  s.  c,  33  N.  E. 
Rep.  166;  Prov.  Assn.  v.  Lloyd,  145  id.  620;  s.  c, 
34  N.  E.  Rep.  142.  What  Is  the  "  doing  of  busi- 
ness "  in  this  State.  Id.;  Mandel  v.  L.  &  C.  Co., 
154  111.  177;  8.  c,  40  N.   E.   Rep.  462. 


It  is  tlie  charter  of  the  corporation  alone  which, 
by  the  law  of  comity,  is  recognized  and  enforced 
in  other  jurisdictions,  and  not  the  general  legis- 
lation or  local  policy  of  the  State  in  which  the 
companv  is  formed.  Warren  t.  Bank,  149  111.  9; 
8.  c,  38  N.   E.   Rep.  122. 

Filing  of  a  creditor's  bill  against  a  foreign  cor- 
poration creates  no  lien  upon  del)ts  due  such  cor- 
poration from  residents  of  a  State  other  than 
that  in  which  such  bill  is  brought,  where  there  is 
no  service  of  process  upon  the  corporation.  Hol- 
brook  V.  Ford,  153  111.  633;  s.  c,  39  N.  E.  Rep.  1091. 

Foreign  corporation  is  "  resident  "  where,  by 
proper  permission,  it  carries  on  its  business. 
Pennsylvania  Co.  v.  Sloan,  1  111.  App.  364.  Cor- 
poration of  one  State  may  remove  Its  otBcers  and 
agents  into  another  by  permission  of  the  latter, 
and  exercise  its  franchise  there.     Id. 

Words  "  doing  business  in  this  State,"  in  the 
statute  limiting  the  powers  of  foreign  corpora- 
tions, refer  to  the  business  for  which  the  foreign 
corporation  is  organized,  and  not  to  its  doings 
with  its  own  members,  or  its  resort  to  the  courts 
here  to  enforce  liabilities.  Mandel  v.  Land  Co., 
154  III.  177;  s.  c,  40  N.  E.  Rep.  462. 

A  foreign  corporation,  in  so  far  as  it  is  doing 
business  in  Illinois,  through  any  control  it  may 
exercise  over  a  business  transferred  to  it  by  a 
resident  of  Illinois,  is  subject  to  the  same  restric- 
tions and  duties  as  corporations  formed  in  this 
State.  Bishop  v.  American  Co.,  157  111.  284;  s.  c, 
41   N.    E.    Rep.    705. 

Proof  of  de  facto  existence  of  foreign  corpora- 
tion held  suflScient.  Cozzens  v.  Chicago  H.  P. 
B.  Co.,  46  N.  E.  Rep.  788.] 

§  27.  The  certified  copy  of  any  articles  of 
incorporation,  and  changes  thereof,  together 
with  all  indor.sements  thereon,  tinder  the 
great  seal  of  the  State  of  Illinois,  shall  be 
taken  and  received  in  all  courts  and  places 
as  prima  facie  evidence  of  the  facts  therein 
stated. 

Records  of  private  corporation,  how  certified. 
Ch.  51,  §  15.  Charter,  what  to  contain.  §  2,  ante. 
Proof  of  corporation.     Ch.  38,   §  110. 

[Certified  articles  of  association,  evidence  that 
the  capital  stock  has  been  subscribed.  Jewell  v. 
R.  R.  Paper  Co.,  101  111.  57. 

A  copy  of  articles  of  incorporation  certified  by 
the  secretary  of  State  bearing  the  State  seal,  to- 
gether with  all  the  indorsements  thereon,  is  prima 
facie  evidence  of  the  facts  therein  stated.  Kern 
V.  Chicago  Co-op.  B.  Co.,  40  111.  App.  357.] 

§  28.  Nothing  in  this  act  shall  be  consti-ued 
to  allow  the  construction  or  operation  of  any 
street  railroad  in  any  city,  town  or  incor- 
porated village,  without  the  consent  of  the 
local  authorities  thereof. 

See  Const.,  art.  XI,  §  4.  General  powers.  J  5, 
ante,  notes  and  cross-references. 

[Such  consent  not  a  condition  precedent  to  exer- 
cise of  power  of  eminent  domain.  Metropolitan, 
etc.,   Co.  V.   Chicago,  etc.,   Co.,  87  111.   317.] 

§  281^.  It  shall  be  unlawful  for  the  secre- 
tary of  State  to  issue  a  license  for  any  per- 
son or  persons  to  incorporate  under  the 
name  of  any  heretofore  existing  corpora- 
tion organized  under  any  general  law  of 
this  State  until  the  expiration  of  thirty 
days  from  and  after  the  expiration  of  the 
existence  of  such  corporation:  Provided, 
That   the   corporation   enjoying   such   name 


ILLIXOIS. 


37 


Repeal;  voluntary  dissolution  —  E,  S.,  ch.  xxxii,  §§  48-49e. 


shall  have  the  exclusive  privilege  of  be- 
coming incorporated  tinder  the  same  name 
at  any  time  within  the  said  thirty  days,  ac- 
coi'ding  to  the  provisions  cf  the  act  to  which 
this  Is  an  amendment.  (As  amended  by  art 
approved  June  16,  1S87;  in  force  July  1, 
1887.) 

See  §  2,  ante.  Continuance  after  expiration, 
etc.  §§  10-12,  ante.  When  dissolved,  corporate 
name.     §  49o,  post. 

[Appearance  to  defend  by  a  corporate  name  Is 
an  admission  that  such  Is  the  true  name.  U.  S. 
Ex.  Co.  v.  Bedburj",  34  111.  450.] 

General  Provisions. 

§  48.  No  corporation,  association  or  so- 
ciety for  any  purpose  authorized  by  this 
act  shall  be  formed  under  any  other  act. 

§  49.  All  acts  or  parts  of  acts  in  coull!<t 
with  the  provisions  of  this  act  are  hereby 
repealed:  Provided,  That  the  repeal  of  said 
acts  shall  not  affect  any  corporations  exist- 
ing under  any  such  acts,  or  any  rights  or 
liabilities  that  may  have  accrued  when  this 
act  shall  take  effect;  but  such  rights  and 
liabilities  shall  remain  as  though  this  act 
had  not  been  passed. 

See  §§  1-49,  ante.  Organization  completed,  g  4, 
ante. 

AN  ACT  to  amend  an  act  entitled  "An  act 
concerning  corporations,"  approved  April 
18,  1872,  in  force  July  1,  1872,  by  provid- 
ing for  the  voluntary  dissolution  of  cor- 
porations organized  or  iiereafter  organized 
upon  the  stock  plan  thereunder,  by  adding 
thereto  four  sections  to  be  numbered  sec- 
tions 50,  51,  52  and  53  respectively.  [Ap- 
proved June  17,  1895;  in  force  July  1, 
1895;  L.  1895,  p.  133;  Legal  News  Ed.,  p. 
98.] 

§  49a.  Be  it  enacted  by  the  People  of  the 
State  of  Illinois,  repre.seuted  in  general  as- 
sembly. That  an  act,  entitled  "An  act  con- 
cerning corporations,"  approved  April  18, 
1872,  in  force  July  1,  1872,  be  and  the  same 
Is  hereby  amended  so  as  to  provide  for 
the  voluntary  dissolution  of  corporations 
organized  or  hereafter  oi'ganized  upon  the 
stock  plan  thereunder,  bj'  adding  thereto 
the  following  sections  to  be  numbered  sec- 
tion 50,  section  51,  section  52  and  section 
63  respectively. 

Dissolution,  proceedings  for.  §§  149  et  seq.,  post. 
Eemedies  not  affected  by  dissolution.     §  12,  ante. 

§  49b.  Whenever  two-thirds  of  the  stock- 
holders of  any  corporation  organized  or 
hereafter  organized  under  the  provisions 
of  this  act  upon  the  stock  plan  may  desire 
to  abandon  the  corr)orate  entei-i)rise,  suri-en- 
der  their  charter,  franchises  and  corporate 
name,  and  dissolve  the  corporation,  it  shall 
be  the  duty   of  the   board   of   directors   ov 


managers  thereof  to  submit  the  question  of 
such  dissolution  to  a  vote  of  the  stock- 
holders at  any  annual  or  a  special  meeting 
of  such  stockholder  to  be  called  and  held 
as  herein  provided. 

See  §  3,  aute,  and  cross-references. 

[Reverting  of  corporate  property  on  dissolution; 
limits  of  rule.  Church  v.  Venable,159  111.  215;  s. 
c,  42  X.  E.  Rep.  a^^.] 

§  49c.  Such  meeting  shall  be  called  by  de- 
livering personally  or  deiwsiting  in  the'pnst- 
office  at  least  thirty  days  before  the  time 
fixed  for  such  meeting  a  notice  properly  ad- 
dressed to  each  stockholder,  signed  by  a 
majority  of  said  directors  or  managers,  stat- 
ing the  time,  place  and  object  of  said  meet- 
ing, and  a  general  notice  of  the  time,  place 
and  object  of  such  meeting  shall  also  be 
published  for  three  successive  weeks  in 
some  newspaper  publisned  in  the  county 
wherein  the  principal  office  of  said  coiijora- 
tlon  is  located. 

Bee   §   3,   ante,  and  cross-references. 

§  49d.  At  such  meeting,  stockholders  shall 
vote  in  person,  each  stockholder  being  en- 
titled to  one  vote  for  each  share  of  stocic 
held  by  him.  and  votes  represented  by  at 
least  two-thirds  of  the  whole  capital  stock 
of  such  corporation  shall  be  necessary  to  ef- 
fect a  dissolution  thereof,  and  if  at  any  such 
meeting  said  stockholders  shall  in  the  luau- 
ner  herein  provided  agree  to  dissolve  said 
corporation,  they  shall  cause  a  complete 
record  of  all  proceedings  taken  with 
respect  thereto,  reciting  therein  the  adop- 
tion of  a  resolution  to  that  effect,  wliicQ 
shall  also  show  that  the  corporate  debtg 
have  been  fully  paid,  the  corporate  liabili- 
ties completely  discharged,  and  the  cor- 
porate assets  and  lOroperty  distributed 
among  all  the  persons  entitled  thereto,  to 
be  made  and  signed  by  the  president,  and 
the  adoption  thereof  and  recitals  therein 
verified  by  his  sworn  affidavit,  and  attested 
by  the  secretary  under  his  signature  and  the 
corporate  seal.  Said  record  shall  be  liled 
in  the  oflice  of  the  recorder  of  deeds  of 
the  county  wherein  the  principal  oflice  of 
such  corporation  is  located  and  by  him  re- 
corded and  a  notice  of  such  dissolution  pub- 
lished for  three  successive  weeks  In  any 
newspaper  published  within  such  county 
and  within  three  months  after  such  dis.so- 
lution  shall  have  been  so  agreed  upon,  t!ie 
record  aforesaid,  bearing  thereon  the  cer- 
tificate of  recordation  executed  by  the  re- 
corder of  deeds  of  the  proper  county,  shall 
be  filed  in  the  office  of  the  secretary  of 
State. 

See  §  3,  ante,  and  cross-references. 

§  49e.  The  provisions  of  this  act  having 
j  been  complied  with,   said  corporation  shall 


38 


ILLINOIS. 


Change  of  name;  increase  of  stock,  etc.—  R.  S.,  ch.  xxxii,  §  50. 


be  deemed  and  taken  to  l>e  dissolved  In  all 
courts  and  places  whatsoever,  and  irom 
and  after  such  dissolution  hereundt'r.  it 
shall  be  lawful  for  the  secretary  of  State 
to  issue  a  license  to  any  ihtsou  or  persons 
to  incorporate  under  the  name  or  names 
previouslv  used  by  such  corporation  ai  any 
time  after  the  dissolution  iliereof :  rrovided. 
That  a  majority  of  the  stockholders  in  num- 
ber and  amount  of  any  such  corporation 
enjoying  such  name  shall  have  the  exclu- 
sive "privilege  of  becoming  incorporated  un- 
der tlie  same  name  at  any  time  within  the 
said  thirty  days,  according  to  the  pro- 
visions of  the  act  to  which  mis  is  an  amend- 
ment. 

Continued    after    expiration    of    charter.      §    10, 
ante.     Corporate  name.     {  28  1-2,  ante. 

Change     of     Name,     Increase     of     Capital 
Stock,  Etc. 

AN  ACT  to  provide  for  changing  the  names, 
for  changing  the  places  of  business,  for  in- 
creasing or  decreasing  the  capital  stock, 
for  increasing  or  decreasing  the  number  of 
directors,  for  enlarging  or  changing  the 
objects  for  which  such  corporations  were 
formed,  and  for  the  consolidation  of  incor- 
porated companies.  Approved  March  2(5, 
1872,  as  amended  June  4,  1887,  and  June 
6,  1889.     [Title  as  amended  June  (i,  1889.] 

§  50.  Be  it  enacted  by  the  people  of  the 
State  ©f  Illinois,  represented  in  the  general 
assembly:  That  whenever  the  board  of 
directors,  managers  or  trustees  of  any  cor- 
poration existing  by  virtue  of  any  general  or 
special  law  of  this  State,  or  any  corporation 
hereafter  organized  by  virtue  of  any  law  of 
this  State,  may  desire  to  change  the  name, 
to  change  the  place  of  business,  to  enlarge 
or  change  the  object  for  which  such  corpo- 
ration was  formed,  to  increase  or  decrease 
the  capital  stock,  to  increase  or  decrease  the 
number  of  directors,  managei-s  or  trustees,  or 
to  consolidate  said  corporation  with  any 
other  corporation  now  existing,  or  which 
may  hereafter  be  organized,  they  may  call 
a  special  meeting  of  tlie  stockholders  of  such 
corporation,  for  the  puniose  of  submitting  to 
a.  vote  of  such  stoclvliolders  tlie  question  of 
sucli  change  of  name,  cliange  of  place  of 
business,  enlargement  or  change  of  the  ob- 
ject for  which  such  corporation  was  formed, 
increase  or  decrease  of  the  number  of  direct- 
ors, managers  or  trustees,  increase  or  de- 
crease of  capita-1  stock,  or  consolidation  with 
some  other  conwration,  as  the  case  may  be; 
and  further  tliat  eleemosynary  or  religious 
corporations  for  educational  purposes,  act- 
ing under  the  general  law  or  by  virtue  of 
spoc-ial  charter  are  autliorized  to  change  the 
time  and  manner  of  electing  the  trustees, 
and  to  allow  the  alumni  of  said  corporation 
to  vote  in  the  election  of  the  trustees,  or  a 
part  thereof:  Trovided,  That  in  changing  the 
name  of  any   other  corporation,   under  the 


provisions  hereof,  no  name  shall  be  assumed 
or  adopted  by  any  corporation  similar  to,  or 
liable  to  be  mistaken  for  tlie  name  of  any 
other  corporation  organized  under  the  laws 
of  this  State,  without  the  consent  of  such 
other  corporation;  and  that  in  no  case  shall 
the  capital  stock  be  diminislied  to  the  preju- 
dice of  the  creditors  of  such  corporation,  or 
the  number  of  directors,  managers  or  tnas- 
tees  be  reduced  to  less  than  five,  or  in  case 
of  corporations  for  pecuniary  profit,  in- 
creased to  more  tlian  eleven:  And,  provided, 
furtlier,  That  no  corporation  shall,  by  virtue 
hereof,  change  its  place  of  business  from 
any  town,  county  or  municipality,  where 
such  town,  county  or  municipality,  or  any 
of  the  inhabitants  thereof,  or  any  person  or 
persons  interested  therein,  shall  have  do^ 
nated  or  in  any  manner  contributed  any 
money  or  any  other  valuable  thing  to  induce 
such  corporation  to  locate  in  siich  town, 
county  or  municipality:  And  provided  fur- 
ther, That  the  provisions  of  this  act,  in  refer- 
ence to  the  consolidation  of  corporations, 
shall  only  apply  to  corporations  of  the  same 
kind,  and  engaged  in  the  same  general  busi- 
ness, and  carrying  on  their  business  in  the 
same  vicinity,  and  that  no  more  than  two 
corporations  now  existing  shall  be  consoli- 
dated into  one,  under  the  provisions  hei'eof: 
And  provided  further,  That  no  alteration  or 
change  shall  be  made  by  virtue  of  this  sec- 
tion to  embrace  any  object  that  miglit  not 
have  been  lawfully  embraced  in  the  state- 
ment and  license  issued  before  the  organiza^ 
tion  of  such  coiToration  as  provided  in  sec- 
tion two  of  an  act  entitled,  "An  act  concern- 
ing corporations,"  approved  April  10,  (18) 
1872,  and  in  force  July  1,  1872. 

(As  amended  by  acts  approved  June  14, 
1887,  and  June  6,  1889.) 

See  §  3,  ante,  and  cross-references.  Stocli,  pay- 
ment, etc.     §  7,  ante.     Name,  see  §  2,  note. 

[Amendment  of  charter,  as  affecting  liability  of 
stockholders.  Dows  v.  Naper,  91  111.  44.  Binding 
upon  the  company.  People  v.  Imp.  Co.,  103  III. 
491. 

The  charter  allowing  an  increase  of  stock,  but 
silent  as  to  the  mode,  shareholders  should  have  a 
voice  in  determining  it.  Eidman  v.  Bowman,  58 
111.  444;  City  v.  Joney,  60  id.  383. 

To  issue  certificates  of  stock  for  amount  of 
subscription  paid,  and  cancel  the  subscription  as 
to  sum  not  paid,  is  not  diminishing  its  capital 
stock.     Chetlain  v.  Ins.  Co.,  86  111.  220. 

A  corporation  cannot,  except  as  authorized  by 
law,  change  its  own  name,  either  directly  or  by 
user.  Sykes  v.  People,  132  111.  46;  s.  c,  23  N.  B. 
Kep.   391. 

Reduction  of  capital  stock;  presumption  that  no- 
tices were  given  as  required  by  law;  and  that  the 
meeting  for  that  purpose  was  regularly  called. 
B.  &  T.  Co.  V.  Gade,  55  111.  App.  182. 

Corporation  may,  by  vote  of  stockholders,  at 
meeting  duly  called,  change  its  name;  but  new 
name  must  not  be  the  same,  or  similar  to,  or  be 
liable  to  be  mistaken  for,  the  name  of  any  other 
corporation  of  the  State,  without  consent  of  such 
other  corporation.  Watch  Case  Co.  v.  Pearson, 
140  111.  423;  s.  c,  31  N.  E.  Rep.  400.  And  this, 
though  the  other  corporation  is  not  fully  organ- 
ized, and,  therefore,  incapable  of  consenting.  Af- 
ter a  corporation  is  licensed  Its  name  is  to  be 
protected.    Id. 


ILLINOIS. 

Change  of  name;  increase  of  stock,  etc. —  R.  S.,  ch.  xxxii,  §§  51-57, 


39 


A  secretary  of  State  may,  when  he  knows  that 
the  new  name  is  that  of  some  other  corporation, 
refuse  to  allow  it  to  be  filed  in  his  office.     Id. 

Directors  have  not,  merely  by  virtue  of  their 
position  as  directors,  authority  to  increase  the 
capital  stock  without  the  assent  of  the  stockhold- 
ers.    McXulta  V.  Bank,  45  N.  E.  Rep.  954. 

A  corporation  held  to  have  such  an  existence  as 
to  enal»le  its  officers  and  stockholders  to  reduce 
the  capital  stock.  Gade  v.  Perkins,  46  N.  E. 
Rep.  2SG. 

Evidence  held  to  show  valid  reduction  of  capital 
stock.     Id. 

Rights  of  creditors  on  reduction  of  capital  stock 
determined.     Id.] 


§  51.  Such  special  meetings  shall  be  called 
by  delivering  per.sonally.  or  depositing  in 
the  post-olRce.  at  least  tliirty  days  before  the 
time  fixed  for  such  nieeting,  a  notice,  prop- 
erly addressed  to  each  stockholder,  signed 
by  a  majority  of  said  directors,  managers  or 
trustees,  stating  the  time,  place  and  object 
of  such  meeting.  A  general  notice  of  the 
time,  phice  and  object  of  such  meeting  shall 
also  be  published,  for  three  successive 
weeks,  in  some  newspaper  printed  in  or 
nearest  the  county  in  wliicli  the  principal 
business  office  of  said  corporation  is  located. 

See  §  60,  post. 

[Notice  required  by  above  section  Is  intended 
only  for  stockholders.  The  notice  required  to  be 
given  to  the  public  is  the  final  notice  required  by 
section  54.  Hence  the  notice  of  the  meeting  of 
the  stockholders  is  no  notice  to  the  proposers 
of  a  new  corporation  of  the  new  name  proposed  to 
be  adopted.  Watch  Case  Co.  v.  Parsons,  140  111. 
423;   s.    c,   31  N.    E.    Rep.   400.] 

§  52.  At  any  such  meeting,  stockholders 
may  vote  in  person  or  by  proxy,  each  stock- 
holder being  entitled  to  one  vote  for  each 
share  of  stock  held  by  him;  and  votes  repre- 
senting two-thirds  of  all  the  stock  of  the 
corporation  shall  be  necessary  for  the  adop- 
tion of  the  proposed  change  of  name,  place 
of  business,  enlargement  or  change  of  the 
object  for  which  such  corporation  was 
formed,  number  of  directors,  managers  or 
trustees,  amount  of  capital  stock,  or  con- 
solidation witli  some  other  company. 

(As  amended  by  act  approved  June  G,  ISSU.) 

Executors  may  vote.  §  2i,  ante.  Manner  of 
voting,  proxies.     §  61,  post. 

§  53.  If,  at  any  regular  annual  meeting,  or 
at  the  time  and  place  specified  in  said  notice 
of  a  special  meeting  called  for  that  purpose, 
said  propositions,  or  any  of  them,  be 
submitted  to  a  vote,  and  if  it  shall  appear 
that  two-thirds  of  all  the  votes  represented 
by  the  whole  stock  of  such  corporation  are 
in  favor  of  the  propositions,  or  of  any  of 
them,  so  submitted,  a  certificate  thereof, 
verified  by  the  affidavit  of  the  president,  and 
under  seal  of  said  coi-poration,  shall  be  filed 
in  the  office  of  the  secretary  of  State,  and  a 
like  certificate  filed  for  record  in  tlie  ofiice 
of  the  recorder  of  deeds  of  the  county  where 
the  principal  business  office  of  such  corpora- 


tion is  located.  And  upon  the  filing  of  such 
certificate,  the  changes  proposed  and  voted 
for  at  such  meeting  as  to  name,  place  of 
business,  enlargement  or  change  of  the 
object  for  which  such  corporation  was 
formed,  increase  or  decrease  of  capital  stock, 
increase  or  decrease  of  the  number  of  direct- 
ors, managers  or  trustees,  or  consolidation 
with  some  other  company,  shall  be,  and  is 
hereby  declared  accomplished,  in  accordance 
with  said  vote  of  the  stockholders:  And 
provided  further,  That  any  corporation, 
other  than  corporations  for  manufacturing 
purposes,  availing  itself  of,  or  accepting  the 
benefits  of,  or  formed  under  this  act  (except 
the  mere  change  of  name),  shall  be  subject 
to  the  general  laws  of  this  State  now  in 
force,  or  which  may  hereafter  be  passed, 
regulating  coriJorations  of  like  character. 
(As  amended  by  act  approved  June  6, 1889.) 

See  §  4,  ante.  Certificates  of  votes  filed.  §  62, 
post. 

§  54.  Such  corporation  shall,  upon  the 
filing  of  said  certificate,  cause  to  be  pul>- 
lished  in  some  newspaper  in,  or  nearest  the 
county  in  which  their  principal  office  is 
located,  a  notice  of  such  changes  of  organ- 
ization, for  three  successive  weeks. 

See  §  51,  and  note. 

§  55.  Corporations,  not  being  stoclv  com- 
panies, may  avail  themselves  of  ♦all  the 
privileges  and  provisions  of  this  act,  by  a 
majority  vote  of  the  members  of  such  cor- 
porations who  may  be  present  at  a  meeting 
called  for  any  of  the  purposes  included  in 
this  act. 

See  §  3,  ante,  and  cross-references. 

§  5G.  Such  change  of  name,  place  of  busi- 
ness, enlargement  or  change  of  object  for 
which  such  corporation  was  formed,  in- 
crease or  decrease  of  capital  stock,  or  in- 
crease or  decrease  of  number  of  directors, 
managers  or  trustees,  or  consolidation  of 
one  corporation  with  another,  shall  not 
affect  suits  pending  in  which  such  coiijora- 
tion  or  corporations  shall  be  parties,  nor 
shall  such  changes  affect  causes  of  action, 
nor  the  rights  of  persons  in  any  particular; 
nor  shall  suits  brought  against  sucli  coipora- 
tion  by  its  former  name  be  abated  for  that 
cause. 

(As  amended  by  act  approved  June  6, 1889.) 

See  §  5,  subd.  1,  ante,  and  cross-references. 

§  57.  Whenever  any  railroad  corporation 
shall  desire  to  con.soIidate  with  any  other 
railroad  corporation,  by  virtue  of  the  pro- 
visions of  this  act.  a  notice,  as  provided  by 
section  two  of  this  act,  shall  be  given  at 
least  sixty  days  before  the  time  fixed  for 
such  meeting,  and  a  general  notice,  as  pro- 


40 


ILLINOIS. 

Number  of  directors;  consolidation  —  R.  S.,  ch.  xxxii,  §§  58-65. 


vided  by  said  section  two,  shall  be  published 
for  nine  successive  weeks:  Pi-ovided,  That 
railn.iid  corporations  shall  not  consolidate 
their  stock,  property  or  franchises  with  any 
other  railroad  corporation  owning  a  parallel 
or  competing  line. 

§  58.  Whereas,  a  large  number  of  coi-pora- 
tlons  in  this  State  desire  to  change  tlieir 
names,  and  in  other  respects  to  comply  with 
the  terras  of  this  act,  whereby  an  emergency 
has  arisen  as  a  reason  why  this  act  should 
take  effect  forthwith;  therefore,  this  act  shall 
take  effect  and  be  in  force  from  and  after 
its  passage. 

See  §  64,  post.  Consolidated  companies  liable 
for  debts  of  original  companies.  §  65,  post. 
Trusts  and  combines  prohibited.  Ch.  38,  §§  269a 
et  seq. 

AN  ACT  authorizing  the  changing  of  -the 
numlier  of  directors  of  incorporated  com- 
panies in  certain  cases.  [Approved  and  in 
force  May  22,  1877.] 

§  59.  Be  it  enacted  by  the  people  of  the 
State  of  Illinois,  represented  in  the  general 
assembly:  That  whenever  the  stockholders 
holding  a  majority  of  the  stock  of  any  corpo- 
ration existing  by  virtue  of  any  general  or 
special  law  of  this  State,  or  any  corporation 
hereafter  organized  by  virtue  of  any  law  of 
this  State,  may  desire  to  change  the  number 
of  its  directors,  managers  or  trustees  from 
an  even  number  to  an  odd  number,  they  may 
call  a  special  meeting  of  the  stockholders 
of  such  corporation  for  the  puiiiose  of  sub- 
mitting to  a  vote  of  the  stockholders  of  such 
corporation  the  question  of  such  change  of 
directors,  managers  or  trustees  from  an 
even  to  an  odd  number:  Provided,  That  the 
number  of  directors,  managers  or  trustees 
shall,  in  no  case,  after  such  change,  be  less 
than  five  nor  more  than  eleven. 

See  §  3,  ante,  and  cross-references.  See  §  64, 
post. 

§  GO.  Such  special  meetings  shall  be  called 
by  the  president  upon  the  written  applica- 
tion of  the  stockholders  of  such  corporation 
owning  a  majority  of  the  stock,  by  deliver- 
ing personally,  or  depositing  in  the  post- 
office  at  least  thirty  days  before  the  time 
fixed  for  such  meeting,  a  notice,  properly  ad- 
dressed to  each  stockholder,  signed  by  the 
president,  stating  the  time,  place  and  ob- 
ject of  such  meeting.  A  general  notice  of 
the  time,  place  and  object  of  such  meeting 
shall  also  be  published  for  three  successive 
weeks  in  .some  newspaper  printed  in  or 
nearest  to  the  county  in  which  the  principal 
business  office  of  said  corporation  is  located. 

See  §  51.  ante. 

§  61.  At  any  such  meeting,  stockholders 
may  vote  in  person  or  by  proxy,  each  stock- 
holder being  entitled  to  one  vote  for  each 


share  of  stock  held  by  him,  and  votes  repre- 
senting a  majority  of  all  the  stock  of  the 
corporation  sliall  be  necessary  for  the  pur- 
pose of  changing  the  number  of  the  directors, 
managers  or  trustees,  from  an  even  to  an 
odd  number. 

Manner  of  voting,  proxies.     §  52,  ante. 

§  62.  If  at  any  regular  annual  meeting,  or 
at  the  time  and  place  specified  in  such  notice 
of  a  special  meeting  called  for  that  purpose, 
said  proposition  to  change  the  number  of 
dii-ectors,  managers  or  tiiistees  fi*om  an 
even  to  an  odd  number,  be  submitted  to 
vote,  and  if  it  shall  appear  that  a  majority 
of  all  the  votes  represented  by  the  whole 
stock  of  such  corporation  are  in  favor  of  such 
change,  a  certificate  thereof,  verified  by  the 
affidavit  of  the  president,  and  under  the  seal 
of  said  corporation,  shall  be  filed  in  the  office 
of  the  secretary  of  State,  and  a  like  cer- 
tificate filed  for  record  in  the  office  of  the 
recorder  of  deeds  of  the  county  wherein  the 
principal  office  of  such  corporation  is 
located;  and  upon  the  filing  of  such  cer- 
tificate, the  number  of  directors,  managers 
or  trustees  shall  be,  and  is  hereby  declared 
to  be,  changed  from  an  even  number  to  an 
odd  number,  in  accordance  with  such  vote 
of  the  stockholders,  as  aforesaid. 

Certificates  of  votes  filed.     §  53,  ante. 

§  63.  All  acts  and  parts  of  acts  inconsist- 
ent with  this  act  are  hereby  repealed. 

§  64.  Whereas,  a  large  number  of  corpo- 
rations in  this  State  desire  to  change  the 
number  of  their  directors,  managers  or 
trustees  from  an  even  number  to  an  odd 
number,  an  emergency  therefore  exists,  and 
this  act  shall  take  effect  and  be  in  force 
from  and  after  its  passage. 

(Approved  May  22,   1877.) 

See  §  58,  ante. 

Consolidation. 

AN  ACT  in  relation  to  the  consolidation  of 
incorporated  companies.  [Approved  March 
9,  1867;  in  force  May  9,  1867.] 

§  65.  Be  it  enacted  by  the  people  of  the 
State  of  Illinois,  represented  in  the  general 
assembly:  That  in  all  cases  when  any  com- 
pany or  corporation,  chartered  or  organized 
under  the  laws  of  this  State,  shall  consoli- 
date its  property,  stocli  and  franchises  with 
any  other  company  or  companies,  such  con- 
solidated company  shall  be  liable  for  all 
debts  or  liabilities  of  each  company  included 
in  said  consolidated  company,  existing  or 
accrued  prior  to  such  consolidation,  and  ac- 
tions may  be  brought  and  maintained,  and 
recovery  had  therefor,  against  such  consoli- 
dated companj'. 

See  §  2,  ante.  Consolidation  of  railroad  com- 
panies.    §  57,  ante. 


ILLINOIS. 


41 


Foreign  corporations;  agents  and  loans — ^  R.  S.,  oh.  xxxii,  §§  6G,  67. 


[Copy  of  articles  of  consolidation  of  two  or  more 
corporations,  duly  authenticated  by  the  secretary 
of  State,  is  prima  facie  evidence  of  the  existence 
of  the  consolidated  company.  E.  St.  L.,  etc., 
Ry.  Co.  V.  Wab.,  etc.,  Ry.   Co.,  24  111.   App.  279. 

"Several  States  may  not  create  corporations  by 
joint  acts  of  legislation,  but  corporations  formed 
under  laws  of  two  or  more  States  may  become  con- 
solidated, and  thereby  a  new  corporation  be 
brought  into  being,  existing  under  the  laws  of 
the  several  States.  Kincaid  v.  People.  139  111.  21.3; 
s.  c.  28  N.  E.  Rep.  1060.  An  indictment  for 
burglary  is  not  necessarily  defective  because  it 
avers  that  building  burglarized  was  that  of 
a  corporation  organized  under  laws  of  different 
States.    Id. 


Corporations  Acting  by  Attorney. 

AN  ACT  to  authorize  corporations  to  act  by 
attorney,  f Approved  and  in  force  Febru- 
ary 16,   1865.] 

§  66.  Be  it  enacted  by  the  people  of  tlie 
State  of  Illinois,  represented  in  the  general 
assembly:  That  any  corporation,  subsisting 
by  the  laws  of  otlier  States  or  countries, 
may  constitute  and  empower,  by  letter  of 
attorney,  any  person  or  persons  to  act  as 
its  agent,  in  the  State  of  Illinois,  for  the 
performance  of  such  acts  and  doing  such 
business  as  such  corporation  may  be  author- 
ized to  perform  and  do  by  the  laws  of  the 
State  of  Illinois;  and  all  instruments  in 
writing,  whether  with  or  without  seal,  and 
all  acts  and  things  executed  or  done  by  such 
duly  qualified  agent,  shall  have  the  same 
force  and  effect,  and  be  as  valid  and  bind- 
ing in  law,  as  if  executed  and  done  in  due 
process  of  law,  by  the  corporation  for  whom 
such  agent  may  act;  and  any  scrawl  or  seal 
written  or  affixed  by  such  agent,  so  duly  em- 
powered, shall  be  deemed  and  considered,  in 
such  particular  instance,  as  the  corporate 
seal  of  the  corporation  for  whom  such  agent 
is  autliorized,  as  aforesaid,  to  act:  Provided, 
That  this  act  shall  not  apply  to  railroad  cor- 
porations. 

§  2.  This  act  shall  take  effect  and  be  in 
force  from  and  after  its  passage. 

(Approved  February  16,  1865.) 

General  powers.  §  5,  ante,  notes  and  cross- 
references.  Powers  to  be  exercised  by  board  of 
directors.  §  6,  ante.  Agents  of  foreign  corpora- 
tion subject  to  liabilities.     §  26,  ante. 

Loans  on  Real  Estate  by  Foreign  Corpora- 
tions. 

AN  ACT  to  enable  corporations  in  other 
States  and  countries  to  lend  money  in 
Illinois,  to  enforce  their  securities,  and  ac- 
quire title  to  real  estate  as  security.  [Ap- 
proved April  9,  1875;  in  force  July  i,  1875.] 

§  67.  Be  it  enacted  by  the  people  of  the 
State  of  Illinois,  represented  iu  tlie  general 
assembly:  That  any  corporation  formed  un- 
der the  laws  of  any  other  State  or  country, 
and  authorized  by  its  charter  to  invest  or 
loan  money,   may  invest  or  loan  money  in 


this  State.  And  any  such  corporation  that 
may  have  invested  or  lent  money  as  afore- 
said, may  have  the  same  rights  and  powers 
for  tlie  recovery  thereof,  subject  to  the  same 
penalties  for  usury,  as  private  persons,  citi- 
zens of  this  State;  and  when  a  sale  is  made 
under  any  judgment,  decree,  or  power  in  a 
mortirage  or  deed,  such  corporation  may  pur- 
chase, in  its  corporate  name,  the  property 
offered  for  sale,  and  become  vested  with 
the  title  wherever  a  natural  person  might 
do  so  in  nice  ca.ses;  Provided,  however.  That 
all  real  estate  so  purchased  by  any  such  coi'- 
poration,  in  satisfatlion  of  any  such  liability 
or  indebtedness,  shall  be  offered  at  public 
auction,  at  least  once  every  year,  at  the 
door  of  the  court-house  of  the  county  wherein 
the  .same  may  be  situated,  or  on  the  premises 
so  to  be  sold,  after  giving  notice  thereof  for 
at  least  four  consecutive  weeks  in  some 
newspaper  of  general  circulation,  published 
iu  said  county,  and  if  there  be  no  such 
newspaper  published  therein,  then  in  the 
nearest  adjacent  county  whei'e  such  news- 
paper is  published;  and  said  real  estate  shall 
be  sold  whenever  tlie  price  offered  for  it  is 
not  less  than  the  claim  of  such  corporation, 
including  all  interest,  costs  and  other  ex- 
pen.ses:  And,  provided,  further,  That  in  case 
such  corporation  shall  not,  within  such  pe- 
riod of  five  years,  sell  such  lands,  either  at 
public  or  private  sale  as  aforesaid,  it  shall 
be  the  duty  of  the  State's  attorney  to  proceed 
by  information,  in  tJie  name  of  the  people  of 
the  State  of  Illinois,  against  such  corpora- 
tion, in  the  circuit  court  of  the  county  within 
whicli  such  land  so  neglected  to  be  sold  shall 
be  situated,  aud  such  court  shall  have  juris- 
diction to  hear  and  determine  the  fact,  and 
to  order  the  sale  of  such  land  or  real  estate 
at  such  time  and  place,  subject  to  such  imles 
as  the  court  shall  establish.  The  court  shall 
tax,  as  the  fees  of  the  State's  attorney,  such 
sum  as  shall  be  reasonable;  and  the  proceeds 
of  such  sale,  after  deducting  the  said  fees 
and  costs  of  proceeding,  shall  be  paid  over 
to  said  ■ooi-poration:  And,  provided,  further. 
That  nothing  in  this  act  contiiined  shall  be 
so  construed  as  to  confer  banking  powers  or 
privileges  upon  any  such  corporation. 

See  S  5,  subd.  3,  ante,  and  cross-references.  Re- 
quirements of  foreign  corporations.  See  Act  of 
1897,  at  p.  57. 

[Foreign  corporations,  in  absence  of  law  provid- 
ing for  creation  of  domestic  corporations  of  like 
character,  may  do  business  in  this  State.  Stevens 
V.  Pratt,  101  111.  20<i.  And  may  loan  money  and 
take  mortgage  security  in  this  State.  Id.  Legisla- 
tion in  this  State  has  never  prohibited  such  acts. 
Id.  But  they  have  no  greater  powers  than  do- 
mestic corporations  formed  for  same  purpose.  Id. 
This  ease  afHrmed.  Commercial,  etc.,  Co.  v.  Scam- 
mon,  102  111.  46. 

This  act  does  not  deprive  foreign  corporations 
of  power  to  acquire  real  estate  given  them  by 
General  Incorporation  Act.  Buggy  Co.  v.  Graves, 
108  111.  459. 

Foreign  corporation  may  sue  in  courts  of  Illinois. 
Bank  v.  Montgomery,  3  111.  422.] 


42 


ILLINOIS. 


Dissolution  —  R.  S.,  ch.  xxxii,  148-155. 


AN  ACT  to  authorize  raining  and  manufac- 
Uiring  companies  to  own  and  hold  shares 
of  the  capital  stoclv.  and  to  own  and  hold 
securities  of  railri)ad  companies  whose 
road  shall  connect  the  different  plants  of 
such  raining  or  inaiiufa'cturing  companies 
with  each  other,  or  with  other  railroads 
or  harbors.  [Approved  June  21,  1893;  in 
force  July  1,  ISD.*?.  L.  1803.  p.  165;  Legal 
News    Ed.,    p.    01;    amended    by    L.    1897, 

§  l-tS.  Be  it  enacted  by  the  people  of  the 
State  of  Illinois,  represented  in  genei'al  as- 
serably.  That  any  corporation  organized  or 
to  be  organized  under  and  by  virtue  of  any 
law  of  this  State,  for  mining  or  manufactur- 
ing purposes,  be  and  the  same  is  hereby 
authorized  to  own  and  hold  shares  of  the 
capital  stock  and  to  own  and  hold  securi- 
ties of  any  railroad  company  or  companies 
when  any  such  railroad  or  railroads  shall 
connect  the  different  plants  of  such  mining  or 
manufacturing  companies  with  each  other  or 
witli  other  railroads  or  harbors:  Provided, 
That  said  mining  or  manufactming  com- 
panies shall  not  be  permitted  to  hold  stock 
in  more  than  one  railroad  connecting  the 
same  points. 

General  powers.  {  5,  ante,  notes,  and  cross- 
references. 

Corporations  —  Dissolution  of. 

AN  ACT  providing  for  the  dissolution  of 
corpoi-ations  in  certain  cases.  [Approved 
June  17.  1805;  in  force  Julv  1.  1805.  L. 
1895,  p.  130;  Legal  News  Ed!,  p.  99.] 

5  149.  Be  it  enacted  by  the  people  of  the 
State  of  Tllinoi.s,  represented  in  the  general 
asembly,  That  whenever  the  board  of  direct- 
ors, managers,  trustees  or  officers  of  any 
corporation  existing  by  virtue  of  any  general 
or  special  law  of  this  State,  or  any  coi-pora- 
tion  hereafter  organized  by  virtue  of  any 
law  of  this  State,  has  ceased  to  do  business 
as  a  coi-poration.  or  has  discontinued  the 
exercise  of  corix)rate  functions,  such  corpo- 
ration shall  be  deemed  to  have  abandoned 
its  corj)orate  franchises  and  it  shall  be  law- 
ful for  the  attorney-general  to  institute  pro- 
ceedings, either  in  the  circuit  court  of 
Sangamon  county  or  In  the  circuit  court  of 
such  other  county  in  this  State  as  to  him 
may  seem  best  for  the  dissolution  of  such 
corporation. 

See  ch.  32.  §  5.  subd.  1.  and  cross-references. 
Remedies  not  affected  by  dissolution.  §  12,  ante. 
Volunt.nry  dissolution.  §{  49a  et  seq..  ante.  See 
note  in  dissolution,   etc.,   after   §  25. 

i  150.  Such  proceedings  shall  be  com- 
menced by  filing  in  stich  court  an  informa- 
tion in  tiie  nature  of  a  bill  in  chancery, 
stating  the  name  and  date  of  the  organiza- 
tion of  such  conioration,  the  location  of  its 


principal  office  and  the  names  of  its  direct- 
ors, managers,  trustees  or  officers,  if  known; 
that  it  has  ceased  to  do  business  as  a  coi-po- 
i*ation,  and  has  discontinued  the  exercise  of 
corporate  functions  and  praying  for  its  dis- 
solution. 

§  151.  In  proceedings  under  this  act,  pro- 
cess in  the  form  of  a  summons  in  chancei*y, 
may  issue  out  of  the  •ct)urt,  ui)on  the  filing 
of  such  information  directed  to  the  sheriff 
of  the  county  in  which  the  principal  ortice 
of  such  corporation  is,  by  its  charter,  lo- 
cated, and  shall  be  served  by  delivering  a 
copy  thereof  to  the  president  of  such  coi-po- 
ration.  if  he  can  be  found  in  such  county, 
and  if  lie  cannot  l>e  found  therein,  then  by 
leaving  sucli  copy  with  any  clerk,  secretai-y, 
superintendent  or  other  agent  of  such  coii)o- 
ration,  and  in  case  the  sheriff  having  such 
process  shall  make  return  thereof  that  such 
president,  clerk,  secretary,  superintendent  or 
other  agent  of  such  c-oiijoration,  cannot  be 
found  in  this  county,  then  the  clerk  of  said 
court  shall  cause  a  notice  to  be  published 
in  some  newspaper  published  in  the  county 
where  the  principal  office  of  such  corporation 
is  located,  which  said  notice  shall  contain 
a  statement  of  tlie  pendency  of  the  proceed- 
ing, tlie  names  of  the  parties  thereto,  the 
title  of  the  court  and  the  time  and  place  of 
the  return  of  such  summons,  and  shall  be 
published  at  least  once  in  each  week  for 
four  successive  weeks.  And  no  default 
shall  be  taken  upon  such  notice  iraless  thii-ty 
days  shall  liave  intervened  between  the  date 
of  the  first  publication  of  such  notice  and 
the  first  day  of  the  term  of  court  at  which 
such  default  or  proceeding  is  proposed  to 
be  taken. 

§  152.  It  shall  not  be  necessary  for  the 
attorn-ey-general  to  file  an  affidavit  showing 
such  president,  clerk,  secretary.  sui>erintend- 
ent  or  other  agent  of  such  corporation  re- 
sides or  has  gone  out  of  the  State,  or  on  due 
inquiry  cannot  be  found,  or  is  concealed  so 
that  process  cannot  be  served  upon  them, 
or  that  upon  diligent  inquiry  the  places  of 
residence  of  such  officers  or  agents  cannot 
be  ascertained. 

§  153.  The  practice  and  proceedings  imder 
this  act  shall  be  the  same  as  in  cases  of 
chancery. 

§  154.  Suits  and  proceedings  instituted  un- 
der provisions  of  this  act  shall  be  placed 
upon  a  separate  docket  by  themselves,  and 
stand  for  trial  upon  the  call  of  such  docket 
at  such  times  during  any  term  of  such  court 
as  the  judge  thereof  may  order. 

§  155.  Upon  the  hearing  of  the  informa- 
tion the  court  may  decree  a  dissolution  of 
such  conioration,  and  uix>n  notice  by  the 
attorney-general  in  writing  of  such  decree 
being  file<l  with  the  secretary  of  State  and 
entered  upon  the  records  of  his  office,  the 
dissolution  of  such  corporation  shall  be 
complete. 

Continued  after  expiration  of  charter.  §  10, 
ante. 


ILLINOIS. 


43 


Blacklist,  etc.;  embezzlement;  forgery  — R.  S.,  ch.  xxxviii,  §§  46,  75,  110,  119. 


§  l.'fi.  The  costs  of  the  court  and  of  publi-  ]  executive  committee  of  any  society  or  orj,'ani- 
catlon  in  proceedings  imder  this  act  sliall  be  ,  zation  or  corporation,  shall  issue  or  utter  any 
paid  out  of  any  moneys  in  the  ti-ea.sury  not  ,  circular  or  edict,  as  the  action  or  iustruc- 
otherTvlse    appropriated    upon    certitied    fee    tion  to  its  members,  or  any  other  persons. 


bills  approved  bj-  the  attorney-general. 

CHAPTER  XXXVIII. 
Criminal  Code. 

DIVISION   I. 
Crimes. 

Conspiracy. 

Sec.  46.  To  do  an  Illegal  act;  boycott;  black-list. 

Embezzlement. 
Sec.  75.   By  officers  of  corporation,   etc. 

Forgery  and  Counterfeiting. 
Sec.  110.  Proof  of  corporation. 

Fraudulent    Stock. 

Sec.  110.  Issuing. 

120.  Signing  with  intent  to  Issue. 
220.  Assuming  corporate  name. 

Trusts,  Pools,  Combines,  Etc. 

Sec.  269a.  Trusts,  pools  and  combines  illegal. 

269b.  Issue  of  trusts  and  certificates  and  or-  ! 
ganization  of  combinations  prohibited 


societies,  organizations,  or  coiiwrations,  for 
the  purpose  of  establishing  a  so-calle<l  boy- 
cott or  black-list,  or  shall  post  or  <listribute 
any  written  or  printed  notice  in  any  place, 
with  tlie  fraudulent  or  malicious  intent 
wrongfully  and  wickedly  to  injure  the  per- 
son, character,  Imsiness,  or  employment,  or 
property  of  another,  or  to  obtain  'money  or 
other  property  by  false  pretenses,  or  to  do 
any  illegal  act  injurious  to  the  public  trade, 
health,  morals,  police,  or  administration  of 
public  justice,  or  to  prevent  competition  in 
the  letting  of  any  contract  by  the  State,  or 
the  authorities  of  any  counties,  city,  town 
or  village,  or  to  induce  any  person  not  to 
enter  into  sucli  comi>etition.  or  to  commit 
any  felony,  they  shall  be  deemed  guiltv  of 
a  conspiracy;  and  every  such  offender, 
whether  as  individuals  or  as  the  officers  of 
any  society  or  organization,  and  every  per- 
son convictetl  of  conspiracy  at  common  law, 
shall  be  imprisone<l  in  the  penitentiaiy  not 
exceeding  five  years,  or  fined  not  exceeding 
$2.(K)0.  or  both.  L\s  amended  by  act  ai> 
prov(Hl  June  10.  1887;  in  force  July  1,  1887. 
L.  1887,  p.  107.) 

Employment  of  labor,   etc.     Ch.   48,   §§6  et  seq. 


§  75.  If  any  officer,  agent,  clerk,  or  ser- 
269c.  Penalties  for  violation  of  this  act,  by  I  yant  of  any  incoriwrated  company;  or  if  a 
269d.  Pfffiv"V/  v°oKn*'of   this   act   by    '^^^^'^-    ^S^at,   servant  or  apprentice   of   any 


by 

officers   or  agents. 
269e.  Declares   contracts   and    agreements    in 

violation  of  this   act  void. 
269f.  Exempts     purchasers     of    commodities, 

produced  or  manufactured  in  violation 

of  this  act.  from  payment. 
269g.   Fines,  how  recovered. 
269h.  Duty  of  secretary  of  State,   to  address 

letter  of  Inquiry  to  officer,  etc. 
2691.  Duty    of   secretary   of   State    when    any 

corporation     has     entered     into     any 

trust. 
269j.   Prosecution    under    this    act;    duties    of 

attorney-general  and  State's  attorney. 

Trusts  and  Conspiracies  Against  Trade. 

Sec.  269k.  Defines   a   trust. 

2691.  Forfeiture  of  franchise. 

269m.  Duty  of  attorney-general  to  prosecute. 

269n.  Foreign  corporations.  Penalties  for 
violation. 

269o.  Violation  of  this  act  declared  to  be  a 
con.spiracy.     Penalties. 

2R9p.  Form  of  indictment  or  information. 

269q.  Proof  of  trust  or  combination. 

269r.  Contracts  and  agreements  in  violation 
of  this  act  void. 

289s.  This  act  shall  not  apply  to  farm  prod- 
ucts in  original  hands. 

269t.  Purchasers  of  commodities  from  trust 
not  liable  for  purchase  money. 

AN    ACT   to   revise   the    law   in    relation   to 


person  or  copartnership,  or  society,  em- 
bezzles or  fraudulently  converts  to  his  own 
use,  or  takes  and  secretes  with  intent  so  to 
do,  ^-ithout  the  consent  of  his  company,  em- 
ployer or  master,  any  property  of  sucli  com- 
pany, employer,  master,  or  another,  which 
has  come  to  his  iwssession.  or  is  imder  his 
care  by  virtue  of  such  office  or  employment, 
he  shall  be  deemed  guilty  of  larceny, 

§  110.  On  the  trial  of  any  person  for  forg- 
ing any  bill  or  note,  purporting  to  be  the 
bill  or  note  of  some  incorporated  company 
or  bank,  or  for  passing  or  attempting  to  pass, 
or  having  in  possession  with  intent  to  pass 
any  such  forged  bill  or  note,  it  shall  not  be 
necessaiy  to  prove  the  incorporation  of  such 
banli  or  company  l>y  the  charter  or  act  of 
incorix)ration,  but  the  same  may  be  proved 
by  general  reputation. 

See  ch.  32,  §  27. 

§  119.  Every  president,  ca.shier,  treasurer, 
secretary  or  other  officer,  and  eveiy  agent, 
attorney,  servant  or  employe  of  any  bank, 
railroad,  manufacturing  or  other  corporation, 
and  every  other  person  who  shall,  knowingly 


cnminal  jurisprud(>nce.     [Approved  March    ^"^^  designedly,  and  with  intent  to  defraud 
27.  1S74:  in  force  July  1.  1S74.]  I  ^^^   person,    bank.    I'ailroad.    manufacturing 

!  or  otlier  coi-poration,  issue,  sell,  transfer,  as- 

§    40.    If   any    two   or    more   persons    con-  i  sign  or  pledge,  or  cause  or  procure  to  be  is- 

spire   or   agi-ee   together,    or   the   officers   or  j  sued,  sold,  transferred,  assigned  or  pledged. 


44 


ILLI]N^OIS. 


Fraiululont  stock;  trusts  — R.  S.,  ch.  xxxviii.  §§  120,  220,  269a,  269b. 


any  false,  fraudulent  or  simulated  certificate 
or'otlier  evidence  of  ownership  of  any  share 
or  shnres  of  the  capital  stoclc  of  any  bank, 
railroad,  manufacturing  or  other  corporation, 
sliall  be  punished  by  fine  not  exceeding 
$2,(XX)  and  by  imprisonment  in  the  peniten- 
tiai-y  not  more  than  ten  years,  as  the  jury 
shail  determine. 

Stock,  transfer  of.     Ch.   32,   §§   7,   8. 

[An  Indictment  chargpfl  the  president  and  secre- 
tary of  a  corporation  with  the  issue,  to  the  former, 
of  "false  and  fraudulent  certiflcates  of  the  cor- 
porate stock  generally,  but  substantially  in  the 
language  of  the  statute.  Cothr.  Stats.  1S91.  p. 
467.  §§  llf)-120.  Indictment  defective.  The  lan- 
guage would  require  defendants  to  answer  as  to 
every  share  of  stock  ever  issued:  it  Is  too  general 
to  apprise  them  of  the  nature  and  extent  of  the 
charge.  "West  t.  People,  137  111.  196;  s.  c,  27  N. 
E.    Rep.   34;   34  Id.   2.51. 

In  such  case,  however,  count  1  charged  that 
the  defendants  "  knowingly  and  designedly  did 
issue  to  him,  the  said  AV.  ftho  presidents,  four 
certain  false  certiflcates  of  ownership,  each  for 
the  sum  of  one  hundred  shares  of  the  capital 
stock  of  the  C.  T.  Co.,  Incorporated."  etc.  Counts 
2  and  3  were  the  same,  except  that  the  -words 
"  fraudulent  "  and  "  simulated  "  were  used  in- 
ttead  of  the  word  "  false."  Counts  4  and  5  were 
timilar  —  as  to  the  issue  of  a  certificate  for  349 
snares  of  stock.  Statement  of  the  offense  snb- 
stautially  in  the  language  of  the  statute  (§  119). 
Id. 

Three  counts  of  Indictment  charged  a  fraudu- 
lent issue  of  four  certificates  of  stock  for  100 
shares  of  stock;  two  counts  charged  the  issue  of 
a  certificate  for  349  shares;  two  other  counts 
charged  a  false  issue  of  certiflcates  for  1,2.50 
shares.  The  people's  evidence  did  not  show  an 
Identity  of  the  three  separate  issues,  as  to  the 
act,  either  In  time,  amount  or  circumstances.  It 
was  error  to  overrule  a  motion,  made  at  the  close 
of  evidence,  that  the  prosecutor  should  elect  on 
which  charge  he  would  proceed.     Id.] 

§  120.  Every  president,  cashier,  treasurer, 
secretary  or  other  officer,  and  every  agent  of 
any  banic,  railroad,  manufacturing  or  other 
corporation,  who  shall  willfully  and  de- 
signedly sign,  with  intent  to  issue,  sell, 
pledge,  or  cause  to  be  issued,  sold  or  pledged, 
any  false,  fraudulent  or  simulated  certificate 
or  other  evidence  of  the  ownership  or  trans- 
fer of  any  share  or  shares  of  the  capital 
stock  of  such  corporation,  or  any  instrument 
purix)rting  to  be  a  <?ertificate  or  other  evi- 
dence of  such  ownership  or  transfer,  the  sign- 
ing, issuing,  selling  or  pledging  of  which  by 
such  president,  cashier,  treasurer  or  other 
officer  or  agent,  shall  not  be  authorized  by 
the  charter  and  by-laws  of  such  cori>oration, 
or  by  some  amendment  thereof,  shall  be 
punislied  by  fine  not  exceeding  $2,000,  and 
by  imprisonment  in  the  penitentiary  not 
more  than  ten  years,  as  the  jury  shall  de- 
termine. 

See  f  119,  ante.  '  ^^'f ' 

§  220.  If  any  company,  association  or  per- 
son ptits  forth  any  sign  or  advertisement, 
and  therein  assumes,  for  the  purpose  of 
soliciting  business,  a  corporate  name,  not 
being  incorporated,  or  being  incorporated, 
Vuts   forth   any   sign  or  advertisement,   as- 


suming any  other  or  different  name  than  that 
by  which  it  is  incorporated  or  authorized 
by  law  to  act,  such  company,  association  or 
person  sliall  be  fined  not  less  than  $10  nor 
more  tlian  $200,  and  a  like  sum  for  eacli  day 
he  or  it  shall  continue  to  offend,  after  hav- 
ing been  once  fined. 

Charter  to  state  corporate  name.     Ch.   32,   §  2. 
Changing  name.     Ch.  32,  §§  50  et  seq. 

Trusts  and  Combines. 
Pools,  Trusts  and  Combines,  Prohibited. 

AN  ACT  to  provide  for  the  punishment  of 
persons,  copartnerships  or  corporations 
forming  pools,  trusts  and  combines,  and 
mode  of  procedure  and  mles  of  evidence 
in  such  cases.  [Approved  June  11,  1891; 
.  in  force  July  1,  1891;  amended  by  act  ap- 
proved June  20,  1893,  in  foive  July  1, 
1893,  and  bj'  act  approved  June  10,  1897.] 

§  269a.  Be  it  enacted  by  the  people  of  the 
State  of  Illinois,  represented  in  the  general 
assembly:  If  any  corporation  organized 
under  the  laws  of  this  or  any  other  State  or 
country,  for  transacting  or  conducting  any 
kind  of  business  in  this  State,  or  any  part- 
nership or  individual  or  other  association  of 
persons  whosoever,  shall  create,  enter  into, 
become  a  member  of  or  a  party  to  any  pool, 
trust,  agreement,  combination,  confederation 
or  understauding  with  any  other  corporation, 
partnership,  individual,  or  any  other  per- 
son, or  association  of  pei'sons,  to  I'egulate  or 
fix  the  price  of  any  article  of  merchandise 
or  commoditj',  or  shall  enter  into,  become  a 
member  of  or  a  party  to  any  pool,  agree- 
ment, contract,  combination  or  confedera- 
tion, to  fix  or  limit  the  amount  or  quantity 
of  any  article,  commodity  or  merciiandise  to 
be  manufactured,  mined,  produced  or  sold 
in  this  State,  such  coiijoration,  partnership 
or  individual  or  other  association  of  persons 
shall  be  deemed  and  adjudged  guilty  of  a 
conspiracy  to  defraud,  and  be  subject  to  in- 
dictment and  punishment  as  provided  in  this 
act:  Provided,  however,  That  in  the  mining, 
manufacture  or  production  of  articles  of 
merchandise,  the  cost  of  which  is  mainly 
made  up  of  wages,  it  shall  not  be  imlawful 
for  persons,  firms  or  corporations  doing  busi- 
ness in  this  State  to  enter  into  joint  arrange- 
ments of  any  sort,  the  principal  object  or 
effect  of  which  is  to  maintain  or  increase 
wages. 

See  post,   §§  269k  et  seq.     Consolidation   of  rail- 
roads.    Ch.  32,  §  57. 

§  269b.  It  shall  not  be  lawful  for  any  cor^ 
poration  to  issue  or  to  own  trust  certificates, 
or  for  any  corporation,  agent,  officer  or 
employes,  or  the  directors  or  stockholders  of 
any  corporation  to  eiater  into  any  combina- 
tion, contract  or  agreement  with  any  person 
or  persons,  corporation  or  corporations,  or 
with  any  stockholder  or  director  thereof,  the 


ILLIXOIb. 


45 


Trusts  and  combines  —  R.  S.,  ch.  xxxviii,  269c-269h. 


purpose  and  effect  of  which  combination, 
contnic-t  or  ag-reement  shall  be  to  place  the 
management  or  control  of  such  combination 
or  combinations,  or  the  manufactured  prod- 
uct thereof,  in  the  hands  of  anj'  trustee  or 
trustees,  with  the  Intent  to  limit  or  fix  the 
price  or  lessen  the  protluction  and  sale  of  an 
article  of  commerce,  use  or  consumption,  or 
to  prevent,  restrict,  or  diminish  the  manu- 
facture or  output   of  any   such   article. 

§  2tj9c.  If  a  corporation  or  a  company,  firm 
or  association  shall  be  found  guilty  of  a 
violation  of  this  act,  it  shall  be  punished 
by  a  fine  in  any  sum  not  less  than  five  hun- 
dred dollars  (§;500j  nor  more  than  two  thou- 
sand dollars  ($2,000)  for  the  first  offense; 
and  for  the  second  offense  not  less  than  two 
thousand  dollars  (.$2,000)  nor  more  than  five 
thousand  dollars  (.S5,IKX)j;  and  for  the  third 
offense  not  less  than  five  thousand  dollars 
($5,00<>)  nor  more  than  ten  thousand  dollars 
($10,iX»0);  and  for  eveiT  subsequent  offense 
and  conviction  thereof,  shall  be  liable  to  a 
fine  of  fifteen  thousand  dollars  ($15,000): 
Provided,  That  in  all  cases  und^r  this  act 
either  party  shall  have  the  right  of  trial 
by  Jury, 

§  2G'Jd.  Any  president,  manager,  director 
or  other  otticer  or  agent  or  receiver  of  any 
corporation,  company,  firm  or  association, 
or  any  member  of  any  companj-,  fii-ni  or  as- 
sociation, or  any  individual  found  guilty  of 
a  violation  of  the  first  section  of  this  act 
may  be  punished  by  a  fine  of  not  less  than 
two  hundred  dollars  ($200)  nor  to  exceed 
one  thousand  dollars  ($1,(XK)),  or  be  punished 
by  confinement  in  the  county  jail  not  to  ex- 
ceed one  year,  or  both,  in  the  discretion  of 
the  court  before  which  such  conviction  may 
be  had. 

§  2G9e.  Any  contract  or  agreement  in  vio- 
lation of  any  provision  of  the  preceding  sec- 
tions of  this  act  shall  be  absolutely  void. 

§  209f.  Any  purchaser  of  any  article  or 
commodity  from  any  individual,  company 
or  coi-poration  transacting  business  contrary 
to  any  provision  of  the  preceding  sections  of 
this  act  shall  not  be  liable  for  the  price  or 
payment  of  such  article  or  commodity,  and 
may  plead  this  act  as  a  defense  in  any  suit 
for   sucli   price  or  payment. 

§  209g.  The  fines  hereinbefore  provided  for 
may  be  recovered  in  an  action  of  debt,  in 
the  name  of  the  people  of  the  State  of  Illi- 
nois. If,  upon  the  ti'ial  of  any  cause  insti- 
tuted under  this  act  to  recover  the  penalties 
as  provided  for  in  section  three,  the  jury 
shall  find  for  the  people,  and  that  the  defend- 
ant has  been  before  convicted  of  a  violation 
of  the  provisions  of  this  act,  they  shall  re- 
turn such  finding  with  their  verdict,  stating 
the  number  of  times  they  find  defendant  so 
convicted,  and  shall  assess  and  return  with 
their  verdict  the  amount  of  the  fine  to  be 
Imposed  upon  the  defendant  in  accordance 
with  said  section  three:  Provide<l,  That  in 
all  cases  under  the  provisions  of  this  act, 
a  preponderance  of  evidence  in  favor  of  the 


people  shall  be  sufficient  to  authorize  a  ver- 
dict and  judgment  for  the  people. 

§  269h.  It  shall  be  the  duty  of  the  secre- 
tary of  State,  on  or  about  the  first  day  of 
September  of  each  year,  to  address  to  the 
president,  secretaiy  or  treasurer  of  each  in- 
corporated company  doing  business  in  this 
State,  whose  post-otfice  address  is  known  or 
may  be  ascertained,  a  letter  of  inquiry  as 
to  whether  the  said  coriioration  has  all  or 
any  part  of  its  business  or  interest  in  or  with 
any  trust,  combination  or  association  of  per- 
sons or  stockholders,  as  named  in  the  pre- 
ceding provisions  of  this  act,  and  to  require 
an  answer,  under  oath,  of  the  president, 
secretary  or  treasurer,  or  any  director  of  said 
company.  A  form  of  affidavit  shall  be  en- 
closed in  said  letter  of  inquiiy,  as  follows: 

Affidavit. 

State  of  Illinois,         j 
County  of f  **••' 

I,   do  solemnly  swear  that  I 

am  the    (president,   secretary, 

treasurer    or    director)    of    the    corporation 

known  and  styled  ,  duly 

incorporated  under  the  laws  of 

on  the   of   ,  18. . ,  and 

now  ti-ansacting  or  conducting  business  in 
the  State  of  Illinois,  and  that  I  am  duly 
authoi'ized  to  represent  said  corporation  in 
the  making  of  this  affidavit;  and  I  do  further 

solemnly  swear  that  the  said    , 

known  and  styled  as  aforesaid,  has  not, 
since  the day  of (nam- 
ing the  day  upon  which  this  act  takes  effect), 
created,   entered  into  or  become  a  member 

of,  or  a  party  to,  and  was  not,  on  the 

day  of   ,  nor  at  any  day  since 

that  date,  and  is  not  now,  a  member  of, 
or  a  party  to,  any  pool,  trust,  agreement, 
combination,  confederation  or  understanding 
with  any  other  coiTwration,  partnership,  in- 
dividual or  any  other  person  or  association 
of  persons,  to  regulate  or  fix  the  price  of 
any  article  of  merchandise  or  commodity; 
and  that  it  has  not  entered  into  or  become 
a  member  of,  or  a  party  to,  any  pool,  trust, 
agreement,  contract,  combination  or  con- 
federation to  fix  or  limit  the  amount  or 
quantity  of  any  article,  commodity  or  mer- 
chandise to  be  manufactured,  mined,  pro- 
duced or  sold  in  this  State;  and  that  it  has 
not  issued  and  does  not  own  any  trust  cer- 
tificates, and  for  any  corporation,  officer  or 

I  employe,  or  for  the  directors  or  stockholders 
of  any  coi"poration,  has  not  entered  into  and 
is  not  now  in  any  combination,  contract  or 
agreement  with  any  person  or  pei"Sons;  cor- 
poration or  corporations  or  with  any  stock- 
holder or  director  thereof  the  purpose  and 
effect  of  which  said  combination,  contract 
or  agi-eement  would  be  to  place  the  manage- 
ment or  control  of  such  combination  or  com- 

[  binations,  or  the  manufactured  product 
thereof,  in  the  hands  of  any  trustee  or  trus- 
tees, with  the  intent  to  limit  or  fix  the  price 


46 


ILLINOIS. 

Trusts  and  combines  —  R.  S.,  ch.  xxxviii,  §§  269i-269k. 


or  lessen  the  production  and  sales  of  any 
article  of  commerce,  use  or  consumption, 
or  to  prevent,  restrict  or  diminish  the  manu- 
facture or  output  of  any  such  article. 


[President,  Secretai-y,  Treasurer  or  Director.] 
Subscribed    and    swoni    to    before    me,    a 

within  and  for  the  county  of 

this day  of  

18.. 

[Seal.]  

And  on  refusal  to  malce  oath  in  answer 
to  said  inquiry,  or  of  failure  to  do  so  within 
thirty  days  from  the  mailing  thereof,  the 
secretary  of  State  shall  certify  that  fact  to 
the  attorney-general,  whose  duty  it  shall  be 
to  direct  tlie  State's  attorney  of  the  county 
wherein  such  corporation  or  corporations  are 
locate<l,  and  it  is  hereby  made  the  duty  of 
the  State's  attorney  under  the  direction  of 
the  attorney-general,  at  the  earliest  practi- 
cable moment,  in  the  name  of  the  people  of 
the  State  of  Illinois,  and  at  the  relation  of 
the  attorney-general  to  proceed  against  such 
corporation  for  the  recovery  of  a  penalty  of 
fifty  dollars  for  each  day  after  such  refusal 
to  make  oath,  or  failure  to  make  said  oath 
within  thirty  days  from  the  mailing  of  said 
notice.  Or  the  attorney-general  may,  by  any 
proper  proceedings  in  a  court  of  law  or 
chanceiT.  proceed,  upon  such  failure  or  re- 
fusal to  forfeit  such  charter  of  such  incor- 
porated company  or  association  incoiijo- 
rated  imder  the  general  laws,  or  by  any  spec- 
ial law  of  this  State,  and  to  revoke  the  rights 
of  any  foreign  corixfl-ation  located  herein 
to  do  business  in  this  State. 

§  2f59i.  It  shall  be  the  duty  of  the  secretary 
of  State,  at  any  time,  upon  satisfactory  evi- 
dence tliat  any  company  or  association  of 
persons,  duly  incoi-porated  under  the  laws  of 
this  or  any  other  State,  doing  business  in 
this  State,  has  entered  into  any  trast,  com- 
bination or  association  in  violation  of  the 
preceding  section  of  this  act,  to  demand  that 
it  sliall  make  the  affidavit,  as  above  set 
forth  in  tliis  act,  as  to  the  conduct  of  its 
business.  In  case  of  failure  of  compliance 
on  the  part  of  the  corporation,  then  the  same 
procedure  shall  ensue  as  is  provided  in  sec- 
tion 7a  of  tliis  act:  Provided,  That  no  cor- 
poration, firm,  association  or  individual  shall 
be  subject  to  any  criminal  prosecution  by 
reason  of  anything  trutlifully  disclosed  b.\ 
the  affidavit  required  by  tliis  act,  or  truth- 
fully disclosed  in  any  testimony  elicited  in 
the  execution  thereof.  Tlie  secTetaiy  of 
State  is  hereby  authorized  and  required  to 
charge  and  collect  of  each  corporation  a  fee 
of  one  dollar  for  receiving  and  filing  the 
affidavit  herein  provided  for,  to  be  accounterl 
for  as  other  fees  received  by  him:  Provided, 
That  corporations  organize<l  imder  tJio  build- 
ing, loan  and  homestead  association  laws  of 
the  State  are  excluded  from  the  provisions 
of  this  act. 


§  269j.  It  shall  be  the  duty  of  the  prosecut- 
ing attorneys  in  their  respective  jurisdic- 
dic'tions,  and  the  attorney-general,  to  enforce 
the  foregoing  provisions  of  this  act,  and 
anj'  prosecuting  attorney  of  any  county, 
securing  a  conviction  imder  the  provisions 
of  this  act,  shall  be  entitled  to  such  fee  or 
salary  as  by  law  he  is  allowed  for  such  pros- 
ecution. When  there  is  a  conviction  under 
this  act,  the  informer  shall  be  entitled  to 
one-fifth  of  the  fine  recovered,  which  shall 
be  paid  him  when  the  same  is  collected.  All 
fines  recovered  under  the  provisions  of  this 
act  shall  be  paid  into  the  county  treasury  of 
the  county  in  which  the  suit  is  tried,  by  the 
person  collecting  the  same,  in  the  manner 
now  provided  by  law,  to  be  used  for  county 
purposes. 

[An  association  formed  for  the  purpose  of  regu- 
lating the  price  of  milk  sold  by  members  thereof 
in  a  particular  city  to  retail  dealers,  which  pur- 
pose was  carried  out  by  a  concurrent  action  of 
members  of  the  association,  is  within  act  pro- 
hibiting trusts  and  combinations.  Ford  v.  Milk 
Assn.,  155  111.  166;  s.  c,  39  N.  E.  Rep.  651. 

Above  act  applies  to  a  corporation  formed  pre- 
vious to  its  passage.     Id. 

A  combination  to  control  the  manufacture  and 
sale  of  all  distillery  products,  so  as  to  stifle  com- 
petition and  dictate  amounts  manufactured  and 
selling  prices,  is  an  illegal  attempt  to  create  a 
monopoly.  Distilling  Co.  v.  People,  156  111.  448; 
s.   c,  41  N.   E.   Rep.   188.] 

AN  ACT  to  define  trusts  and  conspiracies 
against  trade,  declaring  contracts  in  vio- 
lation of  the  provisions  of  this  act  void, 
and  making  certain  acts  in  violation 
thereof  misdemeanors,  and  prescribing  the 
punisliment  therefor  and  matters  connected 
thefewith.    [Approved  June  20,  1893.] 

§  260k.  Be  it  enacted  by  the  people  of  the 
State  of  Illinois,  represented  in  the  general 
assembly.  That  a  trust  is  a  combination  of 
capital,  skill  or  acts  by  two  or  more  persons, 
firms,  corporations  or  associations  of  persons, 
or  of  two  or  more  of  them  for  either,  any  or 
all  of  the  following  pvirposes: 

First.  To  create  or  cany  out  restrictions 
in  trade. 

Second.  To  limit  or  reduce  the  production, 
or  increase  or  reduce  the  price  of  merchan- 
di.se  or  commodities. 

Third.  To  prevent  competition  in  manu- 
facture, malving,  transportation,  sale  or  pur- 
chase of  merchandise,  produce  or  com- 
modities. 

Fourth.  To  fix  at  any  standard  or  figure 
whereby  its  price  to  the  public  shall  be  in 
any  manner  controlled  or  established  upon 
any  article  or  commodity  of  merchandise, 
produce  or  manufacture  intended  for  sale, 
use  or  consumption  in  this  State;  or  to  es- 
tablish any  pretended  agency  whereby  the 
sale  of  any  such  article  or  commodity  shall 
be  covered  up  and  made  to  appear  to  be 
for  the  original  vendor,  for  a  like  purpose 
or  purposes,  and  to  enable  such  original  ven- 
dor or  manufacturer  to  control  the  whole- 
sale or  retail  price  of  any  such   article  or 


ILLINOIS. 


47 


Trusts  and  combines  —  R.  S.,  ch.  xxxviii,  §§  2691-269t. 


commodity  after  the  title  to  such  article  or 
commodity  Khali  have  i)assed  from  such 
vendor  or  niauufat-ture. 

Fifth.  To  make  or  enter  into,  or  examine 
or  cany  out  any  i-outract,  obligation  or  agree- 
ment of  any  Iciud  or  description  by  which 
they  shall  bind  or  have  bound  tliemselves 
not  to  sell,  dispose  of,  or  trausix)rt  any  ar- 
ticle or  foinmotlity,  or  article  of  trade,  use. 
mercliandise,  commerce  or  consumption  be 
low  a  common  standard  figure,  or  card  or 
list  price,  or  by  which  they  shall  agree  in 
any  manner  to  keep  the  price  of  such  ar- 
ticle, commodity  or  transportation  at  a  fixed 
or  graduated  figiu-e.  or  by  which  they  shall 
in  any  manner  establish  or  settle'  the  price  \ 
of  any  article  or  commoditj^  or  transporta- 
tion between  tliem  or  themselves  and  (jthers 
to  preclude  a  free  and  unrestricted  competi- 
tion among  themselves  or  others  in  the  sale 
or  transportation  of  any  such  article  or  com- 
modity, or  bj'  which  they  shall  agree  to  pool, 
combine  or  unite  any  interest  thej'  may  have 
in  connection  \\ith  the  sale  or  transportation 
of  any  such  article  or  commodity  that  its 
price  might  in  any  manner  be  affected. 

§  2G91.  That  any  corporation  holding  a 
charter  under  the  laws  of  this  State  whicli 
shall  violate  any  of  the  provisions  of  this 
act  shall  thereby  forfeit  its  charter  and  fran- 
chise, and  its  corijorate  existence  shall  cease 
and  determine. 

§  269m.  For  a  violation  of  any  of  the  pro- 
visions of  this  act  by  anj'  corporation  men- 
tioned herein  it  shall  be  the  duty  of  the 
attorney-general  or  prosecuting  attorney, 
upon  his  own  motion  to  institute  suit 
or  quo  waiTanto  proceedings  at  any 
county  in  this  State  Hn)  which  such 
corporation  exists,  does  business,  or  may 
have  a  domicile,  for  the  forfeiture  of  its 
charter  riglits  aud  franchise,  and  the  dissolu- 
tion of  its  corporate  existence. 

§  269n.  Every  foreign  corporation  violat- 
ing any  of  the  provisions  of  this  act  is 
hereby  denied  the  rigiit  and  proliibited  from 
doing  any  business  witlnn  tins  State,  and  it 
shall  be  the  duty  of  the  attoniey-geueral  to 
enforce  this  provision  by  injunction  or  other 
proper  proceedliags,  in  any  county  in  which 
such  foreign  coi-poration  does  lousiness,  in 
the  name  of  the  State  on  his  relation. 

§  269o.  Any  violation  of  either  or  all  of 
fihe  provisions  of  section  1  of  this  act 
(§  2601c)  shall  he  and  is  hereby  declared  to 
be  a  conspiracy  against  trade,  and  a  misde- 
meanor; and  any  person  who  may  lie  or  may 
become  engaged  in  any  such  conspiracy  or 
take  part  therein  or  aid  or  advise  in  its  com- 
mission, or  who  shall,  as  principal,  manager, 
director,  agent,  seiwant,  or  employe,  or  in 
any  other  capacity  knowingly  carry  out  any 
of  the  stipulations,  purposes,  prices,  rates, 
orders  tliereunder  or  in  pursuance  thereof 
shall  be  punished  by  fine  not  less  than  two 
thousand  dollars  nor  more  than  five  thou- 
sand   dollars. 

§  269p.  In  any  Indictment  or  Information 


for  any  offense  nameil  in  this  act  it  is  suffi- 
cient to  state  tlie  puiijoses  and  effects  of 
tlie  trust  or  combination,  and  that  the  ac- 
cused wa.s  a  member  of,  acted  with  or  in 
pursuance  of  it,  without  giving  its  name  or 
description,  or  how  or  where  it  was  created. 

§  I'tiOij.  In  prosecutions  under  this  act  it 
shall  be  sufficient  to  prove  that  a  trust  or 
combination  as  defined  herein  exists,  aud 
tliat  the  defendant  belonged  to  it  or  acted 
for  or  in  connection  with  it,  without  proving 
all  the  members  belonging  to  it.  or  proving 
or  producing  any  article  of  agreement  or 
any  written  instrument  on  which  it  may 
have  been  based,  or  that  it  was  evidenced 
by  any  written  instrument  at  all. 

§  269r.  That  any  contract  or  agreement  in 
violation  of  the  provisions  of  tins  act  shall 
1)6  absolutely  void  and  not  enforceable  either 
in  law  or  equity. 

§  269s.  The  provisions  of  this  act  shall  not 
apply  to  agricultural  products  or  live  stock 
while  in  the  hands  of  the  producer  or  raiser. 

§  269t.  Any  purchaser  of  any  article  or 
commodity,  from  any  person,  firm,  corpora- 
tion or  association  of  persons,  or  of  two  or 
more  of  them,  transacting  business  contrary 
to  any  pi'ovision  of  the  preceding  sections 
of  this  act,  shall  not  be  liable  for  the  price 
or  payment  of  such  article  or  commodity  and 
may  plead  this  act  as  a  defense  to  any  suit 
for  such  price  or  payment. 

See  ante,  §§  269a  et  seq. 

CHAPTER  XLVni. 

Employment. 
Truck  System. 

Sec.     6.  Truck  stores  prohilMted. 

7.  Ponaltips  for  violation  of  this  act. 

8.  Derluctions   from   wajres  prohibited. 

9.  Recovery   of   deductions. 

10.  Evasion  or  avoidance  of  this  act;  penal- 

ties. 

11.  Farmers,  laborers  and  servants  excepted. 

12.  The   term    "  truck  "    defined. 

Weekly   Payment   by   Corporations. 

Sec.  13.  Corporations    named     therein    shall    pay 
their  employes  weekly. 

14.  Penalties;  actions,  where  brought;  notice; 

assignment;   agreement. 

15.  Recovery   of  penalties. 

Child  Labor. 

Sec.   16.   T'nlawful  under  thirteen  years  of  age. 

17.  When   board   of  education,   etc.,   may  au- 

thorize employment. 

18.  When  certificate  may  be  granted. 

19.  Not  to  be  employed  without  certificate. 

20.  Penalty. 

AX  ACT  to  provide  for  the  payment  of 
wages  in  lawful  money,  and  to  prohibit 
the  truck  system,  and  to  prevent  deduc- 
tions from  wages  except  for  lawful 
money  actually  advanced.  [Approved  May 
28,  191:  enforced  July  1,  1891.  L.  1891, 
p.  212;  Legal  News  Ed.,  p.  80.] 

§  6.  Be  it  enacted  by  the  people  of  the  State 
of  Illinois,  represented  in  the  general  assem- 


48 


ILLINOIS. 

Truck  system;  weeklj'  payment  — R.  S.,  ch.  xlviii,  §§  7-15. 


bly  That  it  shall  be  unlawful  for  any  per- 
son! company,  cori)Oi-atlon  or  association, 
now  engaged  or  hereafter  to  be  engaged  in 
any  mining  or  manufacturing  business  in 
this  State,  to  engage  in,  or  be  interested  in, 
directly  or  indii-octly,  in  keeping  of  a  truck 
store,  "or  controlling  of  any  store,  shop  or 
scheme  for  the  furuisliing  of  supplies,  tools, 
clothing,  provisions  or  groceries  to  his,  its  or 
their  employes  while  so  engaged  in  mining 
or  nianulncturing. 

§  7.  Every  person,  company,  corporation 
or  association  found  guilty  of  violating  sec- 
tion one  (1)*  of  this  act,  either  by  himself, 
its  or  their  agents,  servants  or  employes,  or 
partners,  shall  be  guilty  of  a  misdemeanor 
for  each  and  every  day  such  business  is 
done  in  violation  of  said  section,  and  on  con- 
viction will  be  liable  to  a  fine  for  each  offense 
of  not  less  than  fifty  ($oU)  nor  more  than 
two  hundred  (^200)  dollai-s,  to  be  recovered 
in  the  name  of  the  people,  for  the  use  of 
the  school  fund,  and  any  person  having 
knowledge  of  the  fact  that  said  section  has 
been  violated  may  make  complaint,  and 
cause  summons  or  warrant  to  be  issued. 

§  8.  It  shall  be  uulaAvful  for  any  person, 
company,  corporation  or  association,  em- 
ploying'workmen  in  this  State,  to  make  de- 
ductions from  the  wages  of  his,  its  or  their 
workmen,  ex<;ept  for  lawful  money,  •checl:s 
or  drafts  actually  advanced  Avlthout  discount, 
and  except  sucli  sums  as  may  be  agreed 
upon  between  employer  and  employe,  wliich 
may  be  deducted  for  hospital  or  relief  fund 
for*  sick  or  injured  employes. 

§  9.  Any  deductions  made  from  the  wages 
of  any  workman  in  this  State,  except  as 
provided  in  section  three  (3)*  of  this  act,  may 
be  recovered  in  any  appropriate  action  before 
any  court  of  competent  jurisdiction,  together 
witli  such  reasonable  attoruey'y  fee  as  tl'C 
court  in  its  discretion  shall  think  proper, 
and  no  offset  or  counterclaim  of  any  kind 
shall  be  allowed  in  such  action  or  proceeding. 
§  10.  All  attempts  to  evade  or  avoid  the 
provisions  of  this  act,  by  contract  or  other- 
wise, shall  be  deemed  a  violation  thereof, 
and  for  eveiy  violation,  in  addition  to  the 
civil  remedy  provided  for  in  section  four  (4),* 
there  shall,  on  coua  iction,  be  a  fine  imposed 
of  not  less  than  fifty  ($50)  nor  more  than  two 
Inuidred  (S200)  dollars  for  each  offense. 

§  31.  Xotliing  in  tliis  act  shall  be  so  con- 
strued as  to  include  the  business  of  farmers, 
or  farm  laborers,  or  servants. 

§  12.  "  Ti-uck "  means  tlie  payment  of 
wages  otlierwise  than  in  lawful  money,  or 
otherwise  than  to  tlie  full  amount  earned  by 
the  employe. 


•§  8  or   §  9.  Weekly  payment  of  wages. 
'•'.  post. 


§§   13- 


AN  ACT  to  provide  for  the  weekly  pay- 
ment of  wages  by  corporations.  [Ap- 
proved April  23,  1891;  in  force  July  1, 
1891.] 

§  13.  Be  it  enacted  by  the  people  of  the 
State  of  Illinois,  represented  in  the  general 
assembly,  That  every  manufacturing,  min- 
ing, quarrying,  luml>ering,  moivautile,  street, 
electric  and "  elevated  railway,  steamboat, 
telegraph,  telephone,  and  municipal  corpora- 
tion, and  every  incorporated  express  com- 
pany and  water  company,  shall  pay  weekly 
each  and  every  employe  engaged  in  its  busi- 
ness, the  wages  earned  by  such  employe  to 
within  six  days  of  the  date  of  such  payment: 
Provided,  liowever,  That  if  at  auy  lime  of 
payment  any  employe  shall  be  absent  from 
his  regular  place  of  labor  he  shall  be  entitled 
to  said  payment  at  any  time  thereafter  upon 
demand. 

§  14.  Any  corporation  violating  any  of  the 
provisions  of  this  act  shall  be  liable  to  a 
penalty  not  exceeding  fiftj'  dollars,  anu  not 
less  than  ten  dollars  for  each  violation,  to 
be  paid  to  the  people  of  the  State,  and 
which  may  be  I'ecovered  in  a  civil  action; 
Provided,  an  action  for  such  violation  is  •com- 
menced within  tliirty  days  from  the  date 
thereof;  any  person  may  bring  an  action  in 
the  name  of  the  People  of  the  State,  as 
plaintift',  against  auy  corporation  Avhich 
neglects  to  comply  with  the  provisions  of 
this  act  for  a  period  of  two  weeks,  after 
having  been  notified  in  writing  by  such  per- 
son tliat  such  action  Avill  be  brought.  On 
the  trial  of  such  action,  such  coi-poration 
shall  not  be  allowed  to  set  up  any  defense 
for  a  failure  to  pay  weekly  any  employe 
engaged  in  its  business  the  wages  eanied 
by  such  employe  to  within  six  days  of  the 
date  of  sueli  payment,  otJier  than  a  valid  as- 
signment of  such  wages,  or  a  valid  set-off 
against  tlie  same,  or  the  absence  of  such 
employe  from  his  regular  place  of  labor  at 
the  time  of  payment,  or  an  actual  tender  to 
such  employe  at  the  time  of  payment  of  the 
wages  so  earned  by  him,  or  a  breach  of  con- 
tract by  such  employe  or  a  denial  of  the 
employment.  No  assignment  of  future 
wages  payable  weelv^j-  under  the  provisions 
of  this  act  shall  be  valid  if  made  to  the 
corporation  from  whom  such  wages  are  to 
l)ecome  due,  or  to  any  person  on  behalf  of 
sucli  coi'poration,  or  if  made  or  procured  to 
1)6  made  to  any  person  for  the  purpose  of  re- 
lieving such  corporation  from  the  obliga- 
tions to  pay  weekly  under  tlie  provisions  of 
this  act.  Nor  shall  any  of  said  coiporations 
require  an.v  agreement  from  auy  employe  to 
accept  wages  at  other  periods  than  as  pro- 
vided in  section  1*  of  this  act,  as  a  condi- 
tion of  employment. 

§   l").  Tlie  jienalties  herein  provided  may 
be  recovered  in  any  court  having  civil  juris- 

*§§   G   antl   13. 


ILl.i.VOlS. 


49 


Child  labor  — R.  S.,  ch.  xlviii,  §§  16-20;  Evidence  —  R.  S.,  ch.  U,  §§  15,  16. 


diction  by  such  in  the  name  of  the  person 
bringing  the  same. 
[Approved  April  23,   1S91.] 

Truck  stores  prohibited,   etc.     §§   6-12,   aute. 

[Act  of  1891,  requiring  the  weekly  paj-meut  of 
wages,  declared  unconstitutional.  Coal  Co.  v.  Peo- 
ple. 147  111.  6G:  s.  c,  35  X.  E.  Rep.  62.] 

AX  ACT  to  prevent  child  labor.  [Approved 
Jiilv  17.  1891.  L.  1891,  p.  87;  Legal  News 
Ed.,  p.  139.] 

§  IG.  Be  it  enacted  by  the  people  of  the 
State  of  Illinois,  represented  in  general  as- 
sembly, That  it  shall  be  unlaAvful  for  any 
person,  firn)  or  corporation  to  employ  or 
hire  any  child  imder  thirteen  years  of  age 
except  as  hereinafter  provided. 

See   §§  6  et  seq.,   ante. 

§  17.  In  case  it  shall  be  made  to  appear 
to  the  board  of  education  or  of  school  direct- 
ors that  the  labor  or  services  of  any  child 
constitutes  and  is  the  means  of  snpixtrt  of 
any  aged  or  infirm  relative,  and  tliat  such 
relative  is  in  whole,  or  in  part,  dependent 
uiK)n  such  child,  then  the  board  of  educa- 
tion or  school  directors  shall  issue  to  such 
child  a  certificate  authorizing  the  employ- 
ment of  such  child;  such  certificate  shall 
state  the  name,  residence  and  age  of  such 
child,  and  a  record  thereof  shall  be  liept  by 
the  board  of  education  or  school  directors  in 
a  boolv  kept  for  that  pun^ose. 

§  18.  No  such  certificate  shall  be  granted 
to  any  child  unless  it  shall  be  shown  to  the 
board  of  education  or  scliool  directors,  in 
which  snclx  child  resides,  that  such  child  has 
attended  some  public  or  private  day  school 
for  at  least  eiglit  (8)  weeks  in  the  cuiTeut 
school  year. 

§  19.  No  person,  firm  or  corporation  shall 
employ  any  child  under  tlie  age  of  thirteen 
years,  in  any  store,  shopv  factory  or  manu- 
facturing establishment,  by  the  day  or  any 
period  of  time  greater  than  one  day,  unless 
sucli  certificate  be  furnished,  nor  shall  he 
permit  any  such  child  to  work  in  his  em- 
ploy without  such  certificate.  He  or  they 
shall  be  authorized  to  retain  the  certificate 
of  any  such  child  employed  by  him,  which 
shall  be  evidence  admissible  in  any  court. 

§  20.  Any  person,  firm  or  coii^oration  who 
violates  the  provisions  of  this  act  and  any 
father,  guardian,  or  person  having  control 
of  any  child  under  the  age  of  thirteen  (].">) 
years,  who  willingly  permits  or  consents  to 
the  employment  of  such  child  without  such 
certificate  as  is  prescribed  by  section  3*  of 
this  act,  shall,  for  every  offense,  be  fined  in 
a  sum  not  less  than  ten  nor  more  than  fifty 
dollars,  for  the  use  of  public  schools  of  the 
city  or  district  in  which  such  child  resides. 


*§   18. 


And  every  day  of  the  employment  of  any 
such  child  shall  be  deemed  a  separate  offense. 

Is  not  this  act  repealed  by  Act  of  June  9,  1897? 
See  p.  58. 

CHAPTER  LI. 

Evidence  and  Depositions. 

Sec.  15.  Records,  etc.,  of  private  corporations;  how 
certified. 
16.  Form  of  certLflcate. 

AN  ACT  in  regard  to  evidence  and  deposi- 
tion in  civil  cases.  [Approved  March  29, 
1872;  in  force  July  1,  1872.  L.  1871-2, 
p.  405.] 

§  1.5.  The  papers,  entiios  and  records  of 
any  corporation  or  incorporated  association 
may  be  proved  by  a  copy  thereof,  certified 
under  the  hand  of  the  secretarj',  clerk,  casli- 
ier  or  other  keeper  of  the  same.  If  the  cor- 
poration or  incorporated  association  has  a 
seal,  the  same  shall  be  affixed  to  such  cer- 
tificate. 

See  ch.  32,  §  5,  subd.  2.  Directors  to  keep 
record  of  all  business.     Ch.  32,  §  13. 

[Secondary  evidence  of  books  and  papers  of  a 
corporation  is  inadmissible  in  its  behalf,  where 
the  original  are  under  its  control.  Mandel  v. 
L.  C.  Co.,  154  111.  177;  s.  c,  40  N.  E.  Rep.  462. 

Records  of  corporation  are  admissible  in  evi- 
dence to  show  that  a  call  upon  the  stock  has 
been  made.  Mandel  v.  L.  &  C.  Co.,  51  111.  App. 
205.] 

§  16.  The  certificate  of  any  such  clerk  of 
a  court,  city,  village,  town,  county,  or  sec- 
retary, clerk,  cashier,  or  other  keeper  of  any 
such  papers,  entries,  records  or  ordinances, 
shall  contain  a  statement  that  sucli  person 
j  is  the  keeper  of  the  same,  and  if  there  is  no 
seal,  shall  so  state. 

I     [Failure  of  certificate  so  to  state,  renders  papers 

inadmissible.    Thompson  v.  Mason,  4  111.  App.  452. 

Naming   corporations   by   Initials   in   clerk's   cer- 

I  tificate  is  not  valid  objection,    where   meaning  of 

I  initials  is  proved  aliunde,  or  by  other  parts  of  the 

certificate.     Phillips  v.  Webster,  85  111.  146.] 

CHAPTER  LXXIV. 

Interest. 

Sec.     8.  Rate  in  contracts. 

11.  Corporation    not   to  plead  usury. 

AN  ACT  to  revise  the  law  in  relation  to  the 
rate  of  interest,  and  to  repeal  certain  acts 
therein  named.  [Approved  May  24,  1879; 
in  force  Julv  1,  1879.  Legal  News  Ed., 
p.  144.] 

§  8.  When  any  written  contract,  wherever 
payable,  shall  be  made  in  this  State,  or 
between  citizens  or  corporations  of  this 
State,  or  a  citizen  or  corporation  of  this 
State  and  a  citizen  or  corporation  of  any 
other  State,  teiTitory  or  country  (or  shall 
be   secured   by   mortgage  or  ti-ust   deed   on 


50 


ILLI.VOIS. 


Judgments;  decrees;  execution  —  R.  S.,  ch.  Ixxvii,  §§  52-55. 


lands  in  this  State),  such  contract  may  bear 
any  rate  of  iuterest  allowed  by  law,  to  be 
taken  or  contracted  for  by  persons  or  cor- 
porations in  this  State  or  which  is  or  which 
may  be  allowed  by  law  on  any  contract  for 
money  duo  or  owinf,'  in  this  State:  Provided 
however,  That  such  rate  of  interest  shall  not 
exceed  seven  per  cent,  per  annum.  And 
if  any  such  ixn*son  or  corporation  shall  con- 
tract to  receive  a  greater  rate  of  interest  or 
discount  than  seven  per  cent.,  upon  any  such 
contract,  such  person  or  corporation  shall 
forfeit  the  whole  of  said  interest  so  con- 
tracted to  be  received,  and  shall  be  entitled 
only  to  rec-over  the  principal  sum  due  to 
such  person  or  corporation. 

See  ch.  32,   §  5,   subd.  4. 

§  11.  No  coi'poration  shall  hereafter  in- 
terpose the  defense  of  usury  in  any  action. 

See  ch.  32,  §  5,   subd.  4. 

[Above  section  construed.  Bank  v.  Ry.  Co.,  145 
111.  208;  s.   c,  34  N.   E.   Rep.   135. 

Statutory  provision  that  a  corporation  shall  not 
Interpose  the  defense  of  usury  will  not  prevent  a 
corporation  or  its  stockholders  from  obtaining  re- 
lief against  a  usurious  contract,  when  one  or  more 
of  Its  managers  voting  to  make  the  contract  had 
a  personal  interest  therein.  Higgins  v.  Lansingh, 
151  111.  301;  s.  c,  40  N.  E.  Rep.  362. 

Above  section  applies  to  insurance  companies. 
Ins.  Co.  V.  Hadden,  28  111.  260.  Agreement  by  cor- 
poration to  pay  eighteen  per  cent.,  binding  in 
absence  of  fraud.  Hurd  v.  Marple,  2  111.  App. 
402.  Corporation  held  to  be  prohibited  to  plead 
usury.     R.  R.  Co.   v.   Mills,  52  111.  174.] 

CHAPTER  LXXVII. 

Judgments,  Decrees,  and  Executions. 

Sec.  52.  Stock  may  be  sold  on  execution. 

53.  Mode  of  levy. 

54.  Mode  of  sale. 

55.  Certificate   of   officer;    refusal,    etc.;   pen- 

alty. 
50.  Further  proceedings. 
57.  Rights  of  purchasers. 

AN  ACT  in  regard  to  judgments  and  decrees 
and  the  manner  of  enforcing  the  same  by 
execution.  [As  amended  by  act  approved 
June  22,  1883;  in  force  July  1,  1883.  L. 
1883,  p.  110;  Legal  News  Ed.,  p.  92.] 

§  52.  The  share  or  interest  of  a  stockholder 
in  any  con>ora.tion  may  be  taken  on  execu- 
tion, and  sold  as  hereafter  provided;  but  in 
all  cases,  Avhere  such  share  or  interest  has 
been  sold  or  pledged  in  good  faith  for  a  valu- 
able consideration,  and  the  certificate  thereof 
has  been  delivered  upon  sucli  sale  or  pledge 
such  shares  or  interest  shall  not  be  liable  to 
be  taken  on  execution  against  the  vendor, 
or  pledgor,  except  for  the  excess  of  the  value 
thereof  orer  and  above  the  sum  for  which 
the  same  may  liave  been  pledged  and  the 
certificate  thei-eof  delivered. 

See  ch.  .32,  §  5.  subd.  1,  and  cross-references. 
Transfer  of  stock,  liability  of  stockholder.  Ch. 
32,   §  8. 


[Statute  must  be  strictly  followed.  Goss,  etc., 
Co.  V.  People,  4  111.  App.  510. 

Shares  of  stock  arc  not  subject  to  attachment. 
Rhea  v.  Powell,  24  111.  App.  77.  But  see  contra, 
Bank  V.  Bvrani,  131  111.  97;  s.  c,  22  N.  E.  Rep. 
S42:  Tlionipson  v.  Wells,  57  111.  App.  436. 

Shartvs  of  stock  which  arc  liable  to  be  taken  on 
(>xccuLion  arc  subject  also  to  be  taken  on  attach- 
ment.    Thompson    v.    Wells,   57    111.    App.    430. 

Shares  of  stock  in  a  corporation  can  be  attached 
or  sold  on  execution  only  in  the  State  creating 
such  corporation.  Reid  v.  Stephens,  62  111.  App. 
334.] 


§  53.  If  tlie  property  has  not  been  attached 
in  the  same  suit,  the  officer  shall  leave  an 
atteste<l  copy  of  the  execution  M'ith  the 
clerk,  treasurer  or  casliier  of  the  company, 
if  thei'e  is  any  such  officer,  otherwise  with 
any  officer  or  person  having  the  ■custody  ^of> 
the  books  and  papers  of  the  coii)oration ;  and 
tlie  property  shall  be  considered  as  seized  on 
execution  wlieii  tlie  copy  is  so  left,  and  shall 
be  sold  in  like  manner  as  goods  and  chattels. 

[Shares  of  stock  in  a  corporation  are  subject 
to  attachment.  If  such  shares  have  been  attached 
in  the  suit  in  which  the  execution  issued,  tlie 
purchaser  at  sheriff's  sale  will  be  entitled  to  all 
dividends  accruing  after  attachment.  Bank  v. 
Byram,  131  111.  97;  s.  c.  22  N.  E.  Rep.  842. 

The  shares  may  be  levied  on  by  leaving  an 
attested  copy  of  the  writ  with  the  officer  of  the 
corporation  in  charge  of  the  records.  Id.  The 
attested  copy  of  the  execution  is  not  required  to 
be  left  with  such  officer  if  the  stock  has  been 
already  attached  in  the  suit.     Id. 

Shares  of  stock,  owned  by  a  defendant  in  at- 
tachment, for  which  a  certificate  has  not  been 
issued,  may  be  reached,  by  garnishment,  in  the 
hand  of  the  corporation.  Storage  B.  Co.  v.  Long, 
41  111.  App.  335. 

Proceedings  by  garnishment  will  not  lie  on  the 
part  of  creditors  of  a  corporation  to  recover  the 
unpaid  balance  on  shares  of  stock,  as  payment 
in  full  was  less  than  the  face  value  thereof.  Sang 
C.  M.   Co.  V.   Richardson,  33  111.  App.  280.] 


§  54.  If  the  share  is  already  attached  in 
tlie  same  suit,  tlie  officer  shall  proceed  in 
seizing  and  selling  it  on  the  execution,  in 
the  same  ma.iner  as  in  selling  goods  and 
chattels. 

§  55.  The  officer  of  tlie  company  wlio  keeps 
a  record  or  account  of  the  sliares  or  interest 
of  the  stockliolders  therein,  sliall,  upon  the 
exhiliiting  to  him  of  the  execution,  be  bound 
to  give  a  certificate  of  tlie  number  of  shares 
or  aiuount  of  the  interest  held  by  tlie  judg- 
ment debtor.  If  he  refuses  to  do  so,  or  if 
he  willfully  gives  a  false  certificate  thereof, 
he  shall  be  liable  for  double  the  amount  of 
all  damages  occasioned  by  such  refusal  or 
false  certificate,  to  be  recovered  in  any 
proper  action,  unless  the  judgment  is  satis- 
fied by  the  original  defendant. 

[Before  officer  of  corporation  can  be  legally 
compelled  to  furnish  officer  such  certificate,  he 
may  require  not  only  exhibition  to  him  of  execu- 
tion, but  also  deliverv  to  him  of  attested  copy 
thereof.     People  v.    Mfg.    Co.,   99  111.   355. 

It  is  the  object  of  section  .55,  chapter  77.  Re- 
vised Statutes,  to  require  official  having  charge  of 
records  of  corporation,  against  which  process  is 
issued,  to  disclose  shares  or  interest  of  stock- 
liolders in  corporation  in  order  to  enable  the 
sheriff  to  individually  levy   his  writ,   such   shares 


ILLIXOTS. 


51 


Service  of  summons;  practice  —  R.  S.,  ch.  Ixxix,  §  23;  ch.  ex,  §  5. 


and    Interests    being    subject    to    attachment    and 
execution.     Thompson  v.  Wells,  57  111.  43G.] 

§  56.  An  attested  copy  of  the  execution  and 
of  tbe  return  thereon  shall,  Avithin  fifteen 
days  after  the  sale,  be  left  with  the  officer 
of  the  company  Avhoso  duty  it  is  to  record 
transfers  of  shai-ies;  and  the  purchaser  shall 
thereupon  be  entitled  to  a  certificate  or  cer- 
tificates of  the  shares  bought  by  him  upon 
payinfr  the  fees  therefor  and  for  i-ecording 
the  transfer. 

See  ch.  32,   §  3,  and  cross-references. 

[Title  to  stock  can  onlj'  pass,  as  against  judg- 
ment creditor,  by  transfer  on  books.  §§  52-56, 
cited.  Bank  v.  Gridley,  91  111.  457.  Between 
vendor  and  vendee,  no  entry  on  books  is  neces- 
sary. Id.  Such  shares  not  mere  securities  for 
money.     Campbell  v.   Morgan,  4  111.   App.   100.] 

§  ^>7.  If  the  shares  or  interest  of  the  Judg- 
ment debtor  had  been  attached  in  the  suit 
in  which  execution  issued,  the  purchaser 
shall  be  entitled  to  all  the  dividends  which 
have  accrued  after  the  attachment. 


CHAPTER  LXXIX. 

Justices  and   Constables. 
Summons. 
Sec.  23.  Service  on  corporations. 

AN  ACT  to  revise  the  laAV  in  relation  to  jus- 
tices of  the  peace  and  constables.  [Ap- 
proved June  26,  1895;  in  force  July  1, 
18S)5,  p.  182.] 

§  23.  An  incorporated  company  may  be 
served  by  leaving-  a  copy  of  the  summons 
with  its  president,  secretaiy,  superintendent, 
general  agent,  cashier  or  principal  clerk,  if 
either  can  be  found  in  the  county  in  which 
the  action  is  brought;  if  neither  shall  be 
found  in  the  countj-,  then  by  leaving  a  copy 
of  the  summons  Avith  any  director,  clerk,  en- 
gineer, conductor,  station  agent,  or  any  agent 
of  such  company  found  in  the  county. 

See  ch.  32,  §  5,  subd.  1,  and  cross-references. 
Corporation  acting  by  attorney.  Ch.  32,  §  66. 
Service  on  corporation.     Ch.  110,  §§  5-11. 

[General  solicitor  of  a  corporation  is  not  a 
person  named  in  the  statute  providing  for  ser- 
vice of  process  upon  corporations,  and  an  officer 
making  service  upon  him  must  take  the  responsi- 
bility of  saying  whether  or  not  he  is  an  agent 
of  the  corporation.  R.  R.  Co.  v.  Man.  Co.,  55 
111.  App.  231. 

Service  on  any  agent  of  company  sufficient  In 
absence  of  officers  designated.  R.  R.  Co.  v.  Tel. 
Co.,  22  III.  3,33. 

Return  that  summons  was  served  by  reading  to 
company,  fails  to  show  statutory  sorvico  and  con- 
fers no  jurisdiction.  Mining  Co.  v.  Schirmer,  64 
111.   100. 

Copy  of  summons  must  be  left  either  with  presi- 
dent, secretary,  etc.,  or  with  certain  other  officers 
named.  The  former  class  is  primary,  and  service 
on  latter  is  good  only  when  failure  to  serve  on 
the  former  is  accounted  for  satisfactorily.  R.  R. 
Co.  V.  Dawson,  3  111.  App.  118.] 


CHAPTER   ex. 

Practice. 

Sec.     5.   Service   on   corporations. 

7a.  Receiver  of  corporations,   how   served. 
11.  Process  in  mandamus  and  quo  warranto. 

AN  ACT  in  regard  to  practice  in  courts  of 
record.     [Approved  February  22,  1872.] 

§  5.  An  inconx)rated  company  may  be 
served  Avitli  process  by  leaving  a  copy 
thereof  with  its  president  if  he  can  be  found 
in  tlio  county  in  Avhicli  the  suit  is  brought, 
if  he  shall  not  be  found  in  the  county,  then 
by  leaA'ing  a  copy  of  the  process  with  any 
clerk,  secretary,  superintendent,  general 
agent,  cashiei',  principal,  director,  engineer, 
conductor,  station  agent  or  any  agent  of 
said  company  found  in  the  county,  and  in 
case  the  proper  officer  shall  make  return  upon 
such  process  tliat  he  cannot  in  liis  county 
find  any  clerk,  secretary,  superintendent, 
general  agent,  cashier,  iirincipal.  director, 
engineer,  conductor,  station  agent  or  any 
other  agent  of  said  company,  then  such  com- 
pany may  be  notifi*Hl  liy  publication  and 
mail  in  like  manner  and  Avith  like  effect,  as 
is  provided  in  sections  twelve  (12)  and  tliir- 
teen  (13)  of  an  act  entitled  "  An  act  to  regu- 
late the  practice  in  courts  of  chancery."  ap- 
proved March  l."».  1872.  (As  amended  by 
act  approved  Mav  20,  1877;  in  force  July 
1,  1877.     Laws  of  1877,  p.  147.) 

See  c)i.  32,  §  5,  subd.  1,  and  cross-references. 
Service  on  corporation.     Ch.  79,   §  23. 

[Legislature  has  power  to  regulate  the  practice 
concerning  service  of  summons  on  corporations. 
Ace.  Assn.  V.  Riel,  38  111.  App.  425. 

Jurisdiction  of,  is  not  had  by  service  of  sum- 
mons on  a  director  who  is  a  plaintitf.  St.  L., 
etc.,  Co.  V.  S.  C.  &  M.  Co.,  Ill  111.  38;  Mining 
Co.  V.  Edwards,  103  id.  472. 

Return  on  summons  served,  etc.,  "  E.  N.  K., 
director  and  treasurer  of  said  company,  the  presi- 
dent of  said  company  not  found  in  my  county," 
dated,  is  good.  Chicago,  etc.,  Co.  v.  Cong.,  etc., 
Co.,   Ill  111.   312. 

Return  of  process,  unable  to  find  president  in 
county;  due  organization  and  representation  by 
president  and  that  he  was  a  resident  at  the  time 
of  issue  and  service  does  not  put  the  return  in 
issue.     Id. 

Defendant  corporation  may  plead  in  abatement 
to  service  of  process,  by  contradicting  sherift's 
return.      Id. 

Service  of  summons  on  a  non-resident  corpora- 
tion cannot  be  had  by  leaving  a  copy  thereof 
with  a  director  found  in  the  county  wherein  suit 
is  brought,  if  such  director  is  there  on  his  private 
affairs  and  not  on  corporate  business.  Silsbee  v. 
Hotel  Co.,  .30  111.   App.  206. 

A  mere  casual  offer  to  receive  a  proposition  re- 
lating to  the  business  of  a  corporation  is  not  the 
transaction  of  business  by  an  agent,  authorizing 
the  conclusion  that  the  company  is  transacting 
its  business  in  this  State.  R.  R.  Co.  v.  Hook, 
40  111.  App.  55G. 

To  be  found  within  the  State  a  foreign  corpora- 
tion must  have  sent  its  agents  on  whom  service 
is  made,  to  the  State  to  conduct  its  business 
therein,  either  continuously  or  for  a  time,  so  as 
to  complete  a  transaction  or  enterprise,  or,  at 
least,  charged  with  the  duty  of  contracting  or 
negotiating  within  the  State  for  the  company. 
Id. 


52 


ILLIXOIS. 

Practice;  quo  wnrrauto  — R.  S.,  ch.  ex,  §§  7a,  11;  ch.  cxii,  §  1. 


Service  of  a  writ  upon  a  corporation  by  de- 
liverliiK  a  copv  to  vice-president  is  bad.  Build- 
lug  Assn.  V.   Cook,  46  111.  App.  271t. 

tservioe  on  corporations  l).v  publication.  Coal 
Co.   V.   Hughes.  45  III.   App.  500. 

\l>ove  section  applies  to  foreign  corporations. 
Hannibal,  etc.,  Co.  v.  Crane,  lOli  111.  249;  Penn. 
Co  V.  Sloan.  1  id.  3CA.  But  not  to  ft)reign  cor- 
porations liaving  no  office  or  agent  here,  whose 
«.tlice  is  only  teniporiiriiy  in  the  State.  R.  R. 
Co.  V.  McDermid.  01  111.  170.  AVhere  foreign  cor- 
poration has  no  office  bore,  service  on  its  agents, 
of  limited  powers,  insufficient.  Union  Pac.  Co. 
V.  Miller.  87  111.  45. 

Service  on  general  agent  in  this  State  of  cor- 
poration would  seem  to  be  sufficient.  Clarljson 
V.  Dispatch.  6  111.  App.  284.  Foreign  insurance 
company  may  bo  served  with  process  under  above 
section.'    Johnson  v.  Ins.   Co.,   11  Biss.  452. 

Foreign  corporation  doing  business  in  Illinois 
may  be  sued  here  in  Federal  court,  though  no 
spe'cillc  forn"  of  service  is  provided  by  statute. 
Packing  Co.  v.  Hunter,  8  Biss.  429. 

Under  above  section,  service  on  corporation 
must  be  by  delivering  a  copy  to  proper  person, 
not   by   reading.     R.   R.   Co.   v.   Joiner,  72  111.  520. 

Defective  service  on  corporation  is  onred  by 
appearance.  Bills  t.  Stanton,  69  111.  51.  Even 
tliongb  defendnut  is  a  foreign  corporation.  Clark- 
son   V.   Dispatch,  G  111.   App.   284. 

Return  of  service  on  officer  other  than  president 
must  state  that  latter  cannot  be  found.  Mill  Co. 
V.  Bank,  80  111.  587. 

Return  that  president  was  not  found  in  city 
of  A.  insufficient;  should  be,  not  fouud  in  county. 
Ins.   Co.  V.  Abcns,  3  111.  App.  488. 

Service  on  A.  B.  "  as  president,"  or  "  as  secre- 
tary." is  insufficient.  It  must  state  he  is  presi- 
dent or  secretary.  Tel.  Co.  v.  Kennedy,  24  111. 
319:  Mill  Co.  v.   Bank,  86  id.  587. 

An  Illinois  insurance  company,  by  taking  a  risk 
In  AVisconsin,  voluntarily  submits  itself  to  the 
laws  of  that  State  as  to  service  of  process  upon 
foreign  corporations.  Ins.  Co.  v.  Thompson,  155 
111.   204;   s.   c,  40  N.   E.   Rep.   488. 

Judgment  of  another  State  against  a  domestic 
corporation,  upon  service  made  upon  one  declared 
by  statute  of  such  State  to  be  an  agent  of  such 
corporation  will  be  enforced  in  Illinois,  where 
such  corporation  has  voluntarily  transacted  busi- 
ness in  such  other  State  in  such  manner  as  to 
bring  itself  within  its  jurisdiction.     Id.] 

§  7a.  That  the  receiver  or  receivers  of  any 
incoi-porated  company  may  be  served  with 
process  by  leaving  a  cojjy  of  such  process 
"witli  such  receiver  or  receivers,  if  he  or  they 
can  be  found  in  the  county  in  which  the  suit 
is  brought;  if  he  or  they  shall  not  be  found 
in  the  county,  then  by  leaving  a  copy  of 
such  process  with  any  clerk,  secretai-y, 
superintendent,  general  agent,  engineer,  con- 
ductor, station  agent,  or  any  agent  in  the 
employ  of  such  receiver  or  receivers  who 
.  may  be  fotnid  in  the  county  in  wliich  such 
suit  is  brought.  (As  nniendwl  by  act  ap- 
proved and  in  force  Mav  3,  1889.'  L.  1889, 
p.  98.) 

See  oh.  32,  S  25. 


§  11.  It  shall  not  be  nec;?ssary  hereafter, 
In  any  action  of  mandamus  or  quo  warranto, 
to  set  out  the  cause  of  the  action  in  tlie 
writ,  but  it  shall  be  sufficient  to  summon 
the  defendant  in  a  summons  in  the  usual 
form,  comm.anding  tlie  defendant  to  appear 
and  answer  the  plaintiff  in  an  action  of 
mandamus  or  quo  warranto,  as  tlie  case  may 
be,    and   the   issues   shall   be    made    up    by 


answering,  pleading  or  demurring  to  the  pe- 
tition as  in  other  cases. 

Quo  warranto.     See  ch.  112. 

CHAPTER  CXII. 
Quo  Warranto. 

Sec.  1.  When    and    at    whose    Instance    writ    may 
issue. 

2.  Summons  —  when  returnable. 

3.  Service  of  summons  —  by  copy  of  Informa- 

tion. 

4.  Defendant   served     must    plead,    etc.—  de- 

fault. 

5.  Time  to  plead,  etc. 

6.  Judgment. 

7.  Appeal  —  error. 

AN  ACT  to  revise  aie  law  in  relation  to  quo 
waiTanto.     [Approved  March  23,   1874.] 

Section  1.  Be  it  enacted  by  the  people  of 
the  State  of  Illinois,  represented  in  general 
assembly.  That  in  case  any  person  shall 
usurp,  intrude  into,  or  unlawfully  hold  or 
execute  any  office  or  franchise,  or  anj'  office 
in  any  corporation  created  by  authority  of 
this  State,  (or  any  person  shall  hold  or  claim 
to  hold  or  exercise  any  privilege,  exemption 
or  license,  which  has  been  improperly  or 
without  warrant  of  law  issued  or  granted 
by  any  officer,  board,  commissioner,  court, 
or  otlier  person  or  persons  authorized  or  em- 
powered by  law  to  grant  or  issue  such  privi- 
lege, exemption  or  license,)  or  any  public 
officer  shall  have  done,  or  suffered  any  act 
which,  by  the  provisions  of  law,  woriis  a 
forfeiture  of  his  office,  or  any  association  or 
number  of  persons  shall  act  within  this 
State  as  a  corporation  without  being  legally 
incorporated,  or  any  coiiwration  does  or 
omits  any  act  which  amounts  to  a  suiTender 
or  forfeiture  of  its  rights  and  privileges  as 
a  corporation,  or  exercises  powers  not  con- 
fen-ed  by  law,  or  if  any  railroad  company 
doing  business  in  this  State,  shall  charge  an 
extortionate  rate  for  the  transportation  of 
any  freight  or  passenger,  or  shall  make  any 
unjust  discrimination  in  tlie  rate  of  freight  or 
passenger  tariff  over  or  upon  its  railroad, 
the  attorney-general  or  State's  attorney  of 
the  in'oper  county,  either  of  his  own  accord 
or  at  the  instance  of  any  individual  relalor, 
may  present  a  petition  to  any  court  of  rec- 
ord of  competent  jurisdiction,  or  any  judge 
thereof  in  vacation,  for  leave  to  file  an  in- 
formation in  the  nature  of  a  quo  Avarranto 
in  the  name  of  the  people  of  the  State  of 
Illinois,  and  if  such  court  or  judge  shall  be 
satisfied  that  there  is  probable  ground  for  the 
proceeding,  the  court  or  judge  may  grant  the 
petition,  and  order  the  information  to  be  filed 
and  process  to  issue.  WhcMi  it  appears  to 
tlie  court  or  judge  that  the  several  rights 
of  divers  parties  to  the  same  office  or  fran- 
chise, privilege,  exemption  or  license,  may 
projiorly  be  determined  on  one  (1)  informa- 
tion, tlie  court  or  judge  may  give  leave  to 
join  all  of  such  persons  in  the  same  infor- 
mation, in  order  to  tiy  their  respective  rights 


ILLIXOIS. 


53 


Quo  warranto  —  R.  S.,  ch.  cxii,  §§  1-7. 


to  such   office,   franchise,   privilege,   exemp- 
tion or  license. 

Forfeiture  of  charter  for  not  organizing.  Const., 
art.  XI,  §  2.  Dissolution  of  corporation.  Ch.  32, 
S  149. 

[Whore  corporation  does  no  private  injury,  and 
cniripits  no  offense  against  the  public  alone,  the 
State  may  either  punish  or  waive  the  right  to 
do  so.     People  v.   R.  R.   Co.,  54  111.   App.  349. 

Franchise  may  be  forfeited  and  corporation  dis- 
solved through"  non-user  or  abuse  of  the  fran- 
chise. E.  C.  Inst.  V.  People,  112  111.  363;  s.  c,  32 
N.  E.   licp.  494. 

Individuals  acting  as  a  corporation,  limiting 
their  liability  and  assuming  perpetuity,  will  be 
liable  to  judgment  of  ouster.  Greene  v.  People, 
150  111.  513;  .s.  c.  37  N.  E.  Rep.  842. 

An  injunction  lies  In  a  suit  on  behalf  of  the 
people  br  the  attorney-general  to  restrain  a  cor- 
poration "  from  doing  illegal  acts  and  exceeding 
its  powers  in  an  unlawful  direction.  Chicago  v. 
People,  60  111.  App.  488. 

Corporation  exceeding  its  powers;  election  of 
remedies  by  the  attorney-general.     Id. 

Failure  of  a  banking  corporation  to  transact 
business  for  fifteen  years  held  ground  for  a  judg- 
ment of  oustei-.  Henderson  Loan  &  Real  Estate 
Assn.   V.   People,  45  N.   E.   Rep.    141. 

Where  by  quo  warranto  a  purchaser  of  the 
franchises  of  another  company  is  absolutely  barred 
from  exercising  the  privileges  dependent  thereon, 
it  could  not  transfer  any  right  acquired  by  such 
company.  Wilmington  W.  P.  Co.  v.  Evans,  46 
N.  E.  Rep.  1083.] 


§  2.  On  the  filing  of  such  information,  the 
clerk  of  the  court  shall  issue  a  summons  in 
lilie  form  as  other  summons,  commanding 
the  defendant  to  appeal*  at  the  return  term 
thereof,  to  answer  the  relator  in  an  informa- 
tion in  the  nature  of  a  quo  warranto.  If  the 
information  is  filed  in  vacation,  the  sum- 
mons shall  be  made  returnable  on  the  first 
day  of  the  next  succeeding  term;  if  in  term 
time,  it  may  be  made  returnable  on  any  day 
of  the  same  term,  not  less  than  five  days 
after  the  date  of  the  writ,  as  shall  be  di- 
rected by  the  court. 

See  ch.  32,  §  5,  subd.  1,  and  cross-references. 

§  3.  The  summons  may  be  ser^-ed  in  the 
Fame  manner  as  other  summons  in  suits  at 
law,  but  if  any  defendant  resides  or  is  out  of 
the  St. ate,  he  may  be  served  with  a  copy  of 
the  information  in  the  same  manner  and 
witli  like  effect,  and  the  service  may  be 
proved  in  the  same  way  as  provided  in  the 
case  of  bills  in  chancei-y. 

Service  of  summons.     Ch.  79,  §  33. 

§  4.  Every  defendant  who  shall  be  sum- 
moned or  served  with  a  copy  of  the  informa- 
tion as  required  in  this  act,  shall  be  held 
to  demtir  or  plead  to  the  information  on  the 
return  day  of  the  summons,  or  when  served 
with  a  copy  of  tlie  information  at  the  expira- 
tion of  tlie  time  required  to  be  given,  or 
within  such  further  time  as  may  be  granted 
by  the  court,  or  in  default  thereof,  judg- 
ment  mav  be  taken  nil  dicit. 


§  5.  The  court  in  which  any  information, 
as  aforesaid,  is  filed,  may  allow  the  relator 
or  any  defendant  sucli  convenient  time  to 
plead,  reply  or  demur,  as  it  shall  deem  just 
and  reasonable. 

[Pleadings  in  quo  warranto  should  conform,  as 
far  as  possible,  to  general  principles  and  rules 
which  govern  civil  actions.  Distilling  Co.  v.  Peo- 
ple, 156  111.  448;  s.  c,  41  N.  E.  Rep.  188.] 

§  6.  In  case  any  person  or  corporation 
against  whom  any  such  information  is  filed 
is  adjudged  guiltj',  as  charged  in  the  infor- 
mation, tlie  court  may  give  judgment  of 
ouster  against  such  person  or  c-orporatioc 
from  the  office  or  francliise,  and  fine  such 
person  or  corporation  for  usurping,  intrud- 
ing into,  or  unlaAvfully  holding  and  execut- 
ing sucli  office  or  franchise,  and  also  give 
judgment  in  favor  of  the  relator  for  the  costs 
of  the  prosecution:  Provided,  That  instead 
of  judgment  of  ouster  from  a  franchise  for 
an  abuse  thereof,  unless  the  court  is  of  the 
opinion  that  the  public  good  demands  such 
judgment,  the  court  may  fine  tlie  person  or 
corporation  found  guilty  in  any  sum  not 
exceeding  $2.5,000  for  each  offense.  When- 
ever judgment  is  given  for  any  defendrint  in 
such  information,  the  person  or  coi-poration 
to  whom  judgment  is  given  shall  recover 
costs  against  the  relator. 

§  7.  Appeals  and  writs  of  error  may  be 
taken  and  prosecuted  in  the  same  mnnaer 
and  upon  the  same  terms,  and  with  like  effect 
as  in  other  civil  cases. 

[Review  of  information  on  appeal.  Distilling 
Co.  V.  People,  156  111.  448;  s.  c,  41  N.  E.  Rep.  188.] 


CHAPTER  CXX. 

Revenue. 

Sec.  1.  What  property  assessed   and  taxed. 
3.  Rules  for  valuing  personal   property. 
6.  Who  shall  list  and  what  listed. 

Where    Listed    and    Assessed    and    What 
•   Held  to  be  Personal  Property  —  Manner 
of  Listing. 

Sec.     7.  Where  personal   property  listed. 

13.  Personal    property    of    banks    and    others 

not  specially  provided  for. 

14.  Gas  and  coke  companies. 

15.  Personal  property  of  street  railroads,  toll 

roads,    etc. 

16.  Of  stage  companies. 

17.  Of  express  companies,  etc. 
20.  Interest  on   bonds. 

26.  Assessors   may  examine  under  oath  —  re- 
fusal   to    answer  —  perjury. 


Rules  for  Listing  Credit. 

Sec.  27.  What   debts  deducted   from   credits. 
28.  What  debts  not  deducted. 
30.  Listing   and    valuing    property    of   banks, 
etc. 


54 


ILLINOIS. 


Assessment  and  taxation  —  R.  S.,  ch.  cxx,  §§  1-7. 


Listing  Capital  Stock  of  Corporations  and 
Franchises  of  Persons. 

Sec.  32.  Rnles  for  listing  cnpital  stock  of  corpora- 
tions —  sworn  statement. 

33.  Schedules  returned,   etc. 

34.  Frnnchlse  to  be  listed  and  valued. 

AN  ACT  for  the  assessment  of  property  auJ 
for  the  levy  and  collection  of  taxes.  [Ap- 
l.i-oved  March  30,  1872;  iu  force  July  1, 
1872.] 

Section  1.  Be  it  enacted  by  the  people  of 
th<-  State  of  Illinois,  represented  in  jreueral 
assembly,  That  tlie  property  named  m  thi.s 
section  "shall  be  assesse<l  and  taxed,  except 
so  much  thereof  as  may  be,  iu  this  act, 
exempted: 

Second.  All  moneys,  credits,  bonds  or 
stoclvs  and  other  investments,  the  shares  of 
stocli  of  incoiiiorated  companies  and  associa- 
tions, and  all  other  personal  property  includ- 
ing property  in  transitu  to  or  from  this  State, 
used,  held,  o"mied  or  controlled  by  persons, 
residing  in  this  State. 

Third.  The  shai-es  of  capital  stocli;  of  banks 
and  banking  companies  doing  business  in  this 
State. 

Fourth.  The  capital  stock  of  companies 
and  associations  incorix)rated  under  the  laws 
of  this  State. 

See  Const.,  art.  IX,  §  1.  Interest  on  bonds. 
§  20,  post 

[The  constitutional  rule  of  uniformity  of  taxa- 
tion applies  to  the  class,  not  to  all  corporations 
alike.  Coal  U.  C.  Co.  v.  Finlen,  124  111.  668;  s.  c, 
17  N.  E.  liep.  11;  Gas  Co.  v.  Higby,  134  111.  562; 
s.  c,  25  N.  E.  Rep.  560;  R.  R.  Co.  v.  Donoughue, 
127  111.  29;  s.  c,  18  X.  E.   Rep.  827. 

Legislature  is  not  prohibited  from  providing  dif- 
ferent modes  for  determining  the  value  of  capital 
stock,  including  the  franchise  of  railway,  mining 
and  maniifacturing  companies.  Coal  R.  C.  Co.  v. 
Finlen,   supra. 

Capital  stock  Is  ordinarily  to  be  listed  at  place 
of  principal  office  of  corporation,  if  it  has  such 
office  in  the  State.  G.  T.  &  C.  Co.  v.  People,  138 
111.  336;  s.  c,  27  .S.   E.  Rep.  924.1 

§  3.  Personal  property  shall  be  valued  as 
follows : 


Fourth.  The  capital  stock  of  all  com- 
panies and  associations  now  or  liereafter 
created  under  tlie  laws  of  this  State  except 
those  required  to  be  assessed  by  the  local  as- 
sessors, a.s  lieroinafter  provided  shall  be  so 
valued  by  tlie  State  board  of  equalization  as 
to  ascertain  and  determine  respectively,  the 
fair  cash  vahie  of  such  capital  stock,  includ- 
ing the  francliise,  over  and  above  the  assessed 
value  of  tlie  tangible  property  of  such  com- 
pany or  ar,sociation;  such  board  shall  adopt 
such  rules  and  principles  for  ascertaining 
the  fair  ca^Jh  value  of  such  capital  stock, 
as  to  it  may  seem  equitable  and  just,  and 
such  rules  and  princii)les  when  so  adopted. 
If  not  inconsistent  with  this  act,  shall  be  as 
binding  and  of  the  same  efftn^t  as  if  con- 
tained in  this  act,  subject  however,  to  such 


change,  alteration  or  amendment  as  may  be 
found  from  time  to  time,  to  be  necessary 
by  Siiid  lx)ard:  Provided,  That  in  all  cases 
where  the  tangilile  property  or  capital  stock 
of  any  company  or  association  is  assessed 
under  this  act,  the  shares  of  capital  stock 
of  such  company  or  as.sociation  shall  not 
be  assessed  or  taxed  in  this  State.  This 
clause  shall  not  apply  to  the  capital  stock, 
or  sliares  of  capital  stock  of  banks  organized 
under  the  general  banking  laws  of  this  State 
or  under  any  special  charter  heretofore 
grantetl  by  the  legislature  of  this  State: 
I^ovided,  further.  That  companies  and  as- 
sociations organized  for  purely  manufactur- 
ing purposes  or  for  the  mining  and  sale  of 
coal,  or  printing  or  for  publishing  of  news- 
papers or  for  the  improving  and  breeding  of 
stock,  shall  be  assessed  by  the  local  asses- 
sors in  like  maimer  as  the  propeitj^  of  in- 
dividuals is  required  to  be  assessed.  (As 
amended  by  act  approved  and  in  force  June 
19,   1893.) 

Shares  of  stock  deemed  personal  property.  Ch. 
32,  §  7.  Personal  property  of  banks.  §  13,  post. 
Same  of  certain  companies.  §§  14-17,  post.  Fran- 
chises to  be  listed  as  personal  property.  §  34, 
post. 

[That  the  capital  stock  of  some  corporations  Is 
not  assessed  by  State  board  of  equalization  is 
no  ground  of  relief  to  companies  -whose  stock 
has  been  so  assessed.  Coal  R.  C.  Co.  v.  Finlen, 
124  III.  668;  s.   c,   17  N.   E.   Rep.   11. 

Provision  of  revenue  law  for  the  assessment  of 
capital  stock  of  some  corporations  by  local  asses- 
sors and  of  others  by  State  board  of  equalization 
Is  not  unconstitutional.     Id. 

Equity  will  not  interfere  with  the  assessment 
of  capital  stock  by  the  State  board  of  equaliza- 
tion, iu  the  absence  of  fraud  in  making  it.     Id.] 

§  6.  Personal  propei-ty  shall  be  listed  in 
the  manner  following: 

First.  Every  person  of  full  age  and  sound 
mind,  being  a  resident  of  this  State,  shall 
list  all  his  moneys,  credits,  bonds  or  stocks, 
shares  of  stock  of  joint-stock  or  other  com- 
panies (when  the  capital  stock  of  such  com- 
pany is  not  assessed  in  this  State),  *  *  * 
and  other  personal  property. 

Seventh.  The  property  of  coiTDorations 
whose  assets  are  in  tlie  hands  of  x'eceiv- 
ers,  by  sucli  receivers. 

Eighth.  The  property  of  a  body  politic  or 
corporate,  by  the  president,  or  proper  agent 
or  olEcer  thereof. 

Rules  for  listing.  §§  27-30,  post.  Listing  capital 
stock  of  corporations.     §§  32-34,   post. 

§  7.  *  *  *  The  capital  stock  and  fran- 
chises of  corporations  and  persons,  except 
as  may  be  otherwise  provided,  shall  be  listed 
and  taxed  in  the  county,  town,  district,  city 
or  village  whore  the  principal  office  or  place 
of  business  of  such  corix>ration  or  person  is 
locate<l  in  this  State.  If  there  be  no  princi- 
pal office  or  place  of  business  in  this  State, 
then  at  the  place  in  this  State  where  any 


ILLIXOIS. 


55 


Listing  and  assessment  —  R.  S.,  ch.  cxx,  §§  13-17,  20,  26,  27. 


such   corporation  or  persoa  transacts  busi- 
ness. 

Seo   S   3,   ante. 

§  1.3.  The  personal  proi)erty  of  banlvs  or 
banlcers,  *  ♦  *  insurance  coiupanios, 
*  *  *  mining  conip:iuies,  ^uid  companit's 
not  specially  provideci  lor  in  this  act,  shall 
be  listed  and  assessed  in  tbe  county,  town, 
city,  village  or  district  where  their  business 
is  carried  on,  except  such  property  as  shall 
l)e  lialilo  to  assessment  elsewhere,  in  the 
hands  of  agents.  All  persons,  companies 
and  corpoi-ations  in  this  State  owning  ste;;m- 
boats,  sailing  vessels,  wliaif  lioats,  barges 
and  other  water  craft,  shall  be  required  to 
list  the  same  for  assessment  and  taxation  in 
the  county,  town,  city,  village  or  district 
in  which  the  same  may  belong  or  be  en- 
rolled, i-egistered  or  licensed,  or  kept  when 
not  enrolled,  registered  or  licensed. 

See  I  3,  ante.  Listing  property  of  banks.  §  30. 
post. 

[The  general  presumption  that  public  officers  do 
theh-  duty  does  not.  in  a  suit  against  a  corpora- 
tion for  taxes,  establish  the  essential  fact  that 
the  principal  office  of  the  corporation  is  in  town 
where  such  taxes  were  assessed  in  which  the 
clerk  extended  them.  Twin  Citv  Works  v.  Peo- 
ple.  156  III.  387;  s.  c,  40  X.   E.   Rep.  950. 

Assessment  of  corporations  —  what  is  a  manu- 
facturing corporation.  Distilling  Co.  v.  People, 
161  111.   101;  s.  c,  43  X.  E.  Eep.  779.] 


§  14.  The  personal  property  of  gas  and 
coke  companies,  except  the  pipes  laid  down, 
shall  be  listed  and  assessed  in  the  town, 
village,  district  or  city  Avliere  the  principal 
Arorks  are  located.  Gas  mains  and  pi]ies. 
laid  in  roads,  streets  or  alleys,  shall  l)e  held 
to  be  personal  property,  and  listed  and  jiS- 
sessed  as  such,  in  the  town,  district,  village 
or  city  where  the  same  ai-e  laid. 

See  §  3,  ante. 


^  15.  The  personal  property  of  street  rail- 
road, plankroad.  gravel  road,  turnpike  or 
bridge  companies,  shall  lie  listed  and  as- 
sessed in  the  county,  towu.  district,  village 
or  city  where  the  principal  place  of  business 
is  located.  The  track,  road  or  bridge  shall 
be  held  to  be  personal  property,  and  listed 
and  assessed  as  such,  in  tlie  town,  di.strict, 
village  or  city  where  the  same  is  located  or 
laid. 

See  §  3,  ante. 

§  16.  The  horses,  st.iges  and  other  per- 
sonal property  of  stage  companies  or  per- 
sons operating  stage  lines,  shall  l>e  listed 
and  assessed  in  the  county,  town,  city  or 
district  where  they  are  usually  kept. 

See  §  3,  ante. 


§  17.  The  personal  property  of  express  or 
traLsportation  companies  shall  be  listed  and 
assessed  in  the  county,  town,  district,  vil- 
lage or  city  where  the  same  is  usually  kept. 

See  I  3,  ante. 

§  20.  Persons,  for  tliemselves  or  others, 
holding  bonds  or  stocks  of  any  kind,  the 
principal  of  which  bonds  or  stocks  has 
been  or  may  hereafter  l)e  exempt  from  taxa- 
tion, shall  list  the  amount  of  accrued  in- 
terest on  such  bonds,  without  regard  to 
the  time  when  the  .same  is  to  be  paid. 

See  §  1,  ante. 

§  20.  That  whenever  the  assessor  shall  be 
of  opinion  that  the  person  listing  property 
for  himself  or  for  any  other  person,  com- 
pany or  corporation,  lias  not  made  a  full, 
fair  and  complete  schedule  of  such  prop- 
erty, he  may  examine  such  person  tuuler 
oath  in  regard  to  the  amount  of  tlie  prop- 
erty he  is  required  to  schedule,  and  for  that 
purpose  he  is  authorized  to  administer 
oaths;  and  if  such  peisoii  shall  refuse  to 
ausvser  under  oath  and  a  full  discovery 
lualie,  the  assessor  may  list  the  projierty  of 
such  person  or  his  principal,  according  to 
his  best  judgment  and  information.  If  the 
person  so  examined  shall  swear  falsely,  he 
shall  be  guilty  of  perjury,  and  punished 
accordingly, 

[Private  corporations  are  under  duty  to  furnish 
the  assessor  a  schedule  of  taxable  property,  under 
oath,  when  called  on  by  the  assessor  for  that 
purpose.  X.  Y.,  etc.,  Exch.  v.  Gleason,  121  111. 
508;    s.    c,    13   X.    E.    Rep.    204. 

The  statement  to  the  assessor  who  calls  for  a 
schedule  of  the  corporate  property  that  its  only 
personalty  is  its  office  furniture,  etc.,  does  not 
relieve  him  of  his  duty  —  if  no  schedule  is  pre- 
sented —  of  assessing  the  corporation  according  to 
his  best  judgment  and  information.     Id.] 

§  27.  In  making  up  the  amounts  of  cred- 
its which  any  person  is  required  to  list  for 
himself,  or  for  any  other  person,  com- 
pany or  coi^poration,  he  shall  be  entitled 
to  deduct  from  the  gross  amount  of 
credits  the  amount  of  all  bona  fide  debts 
owing  by  such  *  *  *  r-ompany  or  cor- 
poi'ution,  to  any  other  person,  company  or 
corporation,  for  a  consideration  received; 
but  no  acknowledgment  of  indebtedness  not 
founded  on  actual  consideration,  believed 
^vlien  received  to  have  bet  n  adequate,  and 
no  such  acknowledgment  made  for  the  ))ur- 
pose  of  being  so  deducted,  shall  be  consid- 
ered a  debt  Avithin  the  meaning  of  tliis  sec- 
tion; and  so  much  onl}^  of  any  liability, 
as  siu'etj'  for  others,  sliall  be  deducted  as 
the  person  making  out  the  statement  be- 
lieves he  is  legally  and  equitably  bound, 
and  will  be  compelled  to  pay  on  account  of 
the  inability  or  insolvency  of  the  principal 
debtor:  and  if  there  are  other  sureties  who 
are  able  to  contribute,  then  only  so  much  as 


56 


ILLINOIS. 

Listing  credit -R.  S.,  ch.  cxx,  §§  28,  30,  32,  33. 


the  surety  in  whose  behalf  the  statement  is 
niaOe  will  be  bound  to  contribute:  Provided, 
That  nothing  in  this  section  shall  be  so  con- 
strued as  to  apply  lo  any  banlc,  company  or 
corporation  exercising  baiilviug  powers  or 
privileges,  or  to  authorize  any  deductions 
allowed  bv  this  section  from  the  value  of 
any  other  "item  of  ta:xation  than  credits. 

See  S  1,  ante. 

§  28.  No  person,  company  or  corporation 
shall  be  entitJed  to  any  deduction  from  the 
amount  of  any  bonds,  stocks,  or  money 
loaned,  or  on  account  of  any  bond,  note  or 
obligation  of  any  kinu,  given  to  any  insur- 
ance company  on  account  ♦  *  *  of  any 
unpaid  subscription  to  any  religious,  literary, 
scientific  or  charitable  institution  or  society, 
nor  on  account  of  any  subscription  to  or  in- 
stallment payable  on  the  capital  stock  of 
any  company,  whether  incorporated  or  un- 
incorporated. 

§  30.  Every  bank  (other  than  a  national 
bank),  banker,  broker  or  stock  jobber,  sliall. 
at  the  time  fixed  by  this  act  for  listing  per 
sonal  property,  make  out  and  fui-nish  the 
assessor  a  sworn  statement,  showing: 

First.  The  amount  of  money  on  hand  or  in 
transit. 

Second.  The  amount  of  funds  in  the  hands 
of  other  banks,  bankers,  brokers,  or  others, 
subject  to  draft. 

Third.  The  amount  of  check,  or  other  cash 
Items,  the  amount  thereof  not  being  included 
in  either  of  the  preceding  items. 

Fourth.  The  amount  of  bills  receivable, 
discounted  or  purchased,  and  other  credits 
due  or  to  become  due,  including  accounts 
receivable,  and  interest  accrued  but  not  due, 
and  interest  due  and  unpaid. 

Fifth.  The  amount  of  bonds  and  stocks  ot 
every  kind,  and  shares  of  capital  stock  of 
Joint-stock  or  other  companies  or  corpora- 
tions, held  as  an  investment,  or  in  any  way 
representing  assets. 

Sixth.  All  other  property  appertaining  to 
said  business,  other  than  real  estate,  (which 
real  estate  shall  be  listed  and  a.ssesse<l  as 
other  real  estate  is  listed  and  assessed  under 
this  act.) 

Seventh.  The  amount  of  all  deposits  made 
with  them  by  other  parties. 

Eighth.  The  amount  of  all  accounts  pay- 
able, other  than  current  deposit  accounts. 

Ninth.  The  amount  of  bonds  or  other  se- 
curities exempt  by  law  from  taxation,  .=;peci- 
fying  tlie  amount  and  kind  of  each,  the  same 
being  included  in  the  preceding  fifth  item. 

The  aggregate  amount  of  the  first,  second 
and  third  it^ras  in  said  statement,  shall  be 
listed  as  moneys.  The  amount  of  the  sixth 
item  shall  be  listed  the  same  as  other  similar 
per.sonal  property  is  listed  under  this  act. 
The  aggregate  amount  of  the  seventh  and 
eighth  items  shall  be  deducted  from  the 
aggregate  amount  of  the  fourth  item  of  said 
statement,  and  the  amount  of  the  remainder. 


if  any,  shall  be  listed  as  credits.  The  ag- 
gregate amount  of  the  ninth  item  shall  be 
deducted  from  the  aggregate  amount  of  the 
fifth  item  of  such  statement,  and  tlie  re- 
mainder shall  be  listed  as  bonds  or  stocks. 

rersonal  property  of  banks,  not  provided  for. 
§  13,  ante. 

§  32.  Bridges,  express  ferry,  gravel,  road, 
gas,  insurance,  mining,  plankroad,  stage, 
steamboat,  street  railroad,  transportation, 
turnpike  and  all  other  companies  and  asso- 
ciations incorporated  under  tlie  laws  of  this 
State  other  than  banks  organized  under  any 
special  or  general  law  of  this  State  and  the 
corporations  required  to  be  assessed  by  the 
local  assessors  as  hereinl)efore  provided, 
shall  in  addition  to  the  other  property  re- 
quired by  tliis  act  to  be  listed,  make  out 
and  deliver  to  the  assessor  a  sworn  state- 
ment of  the  amount  of  its  capital  stoclc,  set- 
ting forth  particularly: 

First.  The  name  and  location  of  the  com- 
pany or  association. 

Second.  The  amount  of  capital  stock  au- 
thorized, and  the  number  of  shares  into 
which  such  capital  stoclc  is  divided. 

Third.  The  amount  of  capital  stock  paid 
up. 

Fourth.  The  market  value,  or  if  no  mar- 
ket value,  then  the  actual  value  of  the  shares 
of  stock. 

Fifth.  The  total  amount  of  all  indebted- 
ness, except  the  indebtedness  for  current 
expenses,  excluding  from  such  expenses  the 
amount  paid  for  the  purchase  or  improve- 
ment of  property. 

Sixth.  The  assessed  valuation  of  all  its 
tangible  property;  such  schedule  shall  be 
made  in  conformity  to  such  instructions  and 
forms  as  may  be  prescribed  by  the  auditor 
of  public  accounts.  In  all  cases  of  failure 
or  refusal  of  any  person,  officer,  company 
or  association  to  malce  sucli  return  or  state- 
ment, it  shall  be  the  duty  of  the  assessor  to 
make  such  return  or  statement  from  the 
best  information  which  he  can  obtain.  (As 
amended  by  act  approved  and  in  force  June 
19,  1893.) 

See  §  1,  ante.     §§  7-2C,  ante. 

[Assessment  of  capital  stock  of  a  corporation 
does  not  amount  to  double  taxation  because  of  a 
tax  already  paid  on  tangible  property  wliich  was 
represented  by  capital  stock,  where  it  does  not 
appear  that  the  stock  assessed  Is  not  In  excess 
of  the  value  of  the  tangible  propertv.  Distilling 
Co.  V.  People,  161  111.  101;  s.  c,  43  N.  E.  Rep.  779. 

The  taxation  of  the  capital  stock  of  a  corpora- 
tion is  properly  based  upon  the  amount  of  its 
debts,  where  the  capital  has  been  wholly  swal- 
lowed up  by  Indebtedness.  Bridge  Co.  v.  People, 
ir,l  111.  i;i:i;  s.  c.  43  X.  E.  Rep.  691.] 


§  .33.  Such  statements  shall  be  scheduled 
by  the  assessor;  and  such  schedule,  with  the 
statements  so  scheduled,  shall  be  returned 
by  the  assessor  to  the  county  clerk.     Said 


ILLINOIS. 


57 


Foreign  corporation  —  Act,  May  26,  1897. 


cleric  shall,  at  the  time  he  makes  his  report 
of  assessment,  forward  to  the  auditor  all 
such  schedules  and  statements  so  returned 
to  him.  The  auditor  shall,  annually,  on  tlie 
meeting  of  the  State  board  of  equalization, 
lay  before  said  lx)ard  the  schedules  and 
statements  herein  required  to  be  returned  to 
him;  and  said  board  shall  value  and  assess 
the  capital  stock  of  such  companies  or  asso- 
ciations, in  the  manner  provided  in  this  act. 

[This  section  declared  constitutional.  Gas  Co. 
V.  Higby,  134  111.  r)fJS;  s.  c,  25  X.  E.  Rep.  660. 
State  board  of  equalization  not  concluded  by  value 
of  corporate  property  placed  on  it  by  company's 
officers.     Id.     Nor  is  It  essential  that  the  board 


should  first  hear  evidence  in  fixing  or  changing 
the  valuation.  Id.  The  members  of  the  board 
must  act  on  their  own  knowledge  and  judgment. 
Id.  See,  also.  R.  R.  Co.  v.  Donohue,  127  111.  27; 
s    c,   18  N.   E.   Rep.  827. 

Duty  of  foreign  corporation  which  is  lessee  of 
lines  of  a  domestic  corporation  to  make  return 
to  auditor  under  this  section.  Tel.  Co.  v.  Bar- 
nard, 37  111.  App.   111.] 

§  34.  Every  person  owning  or  using  a  fran- 
chise granted  by  any  law  of  this  State, 
shall,  in  addition  to  his  other  property,  list 
the  same  as  personal  property,  giving  the 
totiil  value  tiiereof. 

See  §  3,  ante. 


LEGISLATIVE  ACTS  RELATING  TO  CORPORATIONS,  ENACTED  IN  1897. 


1.  Relating  to  foreign   corporations. 

2.  Relating  to  employment. 


Act  1. 


Foreign  Corporations. 

Sec.  1.  Foreign  corporations  to  maintain  a  public 
office  or  place  in  this  State,  for  the 
transaction   of   its   business. 

2.  Copy    of    articles    of    incorporation    to    be 

filed  In  the  office  of  the  secretary  of 
State  —  incorporating  taxes  and  fees  to 
be  paid  into  the  office  of  the  secretary 
of    State. 

3.  Liable    to    fine    of    $1,000  —  duties    of    the 

secretary   of  State. 

4.  Act  does  not  apply  to  insurance  companies 

—  repeal. 

AN  ACT  to  require  every  foreign  corpora- 
tion doing  business  in  this  State  to  have  a 
public  office  or  place  in  this  State  at  which 
to  transact  Its  business,  subjecting  it  to  a 
certain  condition,  and  requiring  it  to  file 
its  articles  or  charter  of  incorporation 
with  the  secretary  of  State,  and  to  pay 
certain  taxes  and  fees  thereon. 

Section  1.  Be  it  enacted  by  the  people  of 
the  State  of  Illinois,  represented  in  the  gen- 
eral assemlily:  Every  corporation  for  pe-  > 
cuniary  profit  formed  in  any  other  State, 
territory  or  counti-y.  before  it  shall  be  au- 
thorized or  permitted  to  transact  business  In 
this  State,  or  to  continue  business  therein,  if 
already  established,  shall  have  and  maintain 
a  public  office  or  place  in  this  State  for  the 
transaction  of  its  business,  where  legal  ser- 
vice may  be  obtained  upon  it  and  where 
proper  books  shall  be  kept  to  enable  such 
corporation  to  comply  with  the  constitu- 
tional and  statutory  provisions  governing 
such  corporations;  and  such  corporation 
shall  be  subjected  to  all  the  liabilities,  re- 
strictions and  duties  which  are  or  may  be 
Imposed  upon  corporations  of  like  character 
organized    under   the   general    laws   of   this 

20 


State,   and  shall  have   no  other  or  greater 
po\\  ers.     And  no  foreign  corporation  estab- 
lished  or   maintained   in   any    way   for   pe- 
cuniary profit  of  its  stockholders  or  niem- 
ber.a  shall  engage  in  any  business  other  than 
that  expressly  authorized  in  its  charter,  or 
the  law  of  tliis  State  under  which   it  may 
come,  or  shall  it  hold  any  real  estate  except 
si'cli   as  may  be  necessary  and   proper  for 
carrying  on  its  legitimate  iausiness.    And  no 
corix)ration  incorporated  under  the  laws  of 
any  other  State,  territory  or  country,  doing 
business  in  this  State,  shall  be  permitted  to 
mortgage,  pledge  or  otherwise  encumber  its 
real   or  pei"Sonal   property   situated   in   this 
State  to  the  injury  or  exclusion  of  any  citi- 
zen or  corporation  of    this  State  who  is  a 
creditor  of  such   foreign   corporation.      And 
no  mortgage  by  any  foreign  corporation,  ex- 
cept railroad  and  telegi'aph  companies,  given 
to    secure   any    debt    created    in   any    other 
State,  shall  take  effect  as  against  any  citizen 
or   corporation   of   this    State,    until    a,ll    its 
liabilities  due  to  any  person  or  conx>ration 
in  this  State  at  the  time  of  recording  such 
mortgage  have  been  paid  and  extinguished. 
§  2.  Every  company  inconsorated  for  pur- 
poses of  gain  under  the  laws  of  any  other 
State,  territory  or  country,  now  or  hereafter 
doing  business  within  this  State,  shall  file 
In  the  office  of  the  secretary  of  State  a  copy 
of  its  charter  or  articles  of  incorporation,  or 
in  case  sucli  company  is  incorporated  merely 
bv  a  certificate,  then  a  copy  of  its  certificate 
of  incorporation,  duly  certified  and  authen- 
ticated   by    the   proper   authority;    and    the 
principal  or  agent  in  Illinois  of  the  said  cor- 
poiation    shall    make    and    forward    to    the 
secretary  of  State,  with  the  articles  or  cer- 
tificates above  provided    for,    a    statement 
duly    sworn    to  of    the    proportion    of  the 
capital  stock  of  the  said  coii^oration  which 
is  represented  by  its  property  located  and 
business  transacted  in  the  State  of  Illinois; 
and   such   coii)oratJon   shall   be  required   to 


58 


ILLINOIS. 


Employment  of  children  —  Act,  June  9,  1897. 


pay  ipto  the  office  of  the  secretary  of  State 
of  this  State,  upon  the  proportion  of  its 
capital  stock  represented  by  its  property 
and  business  in  Illinois,  incorporating  taxes 
and  fe>-'S  equal  to  those  required  of  similar 
coriwratious  formed  within  and  under  the 
laws  of  this  State.  Upon  a  compliance  with 
the  above  provisions  by  said  corporation, 
the  secretary  of  State  shall  give  a  certificate 
that  said  corporation  has  duly  complied  with 
the  laws  of  this  State  and  is  authorized  to 
do  business  therein,  stating  the  amount  of 
its  entire  capital  and  of  the  proiwrtion 
thereof  which  is  represented  in  Illinois;  and 
sucl:-  certiticates  shall  l)e  taken  by  all  courts 
in  tills  State  as  evidence  that  the  said  corpo- 
ration is  entitled  to  all  the  rights  and 
benefits  of  this  act,  and  such  corporation 
shall  enjoy  those  rights  and  benefits  for  the 
lime  set  forth  in  its  original  charter  or 
articles  of  association,  unless  this  shall  be 
for  a  greater  length  of  time  than  is  contem- 
plated by  the  laws  of  this  State,  in  which 
event  the  time  and  duration  shall  be  reck- 
oned from  the  ci-eation  of  the  corporation  to 
the  limit  of  time  set  out  in  the  laws  of  this 
State  Provided,  That  nothing  in  this  act 
shall  be  taken  or  construed  into  releasing 
foreign  loan,  building  and  loan,  or  bond  in 
vestment  companies,  or  otlier  corporations, 
on  the  partial  payment  or  installment  plan, 
from  any  provisions  of  law  I'equiring  them 
to  make  a  deposit  of  money  with  a  proper 
officer  of  this  State  to  protect  from  loss  the 
citizens  of  this  State  who  may  do  liusiness 
with  such  loan,  building  and  loan  or  bond  in- 
vestment companies,  or  other  corporations: 
I'rovided.  That  the  requirement  of  this  act 
to  pay  incorporating  tax  or  fee  shall  not  ap- 
ply to  railroad  companies  which  have  here 
tofore  built  their  line  of  railway  into  or 
through  this  State:  And,  provided,  further, 
That  tlie  provisions  of  tliis  act  are  not  in- 
tended to,  and  shall  not,  apply  to  "  drum- 
mers "  or  traveling  salesmen  soliciting  busi- 
ness in  this  State  for  foreign  corporations 
which  are  entirely  non-resident. 

§  o.  Every  corporation  for  pecuniary  profit 
formed  in  any  other  State,  territory  or 
country,  now  doing  business  in,  or  which 
may  hereafter  do  business  in  this  State, 
which  sliall  neglect  or  fail  to  comply  with 
the  conditions  of  this  law,  siiall  be  sul).iect 
to  a  fine  of  not  less  tlian  one  thousand  dol- 
lars, to  be  recovered  before  any  court  of 
competent  jurisdiction;  and  it  is  hereby 
made  the  duty  of  the  secretary  of  State, 
immediately  after  September  first  of  the 
year  eighteen  hundred  and  ninety-seven, 
and  as  often  thereafter  as  he  may  he  ad- 
vised that  corporations  are  doing  business 
In  contravention  to  this  act.  to  i-ei)ort  tlie 
fact  to  the  prosecuting  attorney  of  the 
county  in  whicli  the  business  of  such  cor- 
poration is  locate<l,  and  the  prosecuting 
attorney  shall,  as  socm  thereafter  as  is 
practicable,  institute  proceedings  to  recover 
the  fine  herein  provided  for,  which  shall  go 


Into  the  revenue  fund  of  this  State,  in  addi- 
tion to  which  penalty  on  and  after  the  going 
into  effect  of  this  act,  no  foreign  corporation, 
as  above  defined,  which  shall  fail  to  comply 
with  this  act,  can  maintain  any  suit  or 
action,  either  legal  or  equitalile,  in  any  of 
the  courts  of  this  St^te  upon  any  demand, 
whetlier  arising  out  of  contract  or  tort: 
Provided,  That  tiie  provisions  of  tliis  section 
shall  not  apply  to  railroad  and  telegraph 
companies  which  have  heretofore  built  their 
line  into  or  througli  this  State,  nor  to 
"  drummers  "  or  traveling  salesmen  solicit- 
ing business  in  this  State  for  foreign  cor- 
porations which  are  entirely  non-resident. 

§  4.  This  act  does  not  apply  to  insurance 
companies,  and  is  not  to  1)e  tiiken  or  con- 
strued to  change  or  modify  the  laws  which 
are  directly  applicable  to  that  character  of 
corporations,  but  apart  from  tlie  insurance 
laws  all  acts  and  parts  of  acts  inconsistent 
with  this  act  are  liereliv  repealed. 

(Approved  May  2(3,  1897.) 

See  ch.  32,   §  2G,   and  notes. 


Act  2. 

Employment. 

Sec.  1.  Provides  th.nt  no  child  under  the  age  of 
fourteen  shall  be  permitted  to  work  for 
wages. 

2.  Employers  to  keep  registers. 

3.  Lists  to  be  posted  in  a  conspicuous  place 

containing   the   name   and    age   of    em- 
ployes. 
4.  Persons  under  tlie  age  of  sixteen  years  not 
allowed  to  work  more  than  sixty  hours 
in  any  one  week. 

5.  Presence  of  persons  under  the  age  of  six- 

teen years  in  any  manufacturing  es- 
tablishment prima  facie  evidence  of 
their  being  employed. 

6.  Persons   under   the   age   of   sixteen   years 

not  allowed  to  work  at  any  hazardous 
employment. 

7.  Duty  of  the   State  factory   inspector. 

8.  Meaning    of    the    words    "  manufacturing 

establishment,"  "  factory  "  or  "  work- 
shop." 

9.  Penalty    for   violations   of   the    provisions 

of   act. 
10.  Repeal. 

AN  ACT  to  regulate  the  employment  of 
children  in  the  State  of  Illinois,  and  to 
provide  for  the  enforcement  thereof. 

Section  1.  Be  it  enacted  by  the  people  of 
the  State  of  Illinois,  represented  in  general 
assembly:  That  no  child  under  the  age  of 
f(>urteeii  years  shall  be  employed,  permitted 
or  suffered  to  work  for  Avages  at  any  gainful 
occupation  hereinafter  mentioned. 

§  2.  It  shall  be  the  duty  of  every  person, 
firm  or  corporation,  agent  or  manager  of 
any  firm  or  corporation  employing  minors  in 
any  mercantile  institution,  store,  office, 
laundry,  manufacturing  establishment,  fac- 
tory or  worksliop  within  lliis  State  to  Iceep  a 
register  in  said  mercantile  establishmenr, 
store,  office,  laundry,  manufacturing  estab- 
lishment, factory  or  worlishop  in  which  said 


ILLINOIS. 


59 


Employment  of  children  —  Act,  June  9,  1897. 


mii.'ors  shall  be  employed  or  permitted  or 
suffered  to  work,  in  which  register  shall  be 
recorded  the  name,  age  and  place  of  resi- 
dence of  every  child  employed  or  permitted 
or  suffered  to  work  therein  under  the  age  of 
sixteen  years,  and  it  shall  be  unlawful  for 
any  person,  firm  or  corporation,  agent  or 
manager  of  any  firm  or  corporation  to  hire 
or  employ,  or  to  permit  or  to  suffer  to  work 
In  any  mercantile  institution,  store,  oflice, 
laundry,  manufacturing  establishment,  fac- 
tory, or  workshop,  any  child  under  the  age  of 
sixteen  years  and  over  the  age  of  fourteen, 
unless  tliere  is  first  provided  and  placed  on 
file  in  sucli  mercantile  institution,  office, 
laundry,  manufacturing  establishment,  fac- 
tory or  worksliop  an  affidavit  made  by  the 
parent  or  guardian  stating  the  name,  date 
and  place  of  birth  of  such  child.  If  such 
child  shall  have  no  parent  or  guardian, 
then  such  affidavit  shall  be  made  by  the 
child.  And  fhe  register  and  affidavits  herein 
provided  for  shall,  on  demand,  be  produced 
and  shown  for  inspection  to  the  State  fac- 
tory inspector,  assistant  State  factory  in- 
spector, or  deputy  State  factory  inspector. 

§  3.  Every  person,  firm  or  corporation, 
agent  or  manager  of  a  corporation  employ- 
ing, or  permitting  or  suffering  to  woi*k  chil- 
dren under  the  age  of  sixteen  years,  and 
over  the  age  of  fourteen  years,  in  any  mer- 
cantile institution,  store,  office,  lauudry, 
manufacturing  establishment,  factory  or 
workshop  shall  post,  and  keep  posted  in  a 
conspicuous  place  in  evary  room  in  which 
such  help  is  employed,  or  permitted  or 
suffered  to  work,  a  list  containing  the  name, 
age  and  place  of  residence  of  every  person 
under  the  age  of  sixteen  years  employed, 
permitted  or  suffered  to  work  in  such  room. 
§  4.  No  person  under  the  age  of  sixteen 
years  shall  be  employed  or  suffered  to  work 
for  wages  at  any  gainful  occupation  more 
than  sixty  hours  in  any  one  week,  nor  more 
than  ten  hours  in  any  one  day. 

§  5.  The  presence  of  any  person  under 
sixteen  years  of  age  in  any  manufacturing 
cstiiblislimciit,  factory  or  woi'kslio])  shall 
constitute  prima  facie  evidence  of  his  or  her 
employment  therein. 
§   G.  No   child   under   the   age   of   sixte^'n 


years  shall  be  employed,  or  permitted  or 
suffered  to  work  by  any  person,  firm  or  cor- 
poration in  this  State  at  such  extra  hazard- 
ous employment  whereby  its  life  or  limb  is 
in  danger,  or  its  health  is  likely  to  be  in- 
jured, or  its  morals  may  be  depraved. 

§  7.  It  shall  be  the  duty  of  the  State  fac- 
tory inspector  to  enforce  the  provisions  of 
this  act,  and  to  prosecute  all  violations  of 
the  same  before  any  magistrate  or  any  court 
of  competent  jurisdiction  in  this  State.  It 
shall  be  the  duty  of  the  State  factory  in- 
spector, assistant  State  factory  inspector, 
and  of  the  deputy  State  factory  inspectors, 
under  the  supervision  and  direction  of  the 
State  factory  inspector,  and  they  are  bereby 
authorized  and  empowered  to  visit  and  in- 
spect, at  all  reasonable  times,  and  as  often 
as  possible,  all  places  covered  by  this  act. 
§  8.  The  words  "  manufacturing  estab- 
lishment," "  factory,"  or  "  workshop,"  as 
used  in  this  act,  shall  T)e  construed  to  mean 
any  place  where  goods  or  products  are 
manufactured  or  repaired,  dyed,  cleaned  or 
sorted,  stored  or  packed,  in  whole  or  in  part, 
for  sale  or  for  wages,  and  not  for  personal 
use  of  the  maker,  or  his  or  her  family  or 
en^ployer. 

§  9.  Any  person,  firm  or  corporation,  agent 
or  manager  of  any  corporation,  who, 
whether  for  himself  or  for  such  firm  or  cor- 
poration, or  by  himself  or  through  sub-agents 
or  foreman,  shall  violate  or  fail  to  comply 
witli  any  of  the  provisions  of  this  act  shall 
be  deemed  guilty  of  a  misdemeanor,  and 
upon  conviction  thereof  shall  be  fined  not 
less  than  ten  dollars  ($10)  nor  more  than  one 
hundred  dollars  ($100)  for  each  offense. 
Any  corporation  Avhich,  by  its  agents,  officers 
or  servants,  sliall  violate  or  fail  to  comply 
witli  any  of  the  provisions  of  this  act  shall 
be  liable  to  the  above  penalties,  which  may 
be  recovered  against  such  corporation  in  an 
action  for  debt  or  assumpsit,  brought  before 
any  court  of  competent  jurisdiction  in  this 
State. 

§  10.  All  acts  or  parts  of  acts  inconsistent 
with  this  act  are  hereby  repealed. 
(Approved  June  9,  1897.) 

fiee   Statutes,   ch.   48. 


INDEX  TO  ILLINOIS. 


ADMINISTRATOR.    (See  Executor.) 

AGENTS,  CORPORATE:  ^«se. 

directors  may  determine  upon 18 

rights   and   liabilities    20,  21 

acts  of,  liability  of  corporation  for 20 

unlawful  exercise  of  power  by,  liability  for 28 

ARTICLES  OF  INCORPOR.ITION: 

contents  of 10 

to  be  filed  in  office  of  secretary  of  state   10 

license  to  be  issued  upon 10,  11 

fee   for   filing    11 

and  certificate  to  be  recorded lii 

certified  copy,  evidence    36 

of  foreign  corporation,  to  be  filed 57 

ASSESSORS: 

examine  persons  listing  property  55 

ATTACHMENT: 

creditor   may  hare    ^ 

ATTORNEY: 

foreign   corporations   may   act  by 41 

powers  and  liabilities 41 

BANKS: 

personal  propei'ty,  where  listed  for  taxation 55 

deductions  made  on  sworn  statement   56 

BLACKLISTING: 

of  employes,  a  crime 43 

BOOKS  OF  ACCOUNT: 

to  be  kept  by  corporation   27 

inspection  of,  by  stockholders 27 

BORROW: 

corporations  may 16 

BOYCOTT: 

of  business  of  employer  by  employes 43 

BY-LAWS: 

directors   may   adopt IS,  19 

legality  of    22 

prescribing  penalties  for  failure  to  pay  subscriptions 22 

levy  of  assessments,  to  provide  for 27 

meetings  of  directors,  to  provide  for 29 

CAPITAL  STOCK: 

municipality  not  to  subscribe  to   8 

articles  of  association  to  state  amount 10 

indebtedness  exceeding,  liability  for  28 

diminished  by  illegal  dividends,  liability  for 29 

increase  or  decrease,  meeting  of  stockholders  for 38 

listing  of,  for  taxation   54 

valuation  of,  how  determined    54 

whera   listed    54 


62  IKDEX  TO  ILLmOIS. 

CERTIFICATE:  ^^S^- 

o{  organization,  when  issued  12 

paperii  to  accompany   12 

filed  and  recorded  in  oflicc  of  county  recorder  of  deeds 12 

CriARTEIt.    (Seo  Articles  of  Incorporation.) 
CHILDREN: 

employment   of,   regulated    -i*^-  58 

COMBINES: 

for  fixing  prices,   prohibited    44 

what   constitutes    46 

proceedings  to  preA-ent    44,  45 

contracts  with,  illegal  45 

fines,   how   recovered    45 

affidavit  that  corporations  are  not  members  of 45 

COMMISSIONERS    (Seo  License  to  Commissioners): 

to  receive  subscriptions,  license  to   11 

meetings  of,  for  organization  of  corporation   12 

notice  of  meetings,  to  be  given  to  subscribers   12 

proceedings  upon  organization,  report  of,  to  be  filed 13 

CONSERVATOR.     (See  Guardian.) 
CONSOLIDATION: 

of  corporations,  meetings  of  stockholders  for '6ii 

meetings  for,  how  conducted   ^39 

certificate,  to  be  filed   39 

liability  for  debts   40 

for   fixing  prices    44 

CONSPIRACY: 

for  establishing  boycott  or  blacklist 43 

against  trade,  forming  a  trust  is 47 

CORPORATIONS: 

credit  of  state  not  loaned  to 6 

special  privileges  to,  prohibited   6 

taxation  to  be  uniform    6 

not  to  be  created  by  special  law  7 

organization  of,  for  pecuniary  profit 10 

number  of  incorporators    10 

general   powers    13-18 

general  assembly,  may  regulate 26 

CREDIT: 

of  state  not  to  be  loaned 8 

CREDITORS: 

remedies  of,  against  stockholders   30 

CUMULATIVE  VOTING: 

for  directors 12 

DEBTS,  CORPORATE: 

liability  of  stockholders  for 24 

action  against  corporation  and  stockholder  24 

exceeding  capital  stock,  liability  of  directors  and  officers  for 27 

unlawful  exercise  of  powers  by  officers,  liability  for 28 

illegal  dividends  declared  by  officers   29 

suit  on  account  of,  when  brought 30 

DIRECTORS: 

election  of,  general  assembly  may  provide  for  7 

stockholders  may  vote  at   12 

divided   into   classes    12 

corporate  powers  exercised  by   18 

number  of,  how  changed   18 

officers  determined  by   18 

by-laws,  may  adopt    18 


IXDEX  TO  ILLINOIS.  63 

DIRECTORS— (Continuod):  Page. 

powers   and   liabilities    19 

payment  of  subscriptions,  may  rofculate  22 

penalty  for  failure  to  make,  may  presoribe 22 

books  of  accounts  to  be  kept ~ 

open  to  inspection  of  stockholders 2' 

failure  to  elect,  not  to  dissolve   2' 

assessments  levied  by  2 

excessive  indebtedness,  liability  for 2 

unlawful  exercise  of  powers  by 28 

unlawful  combines,  trusts  and  p<iols 44 

unlawful  dividends  declared  by,  liability  for   29 

meetings  of,  by-laws  to  regulate   29 

held  outside  of  state   29 

when  sued  for  corporate  debts 30 

call  of  meeting  of  stockholders  for  voluntary  dissolution 87 

number  of,  meeting  of  stockholders  for  changing  38.  40 

meetings  for,  how  conducted 30.  40 

certificate  of,  to  be  filed   3'J,  40 

DISSOLUTION: 

existence  after,  for  certain  purposes   26 

does  not  affect  remedy  against  corporation,  etc 26 

failure  to  elect  officers,  not  to  effect 27 

appointment  of  receiver  upon    30 

rights  of  creditors  upon 33-3.5 

new  corporation  with  same  name 36 

voluntary,  stockholders  may  vote  for ,37 

meetings  for,  how  called 37 

resolution  for   37 

for  ceasing  to  do  business  or  abandonment  of  franchise 42 

proceedings  upon  42 

DIVIDENDS: 

directors  liable  for  illegal 29 

EMBEZZLEMENT: 

by  officers  of  corporation 43 

EMINENT  DOMAIN: 

right  to  take  by,  limited 7 

EMPLOYES: 

blacklisting  a  misdemeanor 43 

truck  system  of  paying  wages,  prohibited   -17.  48 

wages  to  be  paid  in  money 47,  48 

deductions  for,  when  prohibited    48 

to  be  paid  weekly,  penalties   48 

children  as,  regulated   41).  .58 

EVIDENCE: 

certified  copy  of  articles  of  association    36 

papers  of  corporation,  how  certified   49 

EXECUTION: 

levy  of,  on  stock   50 

copy  of,  to  be  left  with  officers  of  corporation 50 

oflScer  of  corporation  to  furnish  certificate  of  number  of  shares 50 

EXECUTOR: 

not  liable  as  stockholder  30 

may  vote  at  stockholders'  meeting 30 

EXISTENCE,  CORPORATE: 

duration  of,  articles  of  association  to  state   10 

legality  of,  how  proved   11 

to  continue  after  expiration  of  charter   26 


64  IXDEX  TO  ILLINOIS. 

FEES:  ^^S^- 

for  filing  artich's  of  inrorporation    11 

for  filing  charter  of  foreign  corporation 08 

FOREIGN  COIiPOHATIOXS: 

subject  to  liabilities  of  domestic  corporations   <^5 

may  act  by  attorney   "tl 

loan  of  money  by,  on  real  proi)i'rty  -41 

entering  into  trust,  not  permitted  to  do  business   47 

place  of  business  in  state 57 

subject  to  same  liabilities  as  domestic  corporations    57 

creditors  of,   to  be  protected    57 

articles  of  incorporation  to  be  filed   57 

certificate  of  authority  to 58 

fees  for  filing  58 

penalty  for  illegal  transa<tion  of  business   58 

FORGERY: 

of    corporation    notes    43 

FRANCHISE: 

corporation  ceasing  to  exercise  proceedings  for  dissolution    42 

service  of  summons  in  proceedings    42 

quo  warranto    proceedings  to  prevent  illegal  exercise  of   52 

valuation  of,  for  taxation   57 

GUARDIAN: 

not  liable  as  stockholder 30 

may  vote  at  stockholders*  meeting 30 

IMPLIED  POWERS: 

of  corporations  17 

INSOLVENCY: 

rights  of  creditors  upon   33 

INSTALLMENTS: 

subscriptions!  to  stock  may  be  paid  in 22 

actions  to  recover    22 

forfeiture  of  stock,  for  failure  to  pay 22 

INTEREST: 

rate  of,  regulated   41),  50 

usury,  corporation  not  to  plead    50 

JUSTICES'  COURT: 

servico  of  sunmions  in  actions  in   50 

LAWS: 

ex  post  facto,  not  to  be  passed 5 

granting  right  to  lay  down  tracks 6 

exclusive  franchises   (j 

releasing   indebtedness   to    state    (j 

corporations  not  to  lie  created  by  special   7 

LICENSE  TO  COMMISSIONERS- 

upon  filing  articles  of  association 10,  11 

not  to  be  issued  to  two  corporations  of  same  name 11 

organization  must  be  completed  within  two  years 13 

to  corporation  having  name  of  dissolved  corporation 36 

LISTING: 

capital  stock  of  corporation    5i 

where  made   54 

of  shares  of  stock  by  owners 54 

person  may  be  examined  by  assessor   55 

deductions   of   debts,   etc 55 

not  allowed  for  unpaid  subscriptions 50 


INDEX  TO  ILLmOIS.  65 

LISTING  —  (Contiuued) :  Page. 

deductions  of  debts,  etc.,  of  bank,  statement  as  to 56 

statement  of  express  and  other  companies   56 

value   of  franchise    57 

MEETINGS: 

of  directors,  by-laws  to  prescribe  for   29 

when  held  out  of  state  29 

of  stockholders,  call  by  stockholders   29 

executors,   administrators,   guardians,   etc.,  may  vote  at 30 

for  voluntary  dissolution  37 

for  change  of  name,  place  of  business,  number  of  directors 38 

how  called   38 

votes  at 38 

NAMES,  CORPORATE: 

two  corporations  not  to  have  same 11 

right  to   use   of    11 

similar  corporation  not  to  have  36 

change  of  meetings  for 38 

meetings,   how  conducted    39 

certificate   to   be   filed    39 

unlawful    use   of    4^ 

OFFICERS,  CORPORATE: 

consist  of  president,  secretary  and  treasurer,  etc 18 

bonds,  directors  may  require 18 

removal    of l^i  19 

rightsi  and  liabilities ^0.  21 

acts  of,  liability  of  corporation  for 20 

excessive  indebtedness,  liability  for 27 

unlawful  exercise  of  power,  liability  for 28 

unlawful  formation  of  pools,  trusts  or  combines 44 

illegal  dividends,  liabihty  for 29 

liability  of,  for  false  statement  or  report 29 

when  used  for  corporate  debts 30 

embezzlement  by    43 

forgery  of  corporation  paper 43 

fraudulent  stock  issued  by   43 

PERSONAL  PROPERTY: 

corporation  may  hold  and  convey It) 

may  pledge   16 

stock   deemed    22 

PLACE  OF  BUSINESS: 

change  of,  meetings  of  stockholders  for 38 

meetings  for,  how  conducted   '39 

certificate  of,  to  be  filed 39 

foreign  corporation  to  have,  within  state   57 

PLEDGE: 

of  stock,  liability  of  pledgee  and  pledgor  for  debts,  etc 30 

fraudulent,  by  officers,  etc 43 

POOLS: 

for  fixing  prices,  prohibited 44 

what   constitutes    46 

proceedings  to  prevent 44,    45 

contracts   with,   illegal    45 

fines,  how  recovered   45 

affidavit  that  corporations  are  not  members  of   45 


66  IKDEX  TO  ILLINOIS. 

POWERS,  GENERAL:  Page. 

of  corporations   13-18 

PREFERENCES: 

of  creditors,  when  permitted  33 

PRESIDENT    (See  Officers): 

an  officer  of  corporation    18 

statement  of  real  property  acquired    28 

PRINCIPAL  OFFICE: 

articles  of  association  to  state 10 

PROPERTY: 

not  to  be  taken  without  compensation 5 

PROXY: 

right  to  vote  by,  general  assemblj-  may  provide  for   7 

stockholders  may  vote  by  12 

QUO  WARRANTO: 

when  writ  may  issue  52 

summons,  contents  and  service  53 

pleadings 53 

judgment  of  ouster   53 

RAILROADS: 

street,  right  to  lay  down,  special  law  not  to  be  passed 7 

consent  of  local  authorities  required 36 

rates  on,  may  be  uniform  8 

credit  of  state  not  to  be  loaned  to 8 

stock,  purchased  by  certain  companies 42 

REAL  PROPERTY:  1 

fee  of,  taken  for  railway  purposes   5 

corporation  may  hold  and  convey 16 

may  mortgage 16 

sale  of,  acquired  as  satisfaction  of  security  18 

notice  of ]  S 

effect  of  failure 18 

acquired  as  security,  statement  as  to  28 

loan  of  money  on,  by  foreign  corporation  41 

sale  of,  acquired  by  foreign  corporation 41 

RECEIVER: 

of  dissolved  corporation,  powers  of 30 

suits  by  and  against   30 

rights  of 33.  35 

REPORT: 

false,  liability  of  officers  for 29 

SALE: 

of  real  property  acquired  in  satisfaction  of  debts  due  corporation 18 

notice  of,  to  be  published 18 

effect  of  failure   18 

SEAL,  COMMON: 

corporation   may  have    15 

effect  of  use  of 15,  16 

SECRETARY    (See  Officers): 

an  officer  of  corporation 18 

statement  of  real  property  acquired   28 

SERVICE: 

of  process  on  corporation   51 

on  receivers  of  corporations  52 

in  mandamus  or  quo  Avarranto  proceedings   52 


IKDEX  TO  ILLINOIS.  67 

gTATE:  Page. 

credit  of,  not  to  be  loaned G 

STATEMENT: 

annual,  of  real  property  acquired 28 

false,  liability  of  officers  for 29 

of  capital  stock,  etc.,  for  purposes  of  taxation 56 

to  be  scheduled  by  assessors  56 

STOCK: 

sharea  of,  articles  of  association  to  state  10 

amount  of,  not  less  than  $10  nor  more  than  $100 22 

transfer  of,  by-laws  to  regulate 22 

subscriptions  for,   how  paid    22 

actions  to  recover 22 

forfeiture  of,  for  failure  to  pay  subscription 22 

subscribers   to,    liability   of    22,  23 

unpaid,  transfer  of,  to  be  recorded  in  office  of  recorder  of  deeds 24 

liability  of  stockholders  for  corporate  debts  24 

assignor,  when  not  released    '. 24 

assignee,   liable   to   company    24 

assessments  upon,  how  levied 27 

executor,  administrator,  conservator,  guardian  or  trustee  not  liable  on  account  of .  .  30 

pledgee  not  liable  on  account  of   30 

of  railroad  company,  may  be  purchased  by  mining  or  manufacturing  company 42 

fraudulent  issue,  sale  or  transfer  of 43 

signing  with  intent  to  issue,  etc 44 

sold  on  execution.     (See  Execution) 50 

capital,  municipality   not  to  subsci-ibe  to 8 

indebtedness  exceeding,  liability  for 28 

diminished  by  illegal  dividends,  liability  for 29 

increase  or  decrease,  meeting  for  stockholders 38 

listing  of,  for  taxation   54 

valuation  of,  how  determined 54 

where  listed 54 

STOCKHOLDERS: 

election  of  directors  by,  general  assembly  to  regulate 7 

method  of  voting  at  12 

directors  may  be  divided  into  classes   12 

number  of,  may  be  changed  by 18 

liability  of,  for  debts,  when  stock  is  unpaid 24 

books  of  accounts  may  be  inspected  by 27 

meetings,  when  called  by 29 

call  for,  to  be  published,  etc 29 

copies  of  call  to  be  mailed  to  directors 29 

administrator,  executor,  conservator,  trustee  or  guardian  not  liable  as  ... 30 

pledgee  not  liable  as  30 

when  sued  for   corporate  debts    30 

pro  rata  distribution  by,  to  pay  debts 30 

liabilities  of,  how  determined    30-33 

voluntary  dissolution  by    37 

vote  of,  at  meetings  for   37 

meetings,  for  change  of  name,  place  of  business  and  number  of  directors 38 

increase  or  decrease  of  capital  stock 38 

enlarge  object  of  corporation    38 

consolidation  of  corporations   38 

combines,  trusts  and  pools   44 

SUBSCRIBERS: 

liability  of,  how   enforced    22,  23 


68  INDEX  TO  ILLINOIS. 

SUBSCRIPTIONS:  ^^f®- 

for  stock,  how  paid   -^2 

actions  to  recover   ^^ 

liability  of  subscribers,  enforcement   22,  23 

SUB  AND  BE  SUED: 

corporations    may    ^^ 

TAXATION: 

to  ba  uniform  ^ 

capital  stock,  valuation,  how  determined   54 

shares  of  stock,  listing  by  owners 54 

banks,   insurance   companies,    etc 55 

gas  and  coke  companies   55 

personal  property  of  street  railroads,  etc   55 

of  stage  companies,  etc 55 

of  express  companies   55 

assessor  may  examine  person  listing  property  55 

deduction  on  lists  for  debts  55 

not  allowed  on  account  of  unpaid  subscriptions   56 

statement  of  banks  for  purpose  of 56 

statement  of  express  and  other  companies 56 

of    corporate   franchise    57 

TRANSFER: 

of  stock,  by-laws  to  regulate 22 

unpaid,  to  be  recorded  in  office  of  recorder  of  deeds 24 

fraudulent,  a  crime  43 

TREASURER    (See  Officers): 

an  officer  of  corporation 18 

statement  of  real  property  acquired 28 

TRUCK  SYSTEM: 

for  furnishing  employes  with  supplies   47,  48 

TRUSTEE.    (See  Directors;  Guardian.) 

TRUSTS: 

to  fix  price  of  commodities,  prohibited 44 

what   constitutes    46 

proceedings  to  prevent 44,  45 

contracts   with,  illegal    45 

fines,   how   recovered    45 

affidavit  that  corporations  are  not  members  of 45 

forfeiture  of  charter  of  corporation  for  entering  into 47 

foreign  corporation  entering  into,  not  permitted  to  do  business 47 

conspiracy  against  trade   47 

indictment   for    47 

ULTRA  VIRES: 

application   of   principle    17,  ly 

USURY: 

corporation  not  to  interpose  defense  of 50 

VOLUNTARY  DISSOLUTION: 

vote  of  two-thirds  of  stockholders  for 37 

meeting  of  stockholders  for   37 

resolution  for   37 

record  of  proceedings  for,  to  be  filed 37 

WAGES: 

of  employes  to  be  paid  in  money  47  43 

deductions,  when  prohibited  48 

to  be  paid  weekly,  penalties 48 

WEEKLY: 

payment  of  wages 48 


INDIANA. 


TABLE  OF  CONTENTS. 


COIfSTITUTION. 


Paste. 

Art.      I.   Bill  of  rights g 

X.  Finance =; 

XI.  Corporations 6 

STATUTES. 

Ch.     2.  Civil  procedure 7 

Art.     7.  Venue   7 

8.  Actions,    how   commenced    7 

10.  Pleadings    8 

26.  Execution    S 

31.  Attachment    8 

32.  Attorneys    9 

34.  Change  of  name    0 

47.  Receivers 9 

50.  General  provisions    10 

4.  Criminal  procedure 10 

Art.     9.  Arrest   and    recognizance    10 

22.  General   provisions    10 

21.  Corporations,  generally 10 

22.  Foreign  corporations 16 

38.  Manufacturing  and   mining  corporations 17 

81.  Labor .• 23 

Art.     1.  When  preferred  creditors    23 

2.  Day's  labor    24 

3.  Payment  of  wages   24 

4.  Blacklisting    26 

5.  Importing  alien  laborers 26 

6.  Injuries  to  employes   27 

99.  Offices  and  oiEcers 28 

Art.     9.  Secretary  of  State    28 

30.  Notaries  public 29 

108.  Taxation 29 

Art.    4.  Property,   where  assessed   29 

5.  Definitions  and  rules 29 

9.  Domestic  corporations   29 

19.  Proceedings  against  corporatio 30 

LEGISLATIVE   ACTS   ENACTED    SUBSEQUENTLY    TO    1894. 


INDIANA, 


COJ^STITUTIO]Sr    or    mDIAiS^A-lSSl 


PROVISIONS  RELATING  TO  CORPORATIONS. 


AETICLE  I. 

Bill  of  Rights. 

Sec.  66.  Private  property  not  to  be  taken  without 
compensation. 
69.  Obligation    of    contracts    not    to    be    Im- 
paired. 

ARTICLE  X. 

Finance. 

Sec.  198.  No  county  shall  loan  its  credit  to,  or 
subscribe  for  stock  in  any  incorporated 
company. 

ARTICLE  XI. 

Corporations. 

Sec.  211.  State  not  to  be  a  stockholder  in,  or 
loan  its  credit  to  any  corporation. 

212.  Corporations  to  be  formed  under  general 

laws   only. 

213.  Dues  from  corporations  to  be  secured  by 

individual    liability. 

ARTICLE  I. 

Bill  of  Rights. 

§  6G.  *  *  *  No  mau's  property  shall  be 
taken  by  law  Avithout  just  compensation; 
nor,  except  in  case  of  the  State,  without 
such  compensation  first  assessed  and  ten- 
dered. 

[Above  prohibition  does  not  extend  to  the  taxing 
power.    Aurora  v.  West,  9  Ind.   74. 

Compensation  for  private  property  taken  by  a 
private  corporation  must  first  be  assessed  and 
tendered.    Sidcner  v.  Turnpike  Co.,  23  Ind.  623. 

Circumstances  under  which  right  of  eminent 
domain  may  be  exercised  is  a  legislative  ques- 
tion. Consumers,  etc.,  Co.  v.  Harless,  131  Ind. 
446;  s.  c.  29  N.  E.  Rep.  1062. 

State  regulation  of  property  devoted  to  a  public 
use  is  not  the  taking  of  property  within  meaning 
of  above  section,   nor  is  it  an  interference  with 

27 


guaranteed  rights  of  citizens  in  public  property. 
Ilookett  V.  State,  105  Ind.  251;  s.  c.  5  N.  E.  Ren. 
202.]  ^ 


§  69.  No  ex  post  facto  law,  or  law  impair- 
ing the  obligation  of  contracts,  shall  be 
passed. 

See   §  3423,   and  note. 

[The  charter  of  a  corporation  is  a  contract  be- 
tween the  corporation  and  the  State,  and  secures 
to  the  company  a  vested  right  in  its  franchise. 
Turnpike  Co.  x.  Holthouse,  7  Ind.  59.  At  least, 
after  interests  have  become  vested  under  it. 
Smead  v.  R.  R.  Co.,  11  Ind.  105;  see,  also,  Bank 
V.  State,  1  id.  267. 

The  term  ex  post  facto  relates  only  to  criminal 
laws.     Andrews  v.  Russell,  7  Blackf.  474. 

Grant  of  privilege  to  carry  on  lottery  does  not 
constitute  a  contract,  and  may  be  repealed  by 
legislature.    State   v.    Woodward,   89   Ind.    110.] 


ARTICLE  X. 

Finance. 

§  198.  No  county  shall  subscribe  for  stock 
in  any  incorporated  company,  unless  the 
same  be  paid  for  at  the  time  of  such  sub- 
scription, nor  shall  any  county  loan  its 
credit  to  any  incorporated  company,  nor  bor- 
row money  for  the  purpose  of  taking  stock 
in  any  such  company;  nor  shall  the  general 
assembly  ever  on  behalf  of  the  State,  assume 
the  debts  *  *  *  of  any  corporation  what- 
ever. 


[Section  construed.  R.  R.  Co.  v.  Gelger,  34  Ind. 
185. 

A  county  cannot  subscribe  for  such  stock  with- 
out appropriate  affirmative  legislation  authorizing 
it.    Id. 

The  words  "  incorporated  company "  refer  to 
associations  created  for  public   benefit.    Id. 

If  county  subscribes  for  stock,  it  must  be  paid 
for  in  money  at  time  of  subscription.    Id. 


INDIAIs^A. 


Corporations  —  Const.,  Art.  xi,  §§  211-213. 


Aid  to  be  furnished  to  incorporated  companies 


by  "counties    Is    limited    to 
State  V.  AVbcadon.  39  Ind 


the*  taking 
521.] 


ARTICLE  XI. 

Corporations. 

8  oil  The  State  shall  not  be  a  stockholder 
in  any  bank,  after  the  expiration  of  the 
m-esont  bank  charter,  nor  shall  the  credit 
of  the  State  ever  be  given,  or  loaned,  in  aid  of 
any  pei-son.  association,  or  corporation;  nor 
shall  tbe  State  hereafter  become  a  stock- 
holder in  anv  corporation  or  association. 


§  212.  Conwrations,  other  than  banking, 
sliall  not  be  created  by  special  act,  but  may 
be  formed  under  general  laws. 

See  §§  3423  et  seq.,  5051  et  seq. 

§  213  Dues  from  corporations,  other  than 
banking,  shall  be  secured  by  such  individual 
liability  of  the  coi-porators,  or  other  means, 
as  may  be  prescribed  by  law. 

See  §  3441. 

FAbove   section    in    no    way    affects   the    proper 
construction    of    the    acts    to    secure    dues    from 
private   corporations.    ^^  ood  v.    Harrison,   50  Ind. 
1  4S0.] 


INDIANA. 


Venue:  service  of  process  —  Civ.  Pro.,  §§  310,  312,  313,  315,  318. 


INDIAIS'A  STATUTES  -  1894. 


CHAPTER  II. 
Civil  Procedure. 

Art.     7.  Venue. 

8.  Actions,  how  commenced. 
10.  Pleadings. 
26.  Execution. 

31.  Attacliment. 

32.  Attorneys. 

34.  Change  of  name. 

47.  Receivers. 

50.  General  provisions. 


ARTICLE  VII. 
Venue. 

Sec.  310.  Corporations,    etc.;   agency. 

312.  Railroads  and   other  carriers. 

313.  Corporations,   venue  of  actions   against. 
315.  Foreign    corporations,    venue   of   actions 

against. 

§  310.  Wben  a  coiTwration,  company,  or 
ludividual  has  an  office  or  agency  in  any 
county  for  the  transaction  of  business,  any 
action  growing  out  of,  or  connected  with, 
the  business  of  such  office  may  be  brought 
in  the  county  where  the  office  of  the  agency 
is  locate^!,  at  the  option  of  the  plaintiff,  as 
though  the  principal  resided  therein;  and 
service  upon  any  agent  or  clerli  employed  in 
the  office  or  agency  shall  be  sufficient  ser- 
vice upon  the  principal;  or  process  may  be 
sent  to  any  county,  and  served  upon  the 
principal. 

Power  of  corporation  to  sue  and  be  sued.  §  3425, 
and  note. 

[Railroad  company  may  be  regarded  as  resi- 
dent In  each  county  in  which  it  has  an  office  or 
ageucv,  or  an  officer  or  agent  upon  whom  process 
may  be  served.    R.  R.  Co.  v.  Haskell,  11  Ind.  301. 

Section  construed.  Id.;  Ry.  Co  v.  Owen,  43 
Ind.  405;  Rauber  v.  Whitney,  125  id.  216;  s.  c,  25 
X.  E.  Rep.  186. 

Where  person  upon  whom  process  was  served 
was  agent  of  the  corporation  in  the  county  only 
where  action  was  commenced,  and  contract  sued 
on  was  made  out  of  the  State  and  not  connected 
with  his  business,  there  is  no  jurisdiction.  Ins. 
Co.  V.  Black,  80  Ind.  513. 

And  in  an  action  against  a  corporation  under 
above  section,  an  agency  for  the  transaction  of 
business  must  be  shown  to  exist  In  the  county 
at  time  suit  is  commenced.  Ins.  Co.  v.  Capehart, 
108  Ind.  270;  s.  c,  8  N.  E.  Rep.  285.] 

§  312.  An  action  against  a  railroad  or  canal 
corporation  or  company,  or  owner  of  a  line 
of  stage  or  coaches,  for  an  injury  to  person 
or  propertj'  uix)n  the  railroad,  canal,  or  line 
of  stages  or  coaches  of  the  defendant,   or 


npon  a  liability  as  a  carrier,  may  be  brought 
in  any  county  through  or  into  which  such 
railroad,  canal,  or  line  of  stages  or  coaches 
passes;  and  the  summons  may  be  served  in 
any  county  in  the  State. 

[Venue  of  actions  to  enforce  liability  under  the 
statute.  R.  R.  Co.  v.  Renner,  17  Ind.  135;  Rv.  Co. 
V.  Breckenridge,  64  id  113;  R.  R.  Co.  v.  p'ierce, 
95  id.  496;  Croy  v.   Ry.  Co.,  97  id.  126. 

To  enforce  common-law  liability.  Ry.  Co.  v. 
Milligan,  52  Ind.  509;  R.  R.  Co.  v.  Barton.  61 
id.  293;  R.  R.   Co.  v.  Pic-'^e,  supra.] 

§  313.  Any  action  against  a  coriioration 
may  be  brought  in  any  county  where  the 
corporation  has  an  office  for  the  transaction 
of  business,  or  any  person  resides,  upon 
whom  process  may  be  served  against  such 
coiTX)ration,  unless  otherwise  provided  in 
this  act. 

[Under  this  section  action  may  be  brought 
against  railroad  company  in  any  county  where 
there  is  a  person  upon  whom  process  may  be 
served.  Evansville,  etc.,  Co.  v.  Spellbring,  1  App. 
107;  s.  c.  27  N.  E.  Rep.  239.] 

§  315.  Actions  may  be  brought  against  a 
corporation  created  by  or  under  the  laws  of 
any  other  State,  government  or  county,  in ' 
any  court  having  jurisdiction  of  the  amount 
demanded,  by  any  person  having  a  cause 
of  action,  in  any  county  within  the  State, 
where  any  property,  moneys,  credits  or 
effects  belonging  or  due  to  the  corporation 
may  be  found. 

See  §§  3453-3461. 

["  Foreign  corporation "  defined.  Daly  v.  Ins. 
Co.,  64  Ind.   1. 

Corporation  created  by  act  of  Congress  is  a 
corporation  of  the  District  of  Columbia;  as  Con- 
gress cannot  under  the  Federal  Constitution,  as 
the  Congress  of  the  United  States,  create  a  private 
corporation.    Id.] 


ARTICLE  VIII. 
Actions,  How  Commenced. 

Sec.  318.  Service  on  corporations. 
320.  Service  by  publication. 

§  318.  The  process  against  either  a 
domestic  or  foreign  corporation  may  be 
served  on  the  president,  presiding  officer, 
chairman  of  the  board  of  trustees,  or  other 
chief  officer  (or  if  its  chief  officer  is  not 
found  in  the  county,  then  upon  its  cashier, 


8 


IXDIANA. 

Service  of  process;  pleadings;  execution  —  Civ.  Pro.,  §§  320,  362,  735. 


treasurer,  director,  secretary,  clerk,  general 
or  special  agent),  or  if  it  is  a  municipal  cor- 
poration, upon  its  mayor,  marshal,  or  if  it 
is  an  incorporated  library  company,  upon 
Its  librarian.  If  none  of  the  aforesaid  offi- 
cers can  be  found,  then  upon  any  person 
authorized  to  transact  business  in  the  name 
of  such  conioration,  and  if  no  such  person, 
officer  or  agent  be  found  in  the  county 
where  suit  is  pending,  process  may  be  sent 
for  service  to  any  other  county  in  the  State 
where  such  person,  officer,  or  agent  may  be 
found.  In  case  of  a  cori>oi'ation  operating  a 
steamboat  or  steamboats,  process  against 
such  corporation,  if  none  of  the  aforemen- 
tioned persons  uiK)n  -whom  service  can  be 
made  is  found  in  the  county  in  which  said 
process  issued,  then  such  process  may  be 
served  upon  any  Avharfmaster  of  any  wharf 
boat  in  the  State  over  and  upon  which  said 
corporation  receives  or  discharges  freight 
or  passengei-s:  Provided,  however.  That 
process  shall  not  be  sei-ved  upon  any  such 
person,  officer,  or  agent  when  he  is  plaintiff 
in  the  suit;  but  in  such  cases  process  shall 
be  served  upon  some  other  such  person, 
officer,  or  agent  of  the  coriwration  than  such 
plaintiff;  and  in  case  the  defendant  be  a 
foreign  coi-poration.  having  no  such  person, 
officer,  or  agent,  resident  in  the  State,  service 
may  be  made  in  the  same  manner  as  against 
other  non-residents. 

Power  of  corporation  to  sue  and  be  sued.  §  3425, 
and  note.  Actions  commenced,  where.  §  310  et 
seq. 

[Tliis  section  designates  three  classes  of  officers 
or  agents  of  corporations,  upon  wliom  process 
may  be  served;  first,  cliief  officers;  second,  offi- 
cers of  secondary  ranlj;  tliird,  any  person  au- 
thorized to  transact  business  in  the  name  of  the 
corporation.    Ry.   Co.   v.   Owen,   43  Ind.  405. 

Service  on  a  local  freight  agent  is  good,  though 
superintendent  and  director  resides  in  the  county, 
and  conductors  daily  pass  on  the  trains.    Id. 

Service  upon  agent  of  telegraph  company,  there 
being  no  higher  officer  in  the  bailiwicli,  was  held 
sufficient.    Tel.    Co.   v.    Lindley,    62  Ind.   371. 

Where  person  upon  whom  process  was  served 
was  agent  of  the  corporation  in  the  county  only 
where  action  was  commenced,  and  contract  sued 
on  was  made  out  of  the  State  and  not  connected 
with  the  business  of  his  office,  there  is  no  juris- 
diction.   Ins.   Co.   V.    Black,   80   Ind.   513. 

Above  section  relates  to  foreign  corporations 
In  general,  and  has  no  application  to  such  cor- 
porations as  are  under  special  regulations.  Rehm 
V.  Ins.  Co.  ife  Sav.  Inst.,  125  Ind.  135;  s.  c,  25 
N.    E.   Rep.   173. 

Service  of  summons  on  a  local  agent  held  good 
against  a  domestic  insurance  company  having  its 
home  office  in  another  county,  though  the  action 
did  not  grow  out  of,  and  was  not  connected  with, 
the  business  of  the  office  where  the  suit  was 
brought.  Globe  Ace.  Ins.  Co.  v.  Reid,  47  N.  E. 
Rep.   947.] 

§  320.  The  clerk,  by  order  of  the  court,  if 
in  session,  or  in  vacation  without  such  order, 
shall  cause  a  notice  of  the  pendency  of  any 
action,  and  the  term  at  which  the  same  will 
stand  for  trial,  to  be  published  for  three 
weeks  successively,  in  some  newspaper  of 
general  circulation,   named  by  the  plaintiff 


or  his  attorney,  printed  in  the  English  lan- 
guage, and  published  in  the  county  (or  if 
none  be  printed  or  published  thereiu,  then 
in  Hie  county  in  this  State  nearest  thereto 
in  which  any  such  paper  may  be  printea), 
in  either  of  the  following  cases  shown  by 
affidavit: 

First.  When  the  defendant  is  a  foreign 
corporation  and  has  property  within  the 
State,  or  the  cause  of  action  arose  therein. 


ARTICLE  X. 

Pleadings. 

Sec.  3G2.  Interrogatories  to  be  answered  by   cor- 
porations. 

§  362.  Either  party  may  propound  inter- 
rogatories, to  be  filed  with  the  pleadings, 
relevant  to  the  matter  in  controversy,  and 
require  the  opiX)Site  party  to  answer  the 
same  under  oatli.  And  corporations,  through 
their  proper  officers,  agent,  or  agents,  shall 
be  required  to  answer  interrogatories  as 
natural  persons.    *    *    * 

ARTTICLE  XXVI. 
Execution. 
Sec.  735.  Against  shares  of  stock. 

§  735.  Shares  of  stock  in  any  corporation 
or  company  may  be  levied  upon  and  sold 
in  the  county  where  the  office  and  books 
showing  the  shares  of  stock  and  stock- 
holders of  the  corporation  or  company  are 
kept;  and.  the  sheriff  shall  transfer  tihe 
stock,  subject  to  the  rights  of  the  corpora- 
tion or  company.  The  sheriff  shall  have 
access  to  the  books  of  any  corporation  or 
company  in  his  county,  for  the  purpose  of 
making  the  levy;  and  if  refused  access,  the 
court  shall  enforce  the  right.  The  shares 
of  stock  subject  to  be  levied  upon  shall  be 
bound  by  the  execution  from  the  time  of  the 
levy;  and  when  such  levy  is  made,  the 
sheriff  shall  leave  a  notice  thereof  with  the 
officers  of  the  company,  and  such  levy  shall 
constitute  a  lien  upon  the  stock  from  the 
time  of  such  levy. 

[Mandate  lies  to  compel  the  officers  of  a  bank 
to  give  a  sheriff  access  to  its  books  to  transfer 
stock  of  the  bank  to  one  whom  he  has  sold  such 
stock  on  execution.  State  ex  rel.  Koons  v.  Bank, 
89   Ind.    302.] 

ARTICLE  XXXI. 

Attacliments. 

Sec.  925.  Causes. 

945.  Statement  of  garnishee  and  examination. 

970.  Wages;    parties    non-resident,    no    juris- 

diction. 

971.  Wages  for  one  month  exempt. 

972.  Garnishee  may  pay  one  month's  wages. 

§  925.  The  plaintiff,  at  the  time  of  tiling 
his   complaint,    or   at   any   time   afterward, 


4 


f 


INDIANA. 


Attachment;  change  of  name;  receivers  —  Civ.  Pro.,  §§  M5,  970-973,  1012-1016. 


may  have  an  attachment  against  the  prop- 
erty of  the  defendant,  in  the  cases  and  in 
the*  manner  hereinafter  stated,  where  the 
action  is  for  the  i-ecovery  of  money: 

First.  Where  the  defendant,  or  one  of 
several  defendants,  is  a  foreign  corpora- 
tion or  a  non-resident  of  this  State. 

:K>tc>|c  ****** 

§  945.  It  shall  be  the  duty  of  any  officer 
or  agent  of  any  association  or  corporation, 
and  of  every  otlier  person  summoned  as  a 
garnishee,  when  sei-ved,  or  -within  five  days 
afterward,  to  furnish  the  sheriff  with  a 
certificate  of  the  number  of  shares  or  rights 
of  the  defendant  in  the  stock  of  such  cor- 
poration or  association;  or  a  description  of 
the  proiierty  held  by  such  corporation,  as- 
sociation, or  person,  belonging  to  or  for 
the  benefit  of  the  defendant;  or  the  amount 
of  the  debt  owing  to  the  defendant  by  such 
association,  coiixiratlon,  or  person,  whether 
due  or  not;  which  certificate  shall  be  re- 
turned by  the  sheriff  with  the  summons. 
If  such  officer,  agent,  or  ix^rson  refuse  to 
do  so,  he  may  be  required  by  the  court  to 
attend  before  it,  and  be  examined,  on  oath, 
conceniing  the  same;  and  obedience  to  the 
orders  may  be  enforced  by  attachment. 

See  §   3426. 

[Shares  of  stock  in  a  private  corporation  may 
be  reached  bv  attachment.  Quarl  v.  Abbett,  102 
lud.  233;  s.  c,  1  N.   E.   Rep.  476.] 

§  970.  Hereafter  no  court  in  this  State 
shall  have  or  entertain  jurisdiction  in  any 
action  of  attachment,  garnishment,  or  sup- 
plementary proceeding,  when  the  plaintiff 
and  principal  defendant  are  both  non- 
residents of  this  State,  and  the  money  sought 
to  be  reached  by  such  attachment,  garnish- 
ment, or  supplementary  i^roceedings  is  the 
personal  earnings  or  wages  due  or  owing 
to  the  principal  defendant  from  any  person 
or  corporation  doing  business  in  this  State. 

§  971.  The  Avages  of  all  persons  in  the 
employ  of  any  i>erson  or  corporation  shall 
be  exempt  fi-om  garnishment  and  proceed- 
ings supplemental  to  execution  in  the  hands 
of  such  person  or  corporation,  so  long  as 
such  employe  remains  in  such  employment, 
not  exceeding  one  month's  wages  at  any  one 
time. 

§  972.  A.ny  person  or  corporation  in  debt 
for  wages,  as  in  the  preceding  section  pro- 
vided, may,  at  any  time  after  being  served 
with  a  garnishee  summons,  pay  to  any 
such  employe  the  amount  of  wages  exempted 
by  the  preceding  section;  and  such  payment 
shall  discharge  such  garnishee  defendant 
from  liability  for  the  amount  so  paid,  as 
effectually  as  if  paid  before  the  issuing  of 
such  summons. 

Blacklisting  of  employes  prohibited.  §§  7076- 
7078.    Personal  injury  to  employes.    §  7083  et  seq. 


ARTICLE  XXXn. 

Attomeys. 

Sec.  973.  Who  may  conduct  civil  actions. 

§  973.  A  civil  action  may  be  prosecuted  or 
defended  by  a  party  in  person  or  by  attor- 
ney, except  that  a  corporation  appears  by 
attorney  in  all  cases. 

Power  to  sue  and  be  sued.    §  3425,  and  note. 

ARTICLE  XXXIV. 

Change  of  Name. 

Sec.  1012.  Petition    to    circuit    court. 

1013.  Application,  where  made, 

1014.  Notice  by  publication, 
inlo.  Proof  of  puijlication. 
1016.  Copy   of  decree   evidence. 

§  1012.  The  circuit  courts  in  the  sevei-al 
counties  of  this  State  may  change  the  names 
of  persons  and  corporations  on  application 
by  petition. 

§  1013.  The  application  of  a  person  may  be 
made  to  the  circuit  court  of  the  county  in 
which  such  person  resides,  and  of  a  corpo- 
ration to  the  circuit  court  of  the  county 
in  which  such  corporation  is  situate  or  In 
which  its  prineipnl  oftice  is  located. 

§  1014.  Upon  a  petition  being  filed  for  such 
change,  the  applicant  shall  give  notice 
thereof  by  three  weekly  publications  in  some 
newspaper  of  general  circulation  printed  and 
published  in  the  proper  county,  or,  if  no 
newspaper  be  printed  therein,  in  a  news- 
p.iper  printed  and  published  nearest  thereto 
in  some  adjoining  county,  thirty  days  prior 
to  the  first  day  of  the  term  at  which  such 
petition  Skhall  be  heard. 

§  1015.  Proof  of  the  publication  required 
in  this  act  shall  be  made  by  filing  a  copy  of 
such  published  notice,  verified  by  the  affi- 
davit of  a  disinterested  person;  and  when 
such  proof  of  such  publication  is  made,  the 
court  shall  proceed  to  hear  and  determine 
said  petition,  and  make  such  order  and  de- 
cree therein  as  to  such  court  shall  seem  just 
and  reasonable. 

§  1016.  A  copy  of  the  decree  of  such  court, 
changing  the  name  of  any  person  or  corpo- 
ration, certified  under  the  seal  of  such  court 
by  the  clerk  thereof,  shall  be  sufficient  evi- 
dence of  the  name  of  such  person  or  cor- 
poration, and  of  such  change  having  been 
made,  in  any  court  of  this  State. 

ARTICLE  XL VII. 

Receivers. 

Sec.  1236.  When  appointed. 
1237.  Who  shall  not  be. 

§  12;^>6.  A  receiver  may  be  appointed  by 
the  court,  or  a  judge  thereof  in  vacation, 
in  the  following  cases: 

***** 

Fifth.  When  a  corporation  has  been  dis- 
solved,  or  is  insolvent,   or  is   in   imminent 


10 


INDIANA. 

Receivers;  general  provisions  —  Civ.  Pro.,  §§  1309,  175i,  1970,  1972. 


danger  of   insolvency,   or   bas   forfeited   its 

corporate  rigbts. 

♦  ♦  *  *  * 

[See  Hownrd  v.  Whitman,  29  Ind.  557;  Bank  v. 
T'uited  States,  etc.,  Co.,  105  id.  ".^27;  s..,f-  ^^N-  K. 
Rep  846;  Wayne  Co.  v.  Haniiuous,  LiU  lud.  dOS; 
8.  c,  27  N.  E.  Rep.  487.] 

§  1237.  No  party  or  attorney,  or  other 
person  interested  in  an  action,  shall  be  ap- 
pointed receiver  therein. 

ARTICLE  L. 
General  Provisions. 
Sec.  1309.  Certain    words,    how    construed. 

§  1309.  In  the  construction  of  this  act,  the 
following  rules  shall  be  observed,  when  con- 
sistent with  the  context: 

The  word  "  person  "  extends  to  bodies  poli- 
tic and  corporate. 

See  §  1972. 

[The  provision  of  the  Civil  Code  does  not  apply 
to  the  Criminal  Code.  State  v.  R.  R.  Co.,  23 
Ind.  362.] 

CHAPTER  IV. 
Criminal  Procedure- 
Art.     9.  Arrest  and  recognizance. 
22.  General  provisions. 

ARTICLE  IX. 

Arrest  and  Recognizance. 

Sec.  1754.  Summons  against  a  corporation. 

§  1754.  When  an  indictment  is  returned 
or  an  information  filed  against  a  corpora- 
tion, a  writ  of  summons,  commanding  the 
sheriff  to  notify  the  accused  thereof,  and 
returnable  on  the  tenth  day  after  its  date, 
shall  issue  on  the  precipe  of  the  prosecuting 
attorney.  Such  summons,  together  with  a 
copy  of  the  indictment  or  information,  shall 
be  served  and  returned  in  the  manner  pro- 
vided for  the  service  of  summons  upon  such 
corporations  in  civil  actions.  The  corpora- 
tion, on  or  before  the  return  day  of  a  sum- 
mons duly  served,  may  appear  by  one  of 
its  officers,  or  by  counsel,  and  answer  to  the 
indictment  or  information  by  motion  or  plea; 
and  upon  its  failure  to  make  such  appear- 
ance and  answer,  the  clerk  shall  enter  a  plea 
of  "  not  guilty;  "  and  upon  such  appearance 
being  made  or  plea  entered,  the  corporation 
shall  be  deemed,  thenceforth,  continuously 
present  in  court  until  the  case  is  finally  dis- 
posed of. 

[Whatever  may  be  the  rule  where  the  common 
law  as  to  crimes  is  recognized,  in  this  State,  under 
the  criminal  law,  a  corporation  cannot  be  prose- 
cuted bv  information  or  otherwise  for  a  misfeas- 
ance.   State  V.   R.    R.   Co.,   23  Ind.   365. 

Where  a  corporation  is  in  hands  of  receiver,  It 
cannot  be  prosecuted  for  crimes  or  misdemeanors 
committed  by  agents  or  servants.  State  v.  R.  R. 
Co.,  115  Ind.  466;  s.  c,  17  N.  E.  Rep.  909.] 


Sec. 


ARTICLE  XXH. 

General  Provisions. 

1970.  Corporations    punishable. 
1972.  "  Person  "  defined. 


§  1970.  Corporations  may  be  prosecuted  by 
Indictment  or  information,  for  erecting,  con- 
tinuing, or  maintaining  a  public  nuisance, 
or  for  obstructing  a  public  highway  or  a 
navigable  stream. 

[A  corporation  may  be  prosecuted  criminally 
for  obstructing  a  public  highway.  State  v.  B. 
R.  Co.,  120  Ind.  298;  s.  c,  22  N.  E.  Rep.  307. 

The  necessary  and  reasonable  using  of  highway 
by  a  railroad  company  is  not  an  illegal  obstruc- 
tion of  the  highway.  State  v.  R.  R.  Co.,  86  Ind. 
114.] 

§  1972.  When  the  term  "  person,"  or  other 
word,  is  used  to  designate  the  party  whose 
property  is  the  subject  of  an  offense,  or 
against  whom  any  act  is  done,  with  intent 
to  defraud  or  injure,  the  term  may  be  con- 
strued to  include  *  *  *  a^y  public  or 
private  corporation. 

See  §  1309. 

[The  provision  of  the  Civil  Code  that  the  word 
"  person  "  extends  to  bodies  politic  and  corporate, 
does  not  apply  to  the  Criminal  Code;  and  such 
construction  would  lead  to  absurdities.  State  v. 
R.    R.    Co.,   23   Ind.   364. 

Above  statute  includes  a  church  corporation  in 
the  term  "  person."    White  v.  State,  69  Ind.  274.] 


CHAPTER  XXI. 
Corporations  Generally. 

Sec.  3423.  Evidence   of  organization. 

3424.  Filing  articles  with  secretary  of  State. 

3425.  Powers  of  corporation. 

3426.  Shares  numbered;  certificate. 

3427.  First    meeting;    notice. 

3428.  Otiicers;   vacancies. 

3429.  Continuance  after  dissolution. 

3430.  Liability  of  stocliholders. 

3431.  Fiduciaries. 

3432.  Voting. 

3433.  Stock-book. 

3434.  Penalty. 

3435.  Receiver,    when    ch.Trter   expires. 

3436.  Jurisdiction  of  circuit  court. 

3437.  Receivers'    duties. 

3438.  Disposition  of  surplus. 

.34:'.9.  Judgment;    franchise   forfeited. 

3440.  Receivers'  pay;  suritlus  to  stockholders. 

3441.  Debts,   how  secured. 

3442.  Borrowing   on    mortgage. 

3443.  Discounts  valid. 

3444.  Contracts   valid. 

3445.  Special  charters  extended. 

3446.  I'lace  of  business;  directors. 

3447.  Election  of  directors. 

3448.  Number. 

3449.  Stock;   share. 

3450.  Fire    insurance    company;    real    estate. 

3451.  Insolvency;  stockholders'  liability. 

3452.  Change  of  name. 

§  3423.  When  the  steps  necessary  to  an  or- 
ganization of  a  corporation,  municipal  or 
private,  under  any  general  law,  have  been 
completed,  a  statement  thereof  may  be  filed 
in  the  office  of  the  clerk  of  the  circuit  court 
of  the  proper  county;  and  such  court,  at  its 


im)IAKA. 


11 


Articles  of  incorporation;  powers  —  Stat.,  §§  3424,  3425. 


next  term  thereafter,  shall,  on  proof  of  such 
organization,  cause  to  be  entered  of  I'ecord, 
in  the  order-book,  an  order  declaring  the 
existence  of  such  corporation;  and  such  order 
shall  be  conclusive  as  to  the  fact  of  such 
existence  at  the  date  which  such  court  may 
fix  in  such  order. 

See  Const.,  art.  I,  §  69;  art.  XI,  §  212;  Statutes, 
S  5128.  Creation  of  association  for  manufacturing 
mining,  etc.  See  §  5051  et  seq.  Expiration  of 
charter.  §  3435.  Continuance  after  dissolution. 
S  3429. 

[Charter  of  a  corporation  constitutes  a  contract 
between  it  and  the  State,  securing  to  it  a  vested 
right  in  its  franchise,  subject  to  any  cause  of 
forfeiture  existing  at  the  time  of  the  enactment 
of  charter,  but  cannot  be  divested  of  a  subsequent 
enactment.  Turnpilie  Co.  v.  Holthouse,  7  Ind. 
59;  Smead  v.  R.  R.  Co.,  11  id.  104;  State  v.  Daw- 
son, 22  id.  272. 

But  it  is  competent  for  the  legislature,  at  its 
pleasure,  to  alter  the  remedy  for  enforcing  the 
franchise.    Turnpike  Co.  v.  Holthouse,  supra. 

After  vested  rights  have  been  acquired,  charter 
cannot  be  so  amended  as  to  impair  them,  unless 
power  to  amend  is  expresslv  reserved.  R.  R.  Co. 
V.  Clifford.  113  Ind.  460;  s.  c.  15  N.  E.  Rep.  524; 
see  also  Boe  v.  R.  R.  Co..  10  id.  93. 

Before  charters  granted  by  legislature  have  any 
effect  they  must  be  accepted  by  the  corporators. 
And  amendatory  acts  are  valid  if  passed  before 
acceptance  of  original.  R.  R.  Co.  v.  Clifford,  113 
Ind.  4G0;  s.  c,  15  N.  E.  Rep.  524. 

As  to  what  acts  on  the  part  of  corporators  con- 
stitute an  acceptance  of  charter,  see  State  v. 
Daw.son,  22  Ind.  272. 

A  corporation  exists  not  by  contract  but  by 
statute,  and  where  its  rights  or  modes  of  action 
are  marked  out  by  statute,  they  cannot  be  changed 
even  by  the  contracts  of  the  corporators.  Ins. 
Co.  V.  Xunumacher.   15  Ind.   294. 

Until  statutory  requirements  to  organize  a  cor- 
poration have  been  complied  with,  a  subscriber 
to  articles  of  association  is  not  estopped  to  deny 
existence  of  the  corporation.  F.  &  M.  Co.  v.  Her- 
kimer,  46   Ind.    142.] 


§  3424.  (As  amended  March  11,  1895.)  That 
all  persons,  corporations,  companies  and  as- 
sociations desiring  to  incorporate  under  the 
laws  of  the  State  of  Indiana,  or  desiring 
to  enter  into  any  agreement  of  consolidation 
of  the  interests,  rights  and  powers  of  tjyo 
or  more  existing  corporations,  and  wlio  are 
not  now  by  law  required  to  do  so,  sliall  be, 
and  are,  hereiiy  required  to  file  with  the 
secretary  of  State  certified  copies  or  dupli- 
cates of  tlieir  articles  of  incorporation  or 
association  or  of  consolidation,  and  no  sucli 
corporation,  or  association,  or  consolidation 
of  corporations  shall  be  deemed  and  held  to 
be  legally  incorporated  or  consolidated  until  ' 
the  provisions  of  this  act  shall  have  been 
complied  with,  and  until  sucli  time  tbey 
shall  have  no  right  or  authority  to  do  busi- 
ness within  the  State  of  Indiana,  and  any 
contract  made  or  entered  into  l)y  or  with 
them  under  any  pretended  corporate  or  con- 
solidated name  shall  be  utterly  void.  In 
case  any  such  pretended  corporation,  associa- 
tion or  consolidation  corporation  shall  do 
or  attempt  to  do  any  business  within  the 
State  of  Indiana,  Avithout  having  first  filed 
its  articles  of  incorporation  or  consolidation. 


or  copies  thereof  with  the  secretary  of  State, 
and  having  paid  the  fee  therefor,  as  now 
provided  by  law,  the  State  shall,  in  addition 
to  other  remedies  now  provided  by  law,  have 
the  right  to  proceed  against  such  pretended 
corporation  or  consolidation  of  corporations 
by  suit  in  any  court  of  competent  jurisdic- 
tion for  the  recovery  of  any  fee  which  would 
be  due  under  the  provisions  of  this  act,  the 
same  as  if  their  articles  of  incorporation  or 
consolidation  had  been  filed  and  any  such 
court  shall  have  the  power  to  compel'the  fil- 
ing of  such  articles.  The  provisions  of 
this  act  shall  also  apply  to  all  corporations, 
associations,  or  consolidated  companies  now- 
doing  business  in  this  State,  and  which  have 
heretofore  entered  into  articles  of  incorpo- 
ration, or  consolidation,  but  have  failed,  or 
refused,  to  file  the  same,  or  copies  thereof, 
as  required  by  the  act  of  March  9,  1891,  of 
which  this  is  amendatory,  and  to  pay  the 
fees  required  by  law. 

§  342.5.  Corporations  shall,  where  no  other 
provision  is  specially  made,  be  capable,  in 
their  corporate  name,  to  sue  and  be  sued; 
to  have  a  common  seal,  which  thev  may 
alter  at  pleasure;  to  elect,  in  such  manner 
as  they  shall  determine,  all  necessary  offi- 
cers, fix  their  compensation,  and  define  their 
duties;  to  make  necessary  liy-laws:  deter- 
mine the  manner  of  calling  and  conducting 
meetings,  the  number  that  shall  constitute 
a  quorum,  the  number  of  shares  tliat  shall 
entitle  the  members  to  one  or  more  votes; 
(Provided,  Each  stockholder  shall  have  one 
vote  for  each  share  owned  and  held  by  him 
for  ten  days  previous  to  the  meeting  of  the 
corporation);  the  mode  of  voting  by  proxy; 
the  payment  of  assessments,  and  the  mode' 
of  selling  shares  for  the  non-pavment  of 
assessments;  and  the  tenure  of  offi'ce  of  the 
several  officers. 

See  Code  of  Civ.  Pro.,  §§  310-315.  Service  of 
summons  on  corporation.  §  318.  Pleadings.  §  362. 
Stock-book  is  presumptive  evidence  of  its  contents. 
§  3433.  Corporation  must  appear  by  attorney  in 
all  cases.  §  973.  Attachment  and  garnishment. 
§§  945,  970-972.  Criminal  proceeding  against  cor- 
poration. §§  1754,  1970.  Suits  conducted  after 
dissolution.  §  3429.  Failure  to  pay  judgment. 
§  3439.  Suits  by  foreign  corporation,  requisites. 
§  3453  et  seq.  Vacancies  in  ofSce,  filling  of.  §  3428. 
Election  and  number  of  directors.  §§  3447,  3448. 
Officers  not  to  act  as  notaries.  §  8041.  Notice  of 
first  meeting.    §  3427. 

[The  declaration  in  a  suit  brought  in  corporate 
name  need  not  aver  plaintiffs  to  be  a  corporation. 
Harris  v.  Mfg.  Co.,  4  Blackf.  267:  Hoaston  v.  R.  R. 
Co.,  16  Ind.  275;  State  v.  Stout,  61  Id.  144; 
Mackenzie  v.  Board,  72  id.  189;  Smythe  v, 
Scott,  124  id.  123;  s.  c,  24  N.  E.  Rep.  685. 
The  name  under  which  action  is  prosecuted 
imports  a  corporation.  Id.  What  are  sufficient 
averments  to  show  plaintiff  to  be  a  corpora- 
tion. Traber  v.  Bright.  .32  Ind.  67.  A  default, 
or  answer  in  denial  of  the  complaint,  admits 
plaintiff's  capacity  to  sue.  Heaston  v.  R.  R.  Co., 
supra;  Jones  v.  Foundry  Co..  14  Ind.  89;  Board 
v.  Bright,  18  id.  93.  And  if  the  answer  denies  the 
existence  of  a  corporation  which  is  shown  to  have 


12 


IXDIAXA. 


Powers;  shares;  first  meeting  —  Stat.,  §§  3426,  3427. 


once  existed,  It  must  particularly  set  forth  the 
manner  lu  which  the  corporate  powers  ceased. 
Heastou  v.  R.  K.  Co.,  supra.  (Mortrau  v.  Ins.  Co., 
8  Ind.  2Sr>,  overruled  on  this  point.)  A  plea  to  a 
suit  l>v  a  corporation,  stating  that  it  had  been 
dissolved  b.v  the  acts  of  its  lucnibers,  without 
sliowiutr  cause  or  manner  of  dissolution,  is  sutfl- 
cleiit.  Harris  v.  Mfg.  Co.,  supra.  And  in  an 
action  against  a  corporation  it  is  not  necessary 
to  aver  that  defendant  is  a  legally  organized 
rorporation.    Road  Co.  v.  I'ennington.  G2  Ind.  175. 

If  suit  Is  brought  against  a  defendant  by  name 
niplying  a  corporation  it  will  be  presumed  that 
lefendaut  is  a  corporation.  Express  Co.  v.  Uill, 
.3  Ind.  157;  Sun  Co.  v.  Horrcll,  53  id.  527.  And 
f  such  defendant  forms  an  issue  by  general  de- 
alnl  and  goes  to  trial,  it  is  not  necessary  for  plain- 
tiff to  introduce  any  evidence  of  existence  of 
the  corporation.  Express  Co.  v.  ITill,  supra.  When 
plaintilt  corporation  must  prove  its  existence  and 
general  denial  will  put  such  existence  in  issue. 
Wert  v.  Turuplke  Co.,  19  Ind.  242.  Nul  tiel  cor- 
poration is  a  good  defense,  when.     Id. 

A  de  facto  corporation  can  sue  and  be  sued;  and 
a  part.v  who  contracts  with  such  corporation,  is 
estopped,  in  a  suit  on  such  contract,  from  deny- 
ing siich  organization  at  the  date  of  the  contract. 
Heaston  v.  R.  R.  Co.,  supra;  Jones  v.  Foundry 
Co.,  siipra;  Board  v.  Bright,  supra;  Beatty  v. 
Agr.  Soc  76  Ind.  91;  Mackenzie  v.  Board,  supra. 
And  until  statutory  requirements  to  organize  a 
corporation  have  been  complied  with,  a  subscriber 
to  the  articles  of  association  is  not  estopped  to 
deuv  existence  of  corporation.  F.  &  M.  Co.  v. 
Herkimer,  40  Ind.  142. 

A  demurrer  to  a  complaint  for  want  of  facts 
does  not  raise  question  as  to  existence  of  plain- 
tiff as  a  corporation.  Wiles  v.  Trustees,  63  Ind. 
206.  Proper  mode  of  raising  question  is  by  nul 
tiel  corporation.  Beatty  v.  Agr.  Soc,  76  Ind.  91. 
And  burden  is  then  cast  on  plaintiff  to  prove  its 
corporate  existence.  Mining  Co.  v.  Herkimer,  46 
Ind.    142. 

Stockholder  may  bring  suit  in  favor  of  a  cor- 
poration when  the  corporation  refuses  to  do  so. 
Carter  v.  Glass  Co.,  85  Ind.   180. 

Stockholders  cannot  sue  for  the  conversion  of 
corporate  property.  Tomlison  v.  Bricklayers' 
Union,   87  Ind.  308. 

A  member  of  a  corporation  whose  rights  are 
denied  may  sue  to  have  such  rights  established. 
Fire  Co.  v.   Barnheisel,  92  Ind.  88. 

The  use  of  corporate  franchises  for  fifteen  years 
will  bar  an  action  to  test  validity  of  organization. 
State  V.   Gordon,   87  Ind.   171. 

Where  charter  does  not  require  acts  of  corpora- 
tion to  be  evidenced  b.v  its  seal,  it  is  not  requisite 
that  they  should  be  thus  evidenced.  Hamilton  v. 
It.  R.  Co.,  9  Ind.  360;  Trustees  v.  Johnson,  53  Ind. 
273. 

If  no  expressed  power  to  execute  bills  and  notes 
be  given  in  charter,  corporation  may  make  only 
such  as  may  be  necessary  or  proper  in  carrying 
through  the  purposes  of  its  business.  Smead  v. 
R.   R.    Co.,    11   Ind.    104. 

Notes  executed  through  abuse  of  corporate 
powers  may  be  good  In  hands  of  bona  fide  holders. 
Id. 

A  corporation  has  power  to  take  notes  to  secure 
indebtedness  within  scope  of  their  corporate  under- 
taking; and  power  to  take  a  note  iiuplies  the 
power  to  assign  it.  Hardy  v.  Merryweather,  14 
Ind.  203. 

Corporations  have  such  powers  as  are  especially 
granted,  and  all  others  necessary  for  purpose  of 
'-•arrying  into  effect  the  powers  expressly  granted. 
Bridge  Co.  v.  Hcndrick,  18  Ind.  11;  Board  v. 
Ry.  Co.,  47  id.  407;  Vauarsdall  v.  State,  65  id. 
176. 

One  who  deals  with  a  corporation  Is  presumed 
to  know  the  limitations  of  its  authority,  and  hence 
is  estopped  to  plead  its  want  of  authority.  Voris 
V.   B.  &  I/.  Assn.,  50  N.  E.  Rep.  779. 

One  who  receives  benefits  of  a  contract,  when 
•iued  thereon, held  not  permitted  to  claim  that  the 
contract  was  ultra  vires  as  to  the  other  party. 
Id. 

The  contracts  of  a  corporation  must  relate  to 
its  business,   and  must  be  made  by  uirectors  or 


an  authorized  agent.  Road  Co.  v.  Slaughter,  33 
Ind.   185. 

('orj)orations  have  no  power  to  execute  contracts 
that  are  foreign  to  purposes  for  which  they  were 
created.  Board  v.  Ky.  Co.,  50  Ind.  6o;  Turnpike 
Co.   V.    Board,  72  Ind.  226. 

Where  charter  prescribes  when  and  In  what 
manner  contract  may  be  made,  contracts  made  in 
violation  thereof  are  void.  Leonard  v.  Ins.  Co., 
97  Ind.   299. 

In  absence  of  any  restraints,  corporation  may 
borrow  money  and  execute  contracts  to  attain 
its  legitimate  objects,  the  same  as  natural  per- 
sons. Wright  V.  Hughes,  119  Ind.  324;  s.  c,  21 
N.   E.  Rep.  907. 

Mortgage  executed  by  corporation  to  secure 
money  to  be  used  in  business  in  which  corpora- 
tion has  no  power  to  engage  may  be  enforced  if 
cori)oration  is  not  prohibited  by  statute  from  mak- 
ing such  contract  and  mortgagee  had  no  com- 
plicify   in   the   unauthorized    transaction.    Id. 

A  contract  may  be  inserted  in  articles  of  in- 
corporation that  will  be  binding  on  the  members. 
Furniture  Co.  v.   Nees,  63  Ind.  245. 

Contracts  of  a  corporation  must  purport  on 
their  face  to  be  the  contracts  of  a  corporation. 
I'rather  v.  Ross,  17  Ind.  495;  Williams  v.  Bank, 
83  Ind.  237. 

As  to  wiien  acts  of  agents  in  executing  contracts 
bind  corporations,  see  Tousey  v.  Taw,  19  Ind. 
212;  G.itr  V.  Theis.  33  id.  307;  Road  Co.  v.  Brane- 
gan, 40  id.  361;  Pearse  v.  Wclborn,  42  id.  331; 
Trustees  v.  Johnson.  53  id.  273;  Township  v.  An- 
dress,  56  id.  157:  Williams  v.  Bank,  83  id.  237; 
School  Town  v.  Kendall,  72  id.  91;  Iklackenzie  t. 
Board,   id.  189;  R.   R.  Co.  v.  Davis,  20  id.  6. 

The  power  to  make  by-laws  resides  in  the  mem- 
bers of  a  corporation  at  large,  where  there  is  no 
law  or  usage  to  the  contrary.  Road  Co.  v.  Wy- 
song,  51  Ind.  4.  By-law  of  gravel  road  company 
held   invalid.    Id. 

A  corporation  nia.v  be  estopped  to  deny  a  con- 
tract which  it  had  no  authority  to  make.  Board 
V.   Ry.  Co..  47  Ind.  407. 

Where  cliarter  of  a  corporation  does  not  require 
that  appointment  of  an  agent  or  making  of  a 
contract  shall  be  by  written  instrument,  it  may 
be  by  parol.    Hamilton  v.   R.   R.   Co.,  9  Ind.  350. 

A  corporation  is  liable  for  an  intentional  tres- 
pass committed  by  its  agent,  though  the  directors 
were  not  aware  of  it.  Cole  v.  Reitz,  43  N.  E. 
Rep.  46. 

An  officer  is  not  entitled  to  compensation  in 
the  absence  of  a  governing  by-law  of  contract  to 
which  his  own  vote  was  not  essential.  Blue  v. 
Capitol  Bank,  43  N.  E.  Rep.  655.] 


§  3420.  Shares  shall  be  numbered  in  pro- 
gressive order,  besrinniug  at  number  one,  and 
every  stockholder  shall  have  a  certificate, 
uuder  the  seal  of  the  corporation,  signed 
by  the  treasurer,  certifying  his  property  in 
such  shares. 

[Shares  of  capital  stock  in  a  private  corpora- 
tion may  be  reached  by  attachment.  Quarl  v. 
Abbott,  102  Ind.  233;  s.  c,  1  N.  E.  Rep.  470. 

AVhere  by-laws  of  a  corporation  provide  for 
forfeiture  of  stock  on  non-payment  of  dues,  direct- 
ors may,  when  authorized,  waive  forfeiture,  and, 
when  not  so  authorized,  general  principles  of  law 
would  authorize  them  to  do  so.  Bldg.  Assn.  v. 
Black,  136  Ind.  544;  s.  c,  35  N\  E.  Rep.  829. 

Receiving  and  accepting  delinquent  dues  would 
constitute   such   a   waiver.     Id.] 

§  3427.  The  first  meeting  of  all  corporations 
.'ihall,  unle.ss  otherwise  provided  for,  be 
called  by  a  notice  signed  by  three  or  more 
members,  setting  forth  the  time,  place  and 
purposes  of  the  meeting,  and  shall,  ten  d:iys 
at  least  before  the  meeting,  be  delivered  to 
each  member,  or  published  in  some  news- 
paper of  the  county  where  the  corporation 


IXDIAXA. 


13 


Liability  of  stockholders;  stock-book;  expiration  —  Stat.,  §§  3428-3437. 


may  be  established,  or,  if  none,  then  in  some 
newspaper  in  this  State  nearest  thereto. 

§  :U28.  Such  corporation  may  elect  ollicers, 
fill  vacancies,  and  do  other  business  properly 
before  them. 

§  :'A'2'.).  All  corporations  "whose  charters 
shall  expire  by  limitation,  forfeiture,  or 
otlu-rwise,  shall,  nevertheless,  be  continued 
bodies  corporate  for  three  years  after  the 
time  they  would  have  been  so  dissolved,  for 
the  purpose  of  prosecuting  and  defending 
suits  to  which  they  are  a  party,  and  to 
enable  them  to  settle,  dispose  of.  and  con- 
vey their  property,  and  divide  the  capital 
stock,  but  not  to  continue  the  business  for 
Avhich   such   corporations   Avere   established. 

[Such  suits  to  be  conducted  in  name  of  defunct 
body.    Henon  v.   Vance,   17  Ind-   595. 

Under  this  section  a  bank  would  have  three 
years  from  date  of  dissolution  in  which  to  sue 
and  be  sued,  to  settle,  dispose  of  and  convey  its 
projicrt.v,  and  divide  the  capital  stock,  but  not 
to  continue  a  banking  business.  Cunningham  v. 
Clark,  24  Ind.  7;  Conwell  v.  Pattlson,  28  Ind. 
509. 

Section  applies  to  building  associations.  Eigen- 
mau   V.    B.    &   L.    Assn.,    79   Ind.    41.] 

§  3430.  If  any  part  of  the  capital  stock  of 
such  company  shall  be  withdrav\u  and  re- 
funded to  the  stockholders  before  the  pay- 
ment of  all  the  debts  of  the  company,  all 
the  stockholders  of  such  company  shall  be 
jointly  and  severally  linblo  for  the  payment 
of  such  debts. 

[A  stockholder  is  not  liable  for  corporation  debts 
when  the  stock  is  fully  paid  up.  Gainey  v.  Gilson, 
48  N.  E.  Rep.  G33.] 

§  3431.  No  person  holding  stock  in  any  such 
company  as  executor,  administrator,  guar- 
dian, or  trustee,  or  as  collateral  securitj', 
shall  be  personally  subject  to  any  liability 
as  stockholder  of  such  company;  but  the 
estate  and  funds  In  the  hands  of  such  exec- 
utor, administrator,  guardian  or  trustees, 
shall  be  liable  therefor,  and  the  person  pledg- 
ing his  stock  as  aforesaid  shall  be  considered 
as  holding  the  same. 

§  3432.  Every  such  executor,  administrator, 
guardian  or  trustee  shall  represent  the  share 
of  stock  in  his  hands,  and  vote  as  a  stock- 
holder; and  every  person  who  shall  pledge 
his  stock  as  aforesaid,  may,  nevertheless, 
represent  the  same  at  such  meetings,  and 
vote  accordingly. 

§  3433.  A  book  shall  be  kept  by  the  cor- 
poration, at  their  office  or  principal  place  of 
business,  containing  the  names  of  stock- 
holders thereof,  alphabetically  arranged, 
showing  their  respective  places  of  residence 
and  number  of  shares  held  by  them  severally, 
and  the  time  they  became  owners  of  the 
same;  which  book  shall,  at  all  business  hours 
of  the  company,  be  subject  to  the  inspection 
of  creditors,  stockholders,  or  their  representa- 
tives, who  shall  be  permitted  to  take  ex- 
tracts from  the  same.  Such  book  shall  be 
presumptive  evidence  in  favor  of  the  plaintiff 


of  the  facts  therein  stated  in  any  suit  or 
proceeding  against  such  companj-  or  stock- 
holder thereof. 

§  34.34.  Any  company  failing  to  keep  the 
book  to  make  the  entries  required,  or  to  ex- 
hiljit  the  same  as  directetl  in  the  preceding 
.section,  shall  forfeit  to  the  injured  party  a 
penalty  of  fifty  dollars  for  every  such  in- 
stance of  refusal  or  failure,  and  :ill  dam- 
ages resulting  therefrom,  and,  in  addition, 
shall  pay  to  the  State  of  Indiana  the  sum 
of  fifty  dollars  for  every  day  of  such  failure, 
to  be  sued  for  and  recovered  in  the  name  of 
the  State  by  the  prosecuting  attorney  of  the 
district  or  county  in  which  such  corporation 
is  situate:  and  when  recovered  shallbe  paid 
into  the  treasury  of  the  proper  county  for 
the  use  of  common  schools. 

[In  an  action  to  recover  by  penalty,  the  com- 
plaint nui:<t  show  that  otficers  upon  whom  demand 
was  made  had  notice  that  person  making  demand 
was  entitled  to  the  inspection.  Williams  v.  Road 
Co.,  45  Ind.  170.] 

§  343.5.  When  the  charter  of  any  corpora- 
tion shall  expire,  the  circuit  court  of  the 
county  in  which  such  corporation  has  its 
principal  place  of  business,  on  application  of 
any  creditor,  stockholder,  or  member  thereof, 
within  the  said  three  years,  may  appoint  one 
or  more  persons  to  be  receivers  or  trustees 
of  such  corporation,  to  take  charge  of  the 
estate  and  effects,  collect  the  debts  and  prop- 
erty due  and  belonging  to  the  corporation, 
with  power  to  prosecute  and  defend,  in  the 
name  of  the  corporation  or  otherwise,  all 
suits  for  the  purposes  aforesaid,  and  to  ap- 
point agents,  and  do  all  other  acts  which 
might  be  done  by  such  corporation,  if  in 
being,  necessary  for  the  final  settlement  of 
the  business  of  the  corporation;  and  the 
pov\-er  of  such  receivers  may  be  continued 
beyond  the  said  three  years,  and  as  long 
as  the  court  shall  think  necessary,  for  the 
purposes  aforesaid. 


[Receiver  appointed  under  above  section  may 
sue  in  his  own  name,  ilanlove  v.  Burger,  38 
Ind.  211. 

Section  construed.  Bldg.  Assn.  v.  Black,  136 
Ind.  544;  s.  c,  35  X.  E.  Rep.  829.] 


§  .3436.  The  said  court  shall  have  jurisdic- 
tion of  such  application  and  of  all  (juestions 
arising  in  the  proceedings  thereon,  and  may 
make  such  orders,  iujuuctions,  and  decrees 
as  justice  and  equity  shall  require. 

§  3437.  The  said  receivers  shall  pay  all 
debts  due  from  the  corporation,  if  the  funds 
In  their  hands  be  sufficient  therefor;  other; 
wise,  shall  distriliute  the  .same  ratably 
among  all  the  creditors  proving  their  debts, 
as  directed  by  au  order  or  decree  of  the 
court  for  that  purpo.se;  and  if  there  be  any 
oaiance  remaining  after  the  payment  of 
said  debts,  the  receivers  shall  distribute  and 
pay  the  same  to  and  among  those  justly  en- 
titled thereto,  as  having  been  stockholders 


14 


INDIANA. 


Debts;  bonds;  mortgages  —  Stat.,  §§  3438-3445. 


or  members  of  tbe  corporation,  or  their  logal 
representatives. 

§  H-4;iS.  If  there  be  no  person  entitled  to 
receive  the  same,  or  any  part  thereof,  it  shall 
be  paid  into  the  State  treasury,  to  be  dis- 
posed of  in  such  manner  as  the  general  as- 
semlilv  may  direct. 

§  ;M*39.  Whenever  any  judgment  against 
any  corporation  other  than  banking  shall 
have  remained  unpaid  for  the  space  of  one 
year  after  the  rendition  thereof,  and  fxecu- 
tiou  thereon  is  not  stayed  by  appeal  or  super- 
sedeas, the  circuit  court  of  the  proper  cov.nty 
shall  have  power  to  declare  the  franchise 
of  such  corporation  forfeited,  and  appoint  a 
receiver,  who  shall  give  bond,  and  reduce  the 
assets  of  such  corporation  to  possession  and 
pay  the  debts  thereof,  under  the  same  rules 
prescribed  for  the  government  of  adminis- 
trators. 

[Unless  authorized  by  statute  or  by  order  of 
court  appointing  him,  receiver  can  sue  only  In 
the  name  of  person  in  whom  right  of  action  ex- 
isted before  his  appointment.  Therefore  com- 
plaint by  receiver  appointed  in  proceedings  sup- 
plementary to  execution  must  aver  that  the  court 
appointing  him  authorized  him  to  bring  actions 
In   his  own  name.    Garber  v.   Kent,   70   Ind.   428. 

A  court  of  equity  has  no  power,  independently 
of  statute,  to  dissolve  an  insolvent  corporation. 
Iron  Hall  v.  Baker,  134  Ind.  293;  s.  c,  33  N.  E. 
Rep.  1128. 

What  is  suflScient  ground  for  appointment  of 
receiver.    Id. 

A  stocliholder  is  bound  to  apply  to  directors  or 
the  corporation  itself  for  redress,  before  apply- 
ing to  court  for  appointment  of  receiver.    Id.] 

§  344$.  The  services  of  such  receiver  shall 
be  paid  by  an  allowance,  to  be  made  by 
such  court  out  of  such  assets;  and  the  sur- 
plus left  after  the  payment  of  debts  and 
costs  shall  be  distril.)uted  among  the  stock- 
holders, pro  rata. 

[Corporations,  before  the  Revised  Statutes  of 
1852  took  effect,  were  only  subject  to  remedies  for 
non-paynieut  of  debts  to  which  natural  persons 
were.  Therefore  the  i)rovisions  of  the  two  pre- 
ceding sections  do  not  apply  to  corporations  which 
were  in  existence  before  they  took  effect.  Turn- 
pike Co.  V.  Holthouse,  7  Ind.  60. 

Court  has  power  at  any  time  to  discharge 
receiver  and  restore  corporation  to  its  original 
management.  Iron  Hall  v.  Baker,  134  Ind.  293; 
s.   c,  33  N.  E.   Kep.  1128.] 

§  3441.  The  dues  from  all  private  corpora- 
tions which  have  been  or  may  be  organized 
under  the  general  laws  and  under  the  pres- 
ent Constitution  of  this  State,  other  than 
banking  and  road  corporations,  and  other 
than  those  where  security  has  already  been 
provided,  shall  be  secured  in  the  manner 
hereinafter  provided. 

See  Const.,  art.  XI,  §  213. 

[Above  section  does  not  apply  to  corporations 
organized  for  manufacturing  purposes.  Wood  v. 
Harrison,  50  Ind.  480;  Gilbert  v.  Coal  &  Iron  Co., 
62  id.  522.] 

§  3442.  All  companies  organized  under  the 
laws  of  this  State  heretofore  Incorporated 


or  hereafter  incorporated  within  this  State, 
shall  have  full  power  and  authority  from 
time  to  time  to  borrow  money  at  any  rate 
of  interest  not  exceeding  the  legal  rate  of 
interest  allowed  by  law  of  the  State  where 
the  loans  may  be  negotiated  or  money  bor- 
rowed, to  be  agreed  upon  between  the  par- 
ties, for  the  purpose  of  enabling  such  com- 
pany to  purchase  real  estate,  erect  build- 
ings with  all  necessary  macliinery  and  tix- 
tures  and  necessary  funds  to  carry  on  the 
improvements  and  operations  of  such  com- 
pany; and  as  an  evidence  of  such  loans  or 
for  the  purcha.se  of  materials  and  necessary 
improvements,  on  time,  may  issue  its  cor- 
porate bonds  or  promissory  notes,  and  se- 
cure the  repayment  thereof,  Avith  the  interest 
which  shall  accrue,  may  mortgage  its  fran- 
chise, real  estate,  income  and  all  other  prop- 
erty, and  may,  bj^  its  president  or  other  offi- 
cers or  agents,  sell,  dispose  or  negotiate  such 
bonds,  notes  or  the  stock  of  such  company, 
at  such  time  and  at  such  places,  either 
within  or  Avithout  this  State,  and  at  such 
rates  and  for  such  prices  as  in  the  opinion 
of  the  company  will  best  advance  its  in- 
terest. 

[A  turnpike  company  may  mortgage  its  road,  or 
any  part  of  it,  to  secure  payment  of  money  due 
a  contractor  for  constructing  the  road.  Turnpike 
Co.    V.   McCormick,   45   Ind.   239. 

Release  of  mortgage  by  president,  held  ratified. 
Smith  y.   Wells  Mfg.   Co.,   46  N.   E.    Rep.   775. 

Instruction  by  a  majority  of  a  corporation  to 
the  president,  held  to  authorize  release  of  the 
mortgage.    Id.] 

§  8443.  And  if  such  bonds,  notes,  or  stock 
are  thus  sold  at  a  discount,  such  sale  shall 
be  as  valid  and  binding,  in  every  respect, 
as  if  sold  at  their  par  value.  And  every  such 
company  is  hereby  authorized  to  confer  upon 
the  holder  of  any  bond  or  note,  sold  or  issxied 
as  aforesaid,  the  right  to  convert  the  princi- 
pal thereof,  at  any  time  until  paid,  into  the 
stock  of  such  company. 

§  3444.  All  such  contracts,  bonds,  notes, 
and  mortgages,  made  in  pursuance  of  the 
foregoing  provisions,  shall  be  as  valid  and 
binding  upon  the  parties  thereto  as  if  the 
.same  liad  been  originally  embodied  in  tlie 
several  acts  incorporating  such  comiianies: 
Provided,  however.  That  this  act  shall  not  be 
so  construed  as  to  repeal,  change,  or  modify 
any  similar  i)rovisi()ns  contained  in  any  act 
incorporating  and  railroad  company  or  any 
act  amendatory  thereof,  or  to  restrict  the 
provisions  of  any  act  of  incorporation  of 
any  railroad  company  or  any  act  amenda- 
tory thereof,  which  has  enlarged  rights, 
grants,  or  privileges. 

§  344.").  That  each  and  every  private  cor- 
poration now  existing,  and  which  was 
created  and  organized  by  and  under  a  special 
act  of  charter  passed  before  the  present 
Constitution  of  the  State  took  effect,  shall  be 
and  continue  a  corporation  thirty  years  after 
the  passage  of  this  act:  Provided,  That 
where  the  special  act  by  and  under  Avhich 


INDIANA. 


15 


Change  of  place  of  business;  directors;  capital  stock —  Stat.,  §§  344&-3451. 


any  such  corporation  was  created,  or  any 
amendment  of  or  supplement  to  such  act 
gives  the  right  to  continue  and  exist  for  a 
longer  period  or  perpetually,  such  corpora- 
tion shall  continue  for  such  longer  period 
or  perpetually,  as  so  given.  This  act  shall 
only  apply  to  corporations  created  before 
and  existing  before  the  first  day  of  Novem- 
ber, 1851,  and  all  laws  and  parts  of  laws 
creating  any  such  corporation,  and  all  amend- 
ments and  acts  supplemental  thereto,  so  far 
as  the  same  are  in  conflict  with  this  act,  are 
repealed  as  to  all  such  corporations  as  ac- 
cept the  provisions  of  this  act. 

§  344G.  That  in  every  case  where  the  law 
creating  such  corporations  designates  the 
town  or  city  where  such  corporation  shall  be 
established,  the  corporation  may,  by  resolu- 
tion of  its  directors,  change  its  place  of 
business  from  such  town  or  city  to  any  town 
or  city  in  this  State.  The  meeting  of  the 
board  of  directors  for  this  purpose  may  be 
held  at  the  town  or  city  mentioned  in  charter 
of  the  corporation,  or  held  at  the  town  or 
city  to  which  the  change  is  to  be  made.  In 
cases  where  any  such  change  of  location  has 
heretofore  been  made  or  attempted  it  shall 
be  lawful  for  the  board  of  directors  in  their 
resolution  for  a  change  of  location  under  the 
act  to  i-efer  to  and  recite  the  time  and  place 
and  terms  of  the  first  resolution  or  order  of 
the  board  ordering  the  change  of  location, 
and  to  reaffirm  such  first  resolution  or  order, 
and  siich  change  shall  be  good  and  effectual 
from  the  date  of  said  first  resolution  or  order, 

§  3447.  That  the  directors  of  any  such  cor- 
poration shall  be  elected  in  the  manner  and 
at  the  time  and  place  now  provided  for  by 
the  charter  of  such  corporation,  except  where 
there  shall  be  or  has  been  (a)  change  of  its 
place  of  business.  Then  in  such  case  the 
election  of  directors  shall  be  at  the  place 
to  which  such  change  shall  have  been  made, 
and  no  act  of  any  board  of  directors  done 
shall  be  invalid  by  reason  of  any  informality 
or  irregularity  in  time,  place  and  manner 
of  their  election.  At  all  elections  of  directors 
and  at  all  other  meetings  of  the  directors 
each  stockholder  shall  have  one  vote  for  each 
share  of  stock  owned  by  him. 

Directors  of  mining,  manufacturing,  etc.,  cor- 
porations.   §§  5054,  5055. 

[Information  in  quo  warranto  held  proper  rem- 
edy to  contesf  election  of  directors,  where  two 
factious  of  stockholders  had  elected  two  sets  of 
directors.  Caramel,  etc.,  Co.  v.  Small,  47  N,  E. 
Rep.   11.] 

§  3448.  The  number  of  directors  may  be 
Increased  or  reduced  by  resolution  of  the 
board  of  directors  to  any  number  not  ex- 
ceeding thirteen,  and  Avhen  heretofore  any 
change  in  the  numl)er  of  directors  has  been 
made  or  attempted  by  any  resolution  or  by 
any  amendment  or  supplemental  act  it  shall 
be  lawful  for  the  directors  acting  under  this 
law  to  reatfirm  or  adopt  such  change  or  at- 


tempted change,  and  such  change  of  the 
number  of  directors  shall  be  deemed  good 
and  effectual  from  the  time  first  made,  or 
attempted  to  be  made,  and  all  acts  done  by 
such  increased  board  of  directors  shall  be 
legal  and  valid. 

§  3449.  The  lioard  of  directors  may  by  a 
vote  of  two-thirds  of  its  members  reduce  or 
increase  the  amount  required  to  constitute 
a  share  of  stock,  and  the  directors  may  in 
the  same  manner  increase  or  diminish  the 
capital  stock,  and  where  before  the  passage 
of  this  act  there  has  been  a  change  of  the 
amount  required  to  constitute  a  share  of 
stock,  or  where  there  has  been  increase  or 
decrease  of  the  capital  stock  made  or  at- 
tempted by  any  resolution  of  the  board,  or 
hy  any  amendment  or  supplemental  act,  the 
board  of  directors  may  by  a  resolution 
adopted  by  a  vote  of  two-thirds  of  the  di- 
rectors reaffirm  such  increase  or  decrease,  or 
attempted  increase  or  decrease  of  the  capital 
stock,  and  reaffirm  the  change  in  amount 
required  to  make  a  share  of  capital  stock, 
and  such  change  in  the  amount  required  to 
make  a  share  of  such  increase  or  decrease  of 
the  capital  stock  shall  be  legal  and  valid 
from  the  date  Avhen  first  made  or  attempted 
to  be  made. 

§  3450.  Any  insurance  company  having 
power  to  insure  property  against  loss  or 
damage  by  fire,  and  loan  money,  and  power 
to  acquire,  hold,  possess,  use,  occupy  and 
enjoy  real  estate,  may  have  and  hold  real 
estate  to  any  amount  not  exceeding  five  hun- 
dred thousand  dollars  at  any  one  time,  and 
may  receive,  retain  and  contract  for  the 
same  rate  of  interest  as  is  allowed  by  the 
general  laws  of  this  State. 

§  3451.  In  case  of  insolvency  or  insuffi- 
ciency of  effects  of  a  corporation  to  pay  the 
debts  against  it,  each  of  the  stockholders 
shall  be  liable  in  an  amount  equal  to  the 
amount  of  his  stock  at  the  time  the  debts 
were  contracted  and  no  further,  after  the 
assets  of  tlie  corporation  are  exhausted: 
Provided,  That  the  directors,  with  the  assent 
of  the  stockholders,  may  increase  this  lia- 
bility to  any  amount  not  exceeding  three 
times  the  amount  of  stock  held  by  each 
stockholder.  Any  corporation  desiring  to 
avail  itself  of  the  provisions  of  this  act,  or 
of  any  part  thereof,  may  do  so  within  thirty 
days  after  the  pas.sage  of  this  act,  and  shall 
do  so  by  resolution  of  the  board  of  directors 
showing  the  provisions  adopted,  which  reso- 
lution shall  be  filed  in  the  office  of  the  secre- 
tary of  State,  and  accompanying  such  reso- 
lution, or  as  a  preamble  thereto,  there  shall 
be  a  statement  giving  the  title  and  date  of 
the  act  creating  said  corporation,  and  also 
giving  the  title  and  date  of  act  amendatory 
or  supplemental  to  the  first  mentioned  act. 

[An  insolvent  corporation  may  prefer  creditors. 
Levering   v.    Bimel,   45   N.    E.   Rep.    775. 

Corporate  assets  are  not  a  trust  fund  before  a 
corporation  is  placed  under  control  of  the  court. 
Id. 


16 


INDIANA. 


Foreign  corporations  —  Stat.,  §§  3452-3455. 


That  preferences  bv  nn  insolvent  corporation 
inure  to  the  benefit  of  some  directors,  beid  not 
to  render  them   invalid.    Id. 

When  a  corporation  borrowed  money  ana  al- 
rectod  its  officers  to  pay  over  the  same  to  an- 
otlier  creditor,  their  authority  terminated  by  the 
apiiointmcnt  of  a  receiver  for  said  corporation. 
Bank  v.   Dovetail  Co.,   42  N.   E.   Rep.  924. 

An  Insolvent  corporation  may  assign  accounts 
to  its  directors  to  reimburse  tliem  on  account  of 
a  liabilitv   incurred   for   the  corporation.    Id. 

A  creditor  cannot  maintain  a  suit  to  reach  as- 
sets withheld  from  a  corporation  in  charge  of  a 
receiver  unless  the  receiver  refuses  to  sue.     Id.] 

§  3452.  That  any  private  corporation  or 
company  created  and  existing  at  and  be- 
fore tlie  first  day  of  Xovenil>er.  A.  D.  1850, 
may,  by  its  board  of  its  directors,  as  often  as 
deemed  desiraltle.  adopt  a  new  name  for  the 
corporation  or  company,  by  resolution  duly 
entered  upon  its  records,  and  in  so  doing 
may  select  any  name  agreed  upon  by  said 
board,  and  after  any  such  change  of  name 
it  shall  Ije  and  continue  the  same  identical 
corporatTon  or  company  as  it  was  before  jaiy 
such  cliauge  of  name  was  adopted,  and  may 
be  sued  in  its  original  name,  or  in  any  name 
so  adopted.  And  any  such  corporation  or 
company  may  avail  itself  of  the  provisions 
of  this  act  within  thirty  i30)  days  after  the 
passage  hereof,  and  which  shall  be  done  by 
resolution  of  its  board  of  directors,  showing 
the  provision  adopted  and  filing  a  copj* 
thereof  in  the  office  of  the  secretary  of  State. 

Change  of  name.    §§  1012-1016. 


CHAPTER  XXII. 

Corporations  —  Foreign. 

Sec.  345.3.  Agent  must  file  authority. 

3454.  Consent  to  be   sued   here. 

3455.  Service   on   agent   good. 

3456.  Prerequisite  to  business. 

3457.  "  Agent  "    defined. 

3458.  ^Vho   not   agents. 

3459.  Penaltv   on   agent. 

3460.  Forfeiture. 

3461.  Condition  precedent. 

§  3453.  Agents  of  corporations  not  incorpo- 
rated or  organized  in  this  State,  before  en- 
tering upon  tlie  duties  of  their  agency  in 
this  State,  shall  deposit  in  the  clerk's  office 
of  the  county  Avhere  they  propose  doing 
business  therefor  the  power  of  attorney, 
commission,  appointment,  or  other  authority 
under  or  Ijy  virtue  of  vvliich  they  act  as 
agents. 

Actions  against  foreign  corporation,  where  com- 
menced.   §  315. 

["  Foreign  corporation  "  defined.  Daly  v.  Ins. 
Co.,  64  Ind.   1. 

Contracts  made  by  agents  of  foreign  corpora- 
tions not  conii)lying  with  this  section  are  not  void, 
but  their  enforceiuont  is  prohibited  until  the  re- 
quirements of  this  softion  have  been  comi)lied 
with.  Mach.  Co.  v.  Caldwell,  54  Ind.  271;  Mach. 
Co.  V.  Hatfield,  58  id.  1.S7;  Mfg.  Co.  v.  Brown,  64 
id.  548;  Wiestling  v.  AVarthin,  1  Ind.  App.  217: 
6.   c,  27  N.   E.   Kep.  576. 

Failure  to  comply  with  this  section  does  not 
render  a  mortgage  given  to  corporation  void  but 
merely    suspends   right   to   foreclose   it   until    the 


provisions  shall  have  been  complied  with.  Daly 
v.   Ins.   Co.,   supra. 

A  note  given  to  corporation  is  not  void,  but  its 
collection  is  susjicudcd  until  this  section  has  been 
complied  with.    Ins.  Co.  v.   AVellman,  60  Ind.  413. 

This  State  has  the  constitutional  right  to  pre- 
scribe terms  on  which  corporations  organized  In 
other  States  may  transact  business  in  this  State. 
Ins.  Co.  V.  Harrah,  47  Ind.  236. 

While  corporations  are  recognized  as  citizens, 
for  some  purposes,  of  the  State  of  their  creation, 
they  are  not  citizens  within  the  meaning  of  that 
clause  of  the  United  States  Constitution  which 
declares  that  the  citizens  of  each  State  shall  be 
entitled  to  all  the  privileges  and  immunities  of 
citizens  in  the  several  States;  they  exercise  priv- 
ileges only  by  consent  and  comity.  Id.  It  will 
be  presumed  that  a  foreign  corporation  has  com- 
plied with  this  statute  until  contrary  is  shown. 
Sprague  v.  Cutler  Co.,  106  Ind.  244;  s.  c,  6  N.  E. 
Bep.  335. 

(Objection  that  there  has  not  been  such  com- 
pliance must  be  made  how.  Elsten  v.  Piggott, 
94  Ind.    14. 

This  section  applies  only  to  such  agents  as 
propose  to  transact,  within  this  State,  the  busi- 
ness in  which  the  corporation  is  engaged,  and 
not  to  persons  who  are  engaged  in  appointing 
agents  to  do  its  business.  Morgan  v.  >\  liiiu,  lol 
Ind.   14. 

It  relates  to  foreign  corporations  in  general, 
and  lias  not  application  to  such  corporations  as 
are  under  special  regulations.  Rehm  v.  Ins.  & 
Sav.  Inst.,  125  Ind.  135;  s.  c,  25  N.  E.  Rep.  173. 

It  is  applicable  to  foreign  corporations  dealing 
in  articles  under  letters-patent  issued  by  tlie 
I'uited  States.  Agr.  Works  v.  Work,  lO  Ind.  253; 
Hockett  V.  State,  105  id.  250;  s.  c,  5  N.  E.  Rep. 
178;  Breohbill  v.   Randall,  102  Ind.  528. 

AA'here  complaint  of  a  foreign  corporation  is 
silent  on  the  subject,  it  will  be  presumed  that 
it  has  complied  with  sections  3453  and  3454,  and 
demurrer  for  want  of  legal  capacity  to  sue  is 
bad.  Sprague  v.  Lumber  Co.,  106  Ind.  242;  s.  c, 
6  X.  E.  Rep.  335;  Cassaday  v.  Ins.  Co.,  72  Ind.  95. 

A  finding  in  an  action  by  a  foreign  corporation 
construed,  and  held  to  show  that  the  corporation 
had  not  complied  with  the  laws,  so  as  to  be  enti- 
tled to  do  business  in  this  State.  Maine  Guar- 
anty Co.  V.  Cox,  Ind.  Supp.  932.] 

§  3454.  Said  agents  shall  procure  from 
such  corporations,  and  file  with  the  cleric  of 
the  circuit  court  of  the  county  where  tliey 
propose  doing  business,  before  commencing 
the  duties  thereof,  a  duly  authenticated 
order,  resolution,  or  other  sufficient  author- 
ity of  the  board  of  directors  or  managers 
of  such  corporations,  autliorisiug  citizens  or 
residents  of  this  State  having  a  claim  or 
demand  against  such  corporation  arising 
out  of  any  transaction  in  this  State  with 
such  agents,  to  sue  for  and  maintain  an 
action  in  respect  to  the  same  in  any  court 
of  this  State  of  competent  jurisdiction,  and 
further  authorizing  service  of  process  in 
such  action  on  sticlt  agent  to  be  valid  service 
on  such  corporation,  and  that  such  sei'vice 
sliall  autliorize  .iudgment  and  all  otlier  pro- 
ceedings against  such  corporation. 

[Section  not  applicable  to  foreign  corporations 
that  are  under  special  regulations.  Rehni  v.  Ins. 
&  Sav.  Inst.,  125  Ind.  135;  s.  c,  25  X.  E.  Rep.  173. 

Above  section  applies  only  to  suits  arising  out 
of  business  transacted  within  this  State.  Ins.  Co. 
V.  Black,  80  Ind.  513.  And  only  to  actions  on 
contract  and  not  replevin  suits.  Smith  v.  Little, 
67  Ind.   549.] 

§  3455.  The  service  of  process  on  such 
agents,  in  actions  commenced  against  such 


INDIANA. 


17 


Foreign  corporations  —  Stat.,  §§  345&-34G1,  5051. 


corporation,  shall  be  deemorl  a  service  on 
the  corporation,  and  shall  authorize  the  same 
proceediugs  as  in  other  cases. 

[Service  on  such  agents  Is  not  authorized  when 
suit  arises  on  contract  made  out  of  the  State. 
Ins.    Co.    V.    Black,    80   Ind.   513.] 

§  3450.  Such  foroifin  corporations  shall  not 
enforce,  in  any  court  of  this  State,  any  con- 
tracts made  by  their  agents  or  by  persons 
assuming  to  act  as  their  agents,  before  a 
compliance  by  such  agents  or  persons  acting 
as  such  with  the  provisions  of  sections  1  and 
2  of  this  act. 

[Argument  of  counsel  held  to  be  too  meager  to 
advise  the  court  of  incapacity  of  non-resident 
corporation  to  sue.  Sutflc-iency  of  complaint.  Al- 
len V.  Ins.  Co.,  136  Ind.  608;  s.  c,  36  X.  E.  Rep. 
515. 

In  suit  upon  note  and  mortgage  made  to  a 
foreign  corporation,  for  a  loan  of  money,  an  an- 
swer in  al)atpmcnt,  that  corporation  had  not  com- 
plied with  sections  3453-3-156  before  doing  busi- 
ness In  this  State,  is  bad  on  demurrer,  it  not 
appearing  where  the  loan  was  made.  Finch  v. 
Ins.   Co.,   87  Ind.  302. 

Receivers  of  a  foreign  corporation  cannot  sue 
to  enforce  a  contract  unless  the  corporation  has 
complied  with  the  foregoing  statute.  Wiestling 
V.  Warthln,  1  Ind.  App.  217;  s.  c,  27  N.  E.  Rep. 
576.     See  also  notes  to  §§  3453,  3454.] 


§  3457.  Any  person  who  shall,  directly  or 
Indirectly,  receive  or  transmit  money  or 
other  valuable  thing  to  or  for  the  use  of 
such  corporations,  or  who  shall  in  any  man- 
ner make,  or  cause  to  be  made,  any  contract, 
or  transact  any  business  for  or  on  account 
of  any  such  foreign  corporation,  shall  be 
deemed  an  agent  of  such  corporation,  and 
be  subject  to  the  provisions  of  this  act  re- 
lating to  agents  of  foreign  corporations. 

§  3458.  The  foregoing  section  shall  not  ap- 
ply to  persons  acting  as  agents  for  foreign 
corporations  for  a  special  or  temporary  pvu'- 
pose  or  for  purposes  not  within  the  ordinary 
business  of  such  corporations,  nor  shall  it 
apply  to  attorneys  at  law.  as  such. 

§  3459.  Any  person  acting  as  agent  of  a 
foreign  corporation  as  aforesaid,  neglecting 
or  refusing  to  comply  with  the  foregoing 
provisions  as  to  agents,  shall,  upon  present- 
ment or  indictment,  be  fined  in  any  sum 
not  less  than  fiftj'  dollars. 

§  3460.  Every  foreign  corporation  now 
doing  or  transacting,  or  that  shall  hereafter 
do  or  transact,  any  business  in  this  State, 
or  acquire  any  right,  title,  interest  in,  or 
lien  upon  real  estate  in  this  State,  that  shall 
transfer  or  cause  to  be  transferred  from  any 
court  of  this  State  to  any  court  of  the  United 
States,  save  by  regular  course  of  appeal, 
after  trial  In  the  State  courts,  any  action 
commenced  by  or  against  such  corporation 
in  any  court  of  this  State,  by  or  against 
any  citizen  or  resident  thereof:  or  that  shall 
commence  in  any  court  of  the  United  States 
in  this  State,  on  any  contract  made  in  this 
State  or  liability  accrued  therein,  any  suit 
or  action  against  any  citizen  or  resident  of 


the  State  of  Indiana.— shall  thereby  forfeit 
all  right  and  authority  to  do  or  transact 
business  in  this  State  or  hold  real  property 
or  liens  thereon;  and  all  contracts  between 
such  corporations  and  citizens  or  residents 
of  this  State,  made  after  the  passage  of  this 
act,  shall  be  rendered  void  as  in  favor  of 
such  corporation,  but  enforceable  by  such 
citizen  at  his  election. 

§  3401.  The  provisions  of  this  act  are 
hereby  made  conditions  upon  which  such 
corporations  may  lie  authorized  to  do  busi- 
ness in  this  State  or  hold  titles  to  or  liens 
on  real  estate  therein. 

[A  foreign  corporation  obtaining  juagment  In 
this  State  may  purchase  lands  at  a  sale  under 
such  judgment  although  it  has  not  complied  with 
sections  3460,  3461.     Elstou  v.  Piggott,  94  Ind    14  ] 


CHAPTER  XXXVIII. 


Corporations  —  Manufacturing  and  Mining 
Companies. 

Sec.  5051.  How    incorporated. 
.^052.  When    incorporated. 
50.">3.  What    real    estate    may    hold. 

5054.  Directors. 

5055.  Oflicers;  voting. 

50.56.  Marine  railway;  gaspipes. 

5057.  Gas  and  water-worlis  companies. 

5058.  Capital    stoclv. 

5059.  Stocli  transferable;  restrictions. 

5060.  Payment   of   stock. 

5061.  Collections    of   calls. 

.5062.  Certificate   of   payment   to   be  filed. 

5063.  Reduction  of  capital  stock;  certificate. 

5064.  Preferred   stock. 

5065.  Provision    in    articles    of   association. 

5066.  Issuing   of    preferred    stock. 

5067.  Amount  of;   limit. 

5068.  Stock  not  to  be  voted. 

5069.  Redemption    of    stock;    certificate. 

5070.  When    act    not    applicable. 

5071.  Annual    report. 

5072.  '•  Annually  "    construed. 

5073.  Liability    of   oflicers. 

5074.  Suit   against   officers. 

5075.  Improper    dividend;    directors    liable. 

5076.  Liable  for  violating  act. 

5077.  Liability  of  stockholders. 

5078.  Enlarging  objects. 

5079.  Real    estate. 

5080.  Former  charters. 

5081.  Canal   or   race. 

5082.  Acquiring   title. 

5083.  Proceedings    to    appropriate    and    con- 

demn. 

5084.  Payment   of   damages. 

5085.  Unknown    parties;    amendments,    etc. 

5086.  New   proceedings. 

5087.  Stock  in   water-power  corporation. 
5098.  Foreign  corporations  may  acquire  real 

estate. 
5128.  Insolvency;   liability   of  stockholders. 

Corporations. 

§  5051.  Whenever  three  or  more  persons 
may  desire  to  form  a  company  to  carry  on 
any  kind  of  manuracturing,  mining,  mechan- 
ical or  chemical  business,  or  to  furnish  mo- 
tive power  to  carry  on  such  business;  or 
to  supply  any  city  or  village  with  water; 
or  to  form  union  stock-yards  and  transit 
companies,  and  operating,  maintaining  and 
transacting  the  business  incident  to  such 
companies;  or  to  form  grain-elevator  com- 


18 


INDIANA. 


Manufacturing,  etc.,  corporations  —  Stat.,  §§  5052-5056. 


panies,  and  constructing,  maintaining  and 
operating  elevator.s  and  transacting  tlie 
Inisine.-^s  incident  thereto;  or  to  form  com- 
panies for  tlie  purpose  of  buying  and  selling 
dry  goods,  carpets,  boots  and  slioes.  mil- 
linery goods,  fancy  goods  or  jeAvelry,  in  con- 
nection witli  tlie  manufacture  of  such  goods 
and  articles,  into  any  articles  for  which 
they  are  suitable,  and  for  the  sale  of  such 
articles,  when  they  are  so  manufactured  they 
shall  make,  sign  and  acliuowledge.  before 
some  otticer  capable  to  take  acknowledgment 
of  deeds,  a  certificate  in  Avriting,  which  shall 
state  the  corporate  name  adopted  by  the 
company,  the  object  of  its  formation,  the 
amount  of  capital  stock,  the  term  of  its 
existence  (not,  however,  to  exceed  fifty 
years),  the  number  of  directors  and  their 
names  who  shall  manage  the  affairs  of  such 
company  for  the  first  year,  and  the  name  of 
the  town  and  county  in  which  its  operations 
are  to  be  carried  on,  and  file  the  same  in 
the  office  of  the  recorder  of  such  county, 
which  shall  be  placed  upon  the  record,  and 
a  duplicate  thereof  in  the  office  of  the  secre- 
tary of  State. 

General  Corporation  Law,  §  3423  et  seq. 

[A  water-works  company  is  not  a  manufactur- 
ing company  within  meaning  of  above  section. 
Kent  V.    Water-Works,   62   Ind.   03. 

But,  complaint  sufficiently  shows  that  water- 
works company  was  organized  under  •'  Manufac- 
turing and  Mining  Associations  Act,"  wTien. 
Clow  V.  Brown,  134  Ind.  287;  s.  c,  33  N.  E.  Rep. 
1126. 

A  manufacturing  corporation  is  not  authorized  to 
engage  in  the  business  of  private  warehouseman. 
Bank  v.   Whitehead.  49  X.   E.   Hep.  592. 

An  association  which  does  business  after  an 
unsuccessful  attempt  to  incorporate  is  a  part 
nership,  composed  not  only  of  the  directors,  but 
of  the  subscribers  to  the  articles.  Coleman  v. 
Coleman,   78  Ind.   344. 

NL'fess.iry  stops  to  be  taken  to  create  corpora- 
tion ui\der  above  section.  F.  &  M.  Co.  v.  Herki- 
mer,  46   Ind.    142. 

A  nuTO  signing  of  articles  of  association  is  not 
sufficient  compliance  with  above  section.  In  order 
to  make  them  valid  and  effective  all  should  sign 
such  articles;  otherwise  he  does  not  become  a 
stockholder,  and  Is  not  bound  bv  his  subscription. 
Coppage  V.  Ilutton,  124  Ind.  4Ul;  s.  c.  24  N.  E. 
Rep.   112. 

The  fact  that  articles  of  incorporation  mention 
a  purpose  not  within  the  statute  unuer  which 
corporation  is  organized,  does  not  vitiate  the  in- 
corporation. Shick  V.  Citizens'  Enterprise  Co.,  44 
N.   E.   nop.  48. 

A  subscriber  to  an  existing  corporation  need  not 
acknowledge  the  articles  of  incorporation.    Id.] 

§  5052.  When  the  certificate  shall  hare  been 
filed  as  aforesaid,  the  persons  who  sh.all 
have  signed  and  acknowledged  the  same,  and 
their  succe.ssor.s,  shall  lie  a  body  politic  and 
corporate,  and,  by  their  corporate  name, 
may  take,  hold,  and  convey  real  estate  neces- 
sary to  carry  on  the  operations  named  in 
such  certificate. 

§  5053.  All  incorporated  manufacturing 
companies,  in  actual  operation  and  carrying 
on  business  in  the  State  of  Indiana,  may 
take,  hold,  and  convey  so  much  real  estate 
as  may  be  necessary  to  carry  on  their  busi- 


ness, and  may  also  take  and  hold  such  real 
estate  as  may  be  mortgaged  to  such  com- 
panies to  secure  any  debt,  or  may  be  talcen 
in  payment  of  an.v  indebtedness  previously 
contracted,  or  may  bi'  i)ur(liased  on  judg- 
ments, decrees,  or  mortgages  obtained  or 
made  for  such  delits;  and  all  such  convey- 
ances of  land,  whether  made  heretofore  or 
hereafter,  are  hereby  ratified  and  declared 
to  be  valid. 

[If  title  to  real  estate  came  through  a  manu- 
facturing company,  it  will  be  presumed  that  such 
company  had  power  to  convey  the  same.  Gabe 
V.   Root,  93  Ind.  256. 

Sale  and  delivery  of  certificate  of  stock,  with- 
out transfer  on  corporation  books,  vests  equitable 
title  only  in  the  purchaser.  Bruce  v.  Smith,  44 
Ind.   1. 

Mandamus  will  lie  to  compel  proper  officers  to 
transfer,  on  books  of  corporation,  stock  that  has 
been  duly  assigned  by  a  stockholder.  Turnpike 
Co.  v.  Bulla,  45  Ind.  1. 

A  mandamus  will  not  lie  where  petitioner's 
claim  rests  merely  on  the  equitable  title.  Turn- 
pike Co.  V.  State,  119  Ind.  382;  s.  c,  20  N.  E.  Rep. 
421.  Presumption  in  absence  of  proof  is  that 
stock  was  transferred  in  accoi'dance  with  the  by- 
laws. Coal  Co.  V.  Paper  Co.,  129  Ind.  73;  s.  c,  26 
X.   E.   Rep.  8S4. 

Above  section  construed.    Id.] 

§  5054.  The  business  of  such  company  shall 
be  managed  by  not  less  than  three  nor  more 
tlian  eleven  directors,  who  shall  be  stock- 
holders therein  and  residents  of  the  United 
States;  and  a  majority  of  the  directors 
chosen  shall  be  a  quorum.  Such  directors, 
after  one  year  from  the  organization  of  the 
company,  shall  l)e  elected  by  the  stockholders 
annually;  and  tlie  directoi:s  thus  chosen,  or 
first  appointed,  shall  elect  the  president 
thereof. 

[Directors  cannot  repudiate  an  act  done  by  au- 
thority of  stockholders.  Smith  v.  AVells  Mfg.  Co., 
45  X.  E.  Rep.  775. 

A  fair  contract  between  two  corporations  is 
not  invalid  because  they  have  common  directors. 
Evausville  v.    Bank,   42  X.   E.    Rep.    1097.] 

§  5053.  The  directors  of  such  company  shall 
annually  elect  a  secretary  and  treasurer, 
who  shall  respectively  give  bond,  with  se- 
curity as  shall  be  required  by  the  by-laws, 
and  be  sworn  to  the  faithful  discharge  of 
the  duties  assigned  to  each  of  them:  Pro- 
vided, That  said  directors  may,  if  they  deem 
proper,  elect  one  person  to  discharge  the 
duties  of  secretary  and  treasurer.  Absent 
stockholders  may  vote  by  proxy,  and  each 
share  of  stock  shall  entitle  the  owner 
thereof  to  one  vote.  All  officers  shall  serve 
until  their  successors  are  elected  and  quali- 
fied. 

§  5056.  Corporations  building  steamboats 
and  other  vessels  shall  have  the  right  to  con- 
struct marine  railways,  and  all  other  neces- 
sary fixtures  and  machinery  for  repairing 
and  launching  the  same;  and  gas-light  com- 
panies may  lay  pipes  through  the  streets  and 
alleys  of  any  incorporated  city  or  town,  by 
repairing  or  making  good  any  injury  done 
thereto. 


INDIANA. 


19 


Miimifactuiing,  etc.,  corporations  —  Stat.,  §§  5057-50G5. 


§  5057.  That  any  gas-light  or  water-worljs 
company  in  any  city  or  town  of  this  State 
shall  be  authorized  and  empowered  to  extend 
their  pipes  and  mains  beyond  the  corporate 
limits  of  such  city  or  town,  not  to  exceed 
a  <listance  of  tive  miles  from  the  corporate 
limits  of  any  such  city  or  town,  for  the  pur- 
pose of  supplying  persons  or  corporations 
with  gas  or  water,  and  any  such  company 
shall  be  authorizecl  and  empowered  to  fur- 
nish and  supply  gas  or  water  to  any  persons 
or  corporations  residing  or  located  within 
five  miles  of  the  corporate  limits  of  any  such 
city  or  town. 

§  5058.  The  amount  of  capital  stock  shall 
be  fixed  by  the  company,  but  may  be  in- 
creased by  a  vote  of  the  stockholders  at 
any  annual  meeting,  and  in  lilce  manner  any 
company  which  may  have  been  incorporated 
in  this  State  for  any  of  the  purposes  con- 
templated in  said  act,  with  a  fixed  amount 
of  limitation  of  capital,  may  increase  its 
capital  stock,  and  extend  the  term  of  its 
existence  (not,  however,  to  exceed  fifty  years 
from  its  first  organization),  by  a  vote  of  the 
stockholders  at  any  anutial  meeting,  and 
such  capital  stock  shall  be  divided  into 
shares  of  not  more  than  one  hundred  dollars 
each:  Provided,  A  certified  copy  of  the 
record  and  proceedings  of  such  meeting  be 
filed  in  the  office  of  the  secretary  of  the  State 
of  Indiana  Avithin  thirty  days  thereafter. 

§  5050.  The  stock  of  such  company  shall 
be  deemed  personal  estate,  and  when  fully 
paid  in  shall  be  transferable  in  such  man- 
ner as  the  by-laws  may  prescribe.  Such 
company  shall  not  use  its  funds  in  the  pttr- 
chase  of  stock  in  any  other  corporation  only 
upon  the  written  consent  of  all  the  stock- 
holders of  the  company  desiring  to  purchase 
said  stock,  and  also  the  written  consent  of 
all  the  stockholders  of  the  corporation  in 
which  stoclv  is  sought  to  be  purchased. 

§  50G0.  The  capital  stock,  as  fixed  by  stich 
company,  shall  be  paid  into  the  treasury 
thereof,  Avithin  eighteen  mouths  from  the 
incorporation  of  the  same,  in  such  install- 
ments as  the  by-laws  of  tlie  company  assess 
and  direct. 

§  50G1.  If  the  proprietor  of  any  share  shall 
fail  to  pay  the  sum  assessed  thereon  for  the 
period  of  thirty  days  after  the  time  ap- 
pointed for  the  payment  thereof,  the  treas- 
urer of  the  company  may  bring  suit  for  the 
recovery  of  the  same;  or  by  giving  three 
weeks'  notice  in  a  newspaper  printed  in  the 
county,  if  any  (otherwise,  by  posting  stich 
notices  in  three  or  more  public  places),  may 
sell  at  public  auction  a  sufficient  number  of 
shares  of  such  delinquent  proprietor  to  pay 
all  assessments  due  from  him,  with  all  neces- 
sary and  incidental  charges;  and  a  deed  of 
the  shares  so  sold  shall  thansfer  the  same 
to  the  purchaser  and  entitle  him  to  a  certifi- 
cate therefor. 

[Complaint  in  an  action  on  a  subscription  to 
capital  stock  conditioned  to  be  valid  in  case  a 
certain    amount    was    subscribed,    held    sufficient. 


Shick  V.  Citizens'  Jinterprise  Co.,  Ind.  App.,  44 
N.    E.   Rep.  48. 

In  an  action  by  a  corporation  organized  under 
tlie  Manufacturers  and  Mining  Act  to  recover  a 
subscription  made  in  advance  of  incorporation, 
complaint  must  show  necessary  steps  to  legal 
incorporation.    Id. 

In  an  action  on  a  preliminary  subscription  to 
capital  stock  the  fact  that  plaintiff  before  incor- 
poration made  false  representations  as  to  its  or- 
ganization is  no  defense.     Id. 

It  is  no  defense  to  an  action  on  a  subscription 
to  capital  stock  that  the  promoters  secured  sub- 
scriptions beyond   the  prescribed  amount.    Id. 

Subscriptions  to  capital  stock,  to  be  binding 
if  a  certain  aggregate  amount  is  subscribed,  are 
valid.    Id.] 


§  50G2.  The  president  and  directors,  within 
thirty  days  after  the  payment  of  the  last 
installment  of  the  capital  stock,  shall  make 
a  certificate  stating  the  amount  of  the  capi- 
tal so  fixed  and  paid  in;  which  certificate 
shall  be  signed  by  the  president  and  a  ma- 
jority of  the  directors;  and  they  shall  within 
the  said  thirty  days  file  tlie  same  for  record 
in  the  office  of  the  clerk  of  the  circuit  court 
in  the  proper  county.  If  said  capital  stock 
shall  have  been  increased,  as  provided  in 
section  6  (§  3857),  and  the  last  installment 
of  such  additional  stock  is  paid  in,  then  such 
officers,  Avithin  the  time  named,  shall  make 
a  like  certificate,  and  cause  it  to  be  recorded 
as  above. 

§  50G3.  Every  such  company  may,  by  a 
■^ote  of  its  stockholders,  at  any  meeting 
called  for  that  purpose,  reduce  the  capital 
stock  of  the  same.  In  such  case,  a  certified 
copy  of  the  vote  shall,  within  thirty  days 
thereafter,  be  filed  in  the  office  of  the  clerk 
of  the  circuit  court  in  which  the  original 
certificate  Avas  filed,  and  the  same  shall,  in 
like  manner,  be  recorded;  and  also  a  dupli- 
cate of  the  same  in  the  office  of  the  secretary 
of  State;  and  in  default  thereof,  the  directors 
of  such  company  shall  be  jointly  and  sev- 
erally liable  for  debts  contracted  after  the 
said  thirty  days  and  before  the  record  of 
such  vote. 

§  50G4.  That  any  manufacturing,  mining  or 
other  company  having  a  capital  stock,  which 
has  been  or  which  may  hereafter  be  organized 
nnd  incorporated  under  any  laAv  of  this 
State,  shall  have  the  power  to  create  and  is- 
sue shares  of  preferred  stock  in  such  com- 
pany of  not  more  than  one  hundred  dollars 
($100.00)  each,  the  aggregate  amount  of 
which  shall  at  no  time  exceed  double  the 
amotmt  of  the  common  stock  of  such  com- 
pany. 

§  50G5.  At  the  time  any  such  company  is 
organized  and  incorporated,  the  incorpo- 
rators thereof  may  in  their  certificate  or 
articles  of  association  provide  for  the  is 
sua  nee  of  such  preferred  stock  by  such  com- 
pany, by  stating  the  amount  of  preferred 
stock  proposed  to  be  i.ssued  and  the  number 
of  shares  into  which  it  is  to  be  divided,  and 
when  so  provided  for  in  said  certificate  or 
articles  of  association  said  company  shall  be 
duly    authorized    and    haA'e    full    poAver    to 


20 


INDIANA. 


Manufacturiug,  etc.,  corporations  —  Stat.,  §§  5066-5073. 


create  and  issue  certificates   for  shares  of 
such  preferred  stock. 

§  SfHlc.  Auv  such  company  already  organ- 
ized desiring  to  create  and  issue  shares  of 
preferred  stoclc  in  sucli  company  may  do  so 
at  any  annual,  regular  or  special  meeting  of 
its  stocldiolders  by  the  unanimous  vote  of 
the  holders  of  its  common  stock,  and  such 
company  may  at  any  such  meeting  or  any 
subsequent  meeting  of  its  stockholders,  by  a 
vote  of  the  holders  of  a  majority  of  its  com- 
mon stock,  authorize  and  empower  its  board 
of  directors  to  dispose  of  and  issue  such 
preferred  stock  upon  such  terms  and  con- 
ditions as  said  board  of  directors  may  deem 
best,  or  as  such  cftmpany  may  prescribe; 
and  when  so  authorized  the  validity  of  the 
issuance  and  the  disposition  made  of  such 
preferred  stock  by  said  directors  shall  in 
all  things  be  binding  and  conclusive  upon 
such  company.  "SVithin  thirty  days  after  the 
time  such  company  has  authorized  the  is- 
suance of  preferred  stock  as  provided  in  this 
section,  it  shall  cause  to  be  filed  with  the 
secretary  of  State  its  certificate  in  writing, 
signetl  ijy  its  president  and  attested  by  its 
secretary,  duly  acknowledged,  certifying 
that  the  issuance  of  preferred  stock  has  been 
authorized  by  such  company,  the  amount  of 
such  preferred  stock,  the  number  of  shares 
into  which  it  shall  be  divided  and  the 
amount  of  each  share. 

§  5067.  Such  preferred  stock  shall  not  at 
any  time  exceed  double  the  amount  of  the 
common  stock  of  such  company  actually  sub- 
scribed or  issued,  and  it  shall  be  subject  to 
redemption  at  par  at  such  time  or  times,  and 
upon  such  terms  and  conditions  as  shall  be 
expressed  in  the  certificates  thereof,  and  the 
holders  of  such  preferred  stock  shall  be 
entitled  to  receive,  and  the  said  company 
shall  be  bound  to  pay  thereon  such  semi-an- 
nual sum  or  dividend  as  may  be  expressed  in 
the  certificates,  not  exceeding  four  per 
centum,  before  any  dividend  shall  be  set 
aside  or  paid  on  the  common  stock  of  such 
company,  and  in  no  event  shall  the  holders 
of  such  preferred  stock  be  individually  or 
personally  liable  for  the  debts,  or  other  lia- 
bilities of  such  company,  but  in  case  of  in- 
solvency, or  upon  the  dissolution  of  such  com- 
pany, such  debts  or  other  liabilities  shall  be 
paid  in  preference  to  such  preferred  stock. 
Such  preferred  stock,  however,  shall  at  all 
times  have  priority  in  payment  out  of  the 
assets  of  such  company  over  the  common 
stock  thereof,  for  the  full  face  value,  to- 
gether Avith  all  arrearages  of  interest  or  divi- 
dends due  thereon. 

§  5008.  Such  preferred  stock  shall  not  be 
voted  at  any  meeting  of  such  company,  nor 
shall  Ihe  holders  thereof,  as  such,  have  any 
voice  in  the  management  of  the  affairs  of 
such  company,  excepting,  however,  that  such 
company  shall  not  have  authority  to  convey 
its  real  estate  or  mortgage  any  of  its  prop- 
erty without  the  written  consent  of  the 
holders  of  a  majority  of  the  shares  of  such 


preferred  stock;  nor  shall  such  company 
without  such  consent  declare  any  dividend 
upon  its  common  stock  that  Avill  impair  its 
capital.  Such  preferred  stock  shall  not  en- 
title the  holders  thereof  to  any  interest  in 
the  assets  of  such  company  beyond  the  par 
or  face  value  of  such  preferred  stock,  to- 
gether with  all  arrearages  of  interest  or  divi- 
dends due  thereon. 

S  50(il).  When  any  such  company  has  re- 
deemed the  preferred  stoclc  issued  l)y  it 
under  the  provisions  of  this  act.  its  directors 
shall  within  thirty  days  thereafter  cause  to 
be  filed  Avith  the  secretary  of  State  their 
certificate  in  writing,  as  directors  of  such 
company  duly  acknowledged,  certifying  that 
such  preferred  stock  has  been  redeemed;  and 
in  default  thereof,  the  directors  of  such 
company  shall  be  jointly  and  severally  liable 
for  all  debts  and  liabilities  of  such  company 
contracted  after  said  thirty  days  and  be- 
fore said  certificate  is  filed. 

§  5070.  The  provisions  of  this  act  shall 
not  apply  to  any  company  which  by  any 
existing  law  is  authorized  to  issue  preferred 
slock,  or  which  may  hereafter  be  specially 
authorized  so  to  do. 

§  5071.  Every  such  company  shall,  annu- 
ally, within  twenty  days  from  the  first  day 
of  January,  make  a  I'eport.  which  such  com- 
pany shall  cause  to  be  published  in  some 
newspaper  printed  in  the  county,  if  any 
(otheiwise.  in  this  State,  nearest  thereto), 
which  shall  state  the  amount  of  capital,  the 
amount  of  assessments  made  and  .'ictually 
paid  in.  and  the  amount  of  existing  debts; 
which  report  shall  be  signed  by  the  presi- 
dent and  a  majority  of  the  directors,  and 
shall  be  verified  by  the  oaths  of  the  presi- 
dent and  such  directors  and  secretary. 

§  5072.  The  word  "  annually,"  as  iised  in 
the  preceding  section,  shall  be  consti'ued  to 
mean  once  a  yeai",  after  such  company  has 
been  doing  business  at  least  twelve  months. 

§  5073.  If  any  certificate  or  report  made  or 
public  notice  given  by  the  officers  of  any 
such  company,  as  required  by  this  act,  shall 
be  false  in  any  material  representation,  or 
if  they  shall  fail  to  give  such  notice  or 
make  such  report,  and  any  person  or  per- 
sons shall  be  misled  or  deceived  by  such 
false  report  or  certificate  or  on  account  of 
such  failure  to  make  such  report,  and  dam- 
aged thereby,  then  all  the  officers  who  shall 
sign  the  same,  knowing  it  to  be  false,  or 
fail  to  give  the  notice  or  make  reports  as 
aforesaid,  shall  be  jointly  and  severally 
liable  for  all  damages  resulting  from  such 
failure  on  their  part  while  they  are  stock- 
holders in  stich  company. 

[See  Trabor  v.  Bright,  32  Ind.  69.  Directors  of 
an  incorpoi-ated  mannfacturing  company  are  ofti- 
ccrs  within  the  meaning  of  above  section.  Gaffe 
V.    Thois,    33   Ind.   307. 

In  an  action  under  this  section,  complaint  must 
allege  the  purpose  for  which  corporation  was 
organized  and  manner  in  M'hich  plaintiff  was 
misled  and  deoeivod  by  the  misconduct  of  direct- 
ors, and  that  directors  sued  constituted  at  least 


mDIAKA. 


21 


Manufacturing,  etc.,  corporations  —  Stat.,  §§  5074^-5081. 


a  majority  of  such  directors.    Niles  v.  Dodge,  70 
liul.  147. 

Compliiint  held  to  state  a  cause  of  action  under 
above  section.    Clow  v.  Brown,  49  N.  E.  Kep.  1057.] 

§  5074.  When  any  of  the  officers  of  such 
corporation  shall  be  liable,  by  the  provisions 
of  this  act,  to  pay  the  debt  of  such  com- 
pany, any  person  to  whom  they  shall  be 
so  liable  may  have  an  action  ai^ainst  such 
officer;  and  the  declaration  or  statement,  in 
such  action,  shall  specify  the  claim  against 
the  company,  and  the  ground  upon  which 
the  plaintiff  charges  the  defendant  person- 
ally; and  such  action  may  be  brought  al- 
though suit  be  pending  against  the  company 
for  the  same  claim  or  demand,  and  both  be 
prosecuted  until  the  plaintiff  shall  have  re- 
covered his  debt  with  costs  and  charges. 

§  5075.  If  the  directors  of  any  such  com- 
pany shall  declare  and  pay  a  dividend  when 
the  company  is  insolvent,  or  any  dividend, 
the  payment  of  which  would  render  it  in- 
solvent, knowing  such  company  to  be  in- 
solvent or  that  such  dividend  would  render 
it  so,  the  directors  assenting  to  such  divi- 
dend shall  be  jointly  and  severally  liable  in 
an  action  founded  on  this  act,  for  all  debts 
due  from  such  company,  at  the  time  of  such 
dividend;  Provided,  That  if  any  of  the  di- 
rectors object  to  declaring  such  dividend, 
and  file  their  objections  in  writing  with  the 
secretary  of  the  company  and  with  the  clerk 
of  the  county,  the  director  or  directors  so 
objecting  shall  be  exempt  from  such  lia- 
bility. 

§  5076.  If  any  company  organized  and  es- 
tablished under  the  authority  of  this  act, 
and  of  the  act  to  which  this  is  supplemen- 
ary,  shall  violate  any  of  the  provisions 
thereof,  and  shall  thereby  become  insolvent, 
the  directors  ordering  or  assenting  to  such 
violation  shall  jointly  and  severally  be  liable, 
in  an  action  founded  on  said  acts,  for  all 
debts  contracted  after  such  violation  as 
aforesaid. 

[In  an  action  by  a  corporation  creditor  to  recover 
of  a  director  the  penalty  prescribed  by  this  section, 
the  burden  of  proving  the  facts  from  which  the 
liability  arises  is  on  the  creditor.  Bachman  v. 
Cooper,  50  N.  E.  Rep.  394. 

Fact  that  officers  are  liable  for  violating  §  5076 
does  not  relieve  them  from  any  liability  under 
§  5073.     Clow  V.  Brown,  49  N.  E.  Rep.  1057.] 

§  5077.  The  stockholders  and  members  of 
manufacturing  and  mining  corporations  shall 
only  be  liable  for  the  amount  of  the  stock 
subscribed  by  them  respectively;  and  privi- 
leges or  immunities  which  have  been  here- 
tofore granted  to  such  corporations  shall, 
upon  the  same  terms,  equally  belong  to  all 
citizens  who  may  desire  to  incorporate  them- 
selves for  the  same  purpose:  Provided,  That 
such  stockholders  shall  be  individually  liable 
for  all  debts  due  and  owing  laborers,  ser- 
vants, apprentices  and  employes  for  services 
rendered  such  corporation. 

[The  person  holding  the  stock  at  time  debt  Is 

28 


contracted  is  the  person  liable  under  this  section, 
and  a  subsequent  holder  is  not  liable.  Williams 
V.  Hanna,  40  Ind.   535. 

A  corporation  aggregate  cannot  be  employed  by 
another  corporation,  within  the  meaning  of  the 
word  "  employers  "  as  used  in  this  section.  Dukes 
V.   Love,  97  Ind.  341. 

Above  section  construed.  "Wheeler  v.  Thayer, 
121  Ind.  64;  s.  c,  22  N.  E.  Rep.  972.] 


§  5078.  Whenever  all  the  stockholders  of 
any  such  company  shall  execute  and  ac- 
knowledge, before  some  officer  authorized  to 
take  acknowledgments  of  deeds,  a  certifi- 
cate, in  writing,  showing  the  consent  of 
such  stockholders  to  an  extension  and  en- 
largement of  the  objects  of  such  company, 
beyond  those  expressed  in  the  original  cer- 
tificate of  incorporation,  and  shall  file  and 
have  the  same  recorded,  as  in  the  first  sec- 
tion (.S851)  provided,  such  company  shall 
thereafter  have  full  power  and  authority  to 
carry  on  their  operations  and  pursue  their 
objects  to  the  extent  expressed  and  allowed 
in  the  certificate  showing  such  enlargement 
and  extension;  and  such  corporation  may 
take,  hold,  and  convey  real  estate  proper  for 
carrying  on  the  proposed  business  thereof 
in  the  county  where  the  organization  is  had, 
and  in  any  other  county  or  counties  of  this 
State,  and  in  each  or  any  State  or  territory 
of  the  United  States. 

§  5079.  Whenerer  any  corporation  shall 
have  conformed  to.  and  complied  with,  the 
provisions  of  this  act,  it  shall  take  and  hold 
any  real  estate  heretofore  conveyed  to  it  for 
such  purposes  as  may  be  specified  in  the 
certificate  provided  for  in  said  section;  and 
all  such  conveyances  and  contracts  in  re- 
lation thereto  are  hereby  declared  valid  and 
binding  on  the  parties  thereto. 

§  5080.  But  no  charter  of  any  mining  or 
manufacturing  company  within  this  State 
shall  be  deemed  to  have  been  forfeited  for 
anything  done  prior  to  February  1,  1867, 
unless  the  same  shall  have  been  declared 
to  have  been  forfeited  by  competent  au- 
thority. 

§  5081.  Whenever  any  company  incorpo- 
rated under  the  provisions  of  "  An  act  for 
the  incorporation  of  manufacturing  and 
mining  companies,  and  companies  for  me- 
chanical, chemical,  and  building  purposes," 
approved  May  20,  1852,  shall  desire  to  con- 
struct a  canal  or  race,  for  the  purpose  of 
creating  or  improving  a  hydraulic  power  for 
manufacturing  purposes,  such  corporation 
shall  possess  the  powers,  and  be  subject  to 
the  liabilities  and  restrictions,  expressed  in 
the  following: 

First.  To  cause  such  examination  and  sur- 
veys as  may  be  necessary  to  the  selection  of 
the  most  advantageous  route  for  the  same; 
and  for  such  purposes,  by  their  officers, 
agents,  and  servants,  to  enter  upon  the 
lands  and  waters  of  any  person,  but  sub- 
ject to  responsibility  for  all  damages  which 
they  shall  do  thereto. 

Second,  To  I'eceive,  hold,  and  take  such 
voluntary  grants  and  donations  of  real  es- 


22 


INDIANA. 


Mauufacturing,  etc.,  corporations  —  Stat.,  §  5082. 


tate  and  other  pei-sonal  property  as  shall 
be  made  to  it,  to  aid  in  the  construction, 
maintenance,  and  accommodation  of  such 
canal;  but  the  real  estate  thus  received  by 
voluntary  grants  shall  be  held  and  used 
for  the  purposes  of  such  grants  only. 

Third.  To  purchase,  and  by  voluntary 
gi-auts  and  donations  receive  and  take,  and, 
by  its  officers.  engiuet>rs.  surveyors,  and 
agents,  enter  uix)u,  and  take  possession  of 
and  hold  and  use  all  such  lands  and  real 
estate  and  other  property  as  may  be  neces- 
sary for  the  construction  and  maintenance 
of  the  canal  and  other  accommodations 
necessary  to  accomplish  the  objects  for 
which  the  coi-poratiou  is  created;  but  not 
until  the  compensation  to  be  made  therefor, 
as  agreed  upon  by  tlie  parties  or  ascertained 
as  liereinafter  prescribed,  shall  have  been 
paid  to  the  owner  or  owners  thereof  or  de- 
posited as  hereinafter  directed,  unless  the 
consent  of  such  owner  be  given  to  enter  into 
possession. 

Fourth.  To  lay  out  its  canal  not  exceed- 
ing one  hundred  feet  wide,  and  to  construct 
the  same;  and  for  the  purposes  of  cuttings, 
eml)ankments,  and  procuring  stone,  gravel, 
and  timber,  it  may  take  as  much  more  land, 
within  the  limits  of  its  charter,  in  the 
manner  provided  hereinafter,  as  may  be 
necessary  for  the  proper  construction  and 
security  of  said  canal. 

Fifth.  To  construct  its  said  canal  upon 
or  across  any  stream  of  water,  water-course, 
road,  highway,  or  railroad,  so  as  not  to 
interfere  with  the  free  use  of  the  same, 
whicli  the  route  thereof  shall  intersect,  in 
such  manner  as  to  afford  security  for  life 
or  property;  but  the  corporation  shall  re- 
store the  road  or  highway  thus  intersected 
to  its  former  state,  or  in  a  sufficient  manner 
not  to  have  unnecessarilj'  impaired  its  use- 
fulness or  injured  its  franchises. 

Sixth.  To  purchase  lands  or  take  them; 
and  may  change  the  line  of  its  canal,  when- 
ever a  majority  of  the  directors  shall  so 
determine,  as  is  provided  hereinafter;  but 
no  such  change  shall  vary  the  general  route 
of  such  canal. 

§  5082.  In  case  any  company  formed  imder 
this  act  is  unable  to  agree  for  the  purchase 
of  any  real  estate  in  any  county,  required 
for  the  consti-uction  of  its  canal,  it  shall 
have  the  right  to  acquire  the  title  to  the 
same  in  the  manner  and  by  the  special  pro- 
ceedings prescril)ed  in  this  act. 

§  5083.  Such  company  is  hereby  authorized 
to  enter  upon  any  land  for  the  puriwse  of 
examining  and  surveying  its  canal  line,  and 
may  appropriate  so  much  thereof  as  may 
be  deemed  necessary  for  its  canal,  includ- 
ing necessary  culverts,  drains,  aqueducts, 
tail-races,  materials  for  constructing  (ex- 
cept timber)  a  right  of  way  over  adjacent 
lands,  sufficient  to  enable  such  company  to 
construct  and  repair  its  canals,  and  a  right 
to   conduct   water   by   acqueducts,    and   the 


right  of  making  proper  drains.  The  cor- 
poration shall  forthwith  deposit  with  the 
clerk  of  the  circuit  or  other  court  of  record 
of  the  county  Avhei'e  the  land  lies,  a  de- 
scription of  the  rights  and  interests  intended 
to  be  appropriated;  and  such  lands,  rights 
and  interests  shall  belong  to  such  company, 
to  use  for  the  purpose  specified,  by  making 
or  tendering  payment  as  hei'einafter  pro- 
vided. The  corpoi^ation  may,  by  its  direct- 
ors, purchase  any  such  lands,  materials, 
right  of  way,  or  interest  of  the  owner  of 
such  land;  or  in  case  the  same  is  owned  by 
a  person  insane  or  an  infant,  at  a  price  to 
be  agreed  upon  by  the  regularly  constituted 
guardian  of  said  insane  person  or  infant, 
if  the  same  shall  be  approved  by  the  court 
in  which  the  description  aforesaid  shall  be 
filed;  and  on  such  agreement  and  approval, 
the  owner  or  guardian,  as  the  case  may  be, 
shall  convey  the  said  premises  so  purchased, 
in  fee-simple  or  otherwise,  as  the  parties 
may  agree,  to  such  canal  company;  and 
the  deed,  when  made,  shall  be  deemed 
valid  in  law.  If  the  cox-poration  shall  not 
agree  with  the  owner  of  the  land  (or  with 
his  guardian,  if  the  owner  is  incapable  of 
contracting),  touching  the  damages  sus- 
tained by  such  appropriation,  such  corpora- 
tion shall  deliver  to  such  owner  or  guardian, 
if  within  the  county,  a  copy  of  such  in- 
strument of  appropriation.  If  the  owner 
(or  his  guardian,  in  case  such  owner  is  in- 
capable of  contracting)  be  unknown  or  do 
not  reside  within  the  county,  such  corpora- 
tion shall  publish  in  some  newspaper  of 
general  circulation  in  the  county,  for  the 
term  of  three  weeks,  an  advertisement  recit- 
ing the  substance  of  such  instrument  of 
appropriation.  Upon  filing  such  act  of  ap- 
propriation, and  delivery  of  such  copy,  or 
making  such  publication,  the  circuit  court 
or  other  court  of  record  in  the  county  where 
the  land  lies,  or  any  judge  thereof  In 
vacation,  upgn  the  application  of  either 
party,  shall  appoint,  by  warrant,  three  dis- 
interested freeholders  of  such  county  to 
appraise  the  damages  Avhich  the  owner  of 
the  land  may  sustain  by  such  appropriation. 
Such  appraisers  shall  be  duly  sworn;  they 
shall  consider  the  injury  which  such  owner 
may  sustain  by  reason  of  such  canal,  and 
shall  forthwith  return  their  assessment  of 
damages  to  the  clerk  of  such  court,  setting 
forth  the  value  of  the  property  taken  or 
injury  done  to  the  property  (which  they  shall 
assess  to  the  owner  or  owners  separately), 
to  be  by  him  filed  and  I'ecorded.  There- 
upon, such  corporation  shall  pay  to  said 
clerk  the  amount  thus  assessed,  or  tender 
the  same  to  the  party  in  whose  favor  the 
damages  are  awarded  or  assessed.  On  mak- 
ing payment  or  tender  thereof  in  the  man- 
ner herein  requii-ed.  it  shall  be  lawful  for 
such  coriwration  to  hold  the  interest  in  such 
lands  or  materials  so  appropriated,  and  the 
privilege  of  using  any  materials  on  said 
canal  line  within  fifty  feet  on  each  side  of  the 


INDIAXA. 


23 


Manufacturing,  etc.,  corporations;  laborers  —  Stat.,  §§  5084  -5087,  5098,  5128,  7051. 


center  of  such  canal  line,  for  the  uses  afore- 
said. The  cost  of  such  award  shall  be  paid 
by  such  company;  and  on  notice  by  any 
party  interested  and  showing  said  proceed- 
ings, the  court  may  order  payment  thereof, 
and  enforce  such  payment  bj'  execution. 
The  award  of  said  arbitrators  may  be  re- 
viewed by  the  circuit  court  or  other  court 
in  which  such  proceedings  may  be  had,  on 
written  exceptions  filed  by  either  party  in 
the  clerk's  otfice  within  ten  days  after  the 
filing  of  such  award,  and  the  court  shall 
take  such  order  therein  as  right  and  jus- 
tice may  require,  by  ordering  a  new  appraise- 
ment on  good  cause  shown:  Provided,  if 
prior  to  the  assessment,  the  corporation  shall 
tender  to  such  owner  (or  his  guardian,  if  he 
be  unable  to  contract)  an  amount  equal  to 
the  award  afterward  made,  exclusive  of 
costs,  the  costs  of  arbitration  shall  be  paid 
equally  by  such  company  and  such  owner  or 
guardian. 

§  50S4.  If  there  are  adverse  or  conflicting 
claimants  to  the  money,  or  any  part  of  it, 
to  be  paid  as  compensation  for  the  real 
estate  taken,  the  court  may  direct  the 
money  to  be  paid  into  said  court  by  said 
company,  until  it  can  determine  who  is 
entitled  to  the  same,  and  shall  direct  to 
whom  the  same  shall  be  paid;  and  may,  in 
its  discretion,  order  a  reference  to  ascertain 
the  facts  on  which  said  determination  and 
order  are  to  be  made. 

§  5085.  The  court  shall  appoint  some  com- 
petent attorney  to  appear  for  and  protect 
the  rights  of  any  party  in  interest  who  is 
unknown,  and  who  has  not  appeared  in  the 
proceedings  by  an  attorney  or  agent.  The 
court  shall  also  have  power,  at  any  time,  to 
amend  any  defect  or  informality  in  any 
of  the  special  proceedings  authorized  by  this 
act  as  may  be  necessary,  or  to  cause  new 
parties  to  be  added,  and  to  direct  such 
further  notice  to  be  given  to  any  party  in 
interest  as  it  deems  proper;  and  also  to 
appoint  other  commissioners  in  the  place 
of  any  who  shall  die,  or  refuse  or  neglect 
or  are  unable  to  serve,  or  who  may  leave 
or  be  absent  from  the  State. 

§  508G.  At  any  time  after  an  attempt  to 
acquire  title  l)y  appraisal  of  damages  or 
otherwise,  ff  it  shall  be  found  that  the  title 
thereby  attempted  to  be  acquired  is  de- 
fective, the  company  may  proceed  anew  to 
acquire  or  perfect  the  same,  in  the  same 
manner  as  if  no  appraisal  had  been  made. 

§  5087.  Any  manufacturing  company,  now 
or  hereafter  organized  in  this  State,  may 
take  and  hold  stock  in  any  coi-tporation 
organized  for  the  purpose  of  furnishing 
water  power. 

§  5098.  Corporations  created  by  the  laws 
of  any  State  of  the  United  States  other  than 
of  the  State  of  Indiana,  and  organized  for 
the  purpose  of  manufacturing  goods,  wares 
and  merchandise,  or  for  the  purix»se  of 
mining,   shall  have  the  same  right  to  pur- 


chase and  hold  real  estate  for  the  purpose 
of  their  business,  and  to  convey  or  mort- 
gage the  same,  as  corporations  organized 
for  similar  purposes  under  the  laws  of  this 
State. 

§  5128.  In  case  of  Insolvency  or  insuffi- 
ciency of  effects  of  a  corporation  to  pay  the 
debts  against  it,  each  of  the  stockholders 
shall  be  liable  in  an  amount  equal  to  the 
amount  of  his  stock  at  the  time  the  debts 
were  contracted,  and  no  further,  after  the 
assets  of  the  corporation  are  exhausted: 
Provided,  That  the  directors,  with  the  assent 
of  stockholders,  may  increa.se  the  liability 
to  any  amount  not  exceeding  three  times 
the  amount  of  stock  held  by  each  stock- 
holder. Any  corporation  desiring  to  avail 
itself  of  the  provisions  of  this  act,  or  of 
any  part  thereof,  may  do  so  within  sixty 
days  after  the  passage  of  this  act,  and  shall 
do  so  by  resolution  of  the  board  of  direct- 
ors showing  the  provisions  adopted,  which 
resolution  shall  be  filed  in  the  office  of  the 
secretary  of  State,  and  accompanying  such 
resolution,  or  as  preamble  thereto,  there  shall 
be  a  statement  giving  the  title  and  date  of 
the  act  creating  said  corporation,  and  also 
giving  the  title  and  date  of  each  act 
amendatory  oi'  supplemental  to  the  first 
mentioned  act. 

See  §  3451. 

CHAPTER  LXXXI. 
Laborers. 

Art.   1.  When  preferred  creditors. 

2.  Day's  labor. 

3.  I'ayment  of  wages. 

4.  Blacklisting. 

5.  Importing  alien   laborers. 

6.  Injuries  to  employes. 

ARTICLE   I. 

"When  Preferred  Creditors. 

Sec.  7051.  "U'hen   preferred   creditors. 

§  7051.  Hereafter,  when  the  property  of 
anj'  company,  corporation,  firm  or  person, 
engaged  in  any  manufacturing,  mechanical, 
agricultural  or  other  business  or  employ- 
ment, or  in  the  construction  of  any  work 
or  building,  shall  be  seized  upon  any  mesne 
process  of  any  court  of  this  State,  or  where 
their  business  shall  be  suspended  by  the 
action  of  creditors  or  put  into  the  hands  of 
any  assignee,  receiver,  trustee,  then  in  all 
such  cases  and  debts  owing  to  laborers  or 
employes,  which  have  accrued  by  reason  of 
their  labor  or  employment  to  an  amount 
not  exceeding  fifty  dollars  to  each  employe, 
for  Avork  and  labor  performed  within  six 
months  next  preceding  the  seizure  of  such 
property,  shall  be  considered  and  treated  as 
preferred  debts,  and  such  laborers  or  em- 
ployes shall  be  preferred  creditors  and  shall 
be  first  paid   in   full,   and   if   there   be  not, 


24 


INDIANA. 

Day's  labor;  payment  of  wages  — Stat.,  §§  7052-7059. 


sufBcient  to  pay  them  in  full,  then  the  same 
shall  be  paid  to  them  pro  rata,  after  paying 
costs. 

ARTICLE  II. 

Day's  Labor. 

Sec.  7052.  Day's  labor. 

70.53.  Where  applicable. 

7054.  Violation;   penalty. 

7055.  Secret  invasion;   penalty. 

§  7052.  That  on  and  after  the  passage  of 
this  act  eight  hours  will  constitute  a  legal 
day's  work  for  all  classes  of  mechanics, 
workingnien  and  laborers,  excepting  those 
engaged  iu  agricultural  or  domestic  labor, 
but  over  work  for  an  extra  compensation  by 
agreement  between  employer  and  employe 
is  hereby  permitted. 

§  7053.  This  act  shall  apply  to  all  persons, 
firms,  coiiK)rarions,  companies  or  associa- 
tions employing  labor  in  this  State,  and  to 
all  mechanics,  workingmen  and  laborers 
now  or  hereafter  employed  by  this  State 
or  any  municipal  corporation  herein,  through 
its  agents,  or  officers,  or  in  the  employ  of 
persons  contracting  with  the  State,  or  any 
municipal  corporations  thereof  for  per- 
formance of  labor  on  the  public  works  of 
this  State,  or  such  corporation. 

§  7054.  Any  person,  firm,  company,  cor- 
poration or  association  doing  business  in 
this  State,  or  any  officer  or  agent  of  this 
State  or  uiuuicipal  corporation  thereof,  who 
shall  violate  or  otherwise  evade  the  provi- 
sions of  tliis  act,  shall  be  deemed  guilty 
of  a  misdemeanor,  and,  upon  conviction 
thei'eof,  shall  be  fined  in  any  sum  not 
greater  than  five  hundred  dollars,  and  if 
the  i)erson  or  persons  violate  the  same  be 
an  officer  or  agent  of  this  State,  or  of  any 
municipal  coii)oration  thereof,  he  shall  in 
addition  to  such  tine,  be  removed  from  his 
position. 

§  7055.  Any  party  or  parties  contracting 
with  this  State,  or  any  municipal  corpora- 
tion thereof,  who  shall  fail  to  comply  with, 
or  secretly  evade,  the  provisions  hereof,  by 
exacting  and  receiving  more  hours  of  labor 
than  is  herein  fixed,  he  shall  be  deemed 
guilty  of  a  misdemeanor,  and  upon  con- 
viction thereof,  shall  be  fined  in  any  sum 
not  greater  than  five  hundred  dcUars,  and 
in  addition  thereto,  in  the  option  of  the 
State  or  municipal  corporation,  forfeit  such 
contract. 

ARTICLE  in. 

Paym.ent  of  "Wages. 

Sec.  7056.  Payment   of   employes. 

7057.  Employe   may   demand   payment;    pen- 

alty  for  refusal. 

7058.  Treferred    claim. 

7059.  Payments  to  be  made  weekly. 

70G0.  Checks  or  cards  to   employes;   Issuing 
prohibited;  penalty. 

7061.  Sale  of  merchandise. 

7062.  Failure   to   pay   wages;   penalty. 

7063.  Penalty  for  violating  act. 


Sec.  7064.  Liens  not  affected. 

7065.  Pav  of  laborers. 

7066.  Kot   to  issue  cards  or  checks  In   pay- 

ment. 

7067.  Sale  of  supplies  to  employe;  price. 
706.S.  Failure  to  pay   after  demand. 

7069.  Violation  of  act  a  misdemeanor. 

7070.  I.ieus  not  affected. 

7071.  Waiver    of    money    payment    not    pro- 

hibited. 

7072.  Procuring     contract     of      waiver     pro- 

hibited. 

7073.  Coercion  to  buy  a  particular  place  un- 

lawful. 

7074.  Attempt  to  coerce. 

7075.  Penalty. 

§  7056.  That  every  company,  corporation 
or  association  now  existing,  or  hereafter 
organized  and  doing  business  in  this  State, 
shall,  in  the  absence  of  a  written  contract 
to  the  contrary,  be  required  to  make  full 
settlement  with,  and  full  payment  In 
money  to,  its  employes,  engaged  in  manual 
or  mechanical  labor,  for  such  work  and 
labor  done  or  performed  by  said  employes 
for  such  company,  corporation  or  associa- 
tion at  least  once  in  every  calendar  month 
of  the  year. 

§  7057.  If  any  company,  corporation  or 
association  shall  neglect  to  make  such  pay- 
ment, such  employe  may  demand  the  same 
of  said  company,  corporation  or  association, 
or  any  agent  of  said  company,  corporation 
or  association,  upon  whom  summons  might  be 
issued  in  a  suit  for  such  wages,  and  if  said 
company,  corporation  or  association  shall 
neglect  to  pay  the  same  for  thirty  days 
thereafter,  said  company,  corporation  or 
association  shall  be  liable  to  a  penalty  of 
one  dollar  for  each  succeeding  day,  to  be 
collected  by  such  employe  iu  a  suit  (to- 
gether with  reasonable  attorneys'  fees  in 
said  suit)  for  said  wages  withheld:  Pro- 
vided, That  said  penalty  shall  in  no  instance 
exceed  twice  the  amount  due  and  withheld. 

§  7058.  All  debts  due  any  person  for 
manual  or  mechanical  labor  shall  be  a  pre- 
ferred claim  in  all  cases  against  any  in- 
dividual, copartnership,  corporation  or  joint- 
stock  company  where  the  property  thereof 
shall  pass  into  the  hands  of  an  assignee 
or  receiver,  and  such  assignee  or  receiver 
in  the  distribution  and  payment  of  the  debts 
shall  be  required  to  first  pay  in  full  all 
debts  due  for  manual  or  mechanical  labor 
before  paying  any  other,  except  the  legiti- 
mate costs  and  expenses. 

§  7059.  That  every  corporation,  association, 
company,  firm  or  person  engaged  in  this 
State  in  mining  coal,  ore  or  other  mineral, 
or  quarrying  stone,  or  in  manufacturing 
iron,  steel,  lumber,  staves,  heading  barrels, 
brick  tile,  machinery,  agricultural  or  me- 
chanical implements,  or  any  article  of 
merchandise  shall  pay  each  employe  of  such 
corporation,  association,  company,  firm  or 
person  at  least  once  every  week  the  amount 
to  such  employe  for  labor,  and  such  pay- 
ment sliall  be  in  lawful  money  of  the  United 
States,  and  any  contract  to  the  contrary 
shall  be  void. 


INDIANA. 


25 


Payment  of  wages  —  Stat.,  §§  7060-7071. 


§  70G0.  That  any  person,  copartnership, 
corporation  or  association,  or  any  member, 
agent  or  employe  thereof,  who  shall  pub- 
lish, issue  or  circulate  and  check,  card  or 
other  pai)er  which  is  not  commercial  paper 
payable  at  a  fixed  time  in  any  bank  in  this 
State  at  its  full  face  value  in  lawful  money 
of  the  United  States,  with  eight  per  cent, 
interest  or  by  bank  check  or  currency 
issued  by  authority  of  the  United  States 
government,  to  auy  employe  of  such  person, 
copartnership,  coiixvration  or  association, 
in  payment  for  any  work  or  labor,  done  by 
such  employe  or  in  payment  for  any  labor 
contracted  to  be  done  by  such  employe  shall 
be  guilty  of  a  misdemeanor,  and  upon  con- 
viction thereof,  shall  be  fined  in  any  sum 
not  more  than  one  hundred  dollars. 

§  T0()1.  It  shall  be  unlawful  for  any  cor- 
poration, company,  association,  firm  or 
person,  described  in  section  1  of  this  act, 
or  the  officers  and  agents  of  such  to  sell 
either  directly  or  indirectly  to  any  employe 
of  such  corporation,  company,  association, 
firm  rir  person  any  merchandise  or  supplies 
at  a  higher  price  than  such  merchandise  or 
supplies  are  sold  by  such  corporation,  com- 
pany, association,  firm  or  person  to  others 
for  cash. 

§  7062.  Every  corporation,  company,  as- 
sociation, firm  or  person  who  shall  fail, 
after  demand  for  payment  has  been  made, 
to  pay  employes  for  their  labor,  in  con- 
formity with  the  provisions  of  this  act,  shall 
be  liable  to  such  employe  for  the  full  value 
of  his  labor,  to  which  shall  be  added  a 
penalty  of  one  dollar  for  each  succeeding 
day,  not  exceeding  double  the  amount  of 
wages  due,  and  a  reasonable  attorney's  fee 
to  be  recovered  in  a  civil  action  and  col- 
lectible without  relief  from  valuation  and 
appraisement  laws. 

§  7063.  Every  coriwration,  company,  as- 
sociation, firm  or  person  who  violate  any 
of  the  provisions  of  section  three  (3)*  shall 
be  deemed  guilty  of  a  misdemeanor,  and 
upon  conviction  shall  be  fined  in  any  sum 
not  less  than  five  nor  more  than  one  hun- 
dred dollars. 

§  70G4.  This  act  shall  not  in  auy  way 
affect  the  liens  of  laborers  as  now  secured 
to  them  by  the  laws  of  this  State. 

§  7065.  That  every  corporation,  associa- 
tion, company,  firm  or  person  engaged,  in 
this  State,  in  mining  coal,  ore  or  other 
mineral,  or  quarrying  stone,  or  in  manufac- 
turing iron,  steel,  lumber,  staves,  heading 
barrels,  brick,  tile  machinery,  agricultural 
or  mechanical  implements,  or  any  article  of 
merchandise,  shall  pay  each  employe  of 
such  corporation,  company,  association,  firm 
or  person,  if  demanded,  at  least  once  every 
two  weeks,  the  amount  due  such  employe 
for   labor,    and   such   payment   shall   be    in 


lawful  money  of  the  United  States,  and  any 
contract  to  the  contrary  shall  be  void. 

§  7066.  That  any  person,  copartnership, 
corporation  or  association,  or  any  member, 
agent  or  employe  thereof,  who  shall  publish, 
issue  or  circulate  any  check,  card  or  other 
paijer,  which  is  not  commercial  paper  pay- 
able at  a  fixed  time  in  any  bank  in  this 
State,  at  its  full  face  value,  in  lawful  money 
of  the  United  States,  with  eight  per  cent, 
interest,  or  by  bank  check  or  cuiTency 
issued  by  authority  of  the  United  States 
government,  to  any  employe  of  such  per- 
son, copartnership,  corporation  or  associa- 
tion, in  payment  for  any  work  of  labor  done 
by  such  employe,  or  in  payment  of  any  labor 
contracted  to  be  done  by  such  employe, 
shall  be  guilty  of  a  misdemeanor,  and  upon 
conviction  thereof  shall  be  fined  in  any 
sum  not  more  than  one  hundred  dollars. 

§  7067.  It  shall  be  unlawful  for  any  cor- 
poration, company,  association,  firm  or  per- 
son described  in  section  one  (1)  of  this  act, 
or  the  ofllcers  and  agents  of  such,  to  sell, 
directly  or  indirectly,  to  any  employe  of 
such  coi-poration,  association,  firm  or  person, 
any  merchandise  or  supplies  are  sold  by 
such  corporation,  company,  association,  firm 
or  person  to  others  for  cash. 

§  7068.  Every  corporation,  company,  as- 
sociation, firm  or  person  who  shall  fail  for 
ten  days  after  demand  of  payment  has  been 
made  to  pay  employes  for  their  labor,  in 
conformity  with  the  provisions  of  this  act, 
shall  be  liable  to  such  employe  for  the  full 
value  of  his  labor,  to  which  shall  be  added 
a  penalty  of  one  dollar  for  each  succeeding 
day,  not  exceeding  double  the  amount  of 
wages  due,  and  a  reasonable  attorney's  fee, 
to  be  recovered  in  a  civil  action  and  col- 
lectible without  relief. 

§  7069.  Every  corporation  or  person  who 
knowingly  and  wilfully  violates  any  of  the 
provisions  of  section  three  (3)*  of  this  act, 
shall  be  deemed  guilty  of  a  misdemeanor, 
and  upon  conviction,  shall  be  fined  in  any 
sum  not  less  than  five  nor  more  than  one 
hundred  dollars. 

§  7070.  This  act  shall  not  in  any  way  affect 
the  liens  of  laborers,  as  now  secured  to 
them  by  the  laws  of  this  State. 

§  7071.  That  it  shall  be  unlawful  for  any 
owner,  corixiration,  association,  company, 
firm  or  pei"son  engaged  in  raining  coal,  ore 
or  other  minerals  or  quarrying  stone,  or  in 
manufacturing  iron,  steel,  lumber,  staves, 
heading  barrels,  brick,  tile,  machinery, 
agricultural  or  mechanical  implements  or 
any  article  of  merchandise,  to  directly  or 
indirectly  procure  any  person  or  persons  to 
execute  a  contract  or  agreement  to  waive 
his  or  their  legal  right  to  demand  or  re- 
ceive from  such  owner,  corporation,  associa- 
tion, company,  firm  or  person,  at  least  once 
every  two  weeks,  payment  of  the  amount 


*§  7061. 


*  §  Toor. 


26 


INDIANA. 


Coercion;  blacklisting— Stat.,  §§  7072-7078. 


due  such  person  or  persons  for  labor  per- 
formed, in  lawful  money  of  the  United 
States. 

§  7072.  It  shall  be  unlawful  for  any  owner, 
corporation,  association,  company,  firm  or 
person  enjrajred  in  this  State  in  mining  coal, 
ore,  or  other  minerals  or  quarrying  stone, 
or  in  manufacturing  iron,  steel,  lumber, 
staves,  heading  barrels,  brick,  tile,  ma- 
chinery, agricultural  or  mechanical  im- 
plements, or  any  article  of  merchandise  to 
directly  or  indirectly  procure  any  person  or 
persons  to  execute  any  contract  or  agree- 
ment by  the  terms  which  such  person  or 
persons  agree  to  purchase  any  article  of 
mei'chandise,  food,  groceries  or  supplies  of 
any  particular  person,  corporation,  associa- 
tion, firm  or  company,  or  any  particular 
place,  shop  or  stoi*e  in  this  State. 

§  7073.  It  shall  be  unlawful  for  any  owner, 
manager,  superintendent,  operator,  bank 
boss,  agent  or  employer  employes  in  any 
of  the  occupations  described  in  section  1 
of  this  bill,  to  hold  out  any  tokens  or  in- 
ducements, or  make  any  threats  or  promises 
of  reward,  or  in  any  other  way  by  words 
or  acts,  to  coerce  any  of  their  employes  to 
buy  any  article  of  merchandise,  food, 
groceries  or  supplies  of  any  particular  per- 
son, corporation,  association,  firm  or  com- 
pany, or  at  any  pai-ticular  place,  shop  or 
store  in  this  State. 

§  7074.  It  shall  be  unlawful  for  any  owner, 
manager,  superintendent,  operator,  bank 
boss,  agent  or  employer  to  attempt  by  words 
or  acts  to  coerce  any  of  their  employes  to 
buy  any  article  of  merchandise,  food, 
groceries  or  supplies  of  any  particular  per- 
son, corporation,  association,  firm  or  com- 
pany, or  at  any  particular  place,  shop  or 
store  in  this  State. 

§  7075.  Every  owner,  corporation,  associa- 
tion, company,  firm,  person,  manager,  super- 
intendent, bank  boss,  agent  or  employer, 
who  shall  violate  any  of  the  provisions  of 
this  act,  shall  be  deemed  guilty  of  a  mis- 
demeanor, and  upon  conviction  thereof  shall 
be  fined  in  any  sum  not  more  than  two 
hundred  dollars. 

ARTICLE  IV. 

Blacklisting, 

Sec.  7076.  Preventing  di.seharged  employe  from  ob- 
taining work. 

7077.  Blacklisting. 

7078.  Statement  of  cause  of  discbarge. 

§  707G.  That  if  any  person,  agent,  com- 
pany or  corporation,  after  having  discharged 
any  employe  from  his  or  its  service,  shall 
prevent,  or  attempt  to  prevent,  by  word  or 
writing  of  any  kind,  such  discharged  em- 
ploye from  obtaining  employment  with  any 
other  i)erson,  company  or  corporation,  such 
person,  agent  or  corporation  shall  be  guilty 
of  a  misdemeanor,  and  shall  be  punished  by 
a   fine   not   exceeding   five   hundred   dollars 


nor  less  than  one  hundred  doliai's,  and  such 
person,  agent,  company  or  corporation  shall 
be  liable  in  penal  damages  to  such  dis- 
charged person,  to  be  recovered  by  civil 
action;  but  this  section  shall  not  be  con- 
strued as  prohibiting  any  person  or  agent 
of  any  company  or  corporation  from  inform- 
ing in  writing  any  other  person,  company 
or  corporation,  to  whom  such  discharged 
person  or  employe  has  applied  for  employ- 
ment, a  truthful  statement  of  the  reasons 
for  such  discharge. 

Exemption  of  wages  of  employes.  §§  1)70-972. 
See  act  to  regulate  employment  of  women  and 
cbildren  at  p.  31. 

§  7077.  (As  amended  March  11,  1895.)  If 
any  railway  company  or  any  other  com- 
pauj'  or  partnership  or  corporation  in  this 
State  shall  authorize,  allow  or  permit  any 
of  its  or  their  agents  to  blacklist  any  dis- 
charged employes,  or  attempt  by  words  or 
writing,  or  any  other  means  whatever,  to 
prevent  such  discharged  employe,  or  any 
employe  who  may  have  voluntarily  left  said 
company's  service,  from  obtaining  employ- 
ment with  any  other  person,  or  company, 
said  company  shall  be  liable  to  such  em- 
ploye in  such  sum  as  will  fully  compensate 
him,  to  which  may  be  added  exemplary 
damages. 

§  7078.  It  shall  be  the  duty  of  any  person, 
agent,  company  or  corporation,  after  hav- 
ing discharged  any  employe  from  his  or  its 
service,  upon  demand  by  such  discharged 
employe,  to  furnish  him  in  writing  a  full, 
succinct  and  complete  statement  of  the 
cause  or  causes  of  his  discharge,  and  if 
such  person,  agent,  company  or  corporation 
shall  refuse  so  to  do  within  a  reasonable 
time  after  such  demand,  it  shall  ever  after 
be  unlawful  for  such  person,  agent,  com- 
pany or  corporation  to  furnish  any  state- 
ment of  the  cause  of  such  discharge  to  any 
person  or  corporation,  or  in  any  way  to 
black-list  or  to  prevent  such  discharged 
persons  from  procuring  employment  else- 
where, sub.iect  to  the  penalties  prescribed  in 
section  1  of  this  act  (§  707G):  Provided, 
That  said  written  cause  of  discharge,  when 
so  made  by  such  person,  agent,  company  or 
conioration  at  the  request  of  such  dis- 
charged employe  shall  never  be  used  as  the 
cause  for  an  action  for  slander  or  libel, 
either  civil  or  criminal,  against  the  person, 
agent,  company  or  corporation  so  furnish- 
ing the  same. 

ARTICLE  V. 

Importing  Alien  Laborers. 

Sec.  7070.  Aliens;    importation    of   labor. 

7080.  Contracts  void. 

7081.  Penalty. 

7082.  Foreign   residents. 

§  7079.  That  from  and  after  the  passage  of 
this  act,  it  shall  be  unlawful  for  any  per- 


IXDIAIs^A. 


27 


Alien  laborers;  injuries  to  employes  —  Stat.,  §§  7080-7084. 


son,  company,  partnership,  or  corporation, 
in  any  manner  whatsoever,  to  prepay  trans- 
portation or  in  any  way  assist  or  encourage 
the  importation  or  migration  of  any  alien 
or  aliens,  any  foreigner  or  foreigners,  into 
and  State  of  Indiana  under  contract  or 
agreement,  parol  or  special,  express  or  im- 
plied, made  previous  to  the  importation  or 
migration  of  such  alien  or  aliens,  foreigner 
or  foreigners,  to  perform  labor  or  service  of 
any  kind  in  this  State. 

§  70S0.  That  all  contracts  or  agreements, 
express  or  implied,  parol  or  special,  which 
may  hereafter  be  made  by  and  between  any 
person,  company,  partner.ship  or  corporation, 
and  any  foreigner  or  foreigners,  alien  or 
aliens,  to  perform  labor  or  service,  or  having 
reference  to  the  performance  of  labor  or 
service,  by  any  person  in  the  State  of  In- 
diana previous  to  the  migration  or  importa- 
tion of  the  person  or  persons  whose  labor  or 
service  is  contracted  for,  into  the  United 
States,  shall  be  utterly  void  and  of  no  effect. 

§  70S1.  That  for  every  violation  of  any  of 
the  provisions  of  section  1  of  this  act,  the 
person,  partnership,  company,  or  corporation 
violating  the  same  by  knowingly  assisting, 
encouraging  or  soliciting  migration  or  im- 
portation of  any  alien  or  aliens,  or  of  any 
foreigner  or  foreigners  into  the  State  of  In- 
diana to  perform  labor  or  service  of  any  kind 
under  contract  or  agreement,  express  or  im- 
plied, parol  or  special  with  such  alien  or 
aliens,  foreigner  or  foreigners,  previous  to 
becoming  residents  or  citizens  of  the  United 
States,  shall  b  edeemed  guilty  of  a  misde- 
meanoi*.  and  upon  conviction  thereof,  shall 
be  fined  in  any  sum  not  less  than  one  hun- 
dred dollars  nor  more  than  five  thousand 
dollars. 

§  7082.  That  nothing  in  this  act  shall  be 
so  construed  as  to  prevent  any  citizen  or 
subject  of  any  foreign  country  temporarily 
residing  in  the  United  States,  either  in  a 
private  or  otticial  capacity,  from  engaging 
under  contract  or  otherwise,  persons  not 
residents  or  citizens  of  the  United  States,  to 
act  as  private  secretaries,  servants  or  domes- 
tics for  such  foreigner  temporarily  residing 
in  the  United  States,  nor  shall  this  act  be 
so  construed  as  to  prevent  any  person  or 
persons,  partnership  or  corporation,  from  en- 
gaging, under  contract  or  agreement,  skilled 
workmen  in  foreign  countries  to  perform  la- 
bor in  the  State  of  Indiana,  in  or  upon  any 
new  industry  not  at  present  established  in 
the  State:  Provided,  That  skilled  labor  for 
that  purpose  can  not  otherwise  be  obtained; 
nor  shall  the  provisions  of  this  act  apply 
to  professional  actors,  artists,  lecturers  or 
singers,  nor  to  persons  employed  strictly  as 
personal  or  domestic  servants:  Provided, 
That  nothing  in  this  act  shall  be  construed 
as  prohibiting  any  individual  from  assisting 
any  member  of  his  family,  or  relative,  or 
personal  friend  to  migrate  from  any  foreign 
country  to  the  State  for  the  pui-pose  of 
settlement  here. 


ARTICLE  VI. 

Injuries  to  Employes. 

Sec.  70&3.  Liability   for   personal   injuries. 

7084.  When  damages  not  recoverable. 

7085.  Measure  of  damages. 

7086.  Laws  of  other  State  not  a  defense. 

7087.  Contracts  of  release  void. 

§  7083.  That  every  railroad  or  other  cor- 
poration, except  municipal,  operating  in  this 
State,  shall  be  liable  for  damages  for  per- 
sonal injury  suffered  by  any  employe  while 
in  its  service,  the  employe  so  injured  being 
in  the  exercise  of  due  care  and  diligence, 
in  the  following  cases: 

First.  When  such  injury  is  suffered  by  rea- 
son of  any  defect  in  tlie  condition  of  ways, 
with  or  in  use  in  the  business  of  such  cor- 
poration, when  such  defect  was  the  result 
works,  plant,  tools  and  machinery  connected 
of  negligence  on  the  part  of  the  corpora- 
tion, or  some  person  entrusted  by  it  with  the 
duty  of  keeping  such  way,  works,  plant, 
tools  or  machinery  in  proper  condition. 

Second.  When  such  injury  resulted  from 
the  negligence  of  any  person  in  the  service 
of  such  corporation,  to  whose  order  or  direc- 
tion the  injured  employe  at  the  time  of 
the  injury  was  bound  to  conform,  and  did 
conform. 

Third.  Where  such  injury  resulted  from 
the  act  or  omission  of  any  person  done  or 
niade  in  obedience  to  any  rule,  regulation  or 
by-law  of  such  corporation,  or  in  obedience 
to  the  particular  instructions  given  by  any 
person  delegated  with  the  authority  of  the 
corporation  in  that  behalf. 

Fourth.  Where  such  injury  was  caused  by 
the  negligence  of  any  person  In  the  service 
of  such  corporation  who  has  charge  of  any 
signal,  telegraph  oflice,  switch  yard,  shop, 
round-house,  locomotive  engine  or  train  upon 
a  railway,  or  where  such  injury  was  caused 
by  the  negligence  of  any  person,  coemploye 
or  fellow  servant  engaged  in  the  same  com- 
mon service  in  any  of  the  several  depart- 
ments of  the  service  of  any  such  corporation, 
the  said  person,  coemploye  or  fellow  servant, 
at  the  time  acting  in  the  place,  and  perform- 
ing the  dutj-  of  the  coriwration  in  that  be- 
half, and  the  person  so  injured,  obeying  or 
conforming  to  the  order  of  some  superior  at 
the  time  of  such  injury,  having  authority  to 
direct;  but  nothing  herein  shall  be  construed 
to  abridge  the  liability  of  the  corporation 
under  existing  laws. 

§  70S4.  Neither  an  employe  nor  his  legal 
representative  shall  be  entitled  under  this 
act  to  any  right  of  compensation  or  remedy 
against  the  corporation  in  any  case  where 
the  injury  results  from  obedience  to  anj'  or- 
der Avliich  subjects  the  employe  to  palpable 
danger,  nor  where  the  injury  was  caused 
by  the  incompetency  of  the  coemploye  and 
such  incompetency  was  known  to  the  em- 
ploye injured;  or  such  injured  employe,  in 
the  exercise  of  reasonable  care  might  have 
discovered    such    incompetency;    unless    the 


28 


INDIANA. 

Injuries  to  employes;  fees  of  secretary  of  state  —  Stat.,  §§  70S5-7087,  7G31. 


employe  so  injured  gave  or  caused  to  be 
given  'information  thereof  to  the  corporation 
or  to  some  superior  entrusted  witli  the  gen- 
eral superintendence  of  such  coemploye,  and 
such  corporation  failed  or  refused  to  dis- 
charge sucli  incompetent  employe  Avitliiu  a 
reasonable  time,  or  fail  or  refuse  Avithin 
reasonable  time,  to  investijrate  the  alledsed 
incompetency  of  the  coemploye  or  superior, 
and  discharge  him  if  found  incompetent. 

§  70S5.  The  damages  recoverable  under 
this  act,  shall  commensurate  with  the  injury 
sustained  unless  death  results  from  such 
injury,  when,  in  such  case,  the  action  shall 
survive  and  be  governed  in  all  respects  by 
the  law  now  in  force  as  to  such  actions: 
Provided,  That  where  any  such  person  re- 
covers a  judgment  against  a  i-ailroad  or 
other  corpoi-atiou.  and  such  coiToration  takes 
an  appeal,  and,  pending  such  appeal,  the  in- 
jured person  dies,  and  the  judgment  ren- 
dered in  the  court  below  be  thereafter  re- 
versed, the  right  of  action  of  such  person 
shall  survive  to  his  legal  representative. 

§  70S6.  In  case  any  railroad  corporation 
whicli  owns  or  operates  a  line  extending 
into  or  through  the  State  of  Indiana  and  into 
or  througli  another  or  other  States,  and  a 
person  in  the  employ  of  such  corporation,  a 
citizen  of  this  State,  shall  be  injured  as 
provided  in  this  act,  in  any  other  State 
where  such  railroad  is  owned  or  operated, 
and  a  suit  for  such  injury  shall  be  brought 
in  any  of  the  courts  of  this  State,  it  shall 
not  be  competent  for  such  corporation  to 
plead  or  prove  the  decisions  or  statutes  of 
the  State  where  such  person  shall  have  been 
injured  as  a  defense  to  the  action  brouglit 
in  this  State. 

§  70S7.  All  contracts  made  by  railroads  or 
other  corporations  with  their  employes,  or 
I'ules  or  regulations  adopted  by  any  corpora- 
tion releasing  or  relieving  it  from  liability 
to  any  employe  having  a  right  of  action 
under  the  provisions  of  this  act  are  hereby 
declared  null  and  void.  The  provisions  of 
this  act  however  shall  not  apply  to  any 
injuries  sustained  before  it  takes  effect,  nor 
shall  it  affect  in  any  manner  any  suit  or 
legal  proceedings  pending  at  the  time  it 
takes  effect. 

CHAPTER  XCIX. 

Offices  and  Officers. 

Art.     0.  Secretary  of  State. 
3u.  Notaries  public. 

ARTICLE  IX. 

Secretary  of  State. 

Sec.  7631.  Fees. 

763J.  Certificate    not   to   be    filed    until    fees 
paid. 

§  7r.?,l.  That  the  secretary  of  State  shall 
hereafter  charge  and  collect,  for  the  benefit 
of  the  State,  the  following  fees,  viz.: 

First.    For  tiling   Avith   such   secretary   of 


State  the  articles  of  incorporation,  or  a  cer- 
tified copy  or  duplicate  thereof,  of  any  cor- 
lX)ration  whose  capital  stock  is  ten  thousand 
dollars  or  under,  ton  dollars.  Of  a  corpora- 
tion whose  capital  stock  is  over  ten  thousand 
dollars,  one-tenth  of  one  per  cent,  upon  the 
authorized  capital  stock  of  such  association. 

Second.  For  filing  with  the  secretary  of 
State  a  certificate  of  increase  of  capital 
stock  of  any  corporation  having  a  capital 
stock  where  the  amount  of  increase  is  ten 
thousand  dollars,  one-tenth  of  one  per  cent, 
upon  the  iDroposed  amount  of  increased 
capital. 

Third.  For  filing  with  such  secretary  the 
articles  of  agreement,  or  a  certified  cojjy  or 
duplicate  thereof,  of  any  consolidations  of 
corpoi-ations  having  a  capital  stock,  the  fol- 
lowing fees  shall  be  collected  by  the  secre- 
tary of  State:  Said  articles  of  agreement  of 
consolidations  shall  be  treated  as  the  articles 
of  incorporation  of  the  new  consolidated 
corporations  created  by  such  articles  of 
agreements  of  consolidation,  shall  be  the 
same  in  each  case  as  is  hereinbefore  set 
forth  for  the  filing  of  articles  of  incorpora- 
tion, or  certified  copies,  or  duplicate  thereof, 
of  a  corporation  having  the  same  amount  of 
capital  stock  as  is  provided  for  by  the 
articles  of  agreement  or  consolidation;  and 
in  fixing'  the  amount  of  fees,  no  credit  shall 
be  allowed  for  fees  previously  paid  by  any 
of  the  constituent  corporations,  parties  to 
such  consolidation,  but  the  same  shall  be 
determined  solely  by  the  amount  of  capital 
stock  of  the  new  corporation  created  by  such 
articles  of  agreements  of  consolidation. 

Seventh.  For  filing  with  such  secretary  a 
certificate  of  the  reduction  of  the  capital 
stock  of  any  coi-poration,  five  dollars. 

Eighth.  For  filing  with  such  secretary  a 
copy  of  the  decree  of  court,  changing  the 
name  of  any  corporation,  five  dollars. 

Ninth.  For  filing  with  such  secretary  an 
amendment  of  the  articles  of  incorporation, 
twenty  cents  a  hundred  words,  to  be  in  no 
ease  less  than  five  dollars. 

Eleventh.  For  filing  with  such  secretary  a 
certificate  of  the  extension  of  purpose,  or 
cliange  of  domicle  of  any  corporation,  five 
dollars. 

Twelfth.  For  filing  with  such  secretary 
other  certificates,  not  herein  enumerated, 
except  certificates  of  election,  for  filing  which 
no  charge  shall  be  made,  twenty  cents  a 
liundred  words,  to  be  in  no  case  less  than 
five  dollars. 

Thirteenth.  For  filing  with  such  secretary 
any  certified  copy  or  duplicate  of  acceptance 
by  any  existing  coriioration  or  association 
of  the  provisions  of  any  statute  passed  sub- 
sequent to  the  incorporation  of  such  cor- 
])oration  or  association  now  recpiired  by  law 
to  be  filed  with  the  secretary  of  State,  or 
that  may  hereafter  be  required  to  be  filed 
with  the  secretary  in  such  casps.  five  dollars. 

§  7G32.  All  the  fees  in  this  act  provided  for 


INDIAl^A. 


29 


Taxation  —  Stat,  §§  8041,  8422,  8426,  8435,  8456,  8491. 


shall  be  paid  into  the  State  treasury,  and 
shall  be  in  addition  to  any  fees  that  are  now 
allowed  br  law  to  the  secretary  of  State  for 
personal  services  for  filing  any  of  the  papers 
herein  mentioned.  And  such  secretary  of 
State  shall  neither  file  nor  record  any  of  the 
articles  of  incorporation,  certificates,  dupli- 
cates, or  other  papers  hereinbefore  men- 
tioned, unless  all  fees  for  filing  the  same  are 
first  duly  paid. 

ABTICLE  XXX. 
Notaries  Public. 
Sec.  8041.  Who  cannot  be  a  notary  public. 

§  8041.  No  person,  being  an  officer  in  any 
corporation  or  association,  or  in  any  bank 
possessed  of  any  banking  powers,  shall  act 
as  a  notai-y  public  in  the  business  of  such 
bank,  corporation  or  association.    *    *    * 

CHAPTER  CVni. 
Taxation. 

Art.     4.  Property,   where  assessed. 
5.  Definitions   and  rules. 
9.  Domestic   corporations. 
UK  Proceedings  against  corporations. 

ARTICLE  IV. 
Where  Assessed. 

Sec.  S422.  Corporate  property. 

8426.  Banks;    broliers;    stockjobbers,    etc. 

§  8422.  All  corporate  property,  including 
capital  stock  and  franchises,  except  where 
some  other  pi'ovision  is  made  by  law,  shall 
be  assessed  to  the  corporation  as  to  a 
natural  person  in  the  name  of  the  corpora- 
tion. The  place  where  its  principal  office  in 
this  State  is  situated  shall  be  deemed  its 
residence,  but  if  there  be  no  principal  office 
in  the  State,  then  such  property  shall  be 
listed  and  taxed  at  any  place  in  the  State 
where  the  coi-poration  transacts  business. 

[A  tax  assessed  on  the  capital  stock  of  a  cor- 
poration is  a  tax  on  the  property  of  which  such 
capital  is  composed.  Wljitncy  v.  City,  23  Ind. 
336. 

There  are  in  this  State  two  recognized  modes 
of  taxing  capital  stock  of  corporations  —  by  as- 
sessment against  the  corporation  itself,  and 
against  the  individual  stockholders.  Where  stat- 
ute does  not  otherwise  provide,  stockholders  are 
separately  and  severally  listed  by  the  assessor  for 
the  amount  of  their  capital  stock.  Id.  The 
actual  value  of  such  stock  must  in  all  cases  be 
the  criterion  of  taxation.     Id. 

Shares  of  stock  in  incorporated  companies, 
whether  the  property  of  such  companies  be  tan- 
gible or  intangible,  are  personal  property.  Sew- 
ard  V.   City,   79  Ind.   351. 

A  city  has  the  right  to  tax  its  citizens  for  stock 
owned  by  them  in  a  foreign  railroad  company,  al- 
though a  tax  has  been  paid  thereon  in  the  State 
where  the  corporation  Is   located.     Id. 

Where  all  the  property  of  a  tangible  corpora- 
tion is  duly  returned  for  taxation,  and  represents 
the  entire  capital  of  the  corporation,  the  capital 
stock  could  not  be  assessed  for  taxation.  Hy- 
land  V.  Coal  Co.,  128  Ind.  335;  s.  c,  26  N.  E.  Rep. 
672. 

But  where  such  tangible  property  is  of  less 
value  than  the  capital  stock,  the  latter  is  tax- 
able to  the  extent  that   it  exceeds  in  value  the 


tangible  property.     Hyland  v.  Steel  Co.,  129  Ind. 
68;  s.  c,  28  N.  E.  Rep.  308. 

County  board  of  equalization  has  exclusive 
original  jurisdiction  in  assessment  of  capital 
stock  of  corporations,  and  whether  value  of  such 
stock  exceeds  value  of  tangible  property.  Is  for 
such  board  to  decide.  Jones  v.  Gas  Co.,  135  Ind. 
594;  s.  c,  35  N.  E.  Rep.  390.] 

§  8426.  The  personal  property  of  •  •  * 
all  companies  except  companies  specially 
provided  for  in  this  act,  shall  be  listed  and 
assessed  in  the  township,  town  or  city  where 
such  personal  property  is  situated. 

ARTICLE  V. 

Defi.nitions  and  Rules. 

Sec.  8435.  Franchises. 

8456.  "  Person  "   Includes  corporations. 

§  8435.  Every  franchise  granted  by  any  law 
of  this  State,  owned  or  used  by  any  person 
or  corporation,  and  every  franchise  or 
privilege  used  or  enjoyed  by  any  person  or 
coi-poration,  shall  be  listed  and  assessed  as 
personal  property. 

§  8456.  The  word  "  person,"  as  used  in  this 
act,  shall  be  held  to  include  and  mean 
"  firm,"  "  company,"  "  association,"  or  "  cor- 
porations." 

ARTICLE  IX. 
Domestic  Corporations. 

Sec.  8491.  Sworn  statement. 

8492.  Schedule. 

8493.  Failure;  duty  of  auditor  of  State. 
(Acts  1891,  p.  199.     In  force  March  6,  1891.) 

§  8491.  Every  street  railroad,  water  works, 
gas,  manufacturing,  mining,  gravel-road, 
plank-road,  savings  bank,  insurance  and 
other  associations  incorporated  under  the 
laws  of  this  State  (other  than  railroad 
companies  and  those  heretofore  specially 
designated)  shall,  by  its  president  or  other 
proper  accounting  officer,  between  the  first 
day  of  April  and  the  first  day  of  June  of 
the  current  year,  in  addition  to  the  other 
property  required  by  this  act  to  be  listed, 
make  out  and  deliver  to  the  assessor,  a 
sworn  statement  of  the  amount  of  its  capital 
stock,  setting  forth  particularly: 

First.  The  name  and  location  of  the  com- 
pany or  association. 

Second.  The  amount  of  capital  stock  au- 
thorized, and  the  number  of  shares  in  which 
such  capital  stock  is  divided. 

Third.  The  amount  of  capital  stock  paid 
up. 

Fourth.  The  market  value,  or  if  no  market 
value,  then  the  actual  value  of  the  shares 
of  stock. 

Fifth.  The  total  amount  of  indebtedness, 
except  the  indebtedness  for  current  expenses 
excluding  from  such  expenses  the  amount 
paid  for  the  purchase  or  improvement  of 
property. 

Sixth.  The  value  of  all  tangible  property. 

Seventh.  The  difference  in  value  between 
all  tangible  property  and  the  capital  stock. 

Eighth.  The  name  and  value  of  each  fran- 


30 


INDIANA. 


Taxation;  corporations  —  Stat.,  §§  8492,  8493,  S579-85T1. 


chise  or  privilege  owned  or  enjoyed  by  such 
corporation. 

Such  schedule  shall  be  made  in  conformity 
to  such  instructions  and  forms  as  may  be 
prescribed  by  the  auditor  of  State.  In  case 
of  the  failure  or  refusal  to  make  report,  such 
corporation  shall  forfeit  and  pay  one  hun- 
dred dollars  for  each  additional  day  such 
report  is  delayed  beyond  the  first  day  of 
June,  to  be  sued  and  recovered  in  any  proper 
form  of  action  in  the  name  of  the  State  of 
Indiana,  on  the  relation  of  the' prosecuting 
attorney,  such  penaltj^  when  collected,  to  be 
paid  into  the  county  treasury.  And  such 
prosecuting  attorney  in  every  case  of  con- 
viction shall  be  allowed  a  docket  fee  of  ten 
dollars  to  be  taxed  as  costs  in  such  action. 

[Where  all  the  tangible  property  of  a  corpora- 
tion is  duly  returned  for  taxation,  and  represents 
the  entire  capital  of  the  corporation,  the  capital 
stock  could  not  be  assessed  for  taxation.  Hy- 
land  r.  Coal  Co.,  128  Ind.  335;  s.  c,  26  N.  E.  Rep. 
672. 

But  where  such  tangible  property  is  of  less 
value  than  the  capital  stock,  the  latter  is  tax- 
alili'  to  the  extent  that  it  exceeds  in  value  the 
tangible  property.  Hyland  v.  Steel  Co.,  129  Ind. 
US;   s.   c,   28  N.    B.   Rep.   308. 

Xo  special  notice  of  the  time  or  place  of  boara 
of  equalization  to  assess  property  of  corporations 
need  be  given,  if  the  law  fixes  such  time  and 
place.  Hyland  v.  Coal  Co.,  supra;  Smith  v. 
Manufacturing  Co.,  131  Ind.  150;  s.  c,  30  N,  E. 
Rep.  947.] 

§  8492.  Such  statement  shall  be  scheduled 
by  the  assessor,  and  such  schedule,  with  the 
statement  so  scheduled,  shall  be  returned  by 
the  assessor  to  the  county  auditor.  The 
auditor  shall  annually,  on  the  meeting  of  the 
county  board  of  review,  lay  before  said 
board  the  schedule  and  statements  herein 
required  to  be  returned  to  him,  and  said 
board  shall  value  and  assess  the  capital  stock 
and  all  franchises  and  privileges  of  such 
companies  or  associations  in  the  manner  pro- 
vided in  this  act,  and  the  said  auditor  shall 
compute  and  extend  the  taxes  for  all  pur- 
poses on  the  respective  amounts  so  assessed, 
the  same  as  may  be  levied  on  other  property 
in  such  towns,  cities  or  other  localities  in 
Avhich  such  companies  or  associations  are 
located.  In  all  cases  where  the  capital  stock 
of  any  such  corporation  exceeds  in  value 
that  of  the  tangible  property  listed  for  tax- 
ation, then  such  capital  stock  shall  be  sub- 
ject to  taxation  upon  such  excess  of  value; 
where  no  tangible  properly  is  returned  or 
found,  and  the  capital  stock  has  a  value,  it 
shall  be  assessed  for  its  true  cash  value. 
But  where  the  capital  stock,  or  any  part 
thereof,  is  invested  in  tangible  property,  re- 
turned for  taxation,  such  capital  stock  shall 
not  be  assessed  to  the  extent  that  it  is  so 
invested.  Every  franchise  or  privilege  of 
any  such  corporation  shall  likewise  be  as- 
sessed at  its  ti'ue  cash  value.  Where  the 
full  value  of  any  franchise  is  represented 
by  the  capital  stock  listed  for  taxation  then 
such  franchise  shall  not  itself  be  taxed;  but 
in  all  cases  where  the  franchises  is  of  greater 


value  than  the  capital  stock,  then  the  fran- 
chise shall  be  assessed  at  its  full  cash  value, 
and  the  capital  stock  in  such  case  shall  not 
be  assessed. 

§  8493.  In  case  of  the  failure  or  refusal  of 
the  person  or  persons,  joint-stoclc  associa- 
tions, companies  or  coriwrations,  their  offi- 
cers, agents  or  employes  specified  in  the 
preceding  section  to  make  and  return  the 
statements  and  reports  therein  provided  for 
the  auditor  of  State  shall  make  out  such 
returns,  statements  and  valuations  from  the 
best  information  he  can  obtain,  and  for  that 
purpose  he  shall  have  power  to  summons 
and  examine,  under  oath,  any  person  whom 
he  may  believe  to  have  a  knowledge  thereof. 
And  he  shall  add.  to  such  valuation  twenty- 
five  per  centum  thereon. 

ARTICLE  XIX. 
Proceedings  Against  Corporations. 

Sec.  8579.  Collection    from   corporations. 

8580.  When  tax  is  collected. 

8581.  Bill  of  discovery. 

§  8579.  The  county  treasurer  shall  demand 
payment  of  all  taxes  assessed  on  incorpo- 
rated companies,  except  national  banks  and 
building  and  loan  fund  associations,  from 
the  president  or  other  proper  officer  of  such 
companies,  in  the  same  manner  as  in  other 
cases,  and  if  not  paid  shall  proceed  in  the 
collection  and  payment  thereof  and  penal- 
ties thereon  in  the  same  manner  as  in  other 
cases,  and  shall  be  liable  to  the  same  penal- 
ties for  the  nonpayment  of  monej'S  collected 
by  him. 

§  8580,  If  such  county  treasurer  shall  not 
be  able  to  collect  any  tax  assessed  upou  any 
incoiiDorated  company,  he  shall  return  the 
same  to  the  county  auditor  and  be  allowed 
therefor  as  in  other  cases,  and  the  county 
auditor  shall  certify  the  same,  with  the 
delinquent  taxes,  to  the  auditor  of  the  State. 

§  8581,  If  any  such  company  shall  not 
have  personal  or  real  estate  out  of  which  to 
make  such  delinquent  taxes,  the  auditor  of 
State  may,  if  he  deem  it  expedient,  cause  to 
be  filed  in  a  proper  court,  a  bill  against  such 
company  for  the  discovery  and  sequestration 
of  its  property;  which  court  shall  order  such 
part  of  the  property  of  such  company  to  be 
sequestered  as  they  shall  deem  necessary  for 
the  purpose  of  satisfying  the  taxes,  penalties 
and  interest  in  arrears,  with  the  cost  of 
prosecution,  and  they  may  also,  at  their  dis- 
cretion, enjoin  such  company  and  the  offi- 
cers thereof  from  any  further  proceedings 
under  their  act  of  incorporation,  and  may 
order  and  direct  such  other  proceedings  as 
they  shall  deem  necessary  to  compel  the 
payment  of  such  taxes,  penalties,  interest 
and  cost;  or  such  tax,  penalties  or  interest 
may  be  recovered  with  cost  from  such  de- 
linquent company  by  action  in  the  name  of 
the  State,  or  in  the  relation  of  the  auditor 
of  State,  in  the  circuit  court  of  the  proper 
county. 


IXDIAXA. 


31 


Prohibiting  trusts  and  combinations  —  Act,  March  5,  1897. 


LEGISLATIVE  ACTS  RELATING  TO  CORPORATIONS    ENACTED 
SUBSEQUENTLY  TO  1894. 


1.  Prohibiting  trusts  and   combinations. 

2.  UcKulatiug  the  employment  of  women  and  chil- 

dren. 

Act  1. 
AN  ACT  to  declare  unlawful  and  void 
all  arranfe'enients,  contracts,  agreements, 
trusts,  or  combinations  made  with  a  view 
to  lesson,  or  which  tend  to  lessen,  free 
competition  in  the  importation  or  sale  of 
ai'ticles  imported  into  this  State  or  in  the 
manufacture  or  sale  of  articles  of  domestic 
growth  or  of  domestic  I'aw  material;  to  de- 
clare unlawful  and  void  all  arrangements, 
contracts,  agreements,  trusts  or  combina- 
tions between  persons  or  corporations  de- 
signed, or  which  tend  to  advance,  reduce 
or  control  the  price  of  such  product  or 
article  to  producer  or  consumer  of  any- 
such  product  or  article;  to  provide  for  for- 
feiture of  the  charter  and  franchise  of  any 
corpoi'ation  organized  under  the  laws  of 
this  State,  violating  any  of  the  provisions 
of  this  act,  from  doing  business  in  this 
State;  to  require  the  attorney- general  of 
this  State  to  institute  legal  proceedings 
against  any  such  corporations  violating 
the  provisions  of  this  act,  and  to  enforce 
the  penalties  prescribed;  to  prescribe  penal- 
ties for  any  violation  of  this  act;  to  au- 
thorize any  person  or  corporation,  damaged 
by  any  trust,  agreement,  or  combination, 
to  sue  for  the  recovery  of  such  damage, 
and  for  otlier  purposes. 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  the  State  of  Indiana,  and  it  is 
hereby  enacted  by  the  authority  of  the  same. 
That  from  and  after  the  passage  of  this  act, 
all  arrangements,  contracts,  agreements, 
trusts,  or  combinations  between  persons  or 
corporations  who  control  the  output  of  said 
[any]  article  of  merchandise,  made  with  a 
view  to  lessen,  or  which  tend  to  lessen,  full 
and  free  competition  in  the  importation  or 
sale  of  articles  imported  into  this  State,  and 
all  arrangements,  contracts,  agreements, 
trusts,  or  coml)inations  between  persons  or 
corporations  who  control  the  output  of  said 
articles  of  merchandise  designed,  or  which 
tend  to  advance,  reduce  or  control  the  price 
or  the  cost  to  the  producer  or  to  the  con- 
sumer of  any  such  product  or  article,  are 
hereby  declared  to  be  against  public  policy, 
unlawful  and  void. 

§  2.  Tliat  any  corporation,  chartered  under 
the  laws  of  this  State,  which  shall  violate 
anj'  of  the  provisions  of  this  act,  shall 
thereby  forfeit  its  charter  and  its  franchise, 
and  its  corporate  existence  shall  thereupon 
cease  and  determine.  Every  foreign  corpora- 
tion which  shall  violate  any  of  the  provi- 


sions of  this  act,  is  hereby  denied  the  right 
to  do,  and  is  proliibited  from  doing  business 
in  this  State.  It  is  hereby  made  the  duty 
of  the  attorney-general  of  the  State  to  en- 
force this  provision  by  due  process  of  law. 

§  3.  That  any  violation  of  the  provisions 
of  this  act  shall  be  deemed,  and,  is  hereby 
declared  to  be  destructive  of  full  and  free 
competition  and  a  conspiracy  against  trade, 
and  any  person  or  persons  who  may  engage 
in  any  such  conspiracy,  or  who  shall,  as 
principal,  manager,  director,  or  agent,  or  in 
any  other  capacity,  knowingly  carry  out  any 
of  the  stipulations,  purposes,  prices,  rates  or 
orders  made  in  furtherance  of  such  conspir- 
acy, shall,  on  conviction,  be  punished  by  a 
fine  of  not  less  than  one  hundred  dollars  or 
more  than  five  thousand  dollars,  and  by  im- 
prisonment in  the  penitentiary  not  less  than 
one  year  or  more  than  ten  years;  or,  in  the 
judgment  of  the  court,  by  either  such  fine 
or  such  imprisonment. 

§  4.  The  persons  designed  by  this  act  to 
be  affected  hereby  are  those  who  own,  con- 
trol or  manufacture  the  output  of  any  par- 
ticular article  of  merchandise  mentioned 
herein;  Provided,  however.  That  the  pro- 
visions of  this  act  shall  not  apply  to  agricul- 
tural products  or  live  stock  while  in  the 
possession  of  the  producer  or  raiser. 

§  5.  That  any  person  or  persons  or  corpo- 
rations that  may  be  injured  or  damaged  by 
uny  such  arrangement,  contract,  agreement, 
trust  or  combination,  described  in  section  1 
of  this  act,  may  sue  for  and  recover  in  any 
court  of  competent  jurisdiction,  in  this  State, 
of  any  person,  persons  or  corporation  operat- 
ing such  trust  or  combination  the  full  con- 
sideration or  sum  paid  by  him  or  them  for 
any  goods,  wares,  merchandise  or  articles, 
the  sale  of  which  is  controlled  by  such  com- 
bination or  trust. 

§  6.  That  it  shall  be  the  duty  of  the  judges 
of  the  circuit  courts  of  this  State  specially  to 
instruct  the  grand  juries  as  to  the  provisions 
of  this  act. 

§  7.  That  all  laws  and  parts  of  laws  in  con- 
flict with  the  provisions  of  this  act  be  and 
the  same  are  hereby  i-epealed. 
(Approved  March  5,  1897.) 

Act  2. 

AN  ACT  to  regulate  the  employment  of 
women  and  children  in  manufacturing 
establishments,  and  to  provide  for  the  ap- 
pointment of  inspectors  to  enforce  the 
same. 

Section  1.  Be  it  enacted  by  the  general  as- 
sembly of  the  State  of  Indian,  That  no  per- 


32 


IXDIAXA. 


Employment  of  children;  factories  —  Act,  March  2,  1897. 


son  under  sixteen  years  of  age  and  no 
woman  under  eighteen  years  of  age,  em- 
ployed in  any  manufacturing  establishment, 
shall  be  required,  permitted  or  suffered  to 
work  therein  more  than  sixty  hours  in  any 
one  week,  or  more  than  ten  hours  in  any  one 
day,  unless  for  the  purpose  of  making  a 
shorter  day  on  the  last  day  of  the  week;  nor 
more  hours  in  any  one  week  than  will  make 
an  average  of  ten  hours  per  day  for  the 
whole  number  of  days  in  which  such  person 
or  such  woman  shall  so  work  during  such 
week;  and  every  person,  firm,  corporation  or 
company  employing  any  person  under  six- 
teen years  of  age  or  any  women  under  eigh- 
teen years  of  age  in  any  manufacturing 
establishment  shall  post  and  keep  posted  in 
a  conspicuous  place  in  every  room  where 
such  lielp  is  employed  a  printed  notice  stat- 
ing the  number  of  hours  of  labor  per  day 
required  of  such  persons  for  each  day  of 
the  week,  and  the  number  of  hours  of  labor 
exacted  or  permitted  to  be  performed  by 
such  persons  shall  not  exceed  the  number  of 
hours  of  labor  so  posted  as  being  required. 
The  time  of  beginning  and  ending  the  day's 
labor  shall  be  the  time  stated  in  such  notice: 
Provided,  That  sucli  woman  under  eighteen 
and  persons  under  sixteen  years  of  age  may 
begin  after  the  time  set  for  the  beginning 
and  stop  before  the  time  set  in  such  notice 
for  the  stopping  of  the  day's  labor,  but  they 
shall  not  be  permitted  or  required  to  per- 
form any  labor  before  the  time  stated  on  the 
notices  as  the  time  for  beginning  the  day's 
labor,  not  after  the  time  stated  upon  the 
notices  as  the  hour  for  ending  the  day's 
labor. 

§  2.  No  child  under  fourteen  years  of  age 
shall  be  employed  in  any  manufacturing  es- 
tablishment within  this  State.  It  shall  be 
the  duty  of  every  person  employing  chil- 
dren to  keep  a  register,  in  which  shall  be  re- 
corded the  name,  birth-place,  age  and  place 
of  residence  of  every  person  employed  by 
him  under  the  age  of  sixteen  years;  and  it 
shall  be  unlawful  for  any  proprietor,  agent, 
foreman  or  other  person  in  or  connected 
with  a  manufacturing  establishment  to  hire 
or  employ  any  child  under  the  age  of  sixteen 
years  to  work  therein  without  there  is  first 
provided  and  placet!  on  file  in  the  office  an 
affidavit  made  by  the  parent  or  guardian, 
staling  the  age,  date  and  place  of  birth  of 
said  child;  if  said  child  shall  have  no  parent 
or  guardian,  then  such  affidavit  shall  be 
made  by  the  child,  which  affidavit  shall  be 
kept  on  file  by  the  employer,  and  said  regis- 
ter and  affidavit  shall  be  produced  for  in- 
spection on  demand  made  by  the  inspector, 
appointed  under  this  act.  There  shall  be 
posted  conspicuously  in  every  room  where  ' 
children  under  sixteen  years  of  age  are  em- 
respectively.  (No  child  under  the  age  of  six- 
ployed,  a  list  of  their  names,  with  their  ages, 
teen  years  shall  be  employed  in  any  manu- 
facturing establishment  who  cannot  read  j 
and  write  simple  sentences  in  the  English 


language,  except  during  the  vacation  of  the 
public  schools  in  the  city  or  town  where 
such  minor  lives.  The  factory  inspector 
shall  have  the  power  to  demand  a  certificate 
of  physical  fitness  from  some  regular  physi- 
cian in  the  case  of  children  who  may  seem 
physically  unable  to  perform  the  labor  at 
which  they  may  be  employed,  and  shall  have 
the  power  to  prohibit  the  employment  of 
auj'  minor  that  cannot  obtain  such  a  cer- 
tificate.) 

§  3.  No  person,  firm  or  corporation  shall 
employ  or  permit  any  child  under  the  age 
of  fifteen  years  to  have  the  care,  custody, 
management  of  or  to  operate  any  elevator, 
or  shall  employ  or  permit  any  person  under 
the  age  of  eighteen  years  to  have  the  care, 
custody,  management  or  operation  of  any 
elevator  running  at  a  speed  of  over  two 
hundred  feet  a  minute. 

§  4.  It  shall  be  the  duty  of  the  owner  or 
lessee  of  any  manufacturing  establishment 
Avhere  there  is  any  elevator,  hoisting  shaft 
or  well-hole  to  cause  the  same  to  be  prop- 
erly and  substantially  inclosed  or  secured, 
if  in  the  opinion  of  the  factory  inspector 
it  is  necessary,  to  protect  the  lives  or  limbs 
of  those  employed  in  such  establishment.  It 
shall  also  be  the  duty  of  the  owner,  agent 
or  lessee  of  each  of  such  establishments  to 
provide,  or  cause  to  be  provided,  if  in  the 
opinion  of  the  inspector  the  safety  of  per- 
sons in  or  about  the  premises  should  require 
it,  such  proper  trap  or  automatic  doors  so 
faslened  in  or  at  all  elevator-ways  as  to  form 
a  substantial  surface  when  closed,  and  so 
constructed  as  to  open  and  close  by  the  ac- 
tion of  the  elevator  in  its  passage,  either 
ascending  or  descending,  but  the  require- 
ments of  this  section  shall  not  apply  to  pas- 
senger elevators  that  are  closed  on  all  sides. 
The  factory  inspector  may  inspect  the 
cables,  gearing  or  other  apparatus  of  ele- 
vators in  manufacturing  establishments  and 
require  that  the  same  be  kept  in  safe  con- 
dition. 

§  6.  Proper  and  substantial  hand-rails  shall 
be  provided  on  all  stairways  in  manufactur- 
ing establishments,  and  where  in  the  opinion 
of  the  factory  inspector  it  is  necessary,  the 
steps  of  said  stairs  in  all  such  establishments 
shall  be  substantially  covered  with  rubber, 
securely  fastened  thereon,  for  the  better 
safety  of  persons  employed  in  said  estab- 
lishments. The  stairs  shall  be  properly 
sci'eened  at  the  sides  and  bottom.  All  doors 
leading  in  or  to  such  factory  shall  be  so 
constructed  as  to  open  outwardly  where 
practicable,  and  shall  be  neither  locked, 
bolted  nor  fastened  during  working  hours. 

§  G.  If  in  the  opinion  of  the  factox-y  inspec- 
toi'.  it  is  necessary  to  insure  the  safety  of 
the  persons  employed  in  any  manufactiuing 
establishment,  three  or  moi-e  stories  in 
height  one  or  more  fire-escapes,  as  may  be 
deemed  by  the  factory  inspector  as  neces- 
sary and  sufficient  therefor,  shall  be  pro- 
vided on  the  outside  of  such  establishment, 


IXDIAXA. 


33 


Emplojment  of  children;  factories  —  Act,  March  2,  1897. 


connected  with  each  floor  above  the  first, 
well-fastened  and  secured,  and  of  sufficient 
strength,  each  of  which  fire-escapes  shall 
have  landings  or  balconies  not  less  than  six 
feet  in  len^h  and  three  feet  in  width, 
guarded  by  iron  railings  not  less  than  three 
feet  in  height,  and  embracing  at  least  two 
windows  at  each  story  and  connecting  with 
the  interior  by  easily  accessible  and  unob- 
structed openings,  and  the  balconies  or  land- 
ings shall  be  connected  by  iron  stairs,  not 
less  than  eighteen  inches  wide,  the  steps  not 
to  be  less  than  six  inches  tread,  placed  at  a 
proper  slant,  and  protected  by  a  well-socured 
hand-rail  on  both  sides,  with  a  twelve-inch 
wide  drop-ladder  from  the  lower  platform 
reaching  to  the  ground.  Any  other  plan  or 
style  of  fire-escape  shall  be  sufficient,  if  ap- 
proved by  the  factor.v  inspector,  but  if  not  so 
approved,  the  f.-u-tory  inspector  may  notify 
the  owner,  proprietor  or  lessee  of  such  estab- 
lishment, or  of  the  building  in  which  such 
establishment  is  conducted,  or  the  agent  or 
superintendent,  or  either  of  them,  in  writing, 
that  any  such  other  plan  or  style  of  fire-es- 
cape is  not  sufficient  and  may  by  an  order 
in  writing,  served  in  lilce  manner,  require 
one  or  more  fire-escapes,  as  he  shall  deem 
necessary  and  sufficient,  to  be  provided  for 
such  establisliment  at  such  location  and  such 
plan  and  style  as  shall  be  specified  in  such 
written  order.  Within  twenty  days  after  the 
service  of  such  order,  the  number  of  fire- 
escapes  required  in  such  order  for  such  es- 
tablishment shall  be  provided  therefor,  each 
of  which  shall  be  either  of  the  plan  and  style 
and  in  accordance  with  the  specifications  in 
said  order  required,  or  of  the  plan  and  style 
In  the  sootion  above  described  and  declared 
to  be  sufficient.  The  windows  or  doors  to 
each  fire-escape  shall  be  of  sufficient  size  and 
be  locf  ted  as  far  as  possible  consistent  with 
accessibility  from  the  stairways  and  elevator 
hatchways  or  openings,  and  the  ladder 
thereof  shall  extend  to  the  roof.  Stationary 
stairs  or  ladders  shall  be  provided  on  the  in- 
side of  such  establishment  from  the  upper 
story  to  the  roof,  as  a  means  of  escape  in 
case  of  fire. 

§  7.  It  shall  be  the  duty  of  the  owner 
agent,  superintendent  or  other  person  hav- 
ing charge  of  such  manufacturing  establish- 
ment, or  of  any  floor  or  part  thereof,  to  re- 
port in  writing  to  the  factory  inspector  all 
accidents  or  injury  done  to  any  person  in 
such  factory,  within  forty-eight  hours  of  the 
time  of  the  accident,  stating  as  fully  as  pos- 
sible the  extent  and  cause  of  such  injury  and 
the  place  Avhere  the  injured  person  is  sent, 
with  such  other  information  relative  thereto 
as  may  be  required  by  the  factory  inspector. 
The  factory  inspector  is  hereby  authorized 
and  empowered  to  fully  investigate  the 
causes  of  such  accidents,  and  to  require  such 
reasonable  precautions  to  be  taken  as  will  in 
his  judgment  prevent  the  reoccurrence  of 
similar  accident.^:. 

§  8.  It  shall  be  the  duty  of  any  owner  of 


any  manufacturing  establishment,  or  his 
agents,  superintendent  or  other  person  in 
charge  of  the  same,  to  furnish  and  supply, 
or  cause  to  be  furnished  and  supplied 
therein,  in  the  discretion  of  the  factory  in- 
spector, where  machinery  is  used,  belt  shift- 
ters  or  other  safe  mechanical  contrivances 
for  the  purpose  of  throwing  on  or  off  belts 
or  pulleys;  and  wherever  possible,  machinery 
therein  shall  be  provided  with  loose  pulleys; 
all  vats,  pans,  saws,  planers,  cogs,  gearing, 
belting,  shafting,  set-screws  and  machinery 
of  everj'  description  therein  shall  be  prop- 
erly guai'ded,  and  no  person  shall  remove 
or  make  infective  any  safeguard  around  or 
attached  to  any  planer,  saw,  belting,  shaft- 
ing or  other  machinery,  or  around  any  vat 
or  pan,  while  the  same  is  in  use,  unless  for 
the  purpose  of  immediately  making  repairs 
thereto,  and  all  such  safeguards  shall  be 
promptly  replaced.  By  attaching  thereto  a 
notice  to  that  effect,  the  use  of  any  machin- 
ery may  be  prohibited  by  the  factory  in- 
spector, should  such  machinery  be  regarded 
as  dangerous.  Such  notice  must  be  signed 
by  the  inspector,  and  shall  only  be  removed 
after  the  required  safeguards  are  pi'ovided, 
and  the  unsafe  or  dangerous  machine  shall 
not  be  \isod  in  the  meantime.  Exhaust  fans 
of  sufficient  power  shall  be  provided  for  the 
purpose  of  carrying  off  dust  from  emery 
wheels  and  grindstones,  and  dust-creating 
machinery  therein.  No  person  under  eigh- 
teen years  of  age,  and  no  women  under 
twenty-one  years  of  age,  shall  be  allowed 
to  clean  machinery  while  in  motion. 

§  9.  A  suitable  and  proper  washroom  and 
water-closets  shall  be  provided  in  each  manu- 
facturing establishment,  and  such  water- 
closets  shall  be  properly  screened  and  venti- 
lated and  be  kept  at  all  times  in  a  clean 
condition,  and  if  women  or  girls  are  em- 
ployed in  any  such  establishment,  the  water- 
closets  used  by  them  shall  have  separate 
approaches  and  be  separate  and  apart  from 
those  used  by  men.  All  water-closets  shall 
be  kept  free  from  obscene  writing  and  mark- 
ing. A  dressing-room  shall  be  provided  for 
women  and  girls,  when  required  by  the 
factory  inspector,  in  any  manufacturing  es- 
tablishment in  which  women  and  girls  are 
employed. 

§  10.  Not  less  than  sixty  minutes  shall  be 
allowed  for  the  noonday  meal  in  any  manu- 
facturing establishment  in  this  State.  The 
factory  inspector  shall  have  the  power  to 
issue  written  permits  in  special  cases,  allow- 
ing shorter  meal  time  at  noon,  and  such 
permit  must  be  conspicuously  posted  in  the 
main  entrance  of  the  establishment,  and 
such  permits  may  be  revoked  at  any  time 
the  factory  inspector  deems  necessary,  and 
shall  only  be  given  where  good  cause  can 
be  shown. 

§  11.  The  walls  and  ceilings  of  each  room 
in  every  manufacturing  establishment  shall 
be  lime-washed  or  painted,  when  in  the 
opinion  of  the  factory  inspector  it  shall  be 


34 


i:n^diana. 


Employment  of  children;  factories  —  Act,  March  2,  1897. 


conducive  to  the  health  or  cleauliness  of  the 
persons  workinsr  therein. 

§  12.  The  factory  inspector,  or  other  com- 
petent person  designated  for  such  purpose 
by  the  factory  inspector,  shall  inspect  any 
building  used  as  a  workshop  or  manufactur- 
ing establishment  or  anything  attached 
thereto,  located  therein,  or  connected  there- 
with, which  has  been  represented  to  l)e  un- 
safe or  dangerous  to  life  or  limb.  If  it  ap- 
pears upon  such  inspection  that  the  building  ; 
or  anything  attached  thereto,  located  therein, 
or  connected  therewith,  is  unsafe  or  dan- 
gerous to  life  or  limb,  the  factory  inspector 
shall  order  the  same  to  be  removed  or  ren- 
dered safe  and  secure,  and  if  such  notifica- 
tion be  not  complied  with  within  a  reason- 
able time,  he  shall  prosecute  whoever  may 
be   responsible   for   such   delinquency. 

§  13.  No  room  or  rooms,  apartment  or 
apartments  In  any  tenement  or  dwelling- 
house  shall  be  used  for  the  manufacture  of 
coats,  vests,  trousers,  knee-pants,  overalls, 
cloaks,  furs,  fur  trimmings,  fur  garments, 
shirts,  purses,  feathers,  artificial  tiowers,  or 
cigars,  excepting  by  tlie  immediate  member 
of  the  family  living  therein.  No  person, 
firm  or  corporation  shall  hire  or  employ  any 
person  to  work  in  any  one  room  or  rooms, 
apartment  or  apartments,  in  any  tenement 
or  dwelling-house,  or  building  in  the  rear 
of  a  tenement  or  dwelling-house,  at  making, 
in  whole  or  in  part,  any  coats,  vests,  trou- 
sers, knee-pants,  fur,  fur  trimmings,  shirts, 
purses,  feathers,  artificial  flowers,  or  cigars 
without  obtaining  first  a  written  permit 
from  the  factory  inspector,  which  permit 
may  be  revoked  at  any  time  the  health  of 
the  community,  or  of  those  employed  therein, 
may  require  it.  and  which  permit  shall  not 
be  granted  until  an  inspection  of  such  prem- 
ises is  made  by  the  factory  inspector,  assist- 
ant factory  inspector,  or  a  deputy  factory 
inspector,  and  the  maximum  number  of  per- 
sons allowed  to  be  employed  therein  shall 
be  stated  in  such  permit.  Such  permit  shall 
be  framed  and  posted  in  a  conspicuous  place 
in  the  room,  or  in  any  one  of  the  rooms  to 
which  it  I'elates. 

§  14.  No  less  than  two  hundred  and  fifty 
cubic  feet  of  air  space  shall  be  allowed  for 
each  person  in  any  workroom  Adhere  persons 
are  employed  during  the  hours  between  six 
o'clock  in  the  morning  and  six  o'clock  in 
the  evening,  and  not  less  than  four  hundred 
cubic  feet  of  air  space  shall  be  provided  for 
each  person  in  any  one  workroom  vchere  per- 
sons are  employed  between  six  o''.lo<k  in  the 
evening  and  six  (o'clock  in  the  morning. 
Bj'  a  written  permit  the  factory  inspector 
may  allow  persons  to  be  employed  in  a 
room  where  there  are  less  tnan  four  hun- 
dred cubic  feet  of  air  space  for  each  person 
employed  between  six  o'clock  in  the  evening 
and  six  o'clock  in  the  morning:  Fiovided, 
Such  room  is  lighted  by  el-'ctrioity  at  all 
times  during  such  hours  while  persons  are 
employed  therein.     There  shall  be  sufficient 


means  of  ventilation  provided  in  each  work- 
room of  every  manufacturing  establishment, 
and  the  factory  inspector  shall  notify  the 
OAVuer  in  writing  to  provide,  or  cause  to  be 
provided,  ample  and  proper  means  of  venti- 
lation for  such  workroom,  and  shall  prose- 
cute such  owner,  agent  or  lessee  if  such 
notification  be  not  complied  with  within 
twenty  days  of  the  service  of  such  notice. 
§  15.  The  governor  shall,  by  and  with  the 
advice  and  consent  of  the  senate,  appoint 
a  factory  inspector.  Said  factory  inspector 
shall  hold  and  continue  in  office,  after  the 
expiration  of  his  term  of  office  until  his  suc- 
cessor shall  be  appointed  and  qualified.  The 
term  of  office  of  the  factory  inspector  shall 
be  two  years.  The  annual  salary  of  such 
inspector  shall  be  one  thousand  five  hun- 
dred dollars  (^1,500).  payable  in  monthly  in- 
stallments; said  inspector  shall,  by  and  with 
the  consent  of  the  governor,  appoint  one 
assistant  factory  inspector,  whose  salary 
shall  be  one  thousand  dollars  ($1,000)  per 
j-ear,  and  he  shall  hold  his  office  subject 
to  removal  by  said  inspector  or  the  governor; 
shall  be  paid  monthly  by  the  treasurer  upon 
the  warrant  of  the  auditor  issued  upon 
proper  vouchers  therefor. 

§  IG.  It  shall  be  the  duty  of  the  factory 
inspector  to  cause  this  act  to  be  enforced, 
and  to  cause  all  violators  of  this  act  to  be 
prosecuted,  and  for  that  purpose  he  is  em- 
powered to  visit  and  inspect  at  all  reason- 
able hours,  and  as  often  as  shall  be  practi- 
cable and  necessary,  all  manufacturing  es- 
tablishments in  this  State.  It  shall  be  the 
duty  of  the  factory  inspector  to  examine 
into  all  the  violations  of  the  laws  made  for 
the  benefit  of  labor  and  to  prosecute  all 
violations  thereof.  It  shall  be  unlawful  for 
any  person  to  interfere  with,  obstruct  or 
hinder  said  inspector  while  in  the  perform- 
ance of  his  duties  or  to  refuse  to  properly 
answer  questions  asked  him  with  reference 
to  any  of  the  provisions  hereof.  The  factory 
inspector  shall  make  an  annual  report  of  his 
doings  as  such  inspector  to  the  governor 
during  the  month  of  January  of  each  year. 
Such  inspector  shall  have  the  power  as  a 
notary  public  to  administer  oaths  and  take 
affidavits  in  matters  connected  with  the  en- 
foi'cement  of  the  provisions  of  this  act. 

§  17.  The  prosecuting  attorney  of  any 
county  of  this  State  is  hereby  authorized 
upon  the  request  of  the  factory  inspector 
or  any  other  person  of  full  age.  to  commence 
and  prosecute  to  termination  before  any  cir- 
cuit or  criminal  court  or  police  court,  in 
the  name  of  the  State,  actions  or  proceed- 
ings against  any  person  or  persons  reported 
to  him  to  have  violated  the  provisions  of  this 
act. 

§  18.  The  words  "  manufacturing  estab- 
lishment." wherever  used  in  this  act,  shall 
be  construed  to  mean  any  mill,  factory  or 
workshop  where  ten  or  more  persons  are 
employed  at  labor. 

§  19.  A  copy  of  this  act  shall  be  conspicu- 


IXDIAXA. 

Employment  of  children;  factories  —  Act,  March  2,  1897. 


35 


ouslv  posted  aucl  kept  posted  in  each  work- 
room of  every  mauufacturin?  establishment 
in  this  State. 

§  20.  Any  person  who  violates  or  omits 
to  comply  with  any  of  the  provisions,  or 
who  refuses  to  comply  with  the  orders  of 
the  factory  inspector,  properly  made  vinder 
the  provisions  of  this  act.  or  who  suffers 
or  permits  any  child  to  be  employed  in  vio- 
lation of  its  provisions,  shall  be  deemed 
guilty  of  a  misdemeanor,  and  on  conviction 
shall"  be  punished  by  a  fine  of  not  more  than 


fifty  dollars  for  the  first  offense,  and  not 
more  than  one  hundred  dollars  for  the  sec- 
ond offense,  to  which  may  be  added  im- 
prisonment for  not  more  than  ten  days,  and 
for  the  third  offense  a  fine  of  not  less  than 
two  hundred  and  fifty  dollars  and  not  more 
than  thirty  days'  imprisonment. 

§  21.  All  laws  and  parts  of  laws  in  con- 
flict with  the  provisions  of  this  act  are 
herebv  repealed. 

(Approved  March  2,  1897.) 

See  ch.  81,   §§  7051-7087. 


INDEX  TO  INDIAI^A. 


ACCIDENTS:  Page. 

in  factories,  to  be  reported   33 

ACTIONS: 

against  corporation,  place  of  venue 7 

service  of  summons   7 

pleadings 8 

appearance;?  by  attorney  : 9 

against  railroads  or  canal  corporations   7 

service  of  summons   7 

against  foreign  corporation   7 

pendency,  notice   of    8 

authority  to  bring,  against  agent 16 

service  of  process  upon  agent 16 

against  officers,  for  debts  of  corporation   21 

ADMINISTRATORS.    (See  Executors.) 
AGENTS: 

of  foreign  corporations,  authority  to  be  filed 16 

certificate  authorizing  suit   16 

service  of  process  upon   16 

who  are  deemed    17 

ALIENS: 

contract  for  employment  of,  invalid 26,    27 

assisting  or  soliciting  immigration  of    27 

ARTICLES  OF  INCORPORATION: 

filed  with  secretary  of  state   11 

effect  of  failure  to  file 11 

of   manufacturing   companies    18 

contents  of 18 

amendment,  how  made   21 

fees  for  filing   28 

ASSESSMENT    (See  Taxes): 

upon  stock,  manner  of  making,  corporation  to  regulate 11 

suit   for   recovery   of    19 

of  property,  of  corporation,  for  tax 29 

of  franchise  of  corporation   29 

statements  of  corporation  for 29 

effect  of  failure  to  make   30 

ASSESSOR    (See  Taxes): 

return  of  statement  of  corporation  to 29 

schedule  to  bo  returned  to  county  auditor 30 

ATTACHMENTS: 

against  property  of  foreign  corporations   8,      9 

garnishee  to  furnish  statement  of  shares  held  by  defendant 9 

BLACKLIST: 

of   employes   prohibited    2G 

BONDS: 

corporation  may  issue    14 

discounts   of,   valid    14 

valid,  when  issued  by  corporations  organized  under  special  act 14 

29 


38  INDEX  TO  INDIANA. 

BOOKS:  r'age. 

of  corporation,  slicriff  to  have  access  to 8 

stock,    names   of   stockholders    13 

BORROW: 

power  of  corporation  to  14 

BY-LAWS: 

.corporations  may  make   H 

CANALS: 

mannfacturing,  etc.,  companies  desiring  to  build '21 

restrictions  and  limitations   -I.  -2 

acquisition  of  lands   for    -2 

condemnation   of  lands    22 

appraisal  of  damages    22 

CAPITAL  STOCK: 

withdrawal  of,  before  payment  of  debts IH 

increase   or   decrease    ; IH 

of  manufacturing,  etc.,   companies,   fixed    19 

stockholders  may  increase   19 

when  to  be  paid  in 19 

payment  of,  how  enforced   19 

certificate  of  full  payment   19 

reduction  of,  vote  to  be  filed  19 

taxation  of   29,  30 

CERTIFICATES: 

of  incorporation  of  manufacturing  and  other  companies.     (See  Articles  of  Incorpo- 
ration)    18 

liability  of  officers  for  false 20 

fees  for  filing  with  secretary  of  .state 28 

CHANGE: 

of  name  of  corporation,  proceedings   9 

by  corporations  existing  in  1850 l(j 

CHARTER    (See  Articles  of  Association): 

expiration  of,  application  for  receivers   13 

jurisdiction  of  circuit  court 13 

payment  of  debts  13,  14 

special,  time  extended 14 

change  of  place  of  business  I.5 

directors,  election  of,   when  held    15 

of  corporation,  forfeiture  for  unlawful  combinations  or  trusts 31 

CHILDREN: 

employment  of,  in  factories  regulated 32 

hours  of,  limited   32 

when  not  to  be  employed  in  factories 32 

COMBINATIONS: 

unlawful,   prohibited    3I 

CONDEMNATION: 

of  lands  for  canals,  etc.,  proceedings •>'> 

CONSOLIDATION: 

articles  of  incorporation  to  be  filed -t-, 

fees  for  filing .^c 

CONTRACTS: 

laws  impairing  obligations  of  5 

CORPORATIONS:  

not  created  by  special  act f 

actions  against,  place  of  venue 

service  of  summons   

appearance  by  attorney  ,j 


ESTDEX  TO  li^DIANA.  39 

CORPORATIONS  —  (Continued) :  Page. 

change  of  name  of,  proceedings  9 

indictment   of    10 

order  of  court  declaring  existence 10,  11 

articles  of  incorporation  to  be  filed 11 

general  powers   11 

extension  of  existence  beyond  time  limited  13 

charter  expiring,  receivers  to  be  appointed 13 

duties  of  receivers    13 

payments  of  debts   13.  14 

franchise  forfeited  for  failure  to  pay  judgment 14 

organized  prior  to  constitution,  existence  extended  14 

created  by  special  act,  change  of  place  of  business 15 

election  of  directors   15 

COUNTY: 

stock  of  corporation  not  to  be  subscribed  for 5 

credit  not  to  be  loaned  to  corporation 5 

DAY'S  LABOR: 

M'hat  constitutes   24 

penalty  for  requiring  more  hours 24 

DEBTS: 

of  corporations  not  to  assumed  by  state 5 

liability  of  stockholders  for 15 

enforcement  of  liability  of  officers  for 21 

DECREASE: 

of  capital  stock,  by  directors 15 

DIRECTORS: 

change  of  place  of  business  of  certain  corporations 15 

election  of,  of  certain  corporations   15 

number  of,  decrease  or  increase 15 

share  of  stock,  increase  or  decrease  of  amount  15 

capital  stock,  increase  or  decrease  15 

liability  of  stockholders,  may  increase  15 

general  act,  resolution  to  adopt  provisions  of 15 

of  manufacturing,  etc.,  companies  18 

officers  elected  by  18 

liability  of,  for  failure  to  file  certificate  of  reduction  of  capital  stock 19 

preferred  stock,  duties  as  to.    (See  Preferred  Stock) 20 

liability  for  false  certificates,  etc 20 

for  illegal  dividends 21 

for  violations  of  law 21 

DISCHARGED   EMPLOYES: 

preventing  from  receiving  employment 26 

blacklisting  prohibited 26 

reasons  for  discharge  to  be  stated 26 

DISSOLUTION: 

continuance  after,  for  certain  purposes 13 

DIVIDENDS: 

upon  preferred  stock 20 

illegal,  liability  of  directors  for 21 

ELEVATOR: 

appliances  for  safety  of  employes 32 

EMPLOYES: 

wages  of,  when  not  subject  to  garnishment   'J 

liabifity  of  stockholders  for  debts  due 21 

preference  of  claims  of 2L,  _4 

94. 

day's  labor,  what  constitutes   ■^■* 


40  INDEX  TO  INDIANA. 

EMPLOYES  —  (Continued) :  Page. 

wages  to  bo  paid  monthly 24 

demand  for,  penalty  for  refusal IM 

to  be  paid  weekly  by  certain  companies 24 

checks  or  cards  not  payable  in  money  prohibited 25 

penalties  for  violations    25 

sale  of  merchandise  to,  at  higher  price 25 

wages  payable  once  in  two  weeks,  when  25 

contracts  in  contravention,  illegal  25 

for  payment  in  merchandise,  etc 26 

coercion  of,  to  buy  merchandise  of  certain  persons 20 

injuries  to,  liability  for 27 

limitation  of  liability   27 

damages,  when  not  recoverable 27 

commensurate  with  injuries 28 

actions  for,  statutes  of  other  states  not  to  be  pleaded 28 

contracts  relieving  from  liability,  illegal   28 

in  factories,  regulations  to  provide  for  safety 32.  3.5 

discharged,  preventing  from  receiving  employment 26 

not  to  be  blacklisted  26 

reasons  for  discharge  to  be  stated 26 

alien,  under  contract,  employment  of 26,  27 

contractn  for  employment,  invalid 27 

EXECUTION: 

levy  upon  shares  of  stock 8 

sheriff  to  have  access  to  books 8 

EXECUTORS: 

as  stockholders,  liabihties    13 

right  to  vote  upon  stock 13 

EXISTENCE: 

corporate,  extended  beyond  time  limited 13 

of  corporations  organized  prior  to  constitution 14 

of  manufacturing,  etc.,  companies,  extension  of 19 

FACTORIES: 

regulations  as  to,  for  protection  of  employes 32-35 

belt   shifters    33 

safeguards  around  machinery 33 

FACTORY  INSPECTOR: 

duties  of,  as  to  manufacturing  establishments 32-35 

FALSE: 

certificates  and  reports,  liability  of  officers  for 20 

FEES: 

for  filing  articles  of  incorporation  and  other  papers  with  secretary  of  state 28 

FIRE  ESCAPES: 

on  factories,  construction  of 32,  33 

FOREIGN  CORPORATION: 

actions  against,  where  brought 7 

service  of  summons   7 

notice  of  pendency 8 

attachments  against 8,  9 

agents  of,  to  file  authority 15 

suit  against,  consent  to  be  filed 16 

service  of  process  upon  agents 16 

when  not  bring  actions 17 

who  deemed  agent  of   17 

liability  of  agents   17 

forfeiture  for  transfer  of  suits 17 

forfeiture  of  right  to  do  business  by  unlawful  combine '^1 


INI>EX  TO  E\T)IAIs^A.  41 


FRAN'CIIISE: 


Fagp. 


forfeiture  for  failure  to  pay  judgment 14 

mortgage  of,  by  corporation   14 

of  corporation,  personal  property  for  purpose  of  taxation 29 

GARNISHEE: 

to  furnish  statement  of  shares 9 

GAS  LIGHT  COMPANIES: 

may  extend  pipes I'J 

power  to  furnish  gas  outside  of  city,  etc 19 

GUARDIANS: 

as  stockholders,  liabilities   13 

right  to  rote  13 

HAND  RAILS: 

on  stairways  in  factories 32 

INCORPORATION: 

of  manufacturing,  mining  and  other  corporations 17 

certificate  of,  contents.    (See  Articles  of  Incorporation  ) 18 

to  be  filed   IS 

INCREASE: 

of  capital  stock,  by  directors 15 

INDICTMENT: 

of  incorporation,  summons  on   10 

plea    10 

for  nuisance    10 

INSOLVENCY: 

liability  of  stockholders  in  case  of 23 

claims  of  laborers,  preferred  23 

INSOLVENT  CORPORATION: 

receiver  to  be  appointed  for •'>  10 

INSURANCE   COMPANY: 

power  to  hold  property   ^^ 

JUDGMENT: 

franchise  forfeited  for  failure  to  pay   1-1 

LABORERS    (See  Employes): 

preference  of  claims  of — 

LAWS: 

ex  poste  facto,  not  to  be  passed •* 

impairing  obligations  of  contracts  "^ 

LOANS: 

corporations  may  negotiate   ^"^ 

MANUFACTURING  CORPORATIONS: 

organization  of   ^* 

may  incorporate  for  what  purpose 1 ' 

certificate  of  incorporation    1^ 

to  be  filed   1^ 

management  of  business  by  directors 1^ 

reduction  of  capital  stock 1^ 

preferred  stock   ^^ 

canals  or  races,  construction  of -1 

limitations  and  restrictions   21,  2_ 

real  estate,  acquisition  of — 

stock  in  water  companies,  may  purchase -^ 


42  im)EX  TO  INDIANA. 

MEETINGS:  ^'''f- 

corporatious  may  call  and  regulate  ii 

first,  notice  of,  how  served  ^^- 

holders  of  preferred  stock  not  to  vote -0 

MORTGAGE: 

corporation  may  borrow  money  on 

validity  of,  when  not  affected '* 

MUNICIPAL  CORrORATIONS: 

laborers  employed  by,  day's  work |-"* 

penalty  for  requiring  more  hours -■* 

NAME  OF  CORPORATION: 

change  of,  application  for  

notice  of,  publication   

proof  of  publication   ^ 

decree,  evidence  of  

NOTARY  PUBLIC: 

officera  of  certain  corporations  not  to  be -• ^ 

OFFICERS: 

corporations  may  elect  and  fix  compensation 11 

of  manufacturing,  etc.,  companies,  election  of IS 

to  serve  until  successors  qualify   1*^ 

liability  of,  for  false  reports  and  certificates ^0 

for  debts,  how  enforced ■^l 

ORGANIZATION: 

of  corporation,  order  of  court  upon  filing  statement l"^'-  H 

PENALTY: 

for  failure  to  keep  book  of  stockholders 13 

PERSON: 

word  includes  corporation   10 

PERSONAL  INJURIES: 

to  employes,  when  employer  is  liable ^'" 

damages  for,  when  not  recoverable 27 

commensurate  with  injuries  28 

statutes  of  other  state  no  defense 28 

contracts  relieving  from  liability,  illegal   28 

PLACE  OF  BUSINESS: 

change  of,  of  corporations  organized  under  special  act 15 

residence  of  corporation  for  purpose  of  taxation 29 

PLEADINGS: 

in  actions  against  corporations 8 

POWERS: 

generally  of  corporations   11 

PREFERRED   STOCK: 

manufacturing,  etc.,  company  may  issue 19 

articles  of  incorporation  may  provide  for 19 

stockholders  may  vote  for 20 

certificate  of  issuance,  to  be  filed 20 

limitation  of  amount  of 20 

dividends  upon 20 

holders  of,  not  liable  for  debts '20 

not  to  vote  at  meetings 20 

redemption  of,  certificate  to  be  filed 20 

liability  of  directors  for  failure  to  file 20 

PRICES: 

trusts  or  combinations  to  increase 31 


INDEX  TO  IKDIAi^A.  43 

PEOPERTY:  Page. 

not  to  be  taken  without  compensation 5 

PROXY: 

mode  of  voting  by,  regulations   11 

vote  by,  in  manufacturing,  etc.,  companies  1!^ 

PUBLIC  WORKS: 

day's  work  of  laborers  upon  2^4 

penalty  for  violation  as  to  ^4 

REAL  ESTATE: 

corporation  may  mortgage 14 

when  may  hold  '21 

acquisition  of,  by,  for  canals   21,  22 

proceedings  for  condemnation    22 

appraisal  of  damages  22 

RECEIVERS  OF  CORPORATIONS: 

when  may  be  appointed l>,  10 

upon  expiration  of  charter,  application  for 13 

jurisdiction  of  circuit  court   13 

payment  of  debts  by 13 

compensation  of,  how  paid  14 

claims  of  laborers  first  paid   23 

REPORT: 

annual,  of  manufacturing,  etc.,  companies 20 

liability  of  officers  for  false 20 

SAFEGUARDS: 

around  machinery  in  factories   33 

SCHEDULES: 

of  property  of  corporations,  for  purpose  of  taxation 20.  30 

effect  of  failure  to  make  30 

SEAL,  COMMON: 

corporations  may  have   11 

SECRETARY  OF  STATE: 

fees  for  filing  certificates,  etc.,  in  office  of 28 

STATE: 

credit  not  to  be  loaned 0 

not  to  be  stockholder   B 

STATEMENT: 

of  organization  to  be  filed  with  clerk  of  court 1*1.  11 

liability   of   officers  for   false    20 

of  property  of  corporation  liable  to  taxation 2!J,  30 

effect  of  failure  to  make 30 

STEAMBOAT: 

construction  companies,  powers  of   IS 

STOCK: 

county  not  to  subscribe  to 5 

execution  against  shares  of  S 

statement  of  shares  owned  by  defendant 9 

certificates  of,  stockholders  to  have 12 

pledged,  owner  may  vote 13 

book  containing  facts  as  to 1^ 

inspection   13 

failure  to  keep  13 

of  other  corporations,  when  not  to  be  purchased 10 

issued  to  secure  loans  14 

amount  of  shares,  change  in   1"^ 


44  INDEX  TO  IKDIAXA. 

STOCKS  —  (Continued) :  P:ige. 

of  manufacturing,  etc.,  company,  deemed  personal  estate 39 

transfer  of    19 

preferred,  issue  of.    (See  Preferred  Stock) 19 

manufacturing  company  may  acquire L'3 

capital,  withdrawal  of,  before  payment  of  debts  13 

increase  or  decrease  in  15 

of  manufacturing,  etc.,  companies,  fixed   19 

increase  of   19 

when  to  be  paid  in 19 

payment  of,  how  enforced 19 

certificate  of  full  payment   19 

reduction  of   19 

taxation   of    liO.  30 

STOCKHOLDER: 

state  not  to  be  ti 

to  have  one  vote  at  meetings 11 

certificates  of  stock  to  be  issued  to 12 

executors,  administrators  and  trustees,  liabilities  of 13 

right  to  vote 13 

book  containing  names  of   13 

subject  to  inspection 13 

failure  to  keep,  effect  of 13 

liability  of,  for  debts  of  corporation 35 

of  manufacturing,  etc.,  companies,  directors  to  be IS 

election  of  directors  by IS 

vote  by  proxy   IS 

capital  stock  increased  by 19 

extension  of  coroporate  existence   19 

reduction  of  capital  stock  19 

may  provide  for  issue  of  preferred  stock.     (See  Preferred  Stock) 19 

liability  of,  for  debts 2\ 

for  debts  due  laborers 21 

amendment  of  certificate  by 21 

liability  of,  in  case  of  insolvency 23 

directors  may  increase  liability 15 

SUB  AND  BE  SUED: 

corporations  may   11 

SUMMONS: 

service  of,  upon  corporations 7 

TAXES: 

assessments  of  property  of  corporation,  where  made 29 

franchises  personal  property  for  purpose  of 29 

statements  to  assessors  for  29 

effect  of  failure  to  make 30 

collection  of,  by  county  treasurer   30 

unpaid,  return  of,  to  county  auditor 30 

county  auditor  to  return  to  state  auditor 30 

proceedings  for  collection 30 

TENEMENTS: 

manufacturing  in,  regulated 34 

TRUSTEE: 

ag  stockholder,  liabilities  of  53 

right  to  vote    j3 

TRUSTS: 

prohibited    3j^ 


IXDEX  TO  INDIAIN'A.  45 

VIOLATION:  Page, 

of  provisions  of  law,  liability  of  directors  for 21 

WAGES: 

when  not  subject  to  garnishment 9 

of  employes  to  be  preferred 23.  24 

to  be  paid  monthly  24 

demand  of  employe;  penalty 24 

to  be  paid  weekly,  by  certain  corporations 24 

how  to  bo  paid 25 

checks  not  payable  in  money,  prohibited   25 

penalties  for  violations   25 

payable  once  in  two  weeks  by  certain  corporations 25 

contracts  for  paj-ment  of,  contrary  to  statute 25 

for  payment  in  merchandise,  etc 26 

WASH-ROOM: 

in  factories,  for  use  of  employes 33 

WATER  WORKS  COMPANIES: 

may  extend  pipes 19 

to  furnish  water  outside  of  city,  etc 19 

WOMEN:  1 

under  eighteen,  employment  in  factories   32 


IOWA. 


TABLE  OF  CONTENTS. 


CONSTITUTIONAL  PROVISIONS.  p. 

Art.        I.  Bill  of  rights *^^_ 

VII.  State  debts ^.y. 5 

VIII.  Corporations - 

o 

GENEHAIi  STATUTES. 

Part  First.    Public  Law. 

TITLE  I.      OF  THE   GEXERAI.  ASSEMBLY,    THE    STATf  TES,    ETC. 


Oh.  8.  Of  the  statute*. 


7 


TITLE  VI.   OF  REVENUE. 

Oh.  1.  A^sesBinent  of  taxes ^ 

TITLE  IX.  OF  CORPORATIONS. 

Oh.  1.  Corporations  for  profit Y 

Foreign  corporations 15 

Part  Second.    Private  Law. 

TITLE    XIII.     OF    RIGHTS    OF    PROPERTY. 

Oh.  1.  Rights  of   aliens ig 

Part  Third.     Code  of  Civil  Practice. 

TITLE  XVII.     OF  PROCEDURE  IX  COURTS   OF   ORIGINAL  JURISDICTION. 

Ch.  3.  Parties  to  an  action 17 

4.  Place  of  bringing  suit 17 

6.  Manner  of  commencing  suits 17 

8.  Pleading 18 

15.  Security  for  costs 19 

TITLE   XVIII.     OF   ATTACHMENTS  AND  EXECUTIONS. 

Ch.  1.  Attachments    and    garnishments 19 

2.  Executions 19 

TITLE    XX.     OF    PROCEDURE    IN   PARTICULAR    CASES. 

Ch.  6.  Actions  to  test  corporate  rights 19 

9.  Injunctions   - 20 

Part  Fourth.    Code  of  Criminal  Procedure. 

TITLE   XXlV.     OF  CRIMES    AND    PUNISHMENTS. 

Ch.  11.  Offenses  against  public  policy 20 

TITLE  XXV.  OF  CRIMINAL  PROCEDURE. 

Oh.  17.  Process   upon   indictment 21 

18.  Arraignment " 

LEGISLATIVE  ACTS  PASSED  SUBSEQUENTLY  TO  TKE  GENERAL  STATUTES. 


IOWA. 


COXSTITUTIOX  OF  IOWA-185T. 


PROVISIONS  RELATING  TO  CORPORATIONS. 


ARTICLE  I. 

Bill  of  Rights. 

Sec.  18.  Trivate   property   not   to   be    taken    with- 
out   compensation. 
21.  No    law    shall    be    passed    impairing    ob- 
ligation   of   contracts. 

ARTICLE  VII. 

State  Debts. 

Sec.  1.  Credit  of  State  not  to  be  loaned    to   cor- 
porations. 

ARTICLE  VIII. 

Corporations. 

Sec.  1.  Corporations   shall    be   created  by   general 
laws    only. 

2.  Property  of  all  business  corporations  sub- 

ject  to  taxation. 

3.  State    shall    not    assume    debts   of,    or    be- 

come etoclcholder  in  any  corporation. 
12.  All  laws  for  creating  corporations  may  be 
amended  or  repealed. 

ARTICLE  I. 

Bill  of  Rights. 

§  18.  Private  property  shall  not  be  taken 
for  public  use  without  just  compensation 
first  being  made,  or  secured  to  be  made,  to 
the  owner  thereof,  as  soon  as  the  damages 
shall  be  assessed  by  a  jury,  who  shall  not 
take  into  consideration  any  advantages  that 
may  result  to  said  owner  on  account  of  the 
improvement  for  which  it  is  taken. 

Foreign  corporation  not  to  acquire  or  bold  land. 
iS   3073,   3079. 

[Power  of  eminent  domain  is  a  necessary  attri- 
bute of  sovereignty,  rather  than  any  reserved 
right  of  the  granting  of  property  to  the  citizen. 
Noll  V.  R.  R.  Co.,  32  Iowa,  66.  Above  section 
prohibits,  by  implication,  the  taliing  of  private 
property  for  anything  but  a  public  use.  Banli- 
head  v.  Brown,  25  Iowa,  540.  If  a  public  use  be 
declared  by  the  legislature,  courts  will  hold  such 
use  public,  unless  it  manifestly  appears  from 
provisions  of  the  act  that  It  can  liave  no  tendency 
to  advance  or  promote  such  public  use.  Id.  "What 
constitutes  a  taking.  White  v.  R.  R.  Co.,  64 
Iowa,  281;  s.  c,  20  N.  W.  Rep.  436.  A  party  can- 
not be  deprived  of  lils  property  without  provision 
for  a  Judicial  proceeding  either  originally  or   by 


appeal.  Ragatz  v.  Dubuque,  4  Iowa.  343.  Benefits 
to  accrue  are  not  to  be  estimated.  Deaton  v.  Polk 
Co.,  9  Iowa,  594;  Bland  v.  Hixenbaugh,  ?>0  id. 
532;  Koestenbader  v.  Peirce,  41  id.  204;  Britton 
V.  R.  R.  Co.,  59  id.  540;  s.  c,  13  N.  W.  Rep. 
710.  Legitimate  taxation  not  within  above  pro- 
hibition. Morford  v.  Unger,  8  Iowa,  82.  "  Just 
eoinpensation  "  means  a  fair  equivalent  in 
money,  and  should  be  precisely  commensurate 
with  the  injury  sustained.  Sater  v.  Road  Co.,  1 
Iowa,  386;  Henry  v.  R.  R.  Co.,  2  id.  288. 
The  compensation  must  be  ascertained  in  the 
mode  prescribed  by  law.  McCrory  v.  Griswold, 
7  Iowa,  248.  Payment  of  damages  is  a  condition 
precedent  to  right  to  enter  upon  and  take  the 
land.  Henry  v.  R.  R.  Co.,  supra;  Daniels  v. 
R.  R.  Co.,  35  Iowa,  129.  A  city  cannot  exercise 
right  of  eminent  domain  except  the  power  be 
expressly  given.  Field  v.  Des  Moines,  39  Iowa. 
575.] 

§  21.  No  bill  of  attainder,  ex  post  facto 
law.  or  law  impairing  the  obligation  of 
contracts,  shall  ever  be  passed. 

See  Const.,  art.   VIII,    §   12;   Statutes,   §   1640. 

[While  legislature  may  not  deprive  a  corpora- 
tion of  rights  vested  under  Its  charter  it  may 
pass  laws  in  nature  of  police  regulations,  although 
they  may  operate  to  surrender  the  use  of  a  fran- 
chise more  burdensome  or  less  remunerative. 
Rodemacher    v.    R.    R.    Co.,    41    Iowa,    297. 

The  articles  of  incorporation,  together  with  the 
general  incorporation  laws,  create  the  same  re- 
lation between  the  State  and  the  corporation 
which  would  exist  if  such  general  laws  and  arti- 
cles were  embodied  in  a  special  legislative  char- 
ter. State  V.  Ry.  Co.,  71  Iowa,  410;  s.  c,  32  N.  W. 
Rep.  409.] 

ARTICLE  VII. 

State  Debts. 

Section  1.  The  credit  of  the  State  shall  not, 
in  any  manner,  be  given  or  loaned  to,  or  in 
aid  of,  any  individual,  association,  or  corpo- 
ration; and  the  State  shall  never  assume,  or 
become  responsible  for  the  debts  or  liabili- 
ties of  any  individual,  association,  or  corpo- 
ration, unless  incurred  in  time  of  war  for 
the  benefit  of  the  State. 

ARTICLE  Vm. 

Corporations. 

Section  1.  No  corporations  shall  be  created 
by  special  laws;  but  the  general  assembly 


IOWA. 


Corporations  —  Const.,  Art.  viii,  §§  2,  3,  12. 


shall  px-ovide  by  general  laws,  for  the  organi- 
zation of  all  coriiorations  hereafter  to  be 
created,  except  as  hereinafter  provided. 

See    §§    160S     et   eeq. 

§  2.  The  property  of  all  corporations  for 
pecuniary  profit  shall  be  subject  to  taxation 
the  same  as  that  of  individuals. 

See   Statutes,    §§    1276-1295. 

[Independent  of  this  provision,  the  general  as- 
sembly Is  vested,  by  virtue  of  Its  general  legisla- 
tive authority,  with  power  to  subject  all  classes 
of  property.  Including  that  of  corporations,  to 
taxation  for  proper  purposes.  Davenport  v.  R.  R. 
Co.,  38  Iowa,  634.  This  section  must  be  inter- 
preted as  imposing  the  duty,  instead  of  simply 
granting  the  power,  to  tax  property  of  corpora- 
tions. Id.  Their  property  should  be  taxed  to 
same  extent,  for  same  purposes,  and  at  same 
rates,  as  that  of  an  individual.  Id.  This  section 
subjects  to  taxation  all  corporations  for  pecuni- 
ary profit.  Dubuque  v.  R.  R.  Co.,  39  Iowa,  57. 
An  act  releasing  railroad  company  from  liability 
to  municipal  taxation  held  to  be  in  conflict  with 
above  section.  Land  Co.  v.  County,  39  Iowa,  173. 
Taxation  of  shares  of  a  corporation  which  may 
have  some  additional  value  by  reason  of  good 
will,  etc.,  of  the  business  of  a  corporation  is 
not  unequal  taxation.  Bank  v.  Board.  64  Iowa, 
140;  s.  c,  19  N.  W.  Rep.  889.  Different  method 
may  be  prescribed  for  assessing  railroad  property 
than  that  provided  for  property  of  same  nature 
belonging  to  other  owners.  R.  R.  Co.  v.  Board,  67 
Iowa,  199;  s.  c,  52  X.  W.  Rep.  128. 

In  assessing  for  taxation,  real  estate  of  national 


banks  is  deducted  from  value  of  capital  stock. 
Bank  v.  City,  86  Iowa,  28;  s.  c,  52  N.  W.  Rep. 
334.  Shares  of  stock  in  national  bank  are  credits 
to  be  deducted  from  gross  amount  of  credits  listed 
for  taxation.    Id.] 

§  3.  The  State  shall  not  become  a  stock- 
holder in  any  coiporatiou.  nor  shall  it  as- 
sume or  pay  the  debt  or  liability  of  any  cor- 
poi-ation,  unless  insured  in  time  of  war 
for  the  benetit  of  the  State. 

[This  section  not  violated  by  authorizing  aid 
to  be  voted  by  counties  toward  construction  of 
a  railway.  County  v.  R.  R.  Co.,  4  G.  Gr.  1.  Nor 
by  an  act  making  an  appropriation  to  a  corpora- 
tion to  assist  it  in  testing  validity  of  barb  wire 
patents.  Wire  Co.  v.  Brown,  64  Iowa,  275;  s.  c, 
20  N.  W.  Rep.  434.] 

§  12.  Subject  to  the  provisions  of  this 
article,  the  general  assembly  shall  have 
power  to  amend  or  repeal  all  laws  for  the 
organization  or  creation  of  corporations,  or 
granting  of  special  or  exclusive  privileges 
or  immunities,  by  a  vote  of  two-thirds  of 
each  branch  of  the  general  assembly;  and 
no  exclusive  privileges,  except  as  in  this 
article  provided,  shall  ever  be  granted. 

See  Const.,  art.  I,  §  21;  Statutes,  §  1640. 

[This  section  has  reference  exclusively  to  cor- 
porations for  pecuniary  purposes.  Ex  parte  Prltz, 
9  Iowa,  30.] 


IOWA. 

Construction;  taxes;  corporations—  Stat,  §§  49,  1276,  1289,  1293-12'95. 


STATUTES  OF  IOWA- 1888. 


Part  First.    Public  Law. 

TITLE    I.    OF    THE    GENERAL.    ASSEMBLV, 
THE   STATUTES,   ETC. 

CHAPTER  in. 

Of  the  Statutes. 
Sec.  49.  Rules   of   construction. 

§  49.  (13.)  The  Avord  •'  person  "  may  be  ex- 
tended to  bodies  corporate. 

[So  held  under  statute  as  to  garnishment.  Wales 
T.  Muscatine,  4  Iowa,  302.  Above  rule  cannot  be 
universally  applied,  especially  in  construing  crim- 
inal statutes,  because  there  are  some  crimes  for 
which  corporations  cannot  be  punished.  True 
rule  laid  down.  Stewart  v.  Waterloo,  71  Iowa, 
226;  s.  c,  32  N.  W.  Rep.  275.] 

TITLE  VI.   OF  REVENUE. 

CHAPTEB   I. 

Of  the  Assessment  of  Taxes. 

S«C.  1276.  How  listed. 

1289.  Credits,    annuities,    bank    notes,    stock. 

1293.  Who    a    manufacturer. 

1294.  Mnnufactiuing   companies. 

1295.  Stock    exempt. 

§  1276.  *  *  *  The  property  *  *  *  of  a 
body  corporate,  company,  society,  or  partner- 
ship, [is  to  be  listed]  by  its  principal  ac- 
counting officer,   agent,   or  partner.    *    *    * 

§  1289.  Depreciated  bank  notes  and  the 
stock  of  corporations  and  companies  shall 
be  assessed  at  their  cash  value;    *    *    * 

[Taxation  of  property  of  a  corporation  to  the 
corporation,  and  shares  of  capital  stock  to  its 
stockholder,  is  not  unconstitutional.  Cook  v. 
Burliiiu-ton,  59  Iowa,  251;  s.  c,  13  N.  W.  Rep.  113. 
Real  property  of  a  private  corporation  is  to  be 
assessed  under  section  1302  of  the  Code.  Shares 
of  stock  are,  under  above  section,  taxable  in  hands 
of  owners.  Whether  this  would  amount  to  double 
taxation,  quaere.  Appeal  of  the  Des  Moines  Water 
Co.,  48  Iowa.  324.  Stockholder  is  taxable  upon  his 
Interest  in  the  corporate  property,  including  sur- 
plus, as  well  as  upon  his  capital  stock.  Ins.  Co. 
V.  Board,  37  N.  W.  Rep.  141.  Shares  of  stock  are 
to  be  taxed  to  the  owner  as  his  individual  prop- 
erty. Henkle  v.  Keota,  68  Iowa,  334;  s.  c,  27  N. 
W.  Rep.  250.  Taxation  of  stock  in  savings  bank. 
Bank  v.   Mittelbuscher.  4  McCrary,  361.] 

Assessing  a  corporation  for  corporate  stock  is 
proper,  though  it  owns  none,  if  the  shares  of  the 
stockholders  are  not  assessed.  Robbins  v.  Ma- 
goun,  70  X.  W.  Rep.  700.  Assessing  realty  and 
real  stock  as  "  corporation  stock,"  held  not  to 
defeat  the  assessment.    Id.] 

§  129.3.  Any  person  who  purchases,  re- 
ceives!, or  holds  personal  property  of  any 
description  for  the  purpose  of  adding  to  the 

30 


value  thereof  by  any  process  of  manufactur- 
ing, packing  of  meats,  refining,  purifying,  or 
by  the  combination  of  different  materials, 
w-ith  a  view  of  making  gain  or  profit  bv  so 
doing,  and  by  selling  the  same,  shall  be  held 
to  be  a  manufacturer  for  the  pui-pose  of 
this  title,  and  he  shall  list  for  taxation  the 
average  value  of  such  property  in  his  hands, 
estimated  as  directed  in  the  preceding  sec- 
tion; but  the  value  shall  be  estimated  upon 
those  materials  only  which  enter  into  the 
combination  or  manufacture. 

[A  corporation  manufacturing  sewer  pipes  and 
drain  tile  is  assessable  as  a  manufacturer  under 
above  section.  App.  of  Iowa  Pipe  &  Tile  Co.,  70 
N.  W.  Rep.  115. 

In  assessing  a  manufacturer  under  above  sec- 
tion, labor  and  fuel  are  not  to  be  considered.    Id.] 

§  1294.  Corporations  organized  under  the 
laws  of  this  State  for  pecuniary  profit,  and 
engaged  in  manufacturing  as  defined  by 
section  eight  hundred  and  sixteen  of  the 
Code  (§  1293),  and  which  have  their  capital 
represented  by  shares  of  stock,  shall, 
through  their  principal  accounting  officers, 
list  their  real  estate,  personal  propertv,  and 
moneys  and  credits,  in  the  same  manner  as 
is  required  of  individuals,  and  their  ma- 
chinery used  in  their  manufacturing  estab- 
lishments shall,  for  the  purpo.ses  of  this  act, 
be  regarded  as  real  estate. 

§  1295.  The  owners  of  capital  stock  of 
manufacturing  companies,  as  herein  pro- 
vided for,  having  listed  their  propertv  as 
above  directed,  shall  be  exempt  from  assess- 
ment and  taxation. 

TITLE   IX.      OF   CORPORATIONS. 

CHAPTEB  I. 

Of  Corporations  for  Pecuniary  Profit. 

Sec.    1608.  Who  may  incorporate. 

1609.  Powers. 

1610.  Articles  to  be  adopted,  signed  and  re- 

corded. 

1611.  Limit   of  indebtedness. 

1612.  Notice    to   be    published. 

1613.  Notice   to   contain   what. 

1614.  May  begin  business,  when. 

1615.  Change   of   articles. 

1616.  Dissolution. 

1617.  Notice  of. 

1618.  Individual    liability. 

1619.  Duration  and  renewal. 

1621.  Penalty   for   fraud. 

1622.  Diversion   of   corporate   funds. 

1623.  Dividends    by   insurance    companies 

1624.  Cause  of  forfeiture. 

1625.  Keeping  false  accounts. 

1626.  By-laws  to  be  posted. 

1627.  Amount   of  stock  and   indebtedness   to 

be   posted. 


IOWA. 


Corporations;  powers  —  Stat.,  §§  1608,  1609. 


Sec.    Ifi28.  Transfer  of  shares. 

1G29.  Nmi-usor   of   franchise. 

1630.  Expiration    of  charter. 

ir,31.  Sinking;  fund. 

lt;."?ii.  Indivuhial    liability   of  stockholders. 

]f>;W.  ('ori»>rato   proptTty  must   he  exhausted. 

16.34.  I'roceedings  apalnst  stockholders. 

IC^fi.  Indemnity;   contribution. 

liVW.  Frnnchlsc  may  be  sold  on   execution. 

IG."!?.  Court  may  compel  production  of  books. 

iri.W.  Single  Individual   may  incorporate. 

1639.  Estoppel. 

1040.  Legislative    control. 

Foreign   Corporations. 

Sec.    1641.  Filing  articles;  permit. 

1642.  Permit   essential. 

1643.  Removal  of  causes. 

1644.  Penalty. 

1645.  Repeal. 

§  1608.  Any  nuuiber  of  people  may  asso- 
ciate themselves  and  become  incorporated 
for  the  tran.saction  of  any  lawful  busi- 
ness, including  the  establishment  of  ferries, 
the  construction,  ownership,  operation  and 
maintenance  of  canals,  i"ailways,  bridges  or 
other  works  of  internal  improvement,  and 
the  purchase,  ownership,  operation  and 
maintenance  of  any  railroad  sold  or  trans- 
fen*ed  under  power  of  sale  or  foreclosure  of 
any  mortgage,  deed  or  trust;  but  such  in- 
corporation confers  no  power  or  privilege 
not  posse.ssed  by  natural  persons,  except  as 
hereinafter  provided. 

Bee  Const,  art  VIII,  §  1. 

§  1609.  Among  the  powers  of  such  body 
corporate  are  the  following: 

1.  To  have  perpetual  succession; 

Duration.  §  1619.  Dissolution.  §  1616.  For- 
feiture.    §§    1624,    4581-4603.       Expiration.    §    1630. 

2.  To  sue  and  be  sued  by  its  corpoi*ate 
name; 

Estoppel  to  deny  corporate  existence  when  sued. 
9  1639.  Removal  of  causes  by  foreign  corporation. 
I  1643.  Foreign  corporation  may  bring  suit. 
S  3759.  Venue  of  actions.  §§  3787-3790.  Manner 
of  commencing  actions.  §§  3818,  3823.  Pleading. 
{§  3876,  3923.  3924.  Security  for  costs.  §§  4137, 
4138.  Attachments  and  executions.  §§  4163,  4181, 
4275.  Actions  to  test  corporate  rights.  §§  4581- 
4603.  Injunctions  against  corporations.  §  4627. 
Process  upon  an  indictment  against  a  corporation. 
S  B711.    Arraignment.    §  5712. 

[A  corporation  must  sue  and  be  sued  in  its  cor- 
porate  name.    R.    K.    Co.    v.    Keisel,    43   Iowa,    39. 

A  stockholder  may  maintain  action  to  restrain 
corporation  from  acts  in  excess  of  corporate 
power.  Teachout  v.  St.  R.  Co.,  75  Iowa,  722; 
8.    c,    38  N.   W.    Rep.   145. 

The  use  of  the  word  "  railroad  "  instead  of 
"  railway  "  in  indictment  for  embezzling  funds 
of  the  corporation,  held  not  to  be  material.  State 
V.  Goode.  08  Iowa,  .593;  s.  c  27  N.  AV.  Rep.  772. 

A  railroad  company  cannot,  in  a  legal  proceed- 
ing, be  properly  designated  by  initial  letters  of 
its  name,  even  though  it  may  be  shown  that  it 
is  popularly  known  by  such  initial  letters.  Ac- 
cola  V.  R.  R.  Co.,  70  Iowa,  185;  s.  c,  30  N.  W.  Rep. 
503.  A  corporate  name  is  that  which  Is  adopted 
in  the  articles  of  incori>oration.  If  name  is 
changed  it  must  be  done  by  change   of  articles, 


and  the  best  evidence  as  to  contents  of  articles 
is  the  articles  themselves;  therefore,  held,  that 
parol  evidence  of  a  change  of  name  was  not  suffi- 
cient. R.  R.  Co.  V.  Keisel,  supra.  Where  name 
of  corporation  consists  of  several  words,  the  omis- 
sion, alteration  or  transjjosition  of  any  of  the 
words  in  the  name  used,  if  the  words  in  "the  name 
used  were  synonymous  with  the  true  name,  is  not 
a  misnomer.  Martin  v.  R.  R.  CV).,  59  Iowa,  411; 
s.  c,  13  X.  W.  Rep.  424.  A  variance  from  true 
name  of  a  corporation  will  d(»feat  its  contract  If 
it  appears  that  the  conioratiou  was  intended  to 
be  bound  and  described  in  the  instiument.  Athearn 
V.  Millersburg,  33  Iowa,  105.  AN'liere  note  was 
made  payable  to  order  of  '•  The  E<|uitable  Life 
Insurance  Co.  of  Iowa  at  its  oflice,"  and  was 
dated  at  the  "  ottice  of  the  Equitable  Life  Ins. 
Co.,  Des  Moines,"  held,  that  although  the  two 
nauies  were  not  identical,  it  was  reasonably  ap- 
parent that  they  referred  to  the  same  corporation. 
Ins.  Co.  V.  Gleason,  56  Iowa,  47;  s.  c,  8  N.  W. 
Rep.  790. 

Declaration  of  persons  related  to  corporation 
may  be  excluded  from  evidence  when  It  is  not 
shown  that  such  persons  were  authorized  to  bind 
the  corporation.  McNamara  v.  Corporation,  88 
Iowa,  502;  s.  c,  55  X.  AV.  Rep.  322.  Admission  by 
authorized  agents  of  corporation  is  admlssiltle.    Id. 

That  directors  allowed  fraudulent  judgment  by 
default,  is  not  prima  facie  fraudulent.  Peatman 
V.  Centerville  L.  H.  &  P.  Co.,  69  X.  W.  Rep.  541.] 

3.  To  have  a  common  seal,  which  it  may 
alter  at  pleasure; 

Contract  of  coi-poration  need  not  be  under  seal. 
§   1609   (6),   note. 

[Signature  of  officer  of  a  corporation,  executing 
an  instrument,  being  proved,  seal  will  be  pre- 
sumed genuine  in  absence  of  proof  to  contrary. 
Burden  of  proof  is  upon  party  objecting  to  the 
instrument.  Blackshire  v.  Homestead  Co.,  39 
Iowa,  624;  R.  R.  Co.  v.  Lewis,  .53  id.  101;  s.  c,  4 
X.  W.  Rep.  842:  Morse  v.  Beale,  68  Iowa,  463; 
s.   C,   27  X.   AV.    Rep.   401. 

The  seal  itself  is  prima  facie  evidence  that  it 
was  affixed  to  the  instrument  legally,  b.v  the 
proper  authorit.v.  Ooodnow  v.  Oakle.v,  68  Iowa, 
25:  s.  c,  25  X.  AA'.  Rep.  912;  Blackshire  v.  Home- 
stead Co..  supra. 

Corporations  of  all  lilnds  may  be  bound  by  con- 
tracts not  under  seal.  Merrick  r.  Road  Co.,  11 
Iowa,    74. 

A  valid  written  contract  may  be  made  by  a 
private  corporation  in  this  State  without  the  use 
of  a  seal,  even  though  such  contract  be  one  out 
of  the  ordinary  course  of  business  of  the  corpora- 
tion. AA'ater  Co.  v.  Lumber  Co.,  85  Iowa,  112;  s.  c, 
52  X.  AV.  Rep.  108.] 

4.  To  render  the  interests  of  the  stock 
holders  transferable; 

See  §  1628,  and  note. 

[By-laws  of  a  bank  provide  that  no  transfer  of 
stock  should  be  made  without  consent  of  directors 
by  any  stockholder  who  Is  liable  as  principal  debtor 
or  otherwise.  Held,  that  the  certificate  and  the 
by-laws  constitute  a  contract  between  the  bank 
and  the  defendant,  creating  a  lien  upon  defend- 
ant's stock  superior  to  that  of  an  attaching  credi- 
tor. Bank  v.  Ilanev,  87  Iowa,  101;  s.  c,  54  X.  AV. 
Rep.  61.] 

5.  To  exempt  the  private  property  of  its 
members  from  liability  for  corporate  debts, 
except  as  herein  otherwise  declared. 

See   §§  1618,  1632-1635. 

[Corporation  may   exempt  the  private  property 


IOWA. 

Corporate  powers  —  Stat.,  §  1G09. 


of  its  members  from  liability  for  corporate  debts. 
Spence  v.  Const.  Co.,  36  Iowa,  407;  Larson  v. 
Dayton.  52  Iowa,  5t»i';  s.  c.,  3  N.  W.  Rep.  645. 

The  only  case  in  which  private  property  of  mem- 
bers beoomes  liable  for  corporate  debts  is  that  pro- 
vided in  section  1618.  Bank  v.  Davies,  43  Iowa, 
424. 

Individual  liability  only  extends  to  amount  of 
unpaid  subscription  to  stock.  "Warfield  v.  Canning 
Co..  72  Iowa,  666:  s.  c.   34  X.  W.   Rop.   467. 

The  fact  that  one  corporation  Is  a  stockholder 
In  another,  stockholders  of  former  are  not  thereby 
made  stockholders  in  latter,  and  cannot  be  held 
individually  as  such.  Lancan  v.  (3onst.  Co.,  49 
Iowa.  317.  Exemption  of  corporators  from  per- 
sonal liability  must  be  authorized  by  statute. 
Kaiser  v.  Rank,  56  Iowa,  104;  s.  c,  8  N.  W.  Rep. 
772.  Stockholder  receiving  stock  at  less  than  its 
par  value  cannot  escape  liability  by  transferring 
It  to  an  insolvent.  TVlsbard  v.  Hansen,  68  N.  W. 
Rep.   691.] 

6.  To  make  contracts,  acquire  and  transfer 
property,  possessing  the  same  powers  in 
such  n^spects  as  private  individuals  now 
enjoy; 

Obligation  of  contracts  inviolable.  Const.,  art. 
I,  $  21.  Alien  corporation  cannot  acquire  lands. 
§§  3073,  3079.  Corporation  may  loan  money  from 
Ita   sinking  fund.    §   1631. 

[Corporations  possess  all  Incidental  and  Implied 
powers  necessary  or  proper  to  carry  into  effect 
its  general  and  express  powers  In  respect  to  the 
transaction  of  Its  business.  Ins.  Co.  v.  Packet 
Co..   32  Iowa.  224. 

Corporations  possess  such  powers  only  as  are 
expressly  conferred  upon  them  and  such  as  are 
necessarv  to  carry  out  those  expressed  powers. 
Teachout  v.  Ry.  Co.,  75  Iowa.  722;  s.  c,  38  N. 
W.   Rep.   145. 

For  the  purpose  of  carrying  out  Its  objects  the 
powers  of  a  corporation  are  aa  extensive  as  those 
of  nn  individual,  where  they  are  not  expressly 
limited,  and  it  may  borrow  money  and  execute 
a  mortgage  upon  the  corporate  property.  Thomp- 
son V.   Lambert,  44  Iowa,  239. 

Power  to  mortgage  its  property  Is  Incident  to 
ordinary  power  of  a  corporation.  Dunham  v.  Isett, 
15   Iowa,   2S4. 

The  simple  act  of  becoming  surety  for  another 
is  not  incidental  to  the  prosecution  of  any  busi- 
ness where  power  to  borrow  money  may  neces- 
sarily be  implied,  which  may  be  exercised  by  is- 
suance of  negotiable  bonds.  Gas  Co.  v.  West, 
50  Iowa.   16. 

Where  Its  articles  authorized  a  corporation  to 
purchase  "  any  real  estate  or  other  property," 
it  was  not  beyond  its  powers  to  purchase  its  own 
stock.  Lumber  Co.  v.  Foster,  49  Iowa,  25.  Un- 
less restrained  by  statute,  one  corporation  may 
sell  its  property  to  another.  If  done  in  good  faith. 
Warfleld  v.  Canning  Co.,  72  Iowa.  666;  s.  c  34  N. 
W.  Rep.  467;  State  v.  Ry.  Co.,  71  Iowa,  410;  s.  c, 
32  X.  W.  Rep.  409.  Mortgage  given  by  a  corpora- 
tion to  secure  a  debt  in  excess  of  limit  prescribed 
by  its  articles  Is  not  for  that  reason  invalid,  even 
though  given  to  directors  and  shareholders  as 
preferred  creditors.  Id.;  Garrett  v.  Plow  Co.,  70 
Iowa.  697;  s.  c,  29  N.  W.  Rep.  395. 

A  private  corporation  is  responsible,  at  least  to 
extent  of  the  consideration  received,  for  Indebted- 
ness assumed  to  be  contracted  In  excess  of  limit 
imposed  bv  Its  articles.  Humphrey  v.  Merc.  Assn., 
50  Iowa.  "607. 

The  doctrine  of  ultra  vires  will  be  applied  only 
when  contracts  remain  wholly  executory.  Thomp- 
son  V.   Lambert,  44  Iowa,   2.39. 

A  corporation  cannot  retain  benefits  derived 
from  an  ultra  vires  contract,  and  then  treat  the 
contract  as  entirely  void.  Lucas  v.  Transfer  Co., 
70  Iowa.  .541;  s.  c.  .30  N.  W.  Rep.  771.  Fvery  per- 
son dealing  with  a  corporation  is  charged  with 
knowledge  of  its  power  as  set  out  in  its  recorded 
articles  of  incorporation.  Id.  Where  a  corpora- 
tion contracts  with  third  parties  in  regard  to  mat- 


ters apparently  within   its  power,   but   which  are 
!  in  fact  beyond  them,  the  corporation  must  be  held 
j  liable  for  loss  or  damage  to  such  third  parties.    Id. 
A  corporation   may  make  a  binding  contract  in 
writing   not   under  seal,    and   may   also   be   bound 
.  by  verbal  contracts.    And  may  ratify  the  contract 
of  an  officer  made  outside  the  usual  scope  of  his 
duties.    Merrick  v.   Road  Co.,   11  Iowa,  74.    A  cor- 
poration   may   be   bound   by   an   implied    contract. 
Rank   v.   Ins.    Co.,   66  Iowa,   617;   s.   c,   24   X.    W. 
Rep.  2.39. 

The  articles  of  Incorporation,  together  with  the 
general  incorporation  laws,  create  the  same  re- 
lation between  State  and  the  corporation  which 
I  would  exist  if  such  general  laws  and  articles 
!  were  embodied  In  a  special  legislative  charter. 
i  State  V.  Ry.  Co.,  71  Iowa,  410;  s.  c,  32  N.  W. 
I  Rep.  409. 

Contract  by  corporation  to  surrender  Its  stock 
held  to  be  valid  in  aTjsence  of  any  expressed  pro- 
hibition. Rollins  V.  Carriage  Co.,  SO  Iowa,  380; 
s.  c,  45  X.   W.  Ucp.  1U37. 

Purchaser  of  stock  may  question  validity  of 
contract  made  by  the  corporation  on  ground  that 
It  Is  ultra  vires,  though  such  contract  was  entered 
Into  before  the  purchase  of  the  stock.  Carson  v. 
Gaslight  Co.,  80  Iowa,  6.38;  s.  c,  45  X.  W.  Rep. 
1068. 

A  corporation  has  Incidental  power  to  make 
any  contract  necessary  and  proper  to  accomplish 
the  objects  of  Its  creation.  Wardner,  etc.,  Co. 
V.  Jack,  82  Iowa,  435;  s.  c,  48  X.  W.  Rep.  729. 
An  oliicer  or  stockholder  may  enforce  judgment 
for  payment  of  cbiiins  agaiust  the  corporation. 
Rollins  V.   Carriage  C-'o.,  supra. 

A  granting  of  power  to  make  contracts  gives  a 
corporation  power  to  sell  and  make  conveyances 
of  Its  realty.  Buell  v.  Buckingham,  16  Iowa,  284. 
And  limitation  upon  power  to  sell  implies  a  limi- 
tation on  powei;  to  convey.  Baak  v.  Dubuque, 
15  Iowa,  394. 

Question  of  power  of  corporation  to  hold  land 
Is  a  question  between  the  corporation  and  the 
State,  and  cannot  be  raised  bv  third  partv.  R.  R. 
Co.  v.  Lewis.  53  Iowa,  101;  s.  c,  4  X.  W.  Rep.  842. 
Can  general  superintendent  of  a  railway  be  pre- 
sumed to  have  power  to  alienate  or  charge  its 
lands?  Kipp  v.  Kendall,  55  Iowa,  65;  s.  c,  7  X. 
W.   Rep.   417. 

Power  of  such  superintendent  not  to  be  proved 
by  proving  what  president  of  company  said  about 
it.  Id.  Restriction  upon  power  to  sell  property, 
not  an  inhibition  upon  power  to  mortgage  it. 
Krider  v.  Trustees,   31  Iowa,  647. 

If  a  company  professing  a  corporate  existence 
which  It  does  not  possess,  acquires.  In  its  cor- 
porate name,  the  property  of  another,  and  con' 
veys  the  same,  the  sufficiency  of  such  conveyance 
o"  transfer  may  be  inquired  into  collateVally. 
Carey  v.  R.  R.  Co.,  5  Iowa,  358.  And  the  fact 
whether  the  company  ever  had  any  corporate 
existence,  so  as  to  enable  it  to  take  and  hold 
property,  may  be  inquired  into  collaterally.  Id. 
An  allegation  of  fraud  and  misrepresentation  by 
a  corporation  is  sufficient  without  alleging  that 
its  officers  or  agents  did  not  exceed  their  au- 
thority.   Carey  v.   R.   R.   Co.,  5  Iowa.  .358. 

A  corporation  is  not  chargeable  wifh  notice  of 
transactions  between  its  officers  acting  as  private 
individuals  in  a  private  transaction.  Bank  v.  Gif- 
ford,   47  Iowa,  575. 

Director  not  necessarily  precluded  from  be- 
coming purchaser  at  a  foreclosure  sale  of  property 
of  the  corporation.  Hallam  v.  Hotel  Co.,  56  Iowa, 
17S:  s.   c,   9  X.    W.   Rep.   111. 

A  promissory  note  signed  by  president  and  secre- 
tary is  not  binding  on  the  corporation  in  absence 
of  any  showing  of  authority  or  custom  to  execute 
notes.    Cattron   v.    Soc.   46   Iowa,    106. 

Contracts  between  officers  of  a  corporation,  by 
which  they  were  to  derive  advantage  or  profit 
from  their  positions,  by  purchase  made  nominally 
for  the  company  but  really  for  themselves,  is 
void  as  against  the  other  stockholders.  Land  Co. 
V.   Walker,   50  Iowa,   376. 

A  director  may  become  a  creditor  of  a  corpora- 
tion and  advance  It  money,  or  sell  it  property, 
and  may  enforce  the  obFigation  therefor.  Garrett 
v.  Plow  Co.,  70  Iowa,  C97;  s.  c,  29  X.  W.  Rep.  395. 


10 


IOWA. 


Articles  of  imx)rporation  —  Stat.,  §§  1610,  1611. 


Where  directors  give  authority  to  president  and 
secretary  to  execute  a  note  for  a  certain  sum 
and  interest,  the  insertion  of  an  attorney's  fee 
clatise  in  the  note  was  in  excess  of  the  authority, 
and  not  bindlne  on  the  corporation.  Hardin  v. 
Const.  Co..  7S  Iowa.  726:  s.  c,  43  X.  W.  Rep.  54o. 

A  corporation  orcanized  for  manufacture  and 
sale  of  musical  Instruments  may  talie  from  its 
agent,  in  payment  of  indebtedness  due  from  him, 
a  note  of  a  "third  party  belonging  to  him.  Organ 
Co.  V.  Reddish.  51  Iowa.  55;  s.  c.  49  N.  W.  Rep. 
104S. 

In  absence  of  express  authority,  officers  cannot 
sell  stociv  for  less  than  par.  Oliphant  v.  Min. 
Co..  G.T  Iowa.  332:  s.  c.  19  X.  W.  Rep.  212:  Jackson 
V.  Traer.  &i  Iowa.  460;  s.  c.  20  X.  W.  Rep.  764. 
Nor  accept  property  largely  in  excess  of  its  value 
in  pavment  of  stock  subscription.  Osgood  v.  King. 
42  Iowa.  478. 

Increase  of  salarr  of  officer,  by  action  of  board 
of  directors,  validitv  of.  Clark  v.  Coal  Co.,  86 
Iowa.  4.'>6:  s.  c,  53  X.  W.  Rep.  291. 

As  to  powers  of  corporations  organized  under 
laws  of  Iowa,  see  Reichwald  v.  Hotel  Co..  106 
111.  439;  Glover  v.  ■Wells,  40  111.  App.  353.] 


7.  To  establish  by-laws,  and  make  all  rules 
and  regulations  deemed  expedient  for  tiie 
manasrement  of  their  affairs  in  accordance 
with  law. 

Copy  of  by-laws  must  be  kept  posted.  §  1626. 
By-laws   subject   to   legislative   control.    §    1640. 

[The  general  power  conferred  upon  directors  to 
conduct  affairs  of  a  corporation  carries  with  it 
as  a  necessary  Incident  implied  powers  essential 
to  give  effect  to  general  powers.  Hence,  adoption 
of  a  by-law.  even  in  the  absence  of  express  power, 
is  not  without  color  of  authority.  Hygum  v.  Ins. 
Co.,  11  Iowa.  26.  A  by-law  is  entitled  to  a  reason- 
able construction.  Id.  25.  By-law  of  insurance 
company  printed  In  a  policy  is  blncTing  upon 
holder  of  policy.    Id.    21.] 

§  1610.  L-Vs  amended  March  28.  1898.  and 
April  7,  1808.)  Before  commencing  any  busi- 
ness except  their  own  organization,  they 
must  adopf  articles  of  incon)oration.  which 
must  be  signed  and  aclcnowledged  by  the 
incorporators,  recorded  in  the  office  of  the 
recorder  of  deeds  of  the  county  where  the 
principal  place  of  business  is  to  be.  in  a  book 
kept  therefor,  and  the  recorder  must,  within 
five  days  thereafter,  indorse  thereon  the  time 
when  the  same  were  tiled,  and  the  book  and 
page  where  the  record  will  be  found.  Said 
articles  thus  indorsed  shall  then  be  for- 
warded to  the  secretary  of  State,  and  be  by 
him  recorded  in  a  book  kept  for  the  purpose. 
Such  corporation  shall  pay  to  tlie  secretary 
of  State,  before  a  certificate  of  incorporation 
is  issued,  a  fee  of  twenty-five  dollars,  and,  for 
all  authorized  stock  in  excess  of  ten  thousand 
dollars,  an  additional  fee  of  one  dollar  per 
thousand.  Should  any  corporation  increase 
its  capital  stock,  it  shall  pay  a  fee  to  the 
secretary  of  State  of  one  dollar  for  each  one 
thousand  dollars  of  such  increase,  but  in 
no  event  shall  a  fee  in  excess  of  two  thou- 
sand dollars  be  charged  under  the  provision 
of  this  section.  The  recording  fee  shall  be 
paid  in  all  cases.  Farmers'  mutual  co-opera- 
tive creamery  associations  and  corporations 
organized  for  tlie  manufacture  of  sugar  from 
beets  grown  in  the  State  of  Iowa  shall  be 


exempt  from  the  payment  of  the  incorpora- 
tion fee  provided  herein. 

Change  of  articles.  §  1615.  Individual  liability 
for  failure  to  comply.  §  1618.  Single  Individual 
may   incorporate.    §   1638. 

[Failure  to  file  articles  in  office  of  secretary  of 
.'^tate  does  not  render  stockholder  individually 
liable.  Bank  v.  Davies,  43  Iowa,  424;  Eisfeld  v. 
Kenworth.    50   id.    389.] 

§  1611.  Such  articles  of  incon>oration  must 
fix  the  highest  amount  of  indebtedness  or 
liability  to  which  the  coi'poratiou  is  at  any 
one  time  to  be  subject,  which  must  in  no 
case,  except  in  that  of  risks  of  insurance 
companies,  exceed  two-thirds  of  its  capit.al 
stock.  Provided,  That  the  provisions  of  this 
section  shall  not  apply  to  the  bonds  or  other 
railway  securities  to  be  hereafter  issued  or 
guaranteed  bj*  railway  companies  of  this 
State,  in  aid  of  the  location,  construction 
and  equipment  of  railways,  to  the  amount  of 
not  exceeding  sixteen  thousand  dollars  per 
mile  of  single  track,  standard  gauge,  or 
eight  thousand  dollai's  per  mile  of  single 
track,  narrow  gauge,  lines  of  road  for  each 
mile  of  I'ailway  actually  constructed  and 
equipped.  Provided,  furthei*.  That  the  pro- 
visions of  this  section  shall  not  apply  to  the 
debentures  or  bonds  of  any  company,  duly 
incorporated  imder  the  provisions  of  this 
chapter,  the  payment  of  which  debentures 
or  bonds  shall  be  secured  by  an  actual  trans- 
fer of  real  estate  securities  for  the  benefit 
and  protection  of  purchasers  of  said  deben- 
tures or  bonds,  such  securities  to  be  at 
least  equal  in  amount  to  the  par  value  of 
such  bonds  or  debentures,  and  to  be  first  liens 
upon  unincumbered  real  estate  worth  at 
least  twice  the  amount  loaned  thereon. 

Personal  liability  of  shareholders.  §§  1609  (o), 
1618,   and  note,   1632. 

[Incurring  of  liabilities  greater  than  here  pro- 
vided does  not  render  stockholders  individually 
liable.  Langan  v.  Const.  Co..  49  Iowa,  317.  A 
private  corporation  is  responsible  at  least  to  the 
extent  of  the  consideration  received  for  indebted- 
ness assumed  to  be  contracted  in  excess  of  limit 
imposed  by  the  articles  of  incorporation.  Hum- 
phrey V.  Merc.  Assn.,  50  Iowa,  607.  In  such  case 
the  corporation  is  estopped  from  settilig  up  the 
limit.  Id.  A  debt  of  a  corporation  beyond  limit 
prescribed  by  its  charter  is  not  invalid,  even 
though  held  by  the  directors.  The  latter  are  in 
no  different  position  than  that  of  any  creditor,  if 
debt  was  contracted  in  good  faith.  Garrett  v. 
Plow  Co.,  70  Iowa,  697;  s.  c,  29  X.  W.  Rep.  395; 
Warfield  v.  Canning  Co.,  72  Iowa,  666;  s.  c,  34  X. 
W.   Rep.  467. 

Provision  in  articles  of  incorporation  that  the 
total  indebtedness  "  shall  not  at  any  one  time 
exceed  three  hundred  dollars,  except  by  a  ma- 
jority vote  of  tlie  stockholders  present  at  a  called 
or  annual  meeting,"  is  a  substantial  compliance 
with  provisions  of  above  section.  Thornton  v. 
Balcom.  85  Iowa.  198;  s.  c.  52  X.  AV.  Kep.  190. 

Above  section  does  not  require  that  full  amount 
of  capital  stock  authorized  by  the  articles  shall 
be  subscribed  to  before  corporation  may  begin 
business,  when  the  articles  provide  tTiat  the  cor- 
poration may  do  so  when  a  less  amount  therein 
stated  is  subscribed.  Swehey  v.  Talcott,  85  Iowa, 
103;  s.  c,  52  N.   \V.  Rep.  106.] 


IDWA, 


11 


Notice  of  orKnniiation;  amondmonta,  etc.— Stnt.,  $8  1012-1018. 


§  l(U2.  A  notlw  nmst  also  bo  pubUshoil.  \  spoolnl  uuvthijr  ohIUmI  for  that  jmiposo;  b\»t 
for  four  wiM>ks  In  suooosslon.  In  soiiio  mows  sulil  olijuim's  s\\t\\\  not  b»»  vallil  unl<\ss  ro 
paiuT  MS  .•..Mvoiil.MK  as  praotlinblo  to  ilu>  i-oivb'tl  t\\u\  imbllsiu'il  is  tho  orljilnal  arllrloM 
piiui-ipnl  plnco  of  busliioss.  j  jiro  r.'.piln<«l  to  bo;  iiiul  said  chaiinos  In  tho 

I  aiMlolos   iiocd   onlv    bo  sIuium!   and   aoknovvl 

[Aot8  of  n  .onioriuion   will   not    !.,<   vall.l  unloss     oil.L;od  !>y  tho  olUoors  of  saiil  ooi-poiatlon. 
puMlcalloii  of   iiotloo   of  orjjniil^ntlon    Is   nintlo  ns 


lUlriHl   l>,v    law.     KIsfolil   v.    Koiiworth.   ^0   town, 

Pulilli'Miloii  of  nil  !(l<sirnot  of  iht>  nrtU'los  of  lu- 
coriiorntloii.  oomaluliiK'  all  iho  n-ipilroiin'iiis  of  tli 


ArlU'los  nio  sul>J>>'M  lo  louUlnllvo  oonlrol,    §  IdlO. 


,  .  I  V   olinnjro  la    tlio  arlloloH.   If  proporly   inmlo.    U 

notloos  nrovlilo.l  tor  li.v  Htal\ito  ami  Hiatliis  (liat  I  I>IiuIIiik'  \inoa  all  NtooUluiUlors,  H,  U,  Co,  v.  Whilo. 
"tho  liuloli(<>iliioss  of  tlio  oompaiiy  nIwiII  not  i>x-  t  ft  Iowa.  lOit,  lltit  If  mioIi  ol(an«o  aiMs  a  now  and 
ceod  tlino  Iniiiilioil  dollars  at  any  ono  tlino,"  la  dlO'oront  ImisImons  lo  that  originally  oonirninlatod 
■UflliMcnt  notloo  umlor  nliovo  socilon.  rhomioM  v.  NtooUliolilors  who  <lo  hot  a.ssoni  to'th»«  ohanco  will 
Bnlcoui.  S:>  Iowa.   n>S;  s.  c,  W2  N.   \V.    Kop.    UHi,  j      ,  ho  ahsolvnl    from    llahllliv   of    iholr  hiiI.n.'iIi.iIohm, 


.ip  .  ..  . 
Id,  Mat  not  \\hoi<>  .•luinuo  nioiilv  rolaioN  to  tlaiu 
of  nHvnn'i\t  of  Insiallniont  of  NahNorlpilon  to  Ntook. 
Id.     A  tMiporatlon   havlnc  onioroil   Into  a  oontraot 


5  It'.l.'l.  Suoh  notloo  must  oontalii: 

1.   Tlio    naino   of    tlio    oorpofatlon    .and    Its  I  uaihorlKod'  by    its  artl.-loM.   aa<l    rooolvi«,|    ih,.   ooa 


prluoipal  pl.'U'o  of  ti-ansai'tinj;  buslnoss; 

'2.  'riio  jriMiofal  njitiuo  of  tho  buslnoss  to 
bo  tfaiisaotod: 

;<.  'Tho  aiiiotnit  of  o.apital  stook  atilhor 
Izod.  and  tho  tiiiios  and  oondttlons  on  whUdi 
It  itfi  to  bo  iiald  In; 

4.  Tho  tlnio  td'  lhi>  i-oninionocinont  and 
termination  of  tlio  corporation; 

r>.  Ity  what  tdlh'i>rs  or  porsons  iju'  alTaIrs 
of  the  corporation  .art*  t<>  bo  oondnciod.  and 
tho  tlnios  at  whbdi  thoy  will  Ito  idootcd; 

(>.  'I'lio  lilu'liost  aiiiiumt  of  Indtditodnoss  to 
which  tho  corporal  Ion  is  at  any  timo  to  aub- 
Jool  itsolf: 

7.  Wludlior  private  propcrtv  is  lo  be  o\ 
«u»pt  from  corponilo  debts. 

A»  to  oontrncis  In  oxoo.ss  of  llndls  of  Imlobtotl- 
ness,  HOC  i  mil.  nolo.  K.M'inittlon  of  pilvato  prop- 
erty   from   corpora  to   debts.    Soe   S    ItlOV)   (ft),    nolo. 

[Wlii'ro  tho  pnbllshoil  artlolos  of  liioorporalloii 
did  not  Mtato  whon  ooriioratlon  was  to  bi'ttln 
and  torinlnalo.  nor  whore  lis  prlnolpal  phu'o  of 
buslnoss  was  lo  lio.  Iu>ld  not  to  bo  a  siibsiaiilliil 
coiiipllanco  with  tho  slalnlo.  I'loftu  v.  iiran(;o 
Co..   til    Iowa,    ll'l;   s.   c.    I.'.   N,    W.    |{o|>.  .Siift. 

Whon  lunlltor  In  Issnliitr  I'crllili-aii's  lo  a  oorpora- 
tlon  oMimot  dotormlno  tho  oxolnslvo  uso  of  ii 
iinine.  (irand  LoiIko  v.  (iraham,  (1ft  N.  W.  Uop. 
837. 

A  corporation  oannol  appropriate  tlie  exelnslve 
use  of  a  name  w  lib'h  was  In  nst>  by  anolher  or- 
gnidxatlon.  and  had  a  well  defined  meaning:,  at 
the   time   of    the    liieorporal  l<>n.     ld.| 

g  pill.  'I'iio  cdrpMi-.niioii  may  c(iiiiiucnco 
buslnoss  as  soon  as  tho  art  lidos  of  incorpora- 
tion arc  tiled  In  llio  olllce  of  tho  recorder  of 
doods.  and  thoir  d<diiv;s  sliall  l»o  valid  if 
tho  publication  in  a  newspaper  Is  made,  and 
arlldes  recorded  in  I  lie  olllco  of  llio  soci'o- 
tary  <d'  StJilo  witiilii  tiiro(>  monllis  from  such 
llliiif;  in  tlie  recorder's  olllci>. 

Individual  liability  for  failure  lo  eomply.     §  ItUS. 

[Falhiri'  lo  lib-  arlleles  hi  olllee  of  seoretary  of 
State  within  three  nunilhft  does  not  render  acts 
of  a  eorpoialluii  void,  nor  ib'prlve  If  of  Ms  frail 
ohlses  withiinl  proeeodliiK's  be  Inslllnled  for  that 
purpose.     llanU    v.    l».'ivles,    •!;(    Iowa,    •I'.Jl.i 

8  Itiin.  Any  of  the  provisions  <»f  the 
artbdes  of  Incorporal loll  may  bo  (diaii^'cd  at 
auy   annual   meotliiK  of  tho  slm-klioldors  or 


sideratlon  therefor,  eannot  thereliy  eseaiie  llaldllty 
n|<on  Kiound  that  ainend<>d  arlleles  had  nol  been 
r.eorded,  Unniphrev  v.  .Vssn,,  ftO  Iowa,  (U>7.  Ar- 
lleb»s  i»f  Ineorporallon  of  eompany  oryanU.ed  for 
iteeuiilary  proili  ean  be  amended,  how  Uav  v, 
lus,  Co..  7ft  Iowa,  mil;  s.  e,.  ;i8  N.  \V.  Hep, 'llH. 
It  Is  mdy  a  material  or  railleal  ehanue  \\hl<<h 
will  release  a  snbsi-rlber  from  llabllllv  on  Ida 
subserlpllons.  Assn,  v,  Nelll.  ill  Iowa.  U%;  U,  U. 
to.    V,     I'reslon.    ;ift    Id.     IIft| 


§  Idlti,  No  corpor.'ii  Ion  can  be  dissolved 
prior  to  tiio  perbid  il\ed  In  tlii>  articles  of 
Incorporalittii,  e\c<'pi  by  iiiiaiitmoiis  consent, 
iinicss  a  dllVcrciil  rule  lias  been  luloplcd  In 
tiudr  artlclt>s. 

IMiralloii.  $  mis.  I'oi  leltnre.  §  IH-JI,  i:\plra- 
lloii.  §  lii;iO.  .Sale  of  fraiuhlse  nmler  exoeiiilon 
does  not  dissolve,    g  KUtil. 

S  1(117,  'I'ho  sanio  period  of  newspaper 
pnldlcalion  must  precede  any  such  prema- 
ture dissolution  of  !i  coipoiiil  ion  as  Is  ro- 
tpiired  at.  Its  creation, 

S  Hits,  A  laiiiirc  t,o  comply  siibstanllaily 
with  the  forcjioiii^  roipiisltions  in  ndallon 
to  or;;atii/.atloii  and  publicity,  renders  tho 
Individual  property  of  the  stoi  kiwdderH 
liable  for  lli(>  coiponile  tiebls.  Ibit  lids  soo- 
tlon  shall  iiol  bi>  dcciiied  applh'abio  lo  nill- 
w.'iy  corporal  ions  .Mild  corporators,  and  slock- 
liolders  in  railway  companies  shall  bo  llablo 
only  lor  tho  amount  of  slot  k  Indd  by  them  In 
said  cimipanles. 

S.o  Sf   1(U)»  (5),  UV.V2. 

Il'mler  this  seetlon  fallnre  lo  lib'  arlleles  iloes 
nol  roiider  sloeUludilers  Individually  liable.  Hank 
V.  Iijivles.  i;!  Iowa.  fJ  I ;  Stokes  v,  KImllay,  4 
.Mi'Crary,  '2iK>;  I'Msi'eld  v,  Kenworlli,  ftO  Iowa, 
.'t.sii.  In  the  elaiise  "  In  ri'lalbin  lo  ornanly.allon 
and  piibllellv  "  the  word  "ami"  should  be  eon- 
slrued  as  "or,"  Failure  In  elllmr  respeiM  will 
roiidor  sloekludders  Individually  liable.  Id,  ^'o 
Hold  In  ease  of  failure  lo  publish  any  notleo  wlint- 
evor.  Id.;  .Marshall  v,  Harris,  ftft  Iowa,  18;i;  h.  e., 
7    N,    \V,    Hep.   .%0!>. 

Where  arlleb's  did  nol  stale  priiielpal  place  of 
buslnoss    or    lime    of    I'ommemMiiK    business,    Ihi'l'it 

was  sn<h   failure   lo  e(nnply    wllli    rnpilre iis  aH 

lo  iiollee  as  lo  render  sloeUliolders  Individually 
llablo.  CleHK'  v.  (iran^-o  Co.,  Ill  Iowa,  I'JI;  s.  i'.,  Ift 
N.  W.  It<-p,  Sil."(,  Itui  failure  to  posl  a  eoiiy  of 
bv  laws  ami  slalemeiil  of  amount  of  eapllal  siib- 
serllied.  ole,.  will  nol  render  sloiMioldi'rs  liable. 
Lankan  \.  Coiisi.  Co..  Ill  lowa,  ;117;  .MeKelbir  v. 
Sioiil,    11    Id.    ;tfti».      Kallure    to    properly    ke«'p    tho 


12 


IOWA. 


Duratiou;  fraud;  diversion,  etc.— Stat.,  §§  1619-1G2.5. 


books,  as  required  by  statute,  does  not  create  m- 
dividiial  llal.ility.  Those  participatiut:.  in  fmudu- 
lent  keepiiiL'  of  books  may  be  made  lial'  e.  Lan- 
ean  v  Const.  Co.,  supra.  Incurring  of  Inibilit  os 
bevond  that  allowed  by  statute  does  not  render 
stockholders  individually  liable.  .  Id.  btockholdt>is 
cl-ilminir  exemption  under  provisions  of  OeueHal 
Incorporation  Law  must  show  that  company  wius 
lesallv  Incorporated ;  an  attempt  to  incon)orate 
and  doiuK  business  under  claim  of  incorporation, 
are  not  surlicient  to  ciejite  such  exempt  on  Kaiser 
V  Hank,  ->ii  Iowa,  104;  s.  c,  8  N.  W  Rep. 
77''  Sli"ht  irregularities  or  omissions,  sutncleut 
to"'sustarn  action  for  forfeiture  of  charter,  are 
iusufflcieiit  to  sustain  action  to  enforce  individual 
liabilltv  of  stockholder.  Otherwise  if  Irregularity 
be  mat"-»rial.  Id.  In  suits  against  individuals  claim- 
in"  exemption  from  liability  under  General  Incor- 
mlration  Law,  a  more  strict  compliance  with  stat- 
utory renuirements  must  b°  shown  than  in  case 
plea  of  uul  ticl  corporation  Is  set  up  in  suit 
bvtween  a  corporation  and  the  stockholder  or 
other  individual,  on  liability  contracted.  Id  By 
express  provision  stockholders  in  railway  com- 
nanics  are  not  liable  beyond  amount  of  their  stock 
Bank  v  Davies,  43  Iowa,  424.  A  construction  conv 
pany  bas  power  to  construct  and  operate  a^  rail- 
way as  a  railway  corporation.  Langan  v.  Const. 
Co..  49  Iowa,  OK.  Liability  of  members  of  un- 
incorporated associations.  Keding  v  Anderson,  7^ 
Iowa.  4'J8;  s.  c,  34  i\.  W.  Rep.  300.  A\  hile  a 
material  defect  in  organization  may  render  corpo- 
rators incidentally  liable  as  to  creditors,  as  be- 
tween themselves  their  rights  are  to  be  deter- 
mined by  the  agreements  in  the  articls.  Heald  v. 
Owen,  7!)  Iowa,  23;  s.  c,  44  >.  ^^  .  Rep.  210. 

Persons  dealing  with  a  corporation  as  such,  be- 
fore time  that  notice  of  incorporation  is  required 
to  have  been  published,  is  not  entitled,  under 
section  1G18,  to  have  the  individual  property  of 
stockholders  subjected  to  payment  of  a  debt  of 
the  corporation  growing  out  of  such  dealing,  upon 
eround  that  publication  of  the  notice  was  not  com- 
pleted before  expiration  of  three  months  after 
recording  of  articles  as  required  by  section  1614. 
Actual  notice  supersedes  publication  of.  i  horn- 
ton  V.  Balcom,  85  Iowa,  198;  s.  c,  52  >.  \\  .  Rep. 
190.] 

§  1G19.  Coiiiorations  for  the  constructian 
of  any  work  of  Internal  improvement,  or  for 
the  business  of  life  Insurance,  may  be 
formed  to  endure  fifty  years;  those  formed 
for  other  purposes  cannot  exceed  twenty 
years  in  duration,  but  in  either  case  they 
may  be  renewed,  from  time  to  time,  for 
periods  not  greater  respectively  than  was 
at  first  permissible,  if  three-fourths  of  the 
votes  cast  at  any  rejiular  election  for  that 
purpose  be  in  favor  of  such  renewal,  and  if 
those  wishing  a  renewal  will  puix-hase  the 
stock  of  those  opposed  to  the  renewal  at  its 
fair  current  value. 

Dissolution.  §  1616.  Forfeiture.  §  iC24.  Ex- 
piration.   §  1G30. 

§  1621.  Intentional  fraud  In  failing  to 
comply  substantially  with  the  articles  of 
incorporation,  or  in  deceiving  tlie  public  or 
individuals  in  relation  to  their  means  or 
their  liabilities,  shall  subject  those  guilty 
thereof  to  fine  and  imprisonment,  or  both,  at 
the  discretion  of  the  court.  Any  person  who 
has  sustained  injury  from  such  fraiid,  may 
also  recover  damages  therefor  against  those 
guilty  of  participating  in  such  fraud. 

Keeping  false  accounts.    §   1625. 

[Mere  intention  to  deceive  not  sufficient  to  ren- 
der stockholders  liable.    There  must  be  some  act 


fraudulently  done.  Miller  v.  Bradlsh.  69  Iowa, 
278;  s.  c,  28  X.  W.  Rep.  594.  Mere  fact  that  a 
person  is  a  stockholder  in  an  insolvent  corporation 
does  not  render  him  liable;  a  fraud  in  such  case 
is  not  to  be  presumed.  Spense  v.  (V)nst.  Co..  30 
Iowa,  4(t7.  In  action  to  make  individual  oflicers 
lialjle  under  ab<)\e  section,  proof  of  a1)sence  of 
intentional  fraud  and  divei-sion  of  assets  to  their 
own  use  is  a  complete  <lefense.  This  section  ap- 
ples only  to  those  guilty  of  intentional  fraud. 
Hoffman  v.  Dickey,  54  Iowa,  1.35;  s.  c,  0  N.  W. 
Rei).  174.  In  an  action  for  damages  under  this 
section,  the  particular  respect  in  which  defendant 
failed  to  comply  with  articles,  or  the  particular 
act  of  deception,  resulting  in  damage  to  plaintiff, 
must  be  specified.  White  v.  Hosford,  37  Iowa, 
566.  Otticers  of  bank  illegally  organized  held  per- 
sonally liable.     Allen  v.   I'egnim.   16  Iowa.   163. 

Stock  issued  by  a  mining  company  to  fuel  agent 
of  a  railway  company,  he  agreeing  to  make  th«» 
purchase  of  coal  for  railwaj-  company  from  min- 
ing company,  receiving  compensation  for  his  ser- 
vices as  such  agent,  and  dividends  from  said 
mining  corporation,  held,  that  such  stock  was  not 
issued"  for  a  fraudulent  purpose.  Clark  v.  Coal 
Co.,  86  Iowa,  436;  s.  c.  53  X.  W.  Rep.  291.  Such 
a  contract  is  not  void  as  against  public  policy,  but 
voidable  only.    Id.] 

§  1622.  The  diversion  of  the  funds  of  the 
corporation  to  other  objects  than  those  men- 
tioned in  their  articles  and  in  the  notices 
published  as  aforesaid,  if  any  person  be 
thereby  injured,  and  the  payment  of  divi- 
dends AAhich  leave  insufticient  funds  to  meet 
the  liabilities  of  the  con)oration,  shall  be 
deemed  such  frauds  as  will  subject  those 
therein  concerned  to  the  penalties  of  the 
preceding  section,  and  such  dividends,  or 
their  equivalent,  in  the  hands  of  individual 
stockholders  shall  be  subject  to  said  liabili- 
ties. 

[To  make  officers  liable  under  this  section  it 
must  appear  that  entire  property  of  corporation 
is  not  sufficient  to  pay  its  indebtedness.  Dividends 
may  be  declared  though  corporation  has  not  cash 
on  hand  sufficient  to  pay  all  its  liabilities.  Miller 
V.  Bradlsh,  69  Iowa,  278:  s.  c,  28  N.  W.  Rep.  594. 
The  amount  of  capital  stock  is  not  to  be  included 
in  determining  whetlier  liabilities  of  corporation 
exceed  its  funds  so  as  to  render  declaration  of 
dividend  illegal.  Id.  Sufficient  if  corporation  has 
enough  assets  to  pay  all  its  debts  at  the  time  divi- 
dend is  paid.    Id.] 

§  1623.  Dividends  by  insurance  companies, 
made  in  good  faith  before  their  knowledge 
of  the  happening  of  actual  losses,  are  not 
intended  to  be  pVevented  or  punished  by  the 
provisions  of  the  preceding  section. 

§  1624.  Either  such  failure,  or  the  practice 
of  fraud  in  the  manner  hereinbefore  men- 
tioned, shall  cause  a  forfeiture  of  all  the 
privileges  hereby  conferred,  and  the  courts 
may  proceed  to  wind  up  the  business  of  the 
corporation  by  an  information  in  the  manner 
prescribed  b5'  law. 

See   §§   4581-4603. 

§  162.5.  The  intentional  keeping  of  false 
books  or  accounts  by  any  corporation, 
whereby  any  one  is  injured,  is  a  misde- 
meanor on  the  part  of  those  concerned 
therein,  and  any  person  shall  be  presumed  to 
be  concerned  therein  whose  duty  it  was  to 


IOWA. 


13 


By-laws;  statement  of  capital;  transfer,  etc.— Stat.,  §§  1626-1629. 


see  that  the  books  aud  accounts  were  cor- 
rectly kept. 

§  lC.2(j.  A  copy  of  tJie  by-laws  of  the  cor- 
poration, with  the  name  of  all  its  officers  ap- 
pended thereto,  nnist  be  posted  in  the 
principal  place  of  business,  aud  be  subject 
to  public  inspection. 

See    §    1609   (7). 

§  ICL'T.  A  statement  of  the  amount  of 
cai)ital  stoclv  subscribed,  tlie  amount  of 
capital  actually  paid  in,  and  the  amount  of 
the  indebtedness  in  a  jreneral  way.  must  also 
be  kept  posted  up  in  a  lilie  manner:  which 
statement  must  be  corrected  as  often  as 
any  mateiial  change  takes  place  in  relation 
to  any  part  of  the  sul)ject-matter  of  such 
statement. 

Failure  to  comply  with  sections  1626,  1627  does 
not  render  stockholders  individually  liable.  See 
§    1618,    note. 

§  1628.  (A.«!  amended  April  14.  1896.)  The 
transfer  of  shares  is  not  valid,  except  as  be- 
tween parties  thereto,  tintil  it  is  regularly 
entered  on  the  books  of  the  company,  so  as 
to  show  the  name  of  the  person  by,  and  to 
whom  transferred,  the  number  or  other 
desijruation  of  the  shares  and  the  date  of 
the  transfer;  but  sucli  transfer  sliall  not  in 
any  A\ay  exempt  tlie  person  making  it  from 
any  liability  of  said  corporation  created 
prior  thereto.  The  books  of  the  company 
must  lie  so  kept  as  to  show  intelligibly  the 
original  stockholders,  their  respective  inter- 
ests, the  amount  paid  on  their  shares,  aud  all 
transfers  thereof;  aud  siich  liooks.  or  a  cor- 
rect copy  thereof,  so  far  as  the  items  men- 
tioned in  this  section  are  concerned,  shall 
be  subject  to  the  in.spectiou  of  any  person 
desiring  the  same.  Aud  provided  further 
that  wh«n  any  shares  of  stock  shall  be 
transferred  to  any  corporatiou  as  collateral 
seciu'ity,  such  corporation  may  notify  tlie 
secretary  of  the  conioration  whose  stock  is 
transferred  as  aforesaid,  and  from  the  time 
of  sucli  notice  and  tmtil  notice  that  said 
.stock  sliall  liave  ceased  to  be  held  as  col- 
lateral security  said  stock  so  transferred  and 
noticed  as  aforesaid  sliall  be  considered  in 
law  as  transferred  on  the  liooks  of  the  cor- 
poration wliieli  issued  said  stock  without 
any  actual  transfer  on  the  books  of  such 
corporation  of  such  stock.  In  such  case  it 
shall  be  the  duty  of  the  secretary  or  cashier 
of  the  cori)<)rntion  to  which  sucli  stock  shall 
have  been  transferred  a.s  collateral  security 
at  once  upon  its  ceasing  to  be  so  held  to  in- 
form the  secretary  of  the  corporation  issu- 
ing such  stock  of  such  fact.  The  secretary 
of  the  company  whose  stock  is  transferred 
as  collateral  shall  Iceep  a  record  showing 
such  notice  of  transfer  as  collateral,  and 
notice  of  discharge  as  collateral,  subject  to 
public    inspection;    And    provided,    further. 


That  no  holder  of  stock  as  collateral  security 
shall  be  liable  for  assessments  on  the  same. 

See  §  1G09  (4). 

[Under  above  section,  a  stockholder  who  trans- 
fers his  stock  remains  liable  to  creditors  of  the 
corporation  whose  debts  were  contracted  before 
the  transfer  to  the  amount  unpaid  on  the  stock. 
W  bite   V.    Green,    70    X.    W.    Rep.    182. 

Stockholder  receiving  stock  at  less  than  par 
value  cannot  escape  liability  bv  transterring  it 
to  an  insolvent.  Wlshard  v.  Hansen,  08  X.  W. 
Rep.  6'Jl. 

This  section  is  for  protection  of  the  company, 
and  only  applies  where  sale  or  transfer  of  stock 
in  some  way  conflicts  with  its  Interests.  Mooar 
V.    Walker,   46   Iowa,   104. 

Transferee  may  hold  stock  and  enforce  transfer 
thereof  in  proper  form  in  absence  ot  anv  right 
or  lien  of  the  company  to  or  upon  such"  stock, 
provisions  of  by-laws  to  contrary  notwithstanding 
Hank   V.   Wassoii,  48  Iowa,  330. 

In  absence  of  provisions  of  charter  or  by- 
laws, or  special  contract,  a  corporation  has  no 
implied  lien  upon  shares  of  stockholder  to  secure 
his  indebtedness  to  it,  and  his  transfer  of  such 
stock  is  valid  though  not  assented  to  by  directors. 
Id. 

Shares  of  stock  of  a  corporation  are  the  prop- 
erty of  the  shareholder,  and  he  has  the  absolute 
right  of  sale  and  alienation.  Hershire  v.  Bank, 
35  Iowa.  272. 

Written  assignment  and  delivery  of  certificates 
coupled  with  authority  to  transfer'upon  companv's 
books  vests  title  to  stock  In  transferee.  Court- 
right  V.  Deeds,  .37  Iowa,  50.3. 

Transfer  of  .stock  on  books  of  a  corporation 
upon  surrender  of  previous  certificate  is  sufiicient 
to  bind  corporation  and  third  persons  to  such 
transfer  without  issuance  of  a  stock  certificate. 
Bank  V.   GifTord,   47   Iowa,   575. 

Transfer  not  entered  on  books- is  valid  as  be- 
tween the  parties,  but  not  as  against  attaching 
creditor,  unless  the  latter  had  knowledge  of  the 
transfer.  Lumber  Co.  v.  Bank,  71  Iowa,  270;  s.  c, 
32   X.    W.    Rep.    336. 

If  the  books  of  a  corporation  are  fraudulently 
kept  those  guilty  may  be  held  liable  under  section 
1021,  but  it  does  not  render  stockholders  individu- 
ally   liable.    Langan  v.    Const.    Co..   4!i   Iowa.   317. 

Unless  so  provided  in  charter  or  by-laws,  a  cor- 
poration cannot  refuse  to  execute  or  recognize  a 
transfer  on  ground  that  stock  has  not  been  fully 
paid.    Bank  v.   Wasson.  48  Iowa,   336. 

Transfer  of  stock  is  not  valid  as  against  levy 
of  execution  until  it  is  regularly  entered  upon 
books  of  companv.  Moore  v.  Opera  House  Co., 
81  Iowa.  45:  s.  c.  40  X.  AT.  Rep.  750. 

A  certificate  of  stock  in  a  corporation  is  not 
a  nesrotlable  instrument.  Clark  v.  Coal  Co.,  86 
Iowa.  4.30:  s.   c.   .53  X.   W.   Rep.  201. 

Who  estopped,  as  against  a  pledgee,  from  deny- 
ing validitv  of  a  transfer  of  stock.  Trust  Co.  v. 
Des  Moines,  06  X.  W.  Rep.  914.  Wlio  estopped 
from    claiming    a    lien    as    against    a    plodseo.    Id. 

One  to  whom  stock  is  transferred,  without  any 
notice  of  any  by-law  making  it  lial>ie  for  debts 
of  the  holder  to  the  corporation,  will  be  held  to 
take  free  of  anv  lien.  Des  Moines  v.  Bank,  66 
X.   W.    Rep.   154.] 

§  1629.  Any  corporation  organized  in  ac- 
cordance Avith  the  provisions  of  this  chapter, 
shall  cease  to  exist  by  the  non-user  of  its 
franchises  for  two  years  at  any  one  time, 
but  such  body  shall  not  forfeit  its  fran- 
chises by  reason  of  its  omission  to  elect 
officers,  or  to  hold  meetings  at  any  time  pre- 
scrilK'd  by  the  articles  of  incorporation  or 
by-laws,  provided  such  act  be  done  within 
two  years  of  the  time  appointed  therefor. 

Forfeiture  of  franchises.    §§  4381-4603. 


14 


IOWA. 


Sinking  fund;  liability  of  stockholders  —  Stat.,  §§  1G30-1634. 


§  1G30.  Coi-poratious  -whose  oliartors  ex- 
pire by  their  own  limitation,  or  the  voluntary 
act  of  the  stockholders,  may,  nevertholoss, 
continue  to  act  for  the  purpose  of  winding 
up  their  concerns. 

[Corporation  will  be  kept  alive  by  statute  for 
purpose  of  winding  up  its  business.  R.  R.  Co. 
V.  Horton,  38  Iowa,  33,  45.  A  voluntary  dissolu- 
tion does  not  affect  its  powers  to  act  for  purpose 
of  winding  up  Iti  affairs,  and  does  not  affect  right 
of  a  creditor,  in  equity  at  least,  to  be  released 
from  inequitable  consequences  of  such  dissolution. 
Turn  Verein  v.  Funck,  18  Iowa,  469.] 

§  1G31.  For  the  purpose  of  repairs,  rebuild- 
ing, or  enlarging,  or  to  meet  contingencie.s. 
or  for  the  purijose  of  a  sinking  fund,  the 
corporation  may  establish  a  fund  which  they 
may  loan,  and  in  relation  to  Avhich  they 
may  take  the  proper  securities. 

Powers  of   corporations.    §    1609. 

§  1G32.  Neither  anything  in  this  chapter 
contained,  nor  auj'  provisions  in  the  articles 
of-  incorporation,  shall  exempt  the  stock- 
holders from  individual  liability  to  the 
amount  of  the  unpaid  installments  on  the 
stock  owned  by  them,  or  transferred  by 
them  for  the  purpose  of  defrauding  creditors, 
and  execution  against  the  company  may, 
to  that  extent,  be  levied  upon  the  private 
property  of  any  such  individual. 

Limit  of  indebtedness.  §  1611.  Personal  lia- 
bility. §§  1609  (5),  1618.  Proceedings  against 
Stockholders.    §  1634. 

[Such  liability  should  be  enforced  by  a  pro  rata 
apportionment.  Hablitzel  v.  Latham,  35  Iowa,  550. 
Officers  of  a  corporation  cannot  issue  stock  to  a 
creditor  at  less  than  par  value  with  agreement 
that  it  is  to  be  paid-up  stock.  Creditor  so  accept- 
ing stock  becomes  liable  as  holder  of  unpaid  stock 
to  extent  that  par  value  exceeds  debt  for  which 
it  is  taken.  Jackson  v.  Traer,  64  Iowa,  469;  s.  c, 
20  X.  ^V.  Rep.  764.  A  creditor  thus  accepting 
stock  becomes  a  stockholder  as  much  as  though 
he  had  subscribed  for  it.  Subscription  is  only 
necessary  to  render  a  person  a  stockholder  where 
the  stock  is  not  delivered.  Id.  The  fact  that  the 
stock  was  worthless  at  time  of  its  issuance  and 
acceptance  does  not  relieve  a  stockholder,  accept- 
ing it,  from  liabilitj'.  Id.  But,  on  these  points, 
see  Clark  v.  Bever,  31  Fed.  Rep.  670.  Unless 
expressly  authorized,  officers  of  a  corporation  can- 
not sell  stock  at  less  than  par.  Oliphant  v.  Min- 
ing Co.,  63  Iowa,  332;  s.  c,  19  N.  W.  Rep.  212. 
Where  stock  of  a  company  has  all  been  issued  as 
paid-up  stock,  the  public  has  the  right  to  assume 
that  it  has  peen  paid  for  in  full  either  in  money 
or  property  at  a  fair  value.  Goff  v.  Windmill  Co., 
62  Iowa,  691;  s.  c.  18  N.  W.  Rep.  3U7.  Where 
the  corporation,  contrai-y  to  statute,  but  by  agree- 
ment of  stockholders,  issues  certificate  of  paid-up 
stock  when  only  a  pro  rata  portion  has  in  fact 
been  paid,  this  may  be  ground  for  proceeding  to 
wind  up  the  concern,  but  not  for  one  subscriber, 
a  party  to  the  unlawful  undertaking,  to  have  his 
contract  of  subscription  sot  aside  and  pro  rata 
payment  refunded.  AVhcre  the  corporation  was 
organized  for  manufacture  of  a  patented  article, 
and  all  the  stock  was  taken  by  defendants  for 
their  interest  in  the  patent,  which  proved  worth- 
less, held  that  they  were  personally  liable  to  cred- 
itors of  corporation  to  extent  of  stock  so  taken  by 
them  severally,  under  sections  1632  and  1634.  Chis- 
holm  V.  Forny.  65  Iowa,  SUH;  s.  c,  21  N.  W.  Rep. 
664.     Officers  of  a  corporation  cannot  release  stock- 


holder, to  prejudice  of  creditors,  from  his  obliga- 
tion to  pay  his  subscription  unless  transaction 
is  in  every  respect  fair.  Osgood  v.  King,  42  Iowa, 
478.  Where  president  gave  a  mortgage  to  cor- 
poration in  payment  for  his  stock,  he  could  not 
afterward  surrender  such  stock  and  receive  back 
the  mortgage  after  insolvency  of  company.  Burn- 
ham  v.  Ins.  Co.,  30  Iowa,  632.  Liability  "of  stock- 
hi>lder  under  National  Bank  Act.  Hale  "v.  Walker, 
;H  Iowa,  :j44.  The  corporation  cannot,  by  any  ar- 
rangement upon  its  part,  release  a  subscriber 
from  his  liability.  Fact  that  subscription  was  to 
be  paid  in  property  instead  of  money  does  not 
so  release  liim.  Singer  v.  Given,  61  Iowa,  93;  s.  c, 
15  X.  W.  Rep.  858.  A  stockholder  cannot,  as 
against  creditor,  set  up  claims  for  services,  or  for 
I'.se  of  property,  for  which  corporation  is  indebted 
to  liim.  Id.  A  railroad  comi)any  may,  in  good 
faith,  release  a  stockholder  from  liability,  either 
with  or  without  consent  of  creditors  and  other 
stockholders.  Gelpcke  v.  Blake.  19  Iowa,  263. 
Execution  against  corporation  can  be  levied  on 
private  property  of  a  stockholder  only  after  judg- 
ment has  been  obtained  against  him  as  provided 
in  section  1634.  Bayliss  v.  Swift,  40  Iowa,  648. 
See.  also,  Hampson  v.  Weare,  4  id.  13;  Bailey  v. 
R.  R.  Co.,  13  id.  97.  In  case  of  failure  to  compl.y 
witii  the  statute  in  reference  to  organization  and 
notice,  rendering  a  stockholder  individually  liable, 
he  becomes  so  primarily,  and  may  be  sued  in  tke 
first  instance.  His  relation  to  creditors  is  the 
same  as  if  no  attempt  had  been  made  to  incor- 
porate. Marshall  v.  Harris,  55  Iowa,  182;  s.  c,  7 
X.   W.   Rep.   509. 

A  parol  subscription  to  stock  is  valid  in  ab- 
sence of  any  statute  or  provision  in  the  articles 
of  Incorporation  requiring  such  agreement  to  be 
in  writing.  Sav.  Bank  v.  Hotel  Co.,  88  Iowa,  4; 
3.  c,   55  X.   W.   Rep.   67. 

A  subscriber  to  stock  of  a  corporation  is  liable 
to  garnishment  for  amount  due  on  such  subscrip- 
tion.   Supra.] 

§  1033.  In  none  of  the  cases  contemplated 
in  this  chapter,  can  the  private  property  of 
the  stockholders  be  levied  upon  for  the  pay- 
ment of  corporate  debts,  while  corporate 
property  can  be  found  with  which  to  satisfy 
the  same;  but  it  will  be  sufficient  proof  that 
no  propertj'  can  be  found,  if  an  execution 
has  issued  on  a  judgment  against  the  cor- 
poration, and  a  demand  lias  been  thereon 
made  of  some  one  of  the  last  acting  officers 
of  the  body  for  property  on  Avhich  to  levy, 
and  if  he  neglects  to  point  out  any  such 
property. 

[The  fact  of  demand  and  refusal  may  be  shown 
by  the  official  return  of  the  execution,  which  re- 
turn must  be  regarded  as  conclusive,  though  evi- 
dence may  be  introduced  to  show  that  no  such 
return  was  made.  Singer  v.  Given,  «;i  Iowa,  93; 
s.  c,  15  X.  W.  Rep.  S5S.] 

§  1G34.  Before  any  stockholder  can  be 
charged  with  the  payment  of  a  judgment 
rendered  for  a  corporate  debt,  an  action 
shall  be  brought  against  him,  in  any  stage 
of  which  he  may  point  out  corporate  prop- 
erty subject  to  levy;  and  upon  his  satisfying 
the  court  of  the  existence  of  such  property, 
b.v  affidavit  or  otherwise,  the  cause  may  be 
continued,  or  execution  against  him  stayed, 
until  the  property  can  be  levied  upon  and 
sold,  and  the  court  may  subsequently  ren- 
der judgment  for  any  balance  which  there 
may  be  after  disposing  of  the  corporate 
property;  but,  if  a  demand  of  property  has 
been  made  as  contemplated  in  the  preceding 


IOWA. 


15 


Salo  of  franchise;  defense,  etc.;  foreign  corporations  —  Stat.,  §§  1635-1641. 


section,  tlie  costs  of  said  action  shall  in 
any  event,  be  paid  by  the  company  or  the 
defendant  therein,  but  he  shall  not  be  per- 
mitted to  controvert  the  validity  of  the  judg- 
ment rendered  against  the  corporation,  un- 
less it  was  rendered  through  fraud  and 
collusion. 

[It  Is  competent  for  a  court,  under  above  sec- 
tion, to  render  judgment  against  delinquent  stock- 
holder, in  an  action  founded  in  a  judgment  against 
the  corporation.  Singer  v.  Given,  61  Iowa,  94; 
s.  c,  15  X.  W.  Hep.  858.  To  cbarsre  a  stoci^holder 
it  must  appear  that  there  was  a  valid  claim  against 
the  corporation.     Corse  v.  Sand  ford,  14  Towa,  2Si>. 

The  issue  of  stocli  to  promoters  for  property 
taken  at  a  gross  valuation,  held  fraudulent  as  to 
creditors.     Wishard  v.  Hansen,  68  N.  W.  Rep.  691. 

Evidence  held  to  justify  a  finding  that  defend- 
ant stockholder  was  chargeable  with  notice  of 
the  fact,  that  the  stock  held  by  him  was  origi- 
nally issued  for  less  than  its  par  value.     Id. 

Tlie  burden  is  on  stockholder  to  show  that  he 
was  an  innocent  purchaser  without  notice  of  In- 
adequacy of  the  price  originally  paid  on  the  Issue 
of  stock.     Id.] 

§  lii.35.  When  the  private  property  of  a 
stockholder  is  taken  for  a  corporate  debt, 
he  may  maintain  an  action  against  the  cor- 
poration for  indemnity,  and  against  any  of 
the  other  stockholders  for  contribution. 

§  1G:'.0.  The  franchise  of  a  corporation  may 
be  levied  upon  under  execution  and  sold,  but 
the  corporation  shall  not  become  thereby 
dissolved,  and  no  dissolution  of  the  original 
corporation  shall  affect  the  franchise,  and 
the  purchaser  becomes  vested  with  all  the 
powers  of  the  corporation  therefor.  Such 
franchise  shall  be  sold  without  appraise- 
ment. 

Dissolution.     §  1616. 

§  1637.  In  any  proceedings  by  or  against 
a  corporation,  or  against  a  stockholder,  to 
charge  his  private  property  or  the  dividends 
received  by  him,  the  court  is  invested  with 
power  to  compel  the  officers  to  produce  the 
books  of  the  corporation,  on  the  motion  of 
either  party,  upon  a  proper  cause  being 
shown  for  that  purpose. 

§  1638.  A  single  individual  may  entitle 
himself  to  all  the  advantages  of  this  chapter, 
provided  he  complies  substantially  with  all 
its  requirements,  omitting  those  which  from 
the  nature  of  the  case  are  inapplicable. 

§  1630.  No  l)odj'  of  men  acting  as  a  corpo- 
ration under  the  provisions  of  this  chapter, 
shall  be  permitted  to  set  up  the  want  of  a 
legal  organization  as  a  defense  to  an  action 
against  them  as  a  corporation;  nor  shall  any 
person  sued  on  a  contract  made  with  such  a 
corporation,  or  sued  for  an  injury  to  its 
property,  or  a  wrong  done  to  its  interest,  be 
permitted  to  set  up  a  want  of  such  legal 
organization  in  his  defense. 

[Person  having  contracted  with  a  de  facto  cor- 
poration ■will  not  be  permitted  to  question  legal 
existence  of  such  corporation  as  a  defense  to  an 
action  on  such  contract.  Legality  of  incorporation 
will  not  be  inquired  into  collaterally,  but  only  in 


a  direct  proceeding  instituted  by  the  State  for 
that  purpose.  College  v.  Duke,  14  Iowa,  14:  Same 
V.  Tedford,  Id.;  Mach.  Co.  v.  Snow,  32  id. 
433;  Courtright  v.  Deeds,  37  id.  511.  So  also 
failure  of  a  corporation  to  manage  and  conduct 
its  business  at  places  required  by  law  cannot  be 
successfully  pleaded  as  a  defense.  Courtright  v. 
Deeds,  37  Iowa,  504.  The  execution  of  a  mortgage 
to  a  corporation  admits  its  corporate  existence, 
and  estops  mortgagor  from  denying  same.  Frank- 
lin V.  Twogood,  18  Iowa.  516.  And  where  the 
corporation  seeks  to  enforce  a  bequest  in  a  will, 
its  claim  cannot  be  resisted  because  of  defective 
organization.  Quinn  v.  Shields,  62  Iowa,  129;  s.  c, 
17  X.  AV.  Kep.  437.  And  a  corporation  having  en- 
tered into  a  contract  and  received  benefits  thereof 
is  estopped  from  denying  its  own  existence. 
Humphrey  v.  Assn.,  50  Iowa,  6()7.  An  action  bo- 
gun  by  a  corporation  cannot  be  defeated  on  ground 
that  its  olEcers  were  not  legally  elected.  Car- 
rothers  v.  Spring  Co.,  61  Iowa.  681;  6.  c,  17  N. 
W.  Rep.  J3.  Above  section  does  not  apply,  when. 
(College  V.  Duke,  supra,  distinguished.*  Kirkpat- 
rick  V.  Church,  63  Iowa,  373;  s.  c,  19  X.  W.  Rep. 
272. 

What  acts  would  constitute  "  acting  as  a  cor- 
poration "  under  above  section?  Kirkpatrick  v. 
Church,  63  Iowa,  372;  s.  c,  19  X.  W.  Rep.  272. 
Where  corporation  has  entered  into  a  contract 
authorized  by  its  amended  articles,  and  received 
the  consideration  therefor,  it  cannot  interpose 
defense  that  such  amended  articles  had  not  been 
recorded.  Humphrey  v.  Assn.,  50  Iowa,  6o7.  The 
estoppel  provided  for  by  this  section  applies  only 
to  a  body  of  men  acting  as  a  corporation  for  pecu- 
niary profit.  Kirkpatrick  v.  Church,  supra.  AVhen 
objection  to  illegal  organization  can  be  taken  only 
by  proceeding  by  quo  warranto.  Quinn  v.  Shields, 
62  Iowa,  129;  s.  c,  17  X.  W.  Rep.  437.] 

§  1640.  The  articles  of  incorporation,  by- 
laws, rules,  and  regulations  of  corporations 
hereafter  organized  under  the  provisions  of 
this  title,  or  whose  organization  may  l^e 
adopted  or  amended  hereunder,  shall,  at  all 
times,  be  subject  to  legislative  control,  and 
may  be,  at  any  time,  altered,  abridged,  or 
set  aside  by  law,  and  every  franchise  ob- 
tained, used,  or  enjoyed  by  such  corporation, 
may  be  regulated,  withheld,  or  be  subject  to 
conditions  imposed  upon  the  enjoyment 
thereof,  whenever  the  general  assembly 
shall  deem  necessai'y  for  the  public  good. 

Articles  may  be  changed  by  stockholders.  §  1615. 
See  Const.,   art.  I,   §  21;  art.  VIII,   §   12. 

Foreign  Corporations. 

§  1641.  Hereafter  any  corporation  for  pe- 
cuniary profit  other  than  for  carrying  on 
mercantile  or  manufacturing  business  organ- 
ized under  the  laws  of  any  other  State  or 
of  any  territory  of  the  United  States  or  of 
any  foreign  country  desiring  to  transact  its 
business,  or  to  continue  in  the  transaction  of 
its  business  in  this  State  shall  be  and  hereby 
Is  required,  on  and  after  September,  (first) 
A.  D.,  1886,  to  file  with  the  secretary  of 
State  a  certified  copy  of  its  articles  of  in- 
corporation duly  attested,  accompanied  by 
a  resolution  of  its  board  of  directors  or 
stockholders,  authorizing  the  filing  thereof 
and  also  authorizing  service  of  process  to  be 
made  upon  any  of  its  otficers  or  agents  in 
this  State  engaged  in  transacting  its  busi- 
ness,  and  requesting  the  issrjance  to  such 


16 


IOWA. 


Foreign  oorporation ;  aliens  —  Stat.,  §§  1(542-1045,  3073,  3079. 


corporation  of  a  permit  to  transact  business 
in  this  Stato.  Said  application  to  contain  a 
stipulation  that  said  permit  shall  be  subject 
to  eacli  of  the  provisions  of  this  act.  And 
thereupon  the  secretary  of  State  shall  issue 
to  such  corporation  a  permit  in  such  form  as 
he  may  prescribe  for  the  general  transaction 
of  the  business  of  such  corporation.  And 
upon  the  receipt  of  such  permit  such  corpo- 
ration shall  bo  permitted  and  authorized  to 
conduct  and  carry  on  its  business  in  this 
State.  Provided,  That  nothing  in  this  act  con- 
tained shall  be  construed,  to  prevent  any  for- 
eign coii^orations,  from  buying,  selling,  and 
otherwise  dealing,  in  notes,  bonds,  mort- 
gages, and  other  securities,  or  from  enforcing 
the  collection  of  the  same,  in  the  federal 
courts,  in  the  same  manner,  and  to  the  same 
extent,  as  is  now  authorized  b3'  law. 

Xon-residents  prohibited  from  acquh'ing  title  to 
real  estate.  §§  3073,  3079.  Foreign  corporation 
may  bring  suit  in  this  State.  §  3750.  But  must 
give  security  for  costs.    §§  4137,  413S. 

§  ltj42.  No  foreign  corporation  which  has 
not  in  good  faith  complied  with  the  pro- 
visions of  this  act,  and  taken  otit  a  permit, 
shall  hereafter  be  authorized  to  exercise  the 
power  of  eminent  domain  or  exercise  any  of 
the  rights  and  privileges  conferred  upon  cor- 
porations imtil  they  have  so  complied  here- 
with and  taken  out  such  permit. 

§  1643.  Any  foreign  corporation  sued  or 
impleaded  in  any  of  the  courts  of  this  State 
upon  any  contract  made  or  executed  in  this 
State  or  to  be  performed  in  this  State  or 
for  any  act  or  omission,  puljlic  or  private, 
arising,  oi-iginating,  or  liai)peuing  in  the 
State,  who  shall  remove  any  such  cause  from 
such  State  court  into  any  of  the  federal 
courts  held  or  sitting  in  this  State,  for  the 
cause  that  such  corporation  is  a  non-resident 
of  this  State  or  a  resident  of  another  State 
than  that  of  the  adverse  party,  or  of  local 
prejudice  against  such  corporation,  shall 
thereupon  forfeit  and  render  null  and  void 
any  pernnt  issued  or  authority  granted  to 
such  corporation  to  transact  business  in  this 
State;  such  forfeiture  to  be  determined  from 
the  record  of  removal,  and  to  date  from  the 
date  of  filing  of  the  application  on  which 
such  removal  is  affected  (etfected).  and 
whenever  any  corporation  shall  tlius  forfeit 
its  said  permit  no  new  permit  shall  be  issued 
to  it  for  the  space  of  three  months,  unles.s 
the  executive  council  shall  for  satisfactory 
reasons  cause  it  to  be  issued  sooner. 

[This  statute  is  unconstitutional  for  the  reason 
that  it  nialios  the  stipulation  not  to  remove  cases 
to  the  federal  courts  a  condition  for  obtaining 
the  permit  to  do  business.  Barron  v.  Burnsido, 
121  U.  S.  186;  s.  c,  7  Sup.  Ct.   Rep.  931.] 

§  ir>44.  Any  foreign  corporation  that  shall 
carry  on  its  business  and  transact  the  same 
on  and  after  Septend)er  1,  188(5,  in  the  State 
of  Iowa  by  its  otticers,  agents,  or  otherwise. 


without  having  complied  with  this  statute 
and  taken  out.  and  having  a  valid  permit 
shall  forfeit  and  pay  to  the  State  for  each 
and  every  day  in  which  such  busine.ss  is 
transacted  and  carried  on  the  sum  of  one 
hundred  dollars  to  be  recovered  by  suit  in 
any  court  having  jurisdiction.  And  any 
agent,  otticer  or  employe  who  sliall  know- 
ingly act  or  transact  such  business  for  such 
corporation  when  it  has  no  valid  permit  as 
provided  herein  shall  be  guilty  of  a  misde- 
meanor and  for  each  offense  shall  be  lined 
not  to  exceed  one  hundred  dollars  or  im- 
prisoned in  the  county  jail  not  to  exceed 
thirty  days  and  pay  all  costs  of  prosecution. 
§  Kil.j.  All  acts  and  parts  of  acts  incon- 
sistent with  the  provisions  hereof  are  liereby 
repealed;  Provided.  That  nothing  contained 
in  this  act  shall  relieve  any  company,  cor- 
poration, association  or  partnership  from 
the  performance  of  any  duty  or  obliuation 
now  enjoined  upon  them  or  required  of  them 
or  either  of  them  by  the  laws  now  in  force. 


Part  Second.     Private  Law. 
TITLE    XIII.      OF   RIGHTS    OF   PROPERTY. 

CHAPTER  I. 

Rights  of  Aliens. 

Sec.  3073.  Non-resident   prohibited    from   acquiring 
title  to  real  estate. 
3079.  Act  does  not  apply  to  resident  aliens. 

§  3073.  CAs  amended  April  14.  189(>.i  Non- 
resident aliens,  or  corporations  incorporated 
under  the  laws  of  any  foreign  country,  or 
corporations  organized  in  tliis  country,  one- 
half  of  the  stoclc  of  which  is  owned  or  con- 
trolled b3'  non-resident  aliens,  are  proliibited 
from  acquiring  title  to  or  holding  any  real 
estate  in  this  State,  except  as  hereinafter 
provided,  *  *  *  Provided,  That  nothing 
in  tliis  act  contained  shall  prevent  aliens 
from  having  or  acquiring  property  of  any 
kind  Avithin  the  corporated  limits  of  any 
city  or  town  in  tlie  State  or  lands  not  to 
exceed  three  hundred  and  twenty  acres  in 
the  name  of  one  person  or  any  stock  in  any 
corporation  for  pecuniary  profit  or  from 
alienating  or  devising  the  same.  The  i>ro- 
visions  of  this  chapter  shall  not  affect  the 
distribution  of  personal  property  and  shall 
applj'  to  real  estate  heretofore  devised  or 
descended  when  no  proceedings  or  forfeiture 
have  been  commenced. 

Rights  and  requirements  of  foreign  corporations. 
§§  1641-1645.    Rights  to  acquire  property.    §  1609  (G). 

§  3079.  This  act  shall  not  apply  to  aliens 
who  are  residents  of  the  State  of  Iowa,  who 
shall  have  the  same  right  to  acquire,  hold 
and  dispose  of  property  as  natural-born 
citizens  of  the  United  States. 


IOWA. 


17 


Actions  —  Stat.,  S*?  3759,  3787-3790,  3817,  3818. 


Part  Third.     Code  of  Civil  Practice. 

TITLE  XVIII.  OF  PROCEDURE  IBT  COURTS 
OP   ORIGIIVALi   JURISDICTION. 

Ch.  3.  Parties   to   an    action. 

4.  Of  place   of  bringing   suit. 
6.  Of  tlie  manner  of  commencing  actions. 
8.  Of  pleading. 
1.5.  Of  security   for  costs. 

CHAPTER  III. 

Parties  to   an  Action. 

Sec.  37.50.  Foreign   corporations. 

§  37.'>9.  Foroign  corporations  may  bring 
suit  in  the  courts  of  this  State  in  their  cor- 
porate name. 

Must  give  security  for  costs.  §  4137.  Attach- 
ment of  stocli.  §  4181.  Requirements  of  foreign 
corporations.    §    1641. 

CHAPTER  IV. 
Of  Place  of  Bringing  Suit. 

Sec.  3787.  Actions  against  common  carriers. 

3788.  Against  construction  companies. 

3789.  Against    insurance    companies. 

3790.  Oftice  of  agency   In   county. 

§  3787.  Actions  may  be  brought  against 
railway  corporations,  the  owners  of  mail 
stages,  or  other  line  of  coaches  or  cars,  in- 
cluding express  companies,  car  companies, 
telegraph  and  canal  companies,  and  the 
lessees,  companies,  or  persons  operating  the 
same,  in  any  county  through  which  the  line 
or  road  thereof  passes,  or  is  operated. 

Right  to  sue  and  be  sued.    §  1609  (1). 

[Railroad  company  has  a  residence  in  any  county 
through  which  its  road  passes  and  in  which  It 
transacts  business.  Baldwin  v.  R.  R.  Co.,  5  Iowa, 
518:  Richardson  v.  R.  R.  Co.,  8  id.  260.  Action 
against  foreign  railway  company  not  having  any 
office  or  line  of  railway  within  the  State  cannot 
be  brought  In  the  State  on  a  cause  of  action 
arising  elsewhere  by  means  of  service  on  an  agent 
found  here.  Canning  Co.  v.  R.  R.  Co.,  24  Fed. 
Rep.  866.  Bringing  cars  within  the  State  for 
purpose  of  exhibition  does  not  authorize  service 
upon  a  foreign  corporation  owning  such  cars. 
Carpenter  v.  Air  Brake  Co.,  32  Fed.  Rep.  434. 
Railway  companies  are  subject  to  jurisdiction  of 
our  courts  the  same  as  any  person  resident  within 
the  State.  Mooney  v.  R.  R.  Co.,  60  Iowa,  346; 
s.  c,  14  N.  W.  Rep.  343.  Provision  as  to  telegraph 
companies  is  applicable  to  telephone  companies. 
Franklin  v.  Tel.  Co.,  69  Iowa,  97;  s.  c,  28  N.  W. 
Rep.  461.] 

§  3788.  An  action  may  be  brought  against 
any  corporation,  company,  or  person,  en- 
gaged in  the  construction  of  a  railway,  tele- 
graph line,  or  canal,  on  any  contract  relating 
thereto,  or  to  any  part  thereof,  or  for  dam- 
ages in  any  manner  growing  out  of  the 
work  tliereon,  in  any  county  where  sucli 
contract  was  made,  or  performed  in  whole 
or  In  part,  or  where  the  worli  was  done  out 
of  which  arose  the  damage  claimed. 

[Venue    of   such    actions    will    not    be    changed, 


when.  Vaughn  v.  Smith,  58  Iowa,  553;  s.  c,  12 
X.  W.  Rep.  604;  Jordan  v.  Kavanaugh,  63  Iowa, 
152;  s.  c,  18  N.  W.  Rep.  851.] 

§  3789.  Insurance  companies  may  be 
suf>d  in  any  county  in  which  is  kept  tlieir 
principal  place  of  business,  in  which  was 
n  ade  the  contract  of  insurance,  or  in  which 
the  loss  insured  against  occurred. 

[Under  this  section  an  action  may  be  brought 
before  a  Justice  of  the  peace  against  an  insurance 
company  in  a  county  other  than  thaf  of  its  resi- 
dence. Hunt  v.  Ins.  Co.,  67  Iowa,  742;  s.  c,  24 
N.  W.  Rep.  745.  Suit  may  be  brought  In  the 
Cdunty  where  the  loss  occurs.  Ins.  Co.  v.  Granger, 
62  Iowa,  272;  s.  c,  17  X.  W.  Rep.  504.] 

§  3790.  When  a  corporation,  company,  or 
individual,  has  an  othce  or  agency  in  any 
county  for  the  transaction  of  business,  any 
suits  growing  out  of  or  connected  with  the 
business  of  that  office  or  agency  may  be 
brought  in  the  county  where  such  othee  or 
agency  is  located. 

Right  of  corporation  to  sue  and  be  sued. 
§  1609  (2),  note.  Service  of  summons.  §§  3818, 
3823.  Verification  of  pleadings.  §§  3876  et  seq. 
Security    for   costs.    §§    4137-4138. 

[The  provisions  of  this  section  are  permissive, 
not  mandatory.  Dean  v.  White,  5  Iowa,  266. 
Under  this  section  a  suit  growing  out  of  or  con- 
nected with  the  business  of  soliciting  policies  of 
insurance  in  any  county  may  be  brought  in  that 
county.  Life  Assn.  v.  Walker,  50  Iowa,  75.  This 
section  merely  designates  where  suit  shall  be 
brought,  without  defining  the  manner  in  which 
jurisdiction  over  the  person  is  to  be  acquired. 
Id.  It  does  not  limit  the  right  to  commence  a 
suit  In  the  county  where  the  agency  is  located 
to  the  time  during  which  the  agency  exists. 
Ockerson  v.  Buruham,  63  Iowa,  570;  s.  c,  19  X. 
W.  Rep.  676.  The  otfice  or  agency  is  one  estab- 
lished for  the  purpose  of  carrying  on  the  business 
for  which  the  corporation  is  organized.  Carpenter 
V.  Air  Brake  Co.,  32  Fed.  Rep.  434.] 


CHAPTER  VI. 

Of  the  Manner  of  Commencing  Actions. 

Sec.  3817.   Summons,   how  served  on  corporations. 
3818.  Service  on  agent  of  corporation. 
3823.  Service  by  publication. 

§  3817.  When  the  action  is  against  a 
municipal  corporation,  service  may  l)e  made 
on  the  mayor  or  clerk,  and  if  against  any 
other  conaoratlon,  on  any  trustee  or  otiicer 
thereof,  or  on  any  agent  employed  in  gen- 
eral management  of  its  business,  or  on  any 
of  the  last  known  or  acting  officers  of  said 
corporation,  and  if  no  person  can  be  found 
on  whom  service  can  be  made  as  provided 
in  this  and  the  preceding  section,*  service 
may  be  made  by  publication  as  provided  in 
other  cases. 

§  3818.  When  a  corporation,  company,  or 
individual,  has,  for  the  transaction  of  any 
business,  an  office  or  agency  in  any  county 
other  than  that  In  which  the  principal  re- 


•Relatlng  to  service  upon  railroad  corporations. 


18 


IOWA. 


Actious  —  Stat.,  §§  3823,  3876,  3923,  3924,  4137,  4138. 


sides,  service  may  be  made  on  any  agent  or 
cleric  employed  in  such  oflice  or  agency,  in 
all  actions  growing  out  of  or  connected  with 
the  business  of  that  office  or  agency. 

See  S  1609  (2),  note;  §  3790,  note. 

[This  section  does  not  warrant  service  upon  one 
agent.  In  an  action  growing  out  of  the  business 
of  another  and  former  agent,  who  conducted  a 
different  olHce  in  the  same  to%vn,  ann  a  notice  so 
served  does  not  give  jurisdiction  over  principal. 
Ins.  ("o.  V.  Granger,  62  Iowa,  272;  s.  c,  17  X.  W. 
Rep.  .504. 

It  allows  sen^lce  upon  an  agent  in  a  suit  against 
the  principal  in  matters  connected  with  the  agency, 
but  does  not  give  jurisdiction  over  the  principal 
by  a  notice  of  garnishiuent  in  a  proceeding  for 
collection  of  a  debt  from  the  agent  in  no  manner 
connected  with  the  agency.  Mfg.  Co.  v.  Stewart, 
61  Iowa,  209:  s.  c,   16  X.   W.   Rep.  84. 

Service  on  a  local  soliciting  agent  in  an  insurance 
company  is  sufficient.  It  is  not  necessary  that  he 
should  he  a  general  agent,  have  an  office  or  trans- 
act all  the  companv's  business  in  the  county.  Ins. 
Co.   V.   Highsmith,  44  Iowa,   330. 

Notice  upon  an  agent  whose  agency  has  expired, 
but  who  was  still  acting  as  such  for  the  comple- 
tion of  the  business,  was  properly  served  upon 
him.  Gross  v.  Nichols,  72  Iowa,  239;  s.  c,  83  N. 
W.  Rep.  653.] 

§  3S23.  SeiTice  may  be  made  by  publica- 
tion, when  an  affidavit  is  filed  that  personal 
service  cannot  be  made  on  the  defendant 
within  this  State,  in  either  of  the  following 
cases: 

5.  In  actions  brought  against  a  non-resi- 
dent of  this  State  or  a  foreign  corporation, 
having  in  this  State  propeiiy  or  debts  owing 
to  such  defendant  sought  to  be  talien  by  any 
of  the  provisional  remedies,  or  to  be  appro- 
priated in  any  way. 

[Statute  permitting  service  by  publication  must 
be  strictly  construed.  Hartley  v.  Bovnton,  5  Mc- 
Crary,  453;  Smith  y.  Smith,  4  G.  Gr.  266;  Tunis 
V.  AVIthrow,  10  Iowa,  305;  Bardsley  v.  Hiens,  33 
Id.  157.] 

CHAPTER  VIII. 

Of  Pleading. 

Sec.  3876.  Verification  by  corporation. 

3923.  Corporate  capacity  to  be  averred. 

3924.  Corporate  capacity,  how  controverted. 

§  3876.  Where  a  corporation  is  a  party, 
the  affidavit  may  be  made  by  any  officer 
thereof. 

§  o923.  A  plaintiff  suing  as  a  corporation, 
*  *  *  or  in  any  other  way  implying  cor- 
porate *  *  *  capacity,  need  not  state  the 
facts  constituting  such  capacity  or  relation, 
but  may  aver  generally,  or  as  a  legal  con- 
clusion, such  capacity  or  relation;  and  where 
a  defendant  is  held  in  such  capacity  or  re- 
lation a  plaintiff  may  aver  such  capacity  or 
relation  in  the  same  general  way. 

Right  to  sue  and  be  sued.     §  1G09  (1). 

[Corporate  capacity  must  be  averred,  whether 
corporation  is  plaintiff  or  defendant,  and  a  failure 
to  do  so  will  be  ground  for  demurrer.  Sweet  v. 
Ervin,  54  Iowa,  lol;  s.  c,  6  N.  W.  Kep.  156;  By- 
Ington  v.   R.   R.   Co.,    11  id.   502.     An   action   in  a 


name  which  is  not  that  of  the  corporation  cannot 
be  maintained.  Steamboat  v.  Wilson,  11  Iowa. 
479.] 

§  3934.  If  either  of  the  allegations  contem- 
plated in  tlie  three  preceding  sections  is  con- 
troverted, it  shall  not  be  sufficient  to  do  so 
in  terms  contradictoiy  of  the  allegation,  but 
the  facts  relied  on  shall  be  specially  stated. 

[A  general  allegation  of  corporate  capacity  Is 
sufficient,  and  a  bare  denial  will  not  put  in  issue 
corporate  existence.  Stier  v.  City,  41  Iowa,  353. 
But  where  a  defendant  sued  is  a  corporation,  an- 
swer denying  that  it  was  a  corporation,  or  had 
ever  been  organized  or  attempted  to  be  organized 
as  such,  such  denial  was  held  sufficient  under 
this  section.  Folsom  v.  Freight  Line,  54  Iowa,  490; 
s.  c,  6  N.  W.  Rep.  702.  In  an  action  of  a  re- 
ceiver a  mere  denial  that  he  has  properly  qualified 
as  such  is  not  sufficient  to  put  such  fact  in  issue, 
but  the  facts  relied  on  .should  bo  specifically 
pleaded.  Goodhue  v.  Daniels,  54  Iowa,  19;  s.  c, 
6  N.  W.  Rep.  129.  A  general  denial  does  not  put 
in  issue  the  existence  of  a  corporation  and  its 
capacity  to  sue.  Blackshire  v.  Homestead  Co., 
39  Iowa,  624.  In  an  action  against  a  railroad  com- 
pany, an  allegation  that  it  was  consolidated  with 
another  company  before  the  commencement  of  the 
action  need  not  be  specifically  denied.  A  general 
denial  of  each  and  every  allegation  of  the  petition 
Is  sufficient.  Koons  v.  Ry.  Co.,  23  Iowa,  493.  Ob- 
jection that  petition  contains  no  averment  of 
corporate  existence  of  defendant  is  too  late  after 
judgment,  and  constitutes  no  ground  for  motion 
in  arrest.     Andre  v.  R.  R.  Co.,  30  Iowa,  107.] 


CHAPTER  XV. 

Of  Secvirity  for  Costs. 

Sec.  4137.  When  required. 

4138.  Action  dismissed  for  want  of. 

§  4137.  If  a  defendant  shall,  at  any  time 
before  answering,  malie  and  file  an  affidavit 
stating  that  he  has  a  good  defense  in  whole 
or  in  part,  the  plaintiff,  if  he  be  a  non- 
resident of  this  State  or  a  private  or  foreign 
corporation,  before  any  other  proceeding  in 
the  cause  shall  file  in  the  clerli's  office  a 
bond,  with  a  sufficient  security  to  be  ap- 
proved by  the  clerli,  for  the  payment  of  all 
costs  which  may  accrue  in  the  action  in  the 
court  in  which  it  is  brought  or  in  any  other 
to  which  it  may  be  carried,  either  to  the 
defendant  or  to  the  officers  of  the  court. 
The  application  for  such  security  shall  be 
by  motion,  filed  with  the  case,  and  the  facts 
supporting  it  must  be  shown  by  affidavits 
annexed  thereto,  which  may  be  responded 
to  by  counter-affidavits  on  or  before  the  hear- 
mg  of  the  motion,  and  each  party  shall  file 
all  his  affidavits  at  once,  and  none  there- 
arter. 

[These  provisions  apply  to  both  domestic  and 
foreign  corporations.  Ins.  Co.  v.  Henderson,  38 
Iowa,  446.  But  are  not  applicable  to  proceedings 
in  justices'  courts.  Smith  v.  Humphrey,  15  Iowa, 
428.] 

§  41.38.  An  action  in  which  a  bond  for 
costs  is  required  by  the  last  section,  shall 
be  dismissed  if  a  bond  is  not  given  in  such 
time  as  the  couit  may  allow. 


IOWA. 


19 


Attachmeuts,  etc.;  actions  to  test,  etc.— Stat.,  §§  4165,  4181.  4275.  4.5S1-4586. 


TITLE     XVIII.        OF     ATTACHMENTS     AXD 
EXECUTIONS. 

Ch.  1.  Attachments  and  garnishments. 
2.  Executions. 

CHAPTER  I. 
Attachments  and  Garnishments, 
gee.  4165.  What     petition     for     attachment     must 
4181.  What  may  be  attached  and  how. 

§  4165.  The  petition  which  asks  an  at- 
tachment mu.st  in  ail  cases  be  sworn  to. 
It  must  state: 

1.  That  the  defendant  is  a  foreign  cor- 
poration, or  actinjr  as  snch;    *    *    * 

§  4181.  Stock  or  interest  owned  by  the  de- 
fendant in  any  company,  and  also  debts  dne 
him,  or  property  of  his  held  by  third  persons,  ^ 
may  be  attached,  and  the  mode  of  attach-  i 
ment  must  be  as  follows: 

S.  Stock  in  a  company  is  attached  by  no- 
tifying the  president  or  other  head  of  the 
company,  or  the  secretary,  cashier,  or  other 
manaiering  agent  thereof,  of  the  fact  that 
the  stock  has  been  so  attached. 

[Shares  of  stock  of  a  corporation  could  not  be 
levied  on  at  common  law.  and  the  only  method 
now  Is  that  provided  by  this  section.  Mooar  v. 
Walker,  46  Iowa,  164.  Attaching  creditor  ac- 
quires priority  over  a  transfer  of  the  stock  which 
does  not  appear  on  the  books  of  the  company. 
See  §  1628:  Lumber  Co.  v.  Bank,  71  Iowa,  270;  s.  c, 
32  X.   W.  Rep.  3.36.] 


CHAPTER  II. 

Executions. 

Sec.     4275.  Execution  against  stock  in  corporation. 

§  4275.  Stock  or  interests  owned  by  the  de- 
fendant in  any  corporation,  and  also  debts 
due  him.  and  property  of  his  in  the  hands 
of  third  persons,  may  be  levied  upon  in  the 
same  manner  provided  for  attaching  the 
same. 

TITLE    XX.      OF   PROCEDL'RE    IN   PAR- 
TICULAR   CASES. 

Ch.  6.  Of  actions    to  test  official    and    corporate 
rights. 
9.  Injunctions. 

CHAPTER  VI. 

Of  Actions  to  Test  Official  and  Coi-porate 
Rights. 

Sec.  4.'>S1.  For  what  causes. 

4.')82.  No  joinder  or  conntcrclalm. 

4583.  When  and  by  whom  commenced. 

4584.  By  private  person. 
4.585.  Petition  to  contain  what. 
4586.  Liability  for  costs. 

4592.  Judgment    of     ouster    against     corpora- 
tions. 
4594.  Pretended    corporation;    costs. 
4.59.'S.  Action  against  officers  of  corporation. 
4.59R.  Corporation  dissolved. 
4597.  Bond  of  trustees. 


Sec.  4.")98.  Action    on. 

4599.  Duties  of  trustees. 

4600.  Books  delivered  to. 

4601.  Inventory. 

4602.  Powers  of  trustees. 

4603.  Penalty  for  refusing  to  obey   order  of 

cj  urt. 

§  4581.  A  civil  action  by  ordinary  proceed- 
ings may  be  brought  in  the  name  of  the 
State  as  plaintiff  in  the  following  cases: 

1.  Against  any  per.son  unlawfully  holding 
or  exercising  any  public  office  or  franchise 
within  this  State,  or  any  office  in  any  cor- 
poration created  by  this  State; 

3.  Against  any  person  acting  as  a  corpora- 
tion witliiu  this  State  without  being  author- 
ized by  law; 

4.  Or  against  any  corporation  doing  or 
omitting  acts,  which  amount  to  a  forfeiture 
of  their  rights  and  privileges  as  a  corpora- 
tion, or  exeiKrising  powers  not  conferred  by 
law;    *     *    * 

Causes  of  forfeiture.  §§  1624,  1629;  Act  of 
1890,  p.  21.  post.  Irregular  organization  no  de- 
fense.    §  1639. 

[An  action  may  be  brought  upon  the  relation 
of  the  auditor  to  close  the  business  of  an  insur- 
ance company  for  failure  to  comply  with  statu- 
torv  provisions  as  to  method  of  conducting  busi- 
ness, and  for  the  purpose  of  such  action  it  will 
be  assumed  that  the  corporation  was  duly  or- 
ganized. State  V.  Aid  Assn.,  59  Iowa,  125;  s.  c, 
12  N.  W.  Rep.  782.] 

§  4582.  To  such  action  there  shall  be  no 
joinder  of  any  other  cause  of  action,  nor  any 
counterclaim. 

§  4583.  Such  action  may  be  commenced 
by  the  district  (county)  attorney  at  his  dis- 
cretion, and  must  be  so  commenced  when 
directed  by  the  governor,  the  general  assem- 
bly, or  a  court  of  record. 

§  4584.  If  the  district  (county)  attorney, 
on  demand,  neglect  or  refuse  to  commence 
the  same,  any  citizen  of  the  State  having  an 
interest  in  the  question,  may  apply  to  the 
court  in  which  the  action  is  to  be  com- 
menced, or  to  the  judge  thereof,  for  leave  to 
do  so.  and,  uix)n  obtaining  such  leave,  may 
prosecute  the  action  to  final  judgment  in 
other  respects  as  provided. 

§  4585.  The  petition  shall  contain  plain 
statement  of  the  facts  which  constitute  the 
grounds  of  the  proceeding,  and,  with  the 
notice,  and  all  the  subsequent  pleadings  and 
proceedings,  shall  conform  to  the  rule  given 
for  procedure  in  civil  actions  in  title  seven- 
teen of  this  Code,  except  so  far  as  the  same 
are  modified  by  this  chapter. 

§  4586.  When  such  action  is  brought  upon 
the  relation  of  a  private  individual,  that  fact 
shall  be  stated  in  the  petition,  and  the  order 
allowing  him  to  prosecute  may  require  that 
he  shall  be  responsible  for  costs  in  case  they 
are  not  adjudged  against  the  defendant.  In 
other  cases  the  payment  of  costs  shall  be 
regulated  by  the  same  rule  as  in  criminal 
actions. 


20 


IOWA. 


Actions  to  test,  etc.;  injunction  —  Stat.,  §§  4592-4603,  4627,  5429,  5G0. 


§  4592.  *  ♦  *  If  a  corpoi-ation  be  found 
to  liave  violated  the  law  by  which  it  holds 
its  existence,  or  in  any  manner  to  have  done 
acts  which  amount  to  a  surrender  or  forfeit- 
ure of  its  privileges,  judpuient  shall  be  ren- 
dered that  such  defendant  be  ousted  and 
altofretlier  excluded  from  such  *  *  * 
franchise,  or  privilege,  and  also  that  he  pay 
the  costs  of  the  proceeding. 

§  4.">94.  In  ca-se  judgment  is  rendered 
against  a  pretended  but  not  real  coii^ora- 
tlon,  tlie  cost  may  be  collected  from  any  i>er- 
9on  Avlio  has  been  acting  as  an  officer  or 
proprietor  of  such   pretende<l   corporation. 

?  4505.  When  judgment  of  ouster  is  ren- 
dered against  a  conioration  on  account  of 
the  misconduct  of  the  directors  or  officei-s 
thereof,  such  officers  shall  be  jointlv  and 
.severally  liable  to  an  action  by  auv  one  in- 
jured thereby. 

§  4596.  If  a  corporation  is  ousted  and 
dissolved  by  the  proceedings  herein  author- 
ized, the  court  shall  appoint  three  disintei-^ 
ested  persons  as  tnistees  of  the  creditoi-s  and 
stockholders. 

§  4597.  Said  trustees  shall  enter  Into  a 
bond  in  such  a  penalty  and  with  such  se- 
curity as  the  court  approves,  conditioned  for 
the  faithful  discharge  of  their  trusts. 

§  4.598.  Suit  may  be  brought  on  such  bond 
by  any  i>erson  injured  by  the  negligence  or 
wrongful  act  of  the  trustees  in  the  dis- 
charge of  their  duties. 

§  4.599.  The  trustees  shall  proceed  imme- 
diately to  collect  the  debts  and  pay  the  lia- 
bilities of  the  corporation,  and  to  divide  the 
surplus  among  those  thereto  entitled.      ■ 

§  4*500.  The  court  shall,  upon  application 
for  that  purpose,  order  any  officer  of  such 
corporation  or  any  other  person  having  pos- 
sesssion  of  any  of  the  effects,  books,  or 
papers  of  the  corporation,  in  anywise  neces- 
sary, for  the  settlement  of  its  affairs,  to 
deliver  up  the  same  to  the  trustees. 

§  4601.  As  soon  as  practicable  after  their 
appointment,  the  trustees  shall  make  and 
file  in  the  office  of  the  clerk  of  the  court, 
an  inventoi-y  of  all  the  effects,  rights,  and 
credits  which  come  to  their  possession  or 
knowledge,  the  truth  of  which  inventory 
shall  be  sworn  to. 

§  4602.  They  shall  sue  for  and  recover  the 
debts  and  property  of  the  corporation,  and 
shall  be  responsible  to  the  creditors  and 
stockholders  respectively,  to  tlie  extent  of  the 
effects  which  come  into  their  hands. 

§  4603.  Any  person  who,  without  good  rea- 
son, refuses  to  obey  any  order  of  the  court, 
as  herein  provided,  shall  Ik?  deemed  guilty 
of  contempt  of  court,  and  shall  be  fined  in 
any  sum  not  exceeding  five  thousand  dol- 
lars and  imprisoned  in  the  county  jail  until 
he  com]ily  with  said  order,  and  shall  be  far- 
ther liable  for  the  damages  resulting  to  any 
person  on  account  of  his  refusal  to  obey 
such  order. 


CHAPTER  IX. 

Injunctions. 

Sec.  4G27.  Reasonable  notice  to  be  given. 

§  4627.  An  injunction  to  stop  the  general 
and  ordinary  business  of  a  corporation,  or 
the  operations  of  a  railway  *  *  *  (.^n 
only  be  granted  upon  reasonable  notice  of 
the  time  and  place  of  the  application  to  the 
party  to  be  enjoined. 

[Section    applied.    District    Tp.    v.     Barrett,    47 
Iowa,  110.] 

Part  Fourth.    Code  of  Criminal  Procedure. 


TITLE    XXIV 


Sec. 


OF    CRIMES    AXD    PCXISH- 
MEXTS. 

CHAPTER  XI. 


Offenses  Against  Public  Policy. 

5429.  Blacklisting  employes. 

5430.  Same  by  agents. 


§  5429.  If  any  person,  agent,  company  or 
corporation,  after  having  discharged  any  em- 
ploye from  his  or  its  service  shall  prevent  or 
attempt  to  prevent  by  word  or  ■oTitiug  of 
any  kind  such  discharged  employe  from  ob- 
taining employment  with  any  other  person, 
company  or  corporation,  except  by  furnish- 
ing iu  writing  on  request  a  tnithful  state- 
ment as  to  the  cause  of  his  dischai'ge,  such 
person,  agent  or  corporation,  shall  be  guilty 
of  a  misdemeanor  and  shall  be  punished  by 
a  fine  not  exceeding  five  hundred  dollars  nor 
less  than  one  hundred  dollars,  and  such  per- 
son, agent,  company  or  corporation  sliall  be 
liable  in  penal  damages  to  such  discharged 
person  to  be  recovered  by  civil  action;  but 
this  section  sliall  not  be  construed  as  pro- 
hibiting any  person  or  agent  of  any  com- 
pany or  corporation  from  informing  in 
writing  any  other  person,  company  or  cor- 
poration setting  forth  a  truthful  statement 
of  the  reasons  for  such  discharge. 

See  Act  2,  at  p.  22. 

§  5430.  If  any  railway  company,  any  other 
company  or  partnership  or  corporation  in 
this  State  shall  authorize  or  allow  any  of  its 
or  tlieir  agents  to  blackli-st  any  discharged 
employes  or  attempt  by  word  or  MTiting  or 
any  other  means  whatever  to  prevent  such 
discharged  employe  or  any  employe  who 
may  have  voluntarily  left  said  company's 
service  from  obtaining  employment  with  any 
other  pei-son  or  company,  except  as  provided 
for  iu  section  one  hereof  (section  5429).  such 
person  or  copartnership  shall  be  liable  in 
treble  damages  to  such  employe  so  prevented 
from  obtaining  employment,  to  be  recovered 
by  him  by  a  civil  action. 

See  Act  2,  at  p.  22. 


IOWA. 


21 


Iiidirtiiii'iit:  trusts  — Stat.,  §§  5711,  5712;  Act,  May  C,  1800. 


TITM-:    XXV.      OF   CRIMINAL.   PROCEDIKE. 

Cb.  17.  Of  process  upon   an   intlictnu-nt. 
18.   Of    arraignment    of    defendant. 

CHAPTER  XVII. 
Of  Process  upon  an  Indictment. 

Sec.  5711.     I'rocess  against   a   corporation. 

§  5711.  The  process  upon  an  indictment 
against  a  coi'poration  sliall  bo  a  notice; 
wliicli  sliall  be  issued  by  the  clerk  at  any 
time  after  tlie  tiling  of  the  indictment  in  his 
office,  on  the  application  of  the  district 
(county)  attorney.  The  notice  shall  be  under 
tiie  seal  of  the  court,  and  shall,  substantially, 
notify  the  defendant  of  the  finding  of  the  in- 
dictment, of  the  nature  of  the  offense 
charged,  and  that  he  must  forthwith  appear 
and  answer  the  same.  It  may  be  served  by 
any  peace  officer  in  any  county  in  the  State 
on  any  officer  or  agent  of  the  defendant,  l)y 
reading  the  same  to  him  and  leaving  with 
him  a  copy  thereof.  It  shall  be  returned  to 
the  clerk's  office  without  delay,  with  proper 


evidence  of  its  service;  and,  from  and  after 
two  days  from  the  time  of  the  making  of 
such  service,  the  defendant  shall  be  consid- 
ered in  court,  and  thereafter  shall  be  con- 
sidered to  be  present  to  all  proceedings  had 
on   the   indictment. 

[Corporations  are  to  be  construed  as  persons 
wlien  the  circumstances  in  whicli  they  are  placed 
lire  identical  with  those  of  natural  persons  ex- 
pressly included  in  a  statute.  Ttierefore,  a  cor- 
porntion  was  held  liable  for  penalty  provided  for 
illegal  sale  of  liquor.  Stewart  v.  AVaterloo,  71 
Iowa,  2i;(3;  s.  c.  32  X.  W.  Kep.  275.  And  it  ap- 
peal's to  be  well  settled  that  a  corporation  may 
be  indicted  and  punished  for  a  public  nuisance, 
such  as  obstruction  of  a  highway,  navigable 
streams,  etc.     Id.] 

CHAPTER  XVIII. 

Of  Arraignment  of  the  Defendant. 

Sec.  5712.     Corporation  not  arraigned. 

§  5712.  *  *  *  Where  a  cori)oration  is 
defendant,  arraignment  shall  not  be  re- 
quired. 


LEGISLATIVE  ACTS  RELATING   TO   CORPORATIONS    ENACTED  SUBSE- 
QUENTLY TO  1888. 


1.  For  the   punishment   of   pools,   trusts,   combina- 

tions and  conspiracies. 

2.  To    protect     employes     and     laborers     In     their 

claims  for  wages. 

3.  To  legalize  acknowledgments  of  deeds  and  con- 

veyances of  land. 


Act   1. 

AN  ACT  for  the  punishment  of  pools,  trusts, 
combinations  and  conspiracies,  and  as  to 
evidence  in  .such  cases. 

Be  it  enacted  by  the  general  assembly  of 
the  State  of  Iowa: 

Section  1.  If  any  corporation  organized  un- 
der the  laws  of  this  or  any  other  state  or 
country,  for  transacting  or  conducting  any 
kind  of  business  in  this  State,  or  any  part- 
nership or  individual  or  other  association 
of  persons  whosoever,  shall  create,  enter 
into,  or  become  a  member  of,  or  a  party  to, 
any  trust,  agreement,  combination,  con- 
federation or  understanding  with  any  other 
corijoration,  partnership,  individual,  or  any 
person  or  association  of  persons,  to  regulate 
or  fix  the  price  of  any  article  of  merchandise 
ov  commodity,  or  shall  enter  into,  become  a 
memlier  of  or  inirty  to  any  pool,  agreement, 
contract,  combination  or  confederation  to 
fix  or  limit  the  amount  or  quantity  of  any 
article,  commodity  or  merchandise  to  be 
manufactured,  mined,  pro<luced  or  sold  in 
this  State,  shall  be  deemed  and  adjudged 
guilty  of  a  conspiracy  to  defraud,   and  be 


subject  to  indictment  and  punishment  as 
provided  in  this  act. 

§  2.  It  shall  not  be  lawful  for  any  corpo- 
ration to  isstie  or  to  own  trust  certificates, 
or  for  any  corporation,  agent,  officer  or  em- 
ployes, or  the  directors  or  stockholders  of 
any  conioration,  to  enter  into  any  combina- 
tion, contract  or  agreement  with  any  person 
or  persons,  corporation  or  coi*poratloiis,  or 
with  any  stockholder  or  director  thereof,  the 
purpose  and  effect  of  which  combination, 
contract  or  agreement  shall  bo  to  place  the 
management  or  control  of  such  combination 
or  combinations,  or  the  manufactured  prod- 
uct thereof,  in  the  hands  of  any  trustee  or 
trustees,  with  the  intent  to  limit  or  fix  the 
price  or  lessen  the  production  and  sale  of 
any  article  of  commerce,  use  or  consump- 
tion, or  to  prevent,  restrict  or  diminish  the 
manufacture  or  output  of  any  such  article. 

§  3.  If  a  corporation  or  company,  firm 
or  as.sociation,  shall  be  found  guilty  of  a 
violation  of  this  act.  it  shall  be  punished  by 
a  fine  of  not  less  than  one  per  cent,  of  the 
capital  stock  of  such  corporation  or  .amount 
Invested  in  such  company,  firm  or  associa- 
tion, and  not  to  exceed  twenty  per  cent,  of 
such  capital  stock  or  amount  invested.  Any 
president,  manager,  director  or  other  officer 
or  agent  or  receiver  of  any  corp6ration. 
company,  firm  or  association,  or  any  member 
of  any  company,  firm  or  association,  or  any 
individual,  found  guilty  of  a  violation  of  the 
first  section  of  this  act,   shall   be  punished 


22 


IOWA. 


Trusts;  Hens  for  wages  —  Act,  May  5,  1890. 


by  a  fine  of  not  less  than  five  hnndred  dol- 
lars, nor  to  exceed  five  thousand  dollars, 
and  in  addition  thereto  may  be  imprisoned 
in  tlie  county  jail  not  to  exceed  one  year. 

§  4.  Any  contract  or  agreement  in  viola- 
tion of  any  provisions  of  the  preceding  sec- 
tions of  this  act  shall  be  absolutely  void. 

§  5.  Any  purchaser  of  any  article  or  com- 
modity from  any  individual,  company  or 
corporation  transacting  business  contrary  to 
any  provisions  of  the  preceding  sections  of 
this  act  shall  not  be  liable  for  the  price  or 
payment  of  such  article  or  commodity,  and 
may  plead  this  act  as  a  defense  to  any  suit 
for  such  price  or  payment. 

§  6.  Any  corporation  created  or  organized 
by  or  under  the  law  of  this  State  which  shall 
violate  any  provision  of  the  preceding  sec- 
tions of  this  act  shall  thereby  forfeit  its  cor- 
porate right  and  franchises,  and  for  its  cor- 
porate existence  shall  thereupon  cease  and 
determine  as  provided  in  this  section  and  it 
shall  be  the  duty  of  the  secretary  of  State, 
after  the  passage  of  this  act,  to  address  to 
the  president,  secretary  or  treasurer  of  each 
incorpoi'ated  company  doing  business  in  this 
State,  a  letter  of  inquiry  as  to  whether  the 
said  corporation  has  merged  all  or  any  part 
of  its  business  or  interest  in  or  Avitii  any 
trust,  combination  or  association  of  persons 
or  stockholders  as  named  iu  the  preceding 
provisions  of  this  act,  and  to  require  an 
answer,  under  oath,  of  the  president,  secre- 
tary, treasurer  or  any  director  of  said  com- 
pany; a  form  of  affidavit  prescribed  by  the 
secretary  of  State  shall  be  enclosed  in  said 
letters  of  inquiry,  and  on  refusal  to  make 
oath  in  answer  to  said  inquiry,  the  secretary 
of  State  shall  immediately  ca(u)se  a  certified 
statement  of  the  facts  to  be  filed  in  the  otlice 
of  the  attorney-general  of  the  State  Avho 
shall  proceed,  or  direct  such  proceedings  by 
any  county  attorney  in  the  State,  to  com- 
mence an  action  in  the  district  coui't  of  any 
countj^  in  the  State  of  competent  jurisdic- 
tion, when  said  proceedings  are  instituted 
they  shall  be  conducted  as  ordinary  law 
actions  triable  by  court  or  jury.  On  the  final 
decisions  of  the  same  should  the  defendant 
be  found  guilty  of  a  violation  of  any  of 
the  provisions  of  this  act,  said  court  shall 
render  a  judgment  and  order  a  revocation 
of  the  charter  of  said  company  as  a  penalty 
for  the  violation,  or  violation  for  which  the 
said  company  shall  be  found  guilty,  and  the 
secretary  of  State  shall  make  publication 
of  such  revocation  in  four  newspapers  in 
general  circulation  in  the  four  largest  cities 
of  the  State. 

S  7.  It  shall  be  the  duty  of  the  secretary  of 
State,  upon  satisfactory  edidence  (evidence) 
that  any  company  or  association  of  persons 
duly  incorporated  and  operating  under  the 
laws  of  this  State  have  entered  into  any 
trust,  combination  or  association  as  pro- 
vided in  the  preceding  provisions  of  this 
act,  to  give  notice  to  such  corporation  that 
unless  they  withdraw  from   and  sever  all 


business  connection  with  said  trust,  com- 
bination or  association,  their  charter  will 
be  revoked  at  the  exi)iration  of  thirty  days 
from  date  of  such  notice. 

§  8.  It  shall  be  the  duty  of  the  prosecuting 
attorneys  in  their  respective  jurisdictions, 
and  the  attorney-general,  to  enforce  the  fore- 
going provisions  of  this  act,  and  any  prose- 
cuting attorney,  or  tlie  attorney-general,  se- 
curing a  conviction  under  the  provisions  of 
this  act,  shall  be  entitled,  in  addition  to  such 
fee  or  salaiy  as  by  law  he  is  allowed  for 
such  prosecution,  to  one-fifth  of  the  fine  re- 
covered. "When  the  attorney-general  and 
prosecuting  attorney  act  in  conjunction  in 
the  prosecution  of  any  case,  under  the  pro- 
visions of  this  act.  they  shall  be  entitled  'to 
one-fourth  of  the  fine  recovered  which  they 
shall  divide  equally  between  them,  where 
there  is  no  agreement  to  the  contrary,  and 
it  shall  be  the  duty  of  the  grand  jury  to  in- 
quire into  and  ascertain  if  there  exists  any 
pools,  trusts,  combinations  within  their  re- 
spective coimties. 

§  9.  Chapter  84,  acts  of  the  twenty-second 
general  assembly  and  all  acts  or  parts  of 
acts  in  conflict  with  the  provisions  of  this 
act,  are  hereby  repealed. 

§  10.  Whereas,  great  injustice  is  being  done 
to  the  people  of  this  State  by  the  formation 
of  trusts  and  trust  companies,  therefore  an 
emergency  exists,  and  this  act  shall  take 
effect  and  be  in  force  from  and  after  its 
passage  and  publication,  as  required  by  law, 
in  the  Iowa  State  Register  and  Des  Moines 
Leader,  ncAvspapers  published  in  Des 
Moines,  Iowa. 

(Approved  May  G,  1890.) 

ProoesB  upon  indictniPnt.     §  5711. 

Act  2. 

AN  AOT  to  protect  employes  and  laborers 
in  their  claims  for  wages. 

Be  It  enacted  by  the  general  assembly  of 
the  State  of  Iowa: 

Section  1.  That  hereafter,  when  the  prop- 
erty of  any  company,  corporation,  firm  or 
person  shall  be  seized  upon  by  any  process 
of  any  court  of  this  State;  or  when  their 
business  shall  be  suspended  by  the  action  of 
creditors  or  be  put  into  the  hands  of  a  re- 
ceiver or  trustee,  then  in  all  such  cases,  the 
debts  owing  to  laborers  or  servants,  which 
have  accrued  by  reason  of  their  labor  or 
employment  to  an  amount  not  exceeding  one 
hundred  dollars  to  each  employe  for  work 
or  labor  performed  within  ninety  days  next 
preceding  the  seizure  or  transfer  of  such 
property,  shall  be  considered  and  treated 
as  preferred  debts  and  such  laborers  or  em- 
ployes shall  be  prefeiTcd  creditors,  and  shall 
first  be  paid  in  full;  and  if  there  be  not 
sufficient  to  pay  them  in  full,  then  the  same 
shall  be  paid  to  them  pro  rata  after  paying 


IOWA. 


23 


Legalizing  acknowledgments  —  Act,  March  22,  1898. 


costs.  Any  such  laborer  or  servant  desiring 
to  enforce  his  or  her  claim  for  wages  under 
this  act  shall  present  a  statement  under  oath 
showing  the  amount  due  after  allowing  all 
just  credits  and  set-offs,  the  kind  of  work 
for  which  such  wages  are  due,  and  when 
performed,  to  the  officer,  person  or  court 
charged  with  such  property  within  ten  days 
after  the  seizure  thereof  on  any  execution  or 
writ  of  attacliment,  or  within  tliirty  days 
after  the  same  may  have  been  placed  in 
the  haxads  of  any  receiver  or  trustee;  and 
thereupon  it  shall  be  the  duty  of  the  person 
or  court  receiving  such  statement  to  pay 
the  amount  of  such  claim  or  claims  to  the 
person  or  persons  entitled  thereto  (after  first 
paying  all  coets  occasioned  by  the  seizure  of 
such  property)  out  of  the  proceeds  of  the 
sale  of  the  propert3'  seized;  Provided,  That 
any  pei'sou  interested  may  contest  any  such 
claim  or  claims  or  any  part  thereof  by  filing 
exceptions  thereto,  supported  by  affidavit, 
with  the  officer  having  the  custody  of  such 
property  and  thereupon  the  claimant  shall 
be  required  to  reduce  his  claims  to  judg- 
ment before  some  court  having  jurisdiction 
thereof,  before  any  part  thereof  shall  be 
paid. 

(Approved    May  5,  1890.) 
31 


Act  3. 

AN    ACT   to   legalize   acknowledgments    of 
deeds  and  conveyances  of  land. 
Be  it  enacted  by  the  general  assembly  of 
the  State  of  Iowa: 

Section  1.  That  all  deeds  and  conveyances 
of  lands  within  this  State  heretofore  exe- 
cuted but  Avhich  have  been  acknowledged 
or  proved  according  to  and  in  compliance 
with  the  laws  of  this  state  before  a  notary 
public  or  other  official  authorized  by  law  to 
take  acknowledgments  who  was,  at  the  time 
of  such  acknowledgment,  an  officer  or  stock- 
holder of  a  corporation  interested  in  any 
such  deed  or  conveyance,  or  otherwise  inter- 
ested therein,  are,  if  otherwise  valid,  hereby 
declared  effectual  and  valid  in  law  to  all  in- 
tents and  pun^oses  as  though  acknowledged 
or  proved  before  an  officer  not  interested 
therein;  and  if  heretofore  recorded  in  the  re- 
spective counties  in  which  such  lands  may 
be,  the  records  thereof  are  hereby  confirmed 
and  declared  effectual  and  valid  in  law  to  all 
intents  and  piu'poses  as  though  said  deeds 
and  conveyances,  so  acknowledged  or  proved 
and  recorded,  had  (prior  to  being  recorded) 
been  acknowledged  or  proved  before  an  offi- 
cer having  no  interest  therein. 

(Approved  March  22,  1898.) 


INDEX  TO  IOWA. 


ACCOUNTS:  Page. 

false,  keeping,  a  misdemeanor , 12 

ACTIONS: 

foreign  corporations  may  bring 17 

against  railway  companies 17 

on  construction  contracts  with  railway,  telegraph  or  canal  companies 17 

against  insurance  companies  17 

service  of  summons  on  corporations 17 

on  agents    17 

on  foreign  corporations,  by  publication 18 

pleadings  in  18 

security  for  costs,  when  required 18 

action  dismissed  for  want  of 18 

against  corporations  by  state  for  unlawful  transaction  of  business 19 

counterclaim  not  permitted   19 

district  attorney  to  bring 19 

petition,  what  to  state 19 

liability  for  costs 19 

judgment  of  ouster 20 

effect  of   20 

trustees  to  be  appointed 20 

powers  and  duties  of 20 

ALIENS: 

corporations  composed  of,  not  to  acquire  lands TG 

ARRAIGNMENT: 

of  corporation  not  required 21 

ARTICLES  OF  INCORPORATION: 

signed,  acknowledged,  recorded 10 

fee  for  recording   10 

highest  amount  of  indebtedness  to  be  fixed 10 

provision  as  to,  application  of 10 

notice  of,  to  be  published 11 

contents  of   11 

business  not  to  be  transacted  until  fihng  and  publication 11 

change  of,  by  stockholders      11 

failure  to  comply  with,  penalty  for 12 

subject  to  legislative  control  15 

of  foreign  corporations,  certified  copies  to  be  filed 15,  16 

ATTACHMENT: 

where  corporation  is  foreign  19 

of  stock  in  corporation  19 

ATTAINDER: 

bill  of,  not  to  be  passed 5 

BLACKLISTING: 

employes,   prohibited   20 

agents  guilty  of   21 

BOOKS: 

false,  persons  keeping  guilty  of  misdemeanor 12 

transfer,  entries  in 13 

inspection  of  13 


26  IXDEX  TO  IOWA. 

BY-LAWS:  P^S^- 

corporation  may  establish   10 

copy  of,  to  be  posted liJ 

subject  to  legislative  control  15 

CAPITAL  STOCK: 

increase  of,  fee  for  recording 10 

amount  of,  statement  to  be  posted 13 

COLLATERAL  SECURITY: 

stock  held  as,  notice  of 13 

not  liable  for  assessment 13 

COMBINATION: 

to  regulate  or  fix  prices,  unlawful 21 

Qpntracts  to  form,  invalid 22 

CONTRACTS: 

obligations  of,  not  to  be  impaired 5 

corporations  may  make 9 

CONVEYANCES: 

of  real  property  by  corporations  legalized 23 

CORPORATIONS: 

not  to  be  created  by  special  laws 5 

property  of,  subject  to  taxation (j 

amendment  or  repeal  of  laws  relating  to 6 

included  in  term  "  person  "   7 

taxation  of 7 

formed  for  any  lawful  purpose S 

general  powers  of 8 

dissolution  of,  by  unanimous  consent  11 

failure  to  elect  officers  or  hold  meetings  not  to  dissolve 13 

to  act  after  dissolution 13 

want  of  legal  organization  not  a  defense 15 

agreements  to  form  trusts,  combines,  etc.,  illegal 21 

forfeiture  of  charter  for  entering  into 22 

COSTS: 

security  for,  when  required  of  plaintiff  corporation IS 

action  dismissed  for  want  of 10 

in  actions  by  state  against  corporation 10 

COUNTERCLAIM: 

not  permitted  in  actions  by  state  against  corporations 10 

CREDIT: 

of  state,  not  to  be  loaned 5 

DEBTS: 

corporate,  members  may  be  exempted  8 

limitation  of  amount 10 

liability  of  stockholders  for 11 

statement  of  amount  of,  to  be  posted 13 

liability  of  stockholders  not  to  be  enforced  while  corporate  property  can  be  found .  14 

action  brought  to  enforce  14 

contribution  of  other  stockholders  when  demanded 15 

books  may  be  produced  in  action  to  enforce 15 

DEFENSE: 

want  of  legal  organization,  when  not  to  be  set  up 15 

DIRECTORS.    (See  Officers.) 
DISSOLUTION:  y 

of  corporation,  by  unanimous  consent 11 

publication  of  notice   11 

winding  up  affairs  after 13 


IIsTDEX  TO  IOWA.  27 

DIVIDENDS:  Page. 

declaring  illegal,  ig  fraud   15 

rule  as  to  insurance  companies   12 

DURATION: 

of  corporations,  limited 12 

extension  of   12 

EMPLOYES: 

blacklisting  prohibited 20 

attempt  to  prevent,  securing  employment 20 

claims  of,  to  be  preferred 22 

EXECUTIONS: 

against  stock,  how  enforced 19 

FEE: 

for  recording  articles  of  incorporation 10 

for  increase  of  capital  stock 10 

FOREIGN  CORPORATIONS: 

articles  of  incorporation,  copies  to  be  filed 15 

permit  to  transact  business 15 

not  to  transact  business  until  granted 16 

forfeiture  for  removal  of  cause  of  action  from  state  courts 16 

penalty  for  transacting  business  without 16 

may  bring  actions   17 

service  of  summons  on,  by  publication 18 

attachment  against   19 

FORFEITURE: 

of  privileges  for  fraud 12 

of  franchises  for  non-user 13 

of  permit  of  foreign  corporation  for  removal  of  suits 16 

actions  against  corporation  on  account  of  19 

counterclaim  not  permitted 19 

district  attorney  to  bring   19 

liability  for  costs 19 

judgment  of  ouster  20 

effect  of  20 

of  charters,  for  entering  into  combines,  trusts  or  pools 22 

FRANCHISE: 

non-user,  forfeiture  for 13 

action  against  corporation  for  unlawful  exercise  of 19 

counterclaim  not  permitted 19 

district   attorney   to   bring    19 

petition  what  to  state 19 

liability  for  costs 19 

judgment  of  ouster   20 

effect   of    20 

FRAUD: 

in  failing  to  comply  with  articles  of  incorporation 12 

in  deceiving  public 12 

division  of  corporate  funds  constitutes 12 

declaring  illegal  dividends  is  12 

forfeiture  of  privileges  for 12 

in  keeping  false  books 12 

FUND: 

for  repairs,  rebuilding  or  enlarging 14 

INCORPORATION: 

articles  of.     (See  Articles  of  Incorporation.) 


28  INDEX  TO  IOWA. 

INDICTMENT:  .  Page. 

of  a  corporation,  proceedings  upon 21 

arraignment  not  required   21 

INJUNCTION: 

to  stop  business  of  corporation,  notice  of 20 

INSURANCE: 

life,  duration  of  corporations   12 

INTERNAL  IMPROVEMENT: 

duration  of  corporations  formed  for 12 

JUDGMENT: 

of  ouster  against  a  corporation 20 

effect  of ^0 

LABORERS    (Seo  Employes): 

claims  of,  for  wages,  preferred  22 

LAWS: 

ex  post  facto,  not  to  be  passed 5 

impairing  obligation  of  contracts 5 

relating  to  corporations,  amendment  or  repeal  of 6 

MANUFACTURING  COMPANIES: 

listing  of  property  of,  for  taxation 7 

stock  exempted 7 

MEETINGS: 

renevral  of  duration  of  corporation 12 

MORTGAGES: 

of  real  estate  of  corporations,  not  included  in  debt  limit 10 

NOTICE: 

of  articles  of  incorporation,  to  be  published 11 

contents  of   11 

of  dissolution  of  corporation 11 

OFFICERS: 

liability  of,  for  fraud 12 

for  diversion  of  corporate  funds 12 

for  illegal  dividendg   12 

for  keeping  false  books  or  accounts 12 

names  of,  to  be  posted  13 

failure  to  elect,  not  to  dissolve  corporation 13 

ORGANIZATION: 

want  of  legal,  not  a  defense 15 

PERMIT: 

of  foreign  corporations  to  transact  business IT),  16 

not  to  exercise  functions  until  granted 16 

forfeited  for  removal  of  cause  of  action  from  state  courts 16 

penalty  for  transacting  business  without 16 

PERSON: 

term  extended  to  bodies  corporate 7 

PLEADINGS: 

verification  of,  by  corporations 18 

corporate  capacity  to  be  averred 18 

how   controverted    18 

POOLS: 

prohibited    21 

contracts   to   form,   invalid    22 


IXDEX  TO  IOWA.  29 

POWERS:  Page. 

general,  of  corporationa   y 

PRICES: 

combinations  to  regulate,  unlawful   21 

PROPERTY: 

not  to  be  taken  without  compensation  5 

corporation  may  acquire  and  transfer 9 

RAILROAD: 

corporations,  indebtedness  of,  limited  10 

liability  of  stockholders  for  debts  of 11 

actions  against,  where  brought 17 

on  contracts  for  construction    17 

REAL  PROPERTY: 

alien  corporation  not  to  acquire 16 

conveyances  by  corporations,  legalized   23 

SEAL,  COMMON: 

corporation  may  have g 

SERVICE: 

of  summons  on  corporations   17 

on  agents  of  corporations 17 

on  foreign  corporations,  by  publication 18 

STATE: 

credit  of,  not  to  be  loaned 5 

not  to  become  stockholder  6 

STATEMENT: 

of  capital  stock  and  indebtedness  to  be  posted 13 

STOCK: 

assessed  at  cash  value    7 

of  manufacturing  companies,  when  exempt  from  taxation 7 

transfer  of,  entry  in  books 13 

notice  of,  held  as  collateral  security 13 

attachment  of ID 

levy  upon,  under  execution 19 

capital,  increase  of,  fee  for  recording 10 

amount  of  paid  and  unpaid,  statement  to  be  posted 13 

STOCKHOLDER: 

state  not  to  become 6 

interest)  of,  may  be  transferred 8 

change  of  articles  of  incorporation 11 

vote  of,  for  extending  duration  of  corporation 12 

fraud,  in  deceiving  public,  etc 12 

illegal  dividends  in  hands  of 12 

names  of,  to  be  entered  in  books 13 

liability  of,  for  unpaid  installments 14 

when  exempt  from   8 

for  failure  to  comply  with  certain  provisions  11 

not  enforced  while  corporate  property  can  be  found 1-4 

action  to  enforce,  when  stayed 14 

contribution  of  stockholders 15 

books  may  bo  produced   15 

SUCCESSION:  ' 

corporations  to  have  perpetual   8 

SUMMONS: 

service  of,  on  corporations 1" 

on  agents  of  corporations 1" 

on  foreign  corporations,  by  publication 18 


30  INDEX  TO  IOWA. 

TAXATION:  P»S«- 

property  of  corporations  subject  to 6 

o(  corporations,  property,  bow  listed 7 

stock  of,  how  assessed  7 

listing  property  to  be  manufactured  7 

manufacturing  companies,  listing  of  property 7 

TRANSFER: 

of  stock,  to  be  entered  in  books 13 

as  collateral  security 13 

TRUSTEES: 

appointment  of,  upon  judgment  of  ouster  against  corporation   20 

powers  and  duties  of,  when  so  appointed '. 20 

TRUSTS: 

to  regulate  or  fix  prices,  unlawful 21 

directors  or  stockholders  not  to  agree  to  form 21 

contracts  to  form,  invalid 22 

ULTRA  VIRES: 

doctrine  of 9 

VERIFICATION: 

of  pleadings  by  corporations  18 

WAGES: 

of  laborers  and  employes  to  be  preferred 22 


KANSAS. 


TABLE  OF  CONTENTS 


CONSTITUTIONAL  PROVISIONS.  Page. 

Bill  of  rights   5 

Art.      II.  Legislative 5 

XII.  Corporations  5 

GENERAL  STATUTES. 

Ch.     22.  Conveyances 7 

23.  Corporations ^ 

Art.     1.  Preliminary  provisions  7 

2.  Creation 7 

3.  Powers  and  duties 9 

4.  Miscellaneous  provisions   16 

5.  Dissolution 18 

31.  Crimes  and  punishments   20 

Art.     4.  Offenses  against  records,   writtten  instruments,  etc 20 

9.  Miscellaneous  offenses  20 

11.  General  provisions  22 

80.  Procedure,  civil  22 

Art.     5.  Venue  of  actions   22 

6.  Commencement  of  actions 23 

8.  Pleadings  24 

11.  Attachment 24 

13.  Receivers  25 

29.  Officers   and    franchises 25 

81.  Procedure,  civil,  before  justices 26 

Art.     2.  Commencement  of  actions 26 

4.  Attachment  26 

8.  Trial 26 

82.  Procedure,  criminal  26 

Art.  11.  Trials,  incidents  thereto -6 

107.  Taxation  27 

Art.     1.  Property  subject  to - ' 

3.  Listing  of  property - ' 

5.  Merchants  and  manufacturers -' 

6.  Banks 28 

LEGISLATIVE  ACTS  PASSED  SUBSEQUENTLY    TO    GENERAL    STATUTES  01 

1889. 


KANSAS. 


CONSTlTUTIO]S^  OF  KANSAS-- 1859. 


PROVISIONS  RELATING  TO  CORPORATIONS. 


Bill  of  Rights. 

Sec.  2.  No  special  privileges  to  be  granted.  This 
power  not  to  be  exorcised  by  any 
tribunal  or  agtncy. 

ARTICLE  II. 

Legislative. 

See.  17.  General  laws;  to  be  uniform  In  operation. 

ARTICLE  XIL 

Corporations. 

Sec.  1.  No    special    acts   to   be    passed    conferring 
corporate    powers  —  general     laws  —  sub- 
ject to  amendment   by  repeal. 
2.  Individual   liability  of  stoclsbolders. 
4,  Right    of    wa/  —  payment,    how    made    or 

secured. 
6.  Term     "  corporation  "     defined  —  may    sue 
and   be  sued. 

Bill  of  Rights. 

§  2.  *  *  =*  j^Q  special  privileges  or  Im- 
munities sliall  ever  be  granted  by  the  legis- 
lature, which  may  not  be  altered,  revoiied 
or  repealed  by  tlie  same  body;  and  this  power 
shall  be  exeix-ised  by  no  other  tribunal  or 
agency. 

Corporations  not  to  be  created  by  special  act. 
Art.  XII,  §  1. 

[Above  section  does  not  inhibit  legislature  from 
granting  to  municipal  corporations  the  power  to 
permit  railroad  companies  to  construct  and  ope- 
rate street  railways  therein.  Atchlnson  v.  Ry., 
31    Kan.   660;    s.    c,       Pac.    Rep.   284. 

An  act  of  the  legislature  authorizing  counties 
and  cities  to  subscribe  for  stock  in,  and  Issue 
bonds  to  railroad  companies  was  held  constitu- 
tional and  valid.  State  ex  rol.  v.  Nemaha  Co.,  7 
Kan.  542.] 

ARTICLE  II. 

Legislative. 

g  j^-  *  *  *  jjj  a^u  cases  where  a  gen- 
eral law  can  be  made  applicable,  no  special 
law  shall  be  enacted. 

See  art.  XII.  §  1. 

[The  fart  that  all  persons  and  oorporntions 
brought  within  the  purview  of  certain  legislation 
are    subjoot    to    the    same    duties    and    liabilities. 


V.  Merrill,  40  Kan. 


stitutional  objection.     Uv.   Co 
400;   s.   c,   19   Pae.    Uep.'TO:^.  ' 

An  act  requiring  railroad  cunipanies  to  take  bond 
c'or^S?.:^^"^^^:^  Z  ""— ^'tutioual.     Mann  v! 

.a!;-s^;^^r^^g!S^;-^£u=  '^^^^-'t:^ 

ton,   10  Kau.  505.] 


ARTICLE  XII. 

Corporations. 

Section  1.  Tlie  legi.slature  shall  pass  no 
special  act  conferring  corporate  powers. 
Corporations  may  be  created  under  general 
laws;  but  all  such  laws  may  be  amended  or 
repealed. 

See  Bill  of  Rights,  §  2;  art.  II,  §  17.  General 
laws.     §§   1155  et  seq. 

[It  cannot  be  shown  for  the  purpose  of  avoiding 
an  act  of  the  legislature,  that  the  act  was  passed 
for  Insufficient  or  improper  reasons.  Citv  v  Bur- 
leigh, 36  Kan.  34;  s.  c,  12  Pac.  Rep.  332 

Where  a  general  law  cannot  bo  made  applicable 
the  legislature  may  pass  a  special  act,  and  this 
although  the  special  act  may,  to  some  extent 
atTect  the  uniform  operation  throuirhout  the  State 
of  other  laws;  and  generally,  it  is"  a  question  for 
the  legislature  to  determine  whether  a  general 
law  can  be  made  appliwible  or  not.     Id 

Special  grants  are  not  to  be  extended  by  con- 
struction beyond  the  plain  terms  in  whlcli  they 
are  conferred,  but  should  be  construed  strictlv 
against  the  corporation,  and  in  favor  of  the 
public.  City  v.  Corrigan,  35  Kan.  21;  s.  c,  10  Pac. 
Rep.   99. 

Rights  or  powers  wlnVh  have  been  obtained 
under  old  territorial  charters  are  subject  to  amend- 
ment or  repeal.  State  v.  Ry.  Co.,  33  Kan.  189: 
s.  c,  5  Pac.   Rep.  772. 

A  legislative  act,  general  in  form  but  special  In 
fact,  is  void.  Ritchie  v.  Mulvane,  39  Kau.  241- 
s.   c,   17  Pac.   Rep.   830. 

And  where  it  is  so  special  that,  though  general 
in  form,  it  can  possibly  apply  to  onlv  three  cer- 
tain oorporntions,  it  Is  nnoonsfitutional.  Topeka 
V.  Gillett,  32  Kan.  431;  s.  c,  4  Pac.  Rep.  SCO. 
Article  XIT  of  the  Constitution  construed.  Gray 
V.  Crockett,  30  Kan.  138;  s.  c,  1  Pac.  Rep.  50- 
.\fkinson  v.    Barthalow,   4   Kan.   124. 

An  act  of  the  territorial  legislature,  granting  a 
franchise.  Is  a  contract  between  the  legislature 
and  the  grantee,  which  the  legislature  can  neither 
change,  repeal  or  impair  the  obligation  of.  Ter- 
ritory V.  Reyburn,  McC.  134.] 

§  2.  Duos  from  corix>ration  shall  be  se- 
cured by  individual  liability  of  the  stocl<- 
holders  to  an  additional  amount  equal  to 
tlie  stocic  ownwl  by  each   stocljliolder;   and 


«i<;     r-uii.icri       in     iin:-     >i;mn,"     iiuiiL'S     aim      iia  ijiiuie.s,        —     "■■••^..     ._-.,      <.t»v.ii     ^n_fv_iiiiuiii^"r,     auu 

under  similar  circumstances,  disposes  of  the  con    |  sucll   other   moans   as   shall   be   provided   bv 


KANSAS. 


Corporations  —  Const.,  Art.  xii,  §§  4,  6. 


law;  but  such  iudividual  liabilities  shall  not 
apply  to  railroad  coriwratious,  nor  corpora- 
tions for  rellgrious  or  charitable  purposes. 

Such  liability,  liow  enforced.  |§  1192,  1204. 
Limit    of   liability.    §    1206.     Contribution.    §    120.5. 

fTho  law  in  effect  prohibits  a  bank  from  pur- 
cliMsinjr  its  own  stock.  Bank  v.  Wulfokuhler,  19 
Kan.  65.  Not  only  is  the  bank,  with  all  its  prop- 
erty, liable  for  its  debts,  but  each  stockholder  is 
also  liable  for  such  debts  to  the  amount  of  his 
stock.     Id. 

■Where  no  notice  is  given  to  the  stockholder  of 
the  pendency  of  an  action  against  the  corporation, 
his  liability"  is  secondary  to  the  corporation,  and 
exists  alone  by  reason  of  this  statutory  provi- 
sion, and  of  that  provision  of  the  Constitution  in 
pursuance  of  which  the  statute  is  enacted.  How- 
ell V.  Manglesdorf,  33  Kan.  196;  s.  c,  5  Pac.  Rep. 
759. 

AVhere  a  railroad  company,  operating  a  long  line 
In  the  State,  controls  and  manages  another  rail- 
road for  the  purpose  of  a  local  line,  it  will  be 
held  liable  for  the  negligence  of  the  men  operating 
the  same.  Rv.  Co.  v.  Davis,  34  Kan.  199;  s.  c,  8 
Pa.\    Rep.    116. 

The  above  provision  contemplates  legislative  ac- 
tion as  to  the  means  of  enforcing  such  liability. 
Tut  tie  v.  Xat.  Bank,  etc.  (111.),  44  X.  E.  Rep. 
984.] 


§  4.  No  right  of  way  shall  be  appropriated 
to  the  use  of  any  coiix»ration,  until  full  com- 
pensation therefor  be  first  made  in  money, 
or  secured  by  a  deposit  of  money,  to  the 
owner.  irresi>ectiYe  of  any  benefit  from  any 
Improvement  proposed  by  such  corporation. 

[The  damages  recoverable  under  above  section 
can  never  be  less  than  the  actual  value  of  the 
property  taken.  In  the  statutes  relating  to  con- 
demnation proceedings,  the  word  "  owner  "  may 
be  construed  to  apply  to  every  person  having  any 
interest  in  the  property.  Smith  v.  Lahore,  37 
Kan.  486;  s.  c,   15  Pac.   Rep.  577. 

Railroads  are  not  included  witliin  the  intent  of 
the  act  of  congress  of  July  26,  1866,  which  de- 
clares that  "  the  right  of  wa.v  for  the  construction 
of  highways  over  public  lands  not  reserved  for 
public  uses  is  hereby  granted."  Ry,  Co.  v.  John- 
son. 38  Kan.   142;  s.  c,  16  Pac.   Rep.   125. 

Where  a  railroad  company  enters  upon  land  and 
constructs  its  road,  without  the  consent  of  the 
landowner  and  without  making  compensation  for 
such  land,  the  owner  may  pursue  any  of  the  ap- 
propriate remedies.  Ry.  Co.  v.  Fechheimer,  36 
Kan.   45;   s.   c,    12  Pac.   Rep.   .362. 

And  where  the  railroad  is  being  operated  through 
such  land,  the  owner  may  regard  the  company's 
act  as  a  taking  of  the  property  under  right  of 
eminent  domain,  and  may  bring  an  action  for  the 
damages  he  has  sustained  bv  the  appropriation. 
Cohen  t.  Ry.  Co.,  34  Kan.  158;  s.  c,  8  Pac.  Rep. 
138. 

The  power  of  eminent  domain  is  not  granted 
to  the  legislature  by  the  Constitution;  it  is  in- 
herent to  sovereignty,  and  the  law-making  body 
has  the  fullest  liberty  in  the  exercise  of  its  power 
e.Kcept  as  restricted  by  the  Constitution.  Ry.  Co. 
v.  Ry.  Co.,  28  Kan.  4.53. 

The  compensation  for  right  of  way  appropriated 
to  the  use  of  corporations  includes  not  only  the 
value  of  the  property  taken,  but  also  the  loss  the 
landowner  sustains  in  the  value  of  his  property 
by  being  deprived  of  a  portion  of  it.  Reisner  v. 
Atchison,  27  Kan.  382. 

Above  article  of  the  Constitution  applies  to 
canals,  railroads  and  other  similar  cases  in  which 
some  corporation  takes  a  use  or  benefit  in  the  pro- 
posed way,  other  than  that  enjoyed  by  the  pub- 
lic. Pottawotomie  v.  O'Snllivan,'  17  Kan.  58.  It 
is  not  a  grant  of  power  to  appropriate  private 
property  to  public  use,  but  a  restriction  upon  the 
exercise  of  such  power.     Id. 


The  term  "  right  of  way  "  is  not  used  as  defin- 
ing the  quantity  of  estate  to  be  appropriated,  but 
as  meaning  the  right  of  passage  irrespective  of 
the  estate  or  title  to  be  acquired.  Challiss  v 
Ry.  Co.,  10  Kan.   117. 

The  rule  that  a  compensation  must  be  first  made 
in  money,  or  secured  by  a  deposit  of  monev,  be- 
fore any  right  of  way  can  be  appropriated  to  the 
use  of  the  corporation  is  imperative,  and  is  not 
relaxed  by  the  fact  that  the  landowner  has  ap- 
pealed from  the  assessment  of  damages  bv  the 
commissioner,  nor  by  the  fact  that  he  has  re- 
covered a  judgment  for  the  amount  thereof  on 
such  appeal.    Ry.  Co.  v.  Callender,  13  Kan.  496. 

The  right  of  way  does  not  pass  until  the  com- 
I>ensation  is  secured.  Blackshire  v.  Ry.  Co.,  13 
Kan.  514. 

Xo  man  can  be  deprived  of  any  right,  title  or 
Interest  in  his  lands,  except  as  expressly  pro- 
vidi.'d  by  the  provisions  of  the  Constitution  and 
statutory  law;  and  he  cannot  be  divested  through 
such  power  of  an.v  greater  interest  in  his  land 
than  the  Constitution  or  statutes  expressly  pro- 
vide for.      Shawnee   v.    Bockwith,    10   Kan.    603. 

An  owner  whose  land  has  not  been  condemned 
may  sue  the  railroad  companv  for  trespass.  Ry. 
Co.   v.  Weaver,  10  Kan.   344. 

The  statutes  of  Kansas  authorizing  real  estate 
to  be  appropriated  to  the  use  of  a  railroad  com- 
pany for  right  of  wa.v,  so  far  as  they  apply  to  this 
case,  do  not  contravene  the  provisions  of  the 
above  section  of  the  Constitution.  Hunt  v.  Smith, 
9  Kan.   137. 

On  a  trial  of  an  appeal  from  the  assessment  of 
the  value  of  land  taken  by  a  railroad  company, 
evidence  showing  value  of  the  land  immediately 
before  and  after  the  location  of  the  road  is  prop- 
erly admitted,  but  evidence  of  benefit  to  the  land 
should  be  excluded.  Ry.  Co.  v.  Owen,  8  Kan. 
40<). 

The  railroad  company  must  pa.v  for  the  right 
of  wa.v,  irrespective  of  any  benefit  from  the  pro- 
posed improvement  of  the  company.  Ry.  Co.  v. 
Orr,  8  Kan.  419. 

Could  even  special  benefits  received  by  the 
plaintiff,  b.v  reason  of  the  construction  of  said 
railroad  track,  be  set  off  against  the  plaintiff's 
damages?  Rv.  Co.  v.  Andrews,  30  Kan.  597;  s.  c, 
2   Pac.    Rep.   667. 

Under  the  provisions  of  above  section,  a  railroad 
compau.v  must  make  full  compensation  for  the 
right  of  wa.v  appropriated  to  the  corporation,  ir- 
respective of  an.v  benefits  or  any  improvements 
to  the  property  from  the  construction  of  the 
road.  Rv.  Co.  v.  Ross,  40  Kan.  598;  s.  c,  20  Pac. 
Rep.    197. 

AVhere  a  railroad  grade  has  been  constructed 
and  is  afterward  abandoned,  it  becomes  the  prop- 
erty of  the  owner  of  the  land  through  which 
it  was  constructed,  and  if  another  railroad  appro- 
priates the  same  it  should  pay  to  the  owner  the 
value  of  the  land  as  enhanced  bv  such  grade. 
Cohen  v.  Ry.  Co.,  34  Kan.  1.58;  s.  c,  8  Pac.  Rep. 
1.38. 

If  a  railroad  company  takes  possession  of  a 
strip  of  land,  with  consent  of  a  person  in  posses- 
sion of  it,  claiming  title  thereto,  and  who  has 
color  of  title,  in  an  action  by  the  paramount 
owner  for  such  taking,  the  railroad  compan.v  will 
not  be  considered  a  mere  trespasser,  but  will  be 
required  to  pay  only  the  vahie  of  the  land  at  the 
time  it  was  taken,  and  the  damages  to  the  land 
not  taken.     Id.] 

§  6.  The  term  corporations,  as  used  in  this 
article,  shall  include  all  associations  and 
joint-stock  companies  having  powers  and 
privileges  not  possessed  by  individuals  or 
partnerships;  and  all  corporations  may  sue 
and  be  sued  in  their  corporate  name. 

Corporations  defined.  §S  11.52-11.54.  "  Person  " 
includes.    §  2588.    May   sue  and  be  sued.  §   1167. 

["  Corporation  "  defined.  Leavenworth  v.  Casev, 
McC.    124.] 


KANSAS. 

Conveyauces;  kinds  of  corporations,  etc. —  Stat.,  §§  1113,  1152-1155. 


THE  GE]:^EIIAL  STATUTES  OF  KAE'SAS-1889. 


CHAPTER  XXII. 

Conveyances. 

Sec.  1113.   Private    corporations    may    convey    real 
estate;  effect  of  deed. 

§   1113.  All  deeds,  contracts,  and  convey- 
ances executed  and  acknowledged  by  private 
corporations,  under  and  pursuant  to  section 
foiu-  of  chapter  twenty-two  of  the  general 
statutes  of  eighteen  hundred  and  si.xty-eight, 
be  and  the  same  are  hereby  ratified  and  con- 
firmed; and  all  instruments  of  writing,  exe- 
cuted and  acknowledged  under  and  pursuant 
to  said  section,  now  copied  into  the  proper 
books  of  the  oflice  of  the  register  of  deeds  of 
the  several  counties  of  this  State,  shall,  upon 
the  passage  of  this  act.  be  deemed  to  impart 
to    subsequent    purchasers    and    incumbran- 
cers,   and    all    other   persons,    notice   of   all 
deeds,  mortgages,  powers  of  attorney,  con- 
veyances,  contracts,   and   other   instruments 
of  writing,  so  far  as.  and  to  the  extent  that 
the   same   may   be   found   recorded,   copied, 
or  noted  in  such  books  of  recoi'ds,  notwith- 
standing  any   defect   in   the   exec\ition.    ac- 
linowledgment,    recording,    or    certificate    of 
recording  the  same;  and  the  record  of  such 
instrument,    or    a    duly    authenticated    copy 
thereof,  shall  be  competent  evidence  when- 
ever it  shall  be  made  to  appear  by  the  party's 
own  oatli  or  otherwise,  the  original  is  shown 
to  be  lost,  or  not  in  tlie  possession  or  under 
the  control  of  the  party  wishing  to  use  the 
same:     Provided,   That  nothing  herein  con- 
tained shall  be  construed  to  affect  any  rights 
heretofore  acquired  by  subsequent  grantees, 
assignees,  or  incumbrancers. 

Power  to  convey  realty.     §  1107,  snbd.  4;  §  1198 


CHAPTER  XXIII. 
Corporations. 

.\rt.   1.   Prclitiiiii.-iry    provisions. 

2.  Creation  of  corporations. 

3.  Powers  and  dntics  of  corporations. 

4.  Miscellaneous  provisions. 

5.  Dissolution  of  corporations. 

ARTICLE  1.     PRELIMINARY   PROVISIONS. 

Sec.  1152.  Kinds  of  corporations. 

lir.3.  Public   corporation,    wnat. 
lir>4    Kinds  of  private  corporations. 


§  1153.  A  public  corporation  is  one  that 
has  for  its  object  the  government  of  a  por- 
tion of  the  State. 

§  1154.  Private  corporations  are  of  three 
kinds:  First,  Corporations  for  religion.  Sec- 
ond, Corporations  for  charity  or  benevolence; 
and.  Third,  Corporations  for  profit. 

"  Person  "    includes.      §   2588. 

ARTICLE  II.     CREATION  OP  CORPORATIONS. 

Private   corporations,    how  created. 
Purposes     for     which     they     may     be 

formed. 
The  same. 
The  same. 

Telephone  companies. 
Powers. 

What  charter  must  set  forth. 
Name. 
What    charter   of   road    company    must 

state. 
Must  be  subscribed   and  acknowledged. 
Must    be    filed    and    recorded;    certified 

copy   shall   be   evidence. 
Corporation  shall  exist  from  what  time. 


Sec.  115.5. 
1156. 

1157. 
1158. 
1159. 
HOC. 
1161. 
1162. 
1163. 

1164. 
1165. 

1166. 


§    1152.  Corporations    are 
public;  or,  second,  private. 

See  Const.,  art.  XII,  §  6. 


either:     First, 


§  1155.  Private  corporations  may  be  cre- 
ated by  the  voluntary  association  of  five  or 
more  persons  for  the  purposes  and  in  the 
manner  mentioned  in  the  following  sections 
of  this  article  and  amendments  thereto. 
Every  member  or  stockholder  in  said  cor- 
poration shall  vote  in  person  or  by  proxy. 

Must  be  created  by  general  laws.  Const.,  art. 
XII,  §  1;  art.  II,  §  17.  Bill  of  ri.chts.  §  2.  "  Cor- 
poration "  defined.  Const.,  art.  XII,  §  6;  G.  S. 
§§  1152-11.54.  Dissolution.  §§  1200  et  seq.  For- 
feiture. §§  4766  et  seq.  Method  of  voting. 
§  1185. 

[A  stockholder  will  not  be  relieved  from  li.i- 
bilitv  on  his  subscription  to  stock  by  reason  of 
irregularities  in  the  election  of  officers  or  in  the 
adoption  of  bv-laws,  nor  by  the  fact  that  a  cor- 
poration created  to  "  build  and  maintain  a  flour- 
ing mill  "  is  expending  its  money  to  build  a 
dam.     Ginrich  v.  Mill  Co.,  21  Kan.  61. 

One  who  has  frequently  dealt  with  a  supposed 
corporation,  which  has  attempted  in  good  faith 
to  incorporate,  and  there  has  been  an  actual,  open 
and  notorious  exercise  of  corporate  powers  for  a 
series  of  vears,  unchallenged  by  the  State,  will 
not  he  permitted,  wb.>n  sued  upon  a  note  pur- 
chased and  held  bv  such  corporation,  and  which 
as  a  corporation  it  might  rightfully  purchase  and 
hold,  to  defeat  the  action  by  showing  a  technicnl 
omission  in  the  proceedings  for  organization.  The 
corporation  is  as  to  him  one  de  facto;  and  whether 
it  be  one  also  de  jure  Is  a  question  not  open  for 
inquirv  collaterally,  but  only  by  a  direct  pro- 
ceding  Instituted  by  the  State.  Pape  v.  Bank, 
20  Kan.  440;   see  Douglas  Co.  v.   Bolles,   94   U.   b. 

A  corporation  for  jurisdictional  purposes  is  to 
be  treated  as  a  citizen  of  the  State  by  whose  laws 
it   was  created,   even  though  it   has   no   business 


KAXSAS. 


Ck)rporate  purposes  —  Stat.,  §§  1156-1159. 


office  In,  and  none  of  its  officers  are  In  such 
State.  Pac.  R.  R.  Co.  v.  M.  P.  Ry.  Co.,  5  McC. 
373. 

A  corporation  created  bj-  a  territorial  legisla- 
ture becomes,  after  the  admission  of  the  terri- 
torv  as  a  State,  a  corporation  of  the  State.  K. 
P  Rv  Co.  V.  Atchison,  etc..  R.  R.  Co.,  112  U.  S. 
414:  "s.   c.   5  Sup.   Ct.   Rep.   314. 

An  association  of  persons  cannot  have  even  a  de 
facto  corporate  existence  under  the  general  law, 
without  a  bona  fide  intent  to  comply  with  such 
law.     McLennan  v.   Hopkins,  41  Pac.   Rep.   1061.] 

§  11.jG.  The  pui-poses  for  ^hich  private 
corporations  may  be  formed  are:  First.  Tlie 
support  of  public  worship.  Sec-oml.  The  sup- 
port o^  any  benevolent,  charitable,  educa- 
tional or  missionai-y  undertaking.  Third.  The 
support  of  any  literaiy  or  scientific  under- 
taking, the  maintenance  of  a  library,  or  the 
promoting  of  painting,  music,  or  other  fine 
aits.  Fourth.  The  encouragement  of  agri- 
culture and  horticulture.  Fifth.  The  main- 
tenance of  public  parks,  and  of  facilities  for 
skating,  and  other  innocent  sports.  Sixth. 
The  maintenance  of  a  club  for  social  enjoy- 
ment. Seventh.  The  maintenance  of  a  pub- 
lic or  private  cemetery.  Eighth.  The 
prevention  or  punishment  of  theft  or  wilful 
Injuries  to  property,  and  insurance  against 
such  risks.  Ninth.  The  insurance  of  human 
life,  and  dealing  in  annuities.  Tenth.  The 
Insurance  of  human  beings  against  sickness 
or  personal  injury.  Eleventh.  The  insurance 
of  the  lives  of  domestic  animals,  or  against 
their  loss  by  other  means.  Twelfth.  The  in- 
surance of  property,  marine  risks.  Thir- 
teenth. The  insurance  of  property  against 
loss  or  injuiy  by  fire,  or  by  any  risk  of  in- 
land transportation.  Fourteenth.  The  pur- 
chase, location  and  laying  out  of  town  sites, 
and  the  sale  and  conveyance  of  the  same  in 
lots  and  subdivisions.,  or  otherwise.  Fif- 
teenth. The  construction  and  maintenance  of 
a  railway  and  a  telegraph  line  in  connection 
therewith.  Sixteenth.  The  construction  and 
maintenance  of  any  species  of  road  and  of 
bridges  in  connection  therewith.  Seven- 
teenth. The  construction  and  maintenance  of 
a  bridge.  Eighteenth.  The  construction  and 
maintenance  of  a  telegi'aph  line.  Nineteenth. 
The  establishment  and  maintenance  of  a  line 
of  stages.  Twentieth.  The  establishment 
and  maintenance  of  a  ferry.  Twenty-first. 
The  building  and  navigation  of  steamboats 
and  caiTiage  of  persons  and  property  thereon. 
TAventy-second.  The  supply  of  water  to  the 
public.  Twenty-third.  The  manufacture 
and  supply  of  gas  or  the  supply  of  light  or 
heat  to  the  public  by  any  other  means. 
T\venty-foiu-th.  The  transaction  of  any  man- 
ufacturing, mining,  mechanical  or  chemical 
business.  Twenty-fifth.  The  transaction  of 
a  printing  and  publishing  business.  Twenty- 
sixth.  The  establishment  and  maintenance  of 
a  hotel.  Tu'enty-seventh.  The  erection  of 
buildings  and  the  accommodations  and  loan 
of  funds  for  the  purchase  of  real  property. 
Twenty-eighth.  The  improvement  of  the 
breed  of  domestic  animals  by  importation, 
.sale  or  otherwise.  Twenty-ninth.  The  trans- 


portation of  goods,  wares,  merchandise,  or 
any  valuable  thing.  Thirtieth.  The  promo- 
tion of  immigration.  Thirty-first.  The  con- 
struction and  maintenance  of  sewers.  Thii-tj-- 
second.  The  construction  and  maintenance 
of  a  street  railway.  Thirty-third.  The  erec- 
tion and  maintenance  of  market-houses  and 
market  places.  Thirty-fourth.  The  construc- 
tion and  maintenance  of  dams  and  canals 
for  the  purp<ise  of  water-works,  irrigation  or 
manufacturing  pun")Oses.  Thirty-fifth.  The 
construction,  maintenance  and  operation  of 
union  stoclvyards,  and  the  erection  of  such 
buildings,  hotels,  railways  and  switches  as 
may  be  necessai*y  for  that  purpose.  Thirty- 
sixth.  The  conversion  and  disposal  of  agri- 
cultural products  by  means  of  mills;, 
elevators,  markets  and  stores,  or  othenvise. 
Thirty-seventh.  The  organization  and  main- 
tenance of  boards  of  trade  and  business  ex- 
changes, with  powers  to  hold  and  improve 
real  estate,  and  to  transact  any  and  all  busi- 
ness connected  therewith.  Thirty-eighth. 
The  organization  of  loan  and  trust  com- 
panies: Provided,  That  nothing  in  mis  act 
shall  be  construed  to  authorize  such  loan  and 
trust  companies  to  sell  real  estate  held  as 
security,  except  in  the  manner  provided  by 
law.  Thirty-ninth.  The  accumulation  and 
loan  of  funds,  the  erection  of  buildings,  and 
the  purchase  and  sale  of  real  estate  for  the 
benefit  of  its  members.  Fortieth.  To  raise 
necessary  funds  by  any  settlers  on  any  In- 
dian lands  in  this  State,  to  defray  expenses 
in  endeavoring  to  obtain  title  to  any  such 
lands  so  occupied  by  such  settlers. 

See  §§  1157-1159. 

[T'nder  subdivision  36.  a  corporation  may  be 
created  "  to  build  and  maintain  a  flouring  mill." 
Ginrich  v.  Mill  Co.,  21  Kan.  61.] 


§  1157.  In  addition  to  the  purposes  for 
which  private  corporations  may  be  formed, 
as  provided  in  chapter  seventy  (preceding 
section),  laws  of  eighteen  hundred  and  sev- 
enty-three, are  the  following:  The  transaction 
of  any  manufacturing,  mining,  mechanical, 
chemical,  or  mercantile  and  agricultural  im- 
plements and  produce  business,  either  sepa- 
rately or  all  combined. 

See  §§  1156,  1158,  1159. 

§  1158.  Private  coi-poration  may  be  fomned 
for  the  puiijose  of  selling,  hiring  or  leasing 
engines,  cars,  rolling  stock  and  other  equip- 
ments for  railroads  to  railroad  companies, 
in  addition  to  the  puii)oses  for  which  cor- 
porations may  be  formed  as  provided  in 
chapter  seventy  (§  1156)  of  the  laws  of  eigh- 
teen hundred  and  seventy-three,  and  of  the 
acts  supplemental^  thereto. 

§  1159.  Corporations  for  the  construction 
and  maintenance  of  a  telephone  line  may 
be  formed  in  the  mode  and  manner  pre- 
scribed by  the  general  laws  of  this  State  for 
the  creation  of  private  coi'poratlons. 


KAXSAS. 


Charters  —  Stat.,  §§  1160-1166. 


§  11G(>.  All  sucli  coii^orations  shall  have 
all  tho  rights  and  powers  conferred,  and  be 
subject  to  all  the  liabilities  and  duties  im- 
posed by  the  general  laws  of  this  State  upon 
telegraph  corporations. 

§  1161.  A  chai-ter  must  be  prepared  setting 
forth:  First,  The  name  of  the  coi-poration. 
Second,  The  purposes  for  which  it  is  fonned. 
Tliird,  The  i)lace  or  places  where  its  business 
is  to  bo  transacted.  Fourth,  The  term  for 
which  it  is  to  exist.  Fifth,  The  number  of 
its  dii'ectors  or  trustees,  and  the  names  and 
residences  of  those  who  are  appointed  for  the 
first  year;  and,  Sixth,  The  amoimt  of  its 
capital  stock,  if  any,  and  the  number  of  its 
shares  into  which  it  is  divided. 

See  §  1163.  General  office  must  be  within  the 
State.  §§  1190,  1191.  General  corporate  power. 
5  11G7. 

["Where  corporators  in  preparing  certlticate  em- 
ploy only  the  words  used  in  the  statute  to  de- 
scribe the  general  purposes  of  such  incorporation, 
It  will  be  presumed  that  they  intended  to  create 
a  corporation  of  the  same  general  nature  and 
powers  granted  by  the  statute,  rather  than  that 
by  such  words  they  sought  to  apply  special  limita- 
tions on  the  powers  of  the  cori)oration.  Whet- 
stone V.   University,   13   Kan.    320. 

It  is  not  a  pre-requisite  to  the  transaction  of 
business  by  a  corporation  that  all  the  capital 
stock  be  subscribed.  Corporate  existence  dates 
from  time  of  tiling  charter.  R.  R.  Co.  v.  Staf- 
ford Co.,  36  Kan.   121;  s.  c,  12  Pac.  Rep.  593. 

The  placing  of  a  void  provision  in  the  by-laws 
of  a  corporation  does  not  necessarily  invalidate 
the  organization.  Aultman  v.  AVaddle,  40  Kan. 
201;  s.  c,  19  I'ac.  Rep.  730.] 


§  3.162.  That  the  coi-porate  name  of  every 
coiiioration  hereafter  organized,  (except 
banlis  and  corporations  not  for  pecuniary 
profit,)  shall  commence  with  the  word  "the" 
and  end  with  the  word  "  coi-po ration,"  "  com- 
pany," '*  association,"  or  "  society',"  and 
shall  indicate  by  its  corporate  name 
the  business  to  be  carried  on  by  said 
corporation;  and  any  coriioration  organ- 
ized or  existing  under  tlie  provisions  of 
this  act  may  within  the  limits  of  this  act 
amend  its  charter  in  any  of  tlie  parts  thereof; 
but  in  any  such  case  such  •charter  shall  be 
so  amended  only  when  authorized  by  a  two- 
thirds  vote  of  the  stockholders  of  such  cor- 
poration *at  a  meeting  held  in  conformity 
with  the  by-laws  thereof;  and  as  so  amended 
such  charter  shall  be  subscribed  by  the 
directors  or  trustees  thereof,  and  acknowl- 
edged by  not  less  than  three  thereof,  who 
shall  be  citizens  of  this  State,  before  an 
officer  duly  authorized  to  take  acknowledg- 
ments of  deeds,  and  thereupon  filed  and  re- 
corded in  the  same  manner  and  with  like 
effect  as  now  provided  in  cases  of  original 
charters  under  provisions  of  this  act. 

Name,    how   changed.     §§   1169,   1170.      Misnomer 
not  fatal.     §  1197. 

§  116.3.  The  charter  of  a  road  company 
must  also  state:  First,  The  kind  of  road  in- 


tended  to  be  constructed.  Second,  The  places 
from  and  to  which  the  road  is  intended  to 
be  run.  Third,  Tho  counties  through  whicli 
it  is  intended  to  be  run;  and,  Fourth,  The 
estimated  length  of  the  road.  Fifth,  The 
charter  of  a  bridge  or  ferry  company  shall 
also  state  the  stream  intended  to  be  crossed, 
and  the  place  where  it  is  intended  to  be 
crossed  bj'  the  bridge  or  feriy. 

See  §  1161. 

[Above  section  does  not  apply  to  a  street  rail- 
way company,  incorporated  for  the  purpose  of 
constructing  and  operating  a  horse-car  railway  in 
the  streets  of  a  single  city.  Atchison,  etc.,  Co. 
v.   Ry.  Co..  31  Kan.  660;  s.  c,  3  I'ac.   Rep.  284. 

In  the  certificate  of  incorporation  of  a  bridge 
company,  what  is  a  sufficient  description  of  loca- 
tion of  the  bridge.  Hunt  v.  Bridge  Co.,  11  Kan. 
412.] 

§  1164.  The  charter  of  an  intended  corpo- 
ration must  be  subscribed  by  five  or  more 
persons,  three  of  whom,  at  least,  must  be 
citizens  of  this  State,  and  must  be  acknowl- 
edged by  them  before  an  officer  duly  author- 
ized to  take  acknowledgments  of  deeds. 

[See  Sword  v.  Wickersham,  29  Kan.  746.] 


§  1165.  Such  charter  shall  thereupon  be 
filed  in  the  office  of  the  secretary  of  State, 
who  shall  record  the  same  at  length  in  a 
book  to  be  kei>t  for  that  puiiDose,  and  retain 
the  original  on  file  in  his  office.  A  copy  of 
the  charter,  or  of  the  record  thereof  duly 
certified  by  the  secretary  of  State,  under  the 
great  seal  of  the  State,  shall  be  evidence  of 
the  creation  of  the  corporation. 

See  §§  1166,  1201. 

[Above  section  applied.  Mining  Co.  v.  Adams, 
35  Kan.   193;   s.   c,   10  Pac.   Rep.  468.] 

§  1166.  The  existence  of  the  corporation 
shall  date  from  the  time  of  filing  the  charter, 
and  the  certificate  of  the  secretaiy  of  State 
shall  be  evidence  of  the  time  of  such  filing. 

Denial  of  corporate  existence.  §  4934.  Proof 
of.      §  5279. 

[A  corporation  is  created  when  certificate  Is 
filed  with  secretarv  of  State.  Hunt  v.  Bridge 
Co.,  11  Kan.  412;  R.  R.  Co.  v.  Stafford  Co.,  36 
id.  121;  s.  c,  12  Pac.  Rep.  593. 

While  corporate  existence  dates  from  time  of 
filing  charter,  it  cannot  be  regarded  as  a  com- 
plete organization  authorized  to  transact  busi- 
ness when  subscription  books  have  not  yet  been 
opened,  and  no  stock  has  been  subscribed;  nor 
can  it  be  until  a  full  and  complete  organization 
has  been  effected  in  accordance  with  the  require- 
ments of  the  statutes.  Coal  Co.  v.  Settle,  54 
Kan.  424:  s.  c,  38  Pac.  Rep.  483;  Walton  v.  Oliver, 
49  Kan.   107;  s.  c,  30  Pac.  Rep.  172.] 

ARTICLE   III.      POWERS   AND   DUTIES   OF 
CORPORATIONS. 

Sec.  1167.  Powers  of  corporations. 

1168.  Rights   saved. 

1169.  Corporate  name  or  number  of  directors, 

how    changed. 

1170.  Notice   of  change,    how   given. 


10 


ka:n^sas. 


Corporate  powers  —  Stat.,  §  1167. 


Sec.  1171.  Corporation  may  increase  its  stock;  in- 
crease shall  be  certified  to  secretary 
of  State. 

1172.  Mav  borrow  money. 

1173.  Subsoriptiou-books     shall     be     opened, 

when. 

1174.  Majority  shall  constitute  a  quorum;  an- 

nual  election    shall   be   held. 

1175.  OtHcers  to  be  chosen,  how;  directors  to 

take   oath. 

117r>.   Tly-laws  may   be   adopted. 

1177.  Number  of  directors  may  be  increased. 

117S.  Failure  to  hold  election  on  day  ap- 
pointed; shall  not  be  deemed  a  dis- 
solution. 

1170.  Control  of  secular  affairs  in  trustees, 
and  title  of  property  shall  vest  in 
them. 

1150.  Powers  and  duties  of  directors. 

1151.  Statement   of   condition    of    corporation 

to    be    made,    when;    what    It    shall 
state;  penalty  for  neglect. 

1152.  Corporation    lioietofore    organized    may 

accept  the  provisions  of  this  act. 

HS3.  Corporation  sliall  employ  its  stock  only 
for  legitimate  purposes  of  its  organi- 
zation. 

1184.  Stock  shall  be  deemed  personal  estate; 
who  may  vote  on  stock. 

118.5.  The  manner  of  voting. 

1180.  Subscriptions  shall  be  paid  as  by-laws 
reouire. 

1187.  I'enalty  for  non-payment. 

IISS.  Debts  due  from  members  may  be  sued 
for. 

1189.  Directors  liable  individually,  when. 

1190.  General  office  of  corporation  to  be  kept 

within  the  State. 

1191.  Penalty   for  failure  or  refusal   to   com- 

ply with  preceding  section. 

§  11G7.  Every  corporation,  as  such,  lias 
power: 

First.  To  have  succession  by  its  coi^porate 
name,  for  tlie  period  limited  in  its  charter, 
and  when  no  period  is  limited,  for  twenty 
years. 


Corporate   name.      §    1162. 
certificate.      §    llGl.      Change 
Duration    extended.      §    1182. 
§  1194.     Dissolution.     §  1200. 


Must    be    stated    in 

of.      §§    1169,    1170. 

Charter   extended. 


Second.  To  maintain  and  defend  judicial 
proceedings. 

Corporation  may  sue  and  be  sued.  Const.,  art. 
XII,  §  6.  May  sue  its  members.  §  1188. 
Stockholders  liable,  when.  §§  1192,  1204.  Venue 
of  actions  against  corporations.  §§  4128-4132. 
Service  of  summons  upon.  §§  4147-4156.  Same, 
In  justice's  court.  §§  4859-4861.  Verification  of 
pleadings.  §  4103.  Attachment.  §§  4291-4314. 
Proceedings  for  forfeiture.  §§  4766  et  seg.  Denial 
of  corporate  existence.  §  4934.  How  proved. 
§  5279. 

[Where  one  railroad  company  is  consolidated 
•with  others  under  a  new  name,  it  ceases  to  exist 
as  a  corporation,  and  an  action  brought  by  or 
against  it  cannot  afterward  be  prosecuted  by  or 
agaiust  it  or  in  its  original  name.  Ky.  Co.  v. 
Smith.  40  Kan.   192;  s.   c.   19  Pac.  Rep.  636. 

Parol  evidence  is  admissible  to  sliow  tliat  a 
resolution  of  the  board  of  directors  of  a  railroad 
company,  entered  upon  the  record  of  its  pro- 
ceedings, did  not  correctly  recite  the  amount  of 
money  found  due  and  ordered  to  be  paid  to  one 
of  its  officers.  11.  U.  Co.  v.  Tieruan,  37  Kan. 
606;   s.   c,   15  Pac.   Rep.   .544.      ^       ,         ,  . 

■\Vhen  part  payment  of  an  officers  salary  is  an 
acknowledgment  of  liability   for  remainder.     Id. 


Liability  of  corporation  for  unauthorized  pur- 
chases by  its  officers.  Getty  v.  Milling  Co.,  40 
Kan.  281;  s.  c,  10  I'ac.  Rep.  617.  For  services 
of  an  attorney  employed  by  general  manager  or 
president.  R.  R.  Co.  v.  Grove,  39  Kan.  731;  s.  c, 
18  Pac.  Rep.  0.58;  St.  L.,  etc..  Rv.  Co.  v.  Kirkpat- 
rick.  .52  Kan.  104;  s.  c,  34  I'ac.  Rep.  400;  Rank  v. 
Berry.  53  Kan.  606;  s.  c.  37  Pac.  Rep.  131.  For 
note  executed  by  corporate  oflicers.  R.  R.  Co.  \. 
Tiernan,  37  Kan.  606;  s.  c.  15  Pac.  Rep.  544; 
Massey  v.   C.   P,.  &  S.   Assn..  22  Kan.  024. 

A  corporation  may  be  guilty  of  fraud.  Lewis 
V.   Meier,  14  Fed.  Rep.  311. 

The  existence  of  a  corporation  de  facto  cannot 
be  called  in  question  collaterallv.  Pape  v.  Bank, 
20  Kan.  440;  Douglas  Co.  v.  Kolles.  04  U.  S.  104. 
But  an  association  of  persons  cannot  have  even 
a  de  facto  corporate  existence  under  the  general 
law,  without  a  bona  tide  intent  to  comply  with 
such  law.  McLellan  v.  Hopkins,  41  Pac.  Rep. 
1061. 

Where  a  liability  is  incurred  before  the  organi- 
zation of  a  corporation  is  completed,  the  persons 
assuming  to  act  as  directors  are  personallv  liable. 
Walton  V.  Oliver,  40  Kan.  107;  s.  c,  30  Pac.  Rep. 

Before  a  stockholder  can  maintain  an  action  in 
his  own  name  to  redress  wrongs  committed  against 
the  corporation,  it  must  appear  that  he  has  in 
good  faith,  but  without  success,  attempted  to  se- 
cure action  by  the  directors  or  managing  officers 
of  the  corporation,  or  that  demand  for  their  ac- 
tion would  be  unavailing.  R.  R.  Co.  v.  Sumner 
Co.,  51  Kan.  617;  s.  c,  33  Pac.  Rep.  312. 

Assumption  by  corporation  of  liabilities  of  its 
promoters.  Davis  v.  Butter  Co.,  52  Kan.  693;  s.  c, 
35   Pac.    Rep.    776. 

Liability  of  the  promoters,  as  persons,  to  one 
dealing  with  them  before  lesral  organization.  Mc- 
Lellan V.  Hopkins,  41  i  ac.   Rep.  1061. 

Promoters  are  liable  for  materials  lurnished  by 
one  elected  by  them  as  superiutendeut,  where 
the  organization  of  the  corporation  is  defective. 
Potstone  V.   Mfg.   Co.,  41  Pac.   Rep.  2il. 

When  a  new  corporation  answerable  for  lia- 
bilities of  constituent  companies.  Berry  v.  R.  R. 
Co.,   52  Kan.   774;   s.   c,   36  Pac.    Rep.   724. 

Corporation  liable  in  tort  for  personal  injury  to 
employe.  Morbach  v.  Mining  Co.,  53  Kan.  731; 
s.  c,  37  Pac.  Rep.  122. 

The  interest  of  a  stockholder  is  of  a  collateral 
nature,  and  not  that  of  an  owner,  and  he  may 
sue  the  corporation  for  a  personal  injury.     Id. 

Gas  company  has  no  standing  in  court  to  test 
the  right  of  a  rival  company  to  use  the  streets 
for  the  same  purpose,  or  the  validity  ot  ordinance 
granting  the  right.  Mining  iV:  Gas  Co.  v.  Gas  & 
Mining  Co.,  55  Kan.  173:  s.  c.  40  Pac.  Rep.  326. 

A  corporation  is  liable  to  an  action  tor  malicious 
prosecution  commenced  by  an  agent,  only  when 
the  agent  acted  within  the  scope  of  his  author- 
ity.    Atchison,  etc.,  Co.  v.  Brown,  48  I'ac.  Rep.  31. 

A  corporation  formed  by  consolidation,  which 
voluntarily  adopted  a  petition  in  error  of  one  of 
the  constituent  companies,  held  to  have  consented 
to  be  substituted  as  a  party  in  a  court  below  in 
a  new  trial.  W.  AV.  Rv.  Co.  v.  Quinn,  48  Pac. 
Rep.    1.32. 

Where  a  defendant  corporation  was  consolidated 
witli  another  company  pending  an  action,  held, 
that  tlie  consolidated  corporation  waived  the  lack 
of  revivor  and  substitution.  Curry  v.  Kansas  City 
Ry.  Co.,  48  Pac.   Rep.  579. 

Corporate  records  and  minutes  are  not  compe- 
tent evidence  between  strangers.  Dolan  v.  Wil- 
kerson,  48  Pac.  Rep.  23.] 

Third.  To  make  and  use  a  common  seal, 
and  alter  the  same  at  pleasure. 

Seal  requisite  to  corporate  deeds.  §  1198. 
Corporate  records  under  seal,  evidence.     §  1100. 

[A  court  of  equity  will  not  declare  a  contract 
between  two  corporations  void  because  the  cor- 
porate seals  are  not  atiixed  to  it  (it  being  other- 
wise valid),  but  if  necessary  will  rather  compel 
the  parties  to  affix  their  seals.  R.  R.  Co.  v. 
Miami  Co.,  12  Kan.  483.] 


KANSAS. 


11 


Corporate  powers;  change  of  name,  etc.— Stat.,  §§  1167-1170. 


Fourth.  To    hold,    purchase,    mortgage   or 
otherwise  convey  such  real  and  personal  es- 
tate as  the  purposes  of  the  corporation  shall  ! 
require,  and  also  to  take,  hold  and  convey  i 
such  other  property,  real,  personal  or  mixed, 
as  sliall  bo  roipiisite  for  such  corporation  to  I 
acquire,    in    order    to   obtain    or    secure   the 
payment  of  any  indebtedness  or  liability  due 
to  or  belonging  to  the  corporation. 

Power  to  convey.     §§   111.3,   1198. 

[Where  a  corpoi-jtitui  is  authorized  l)y  its  charter 
to  loan  money,  it  has  an  implied  power  to  take 
mortgage  security  therefor,  where  the  debt  is 
bona  fide,  and  created  in  the  regular  course  of 
business.  Massey  v.  C.  B.  &  S.  Assn.,  22  Kan. 
G24. 

.nuthority  of  corporate  officers  to  execute  a  note. 
U.    R.   Co.   V.   Tiernan,  37  Kan.   606.] 

Fifth.  To  appoint  and  remove  such  subor- 
dinate otlicers  and  agents  as  the  business  of 
the  corporation  shall  require,  and  to  allow 
them  a  suitable  compensation. 

Principal  officers,   election   of.     §   1175. 

[Parties  employed  by  the  president  of  a  cor- 
poration apjiearing  as  an  active  agent  In  the  exe- 
cution of  any  worlj,  have  a  right  to  assume  that 
such  officer  is  acting  for  the  corporation,  and 
that  his  acts  in  that  respect  are  its  acts  and 
binding  upon  it.  R.  R.  Co.  v.  Jones,  30  Kan.  601; 
s.   c:.  2  Par.   Rep.  657. 

Imiilied  authority  of  agent  of  a  foreign  corpora- 
tion. St.  .John  V.  Cornwell,  52  Kan.  712:  s.  c,  35 
I'ac.    Rep.   785.] 


Sixth.  To  make  by-laws,  not  inconsistent 
•with  existing  laws,  for  the  management  of 
its  property,  the  regulation  of  its  affairs,  and 
for  the  transfer  of  its  stock. 

See  §  1176.  May  increase  its  stock.  §  1171. 
And  issue  preferred  stock.  Act  of  1S95,  at  p. 
29.       Transfer  of  stock.     §   1184. 

[The  placing  of  a  void  provision  in  the  by-laws 
of  a  corporation  does  not  necessarily  invalidate 
the  organization.  Aultman  v.  Waddle,  40  Kan. 
201:   s.   c,   19  Pac.   Rep.   730.] 


Seventh.  To  enter  into  any  obligation  or 
contract  essential  to  the  transaction  of  its 
ordinaiy  affairs. 

See  §§  1180,  1183.  May  borrow  money.  §  1172. 
Penalty  for  ultra  vires.  §  4767.  Business  con- 
ducted by  directors.     §  1174. 

[A  corporation  authorized  to  loan  money  has  im- 
plied power  to  take  mortgage  security  therefor. 
Massey  v.   Assn.,  22  Kan.   624. 

So  long  as  it  does  not  depart  from  terms  of  Its 
charter,  a  corporation  is  clothed  everywhere  with 
the  powers  given  it  by  its  said  charter,  and  has 
capacit.v  to  carry  on  its  business  and  extend  its 
operations  in  other  States  and  countries.  R.  R. 
Co.  V.  Fletcher,  35  Kan.  2:W;  s.  c,  10  i'ac.  Rep. 
596. 

An  act  within  the  powers  of  a  corporation,  when 
regularly  done,  binds  both  the  corporation  and  the 
stockholders.  Whetstone  v.  University,  13  Kan. 
320. 

A  Pennsylvania  corporation  which  could  not 
have  an  office  or  do  business  in  that  State    cannot 


do  business  in  Kansas.  Land,  etc.,  Co.  v.  Coffev 
Co.,   6  Kan.  245. 

Additional  powers,  auxilary  to  the  original  pur- 
pose of  a  corporation,  may  be  conferred  thereon 
by  the  legislature.     R.   R,  Co.  v.   Fletcher,   supra. 

What  is  essential  to  constitute  a  person  a  pro- 
moter of  a  corporation.  R.  R.  Co.  v.  Tiernan,  37 
Kan.   606:  s.   c,   15  Pac.   Rep.  544. 

A  corporation  may  ratify  by  its  acts  the  terms 
of  a  contract  by  which  it  "would  not,  without 
such  ratification,  bo  bound.  W.  U.  Tel.  Co.  v. 
Ry.  Co.,  1  McC.  565. 

Where  a  corporation  goes  outside  of  the  scope 
of  its  legitimate  business  to  make  a  contract,  aud 
that  contract  has  been  executed,  and  the  corpora- 
tion has  received  the  benefits  thereof,  it  will  be 
enforced.     Holt  v.   Hank.   25  Fed.   Rep.  812. 

A  corporation  which  has  enjoyed  the  benefits  of 
a  contract  cannot  plead  that  it  was  ultra  vires, 
where  no  fraud  is  intended  or  has  been  committed. 
Sherman  C.  T.  Co.  v.  Morris,  43  Kan.  2S2:  s.  c,  23 
Pac.  Rep.  569:  Town  Co.  v.  Fletcher,  46  Kan.  524; 
s.  c.  26  Pac.   Rep.  951. 

Where  a  corijoration  has  received  benefits  from 
others,  upon  contracts  ultra  vires  or  void  because 
of  some  irregularity  or  want  of  power  in  their 
creation,  but  not  void  because  made  in  violation 
of  express  law,  or  public  policy,  or  good  morals, 
and  retains  such  benefits,  it  must  pay  for  them. 
Hamilton  Co.  v.  Webb,  47  Kan.  106;  s.  c,  27  Pac. 
Rep.    997. 

Those  who  deny  the  authority  of  the  president 
and  secretary  of  a  corporation  to  execute  a  con- 
tract on  its  behalf,  regular  on  its  face,  take  upon 
themselves  the  burden  of  establishing  their  claim. 
Sherman  T.  Co.  v.  Swigart,  43  Kan.  292;  s.  c,  23 
Pac.   Rep.   569.] 

Eighth.  To  increase  or  diminish  by  a  vote 
of  its  stockliolders,  cast  as  its  by-laws  may 
direct,  the  number  of  its  directors  or  tnis- 
tees,  to  be  not  less  than  three  nor  more  than 
twenty-four,  and  may,  in  like  manner, 
change  its  corporate  name,  without  in  any 
wise  affecting  its  rights,  privileges  or  lia- 
bilities. 

See  §§  1169,  1170. 

§  1168.  That  all  acts  performed,  and  rights 
acquired  and  obligations  incniiTed  by  corpo- 
rations under  the  autliority  of  said  section 
eleven.*  of  the  act  to  which  this  is  amenda- 
tory, are  hereby  saved  to  and  against  such 
corporation,  notwithstanding  the  repeal  of 
said  section  eleven.* 

§  1169.  Such  change  of  name,  or  number 
of  directors  or  trustees,  shall  take  effect  and 
be  in  force  from  the  date  at  which  the  presi- 
dent or  secretary  of  the  corporation  shall 
file  Avith  tlie  secretary  of  State  an  affidavit, 
setting  forth  the  name  adopted,  or  the  num- 
ber of  directors  or  trustees  fixed,  together 
with  the  date  at  which  such  change  in  name 
or  number  of  directors  or  trustees  was  voted 
by  the  stockholders  of  such  corporation. 

Name.     §  1162.     See  §  1167,  subd.  8. 

§  1170.  When  the  name  of  a  corporation 
shall  have  been  changed,  as  provided  in  this 
article,  notice  of  such  change  shall  be  im- 
medintely  thereafter  published  by  the 
president  or  other  chief  officer  of  the  corpo- 
ration,   for   six   successive   weeks,    in   some 


*  §  1167. 


12 


KANSAS. 


Capital  stock;  bonds;  subscriptions,  etc. —  Stat.,  §§  1171-1174. 


newspaper  printed  and  published  in  the 
county  in  Avhich  the  principal  ottice  of  the 
corporation  is  located,  and  if  there  be  no 
newspaper  printed  and  published  in  such 
county,  then  in  some  newspaper  having  a 
general  circulation  therein. 

Name.  §  11G2.  Change  of,  not  to  be  prejudicial. 
§  1197.     See   §  11G7,  subd.   8. 

§  1171.  Any  corporation  may  increase  its 
capital  stock  to  any  amount  not  exceeding 
three  times  the  amount  of  its  authorizecl 
capital,  by  a  vote  of  the  stockholders  in  con- 
formity with  the  by-laws  thereof;  or  such 
corporation  may  increase  its  capital  stock 
to  any  amount  by  a  vote  of  the  stockholders 
in  conformity  with  the  by-laws  thereof,  by 
an  actual  bona  fide  additional  paid-up  cash 
subscription  thereto,  equal  to  the  amount  of 
such  increase;  and  if  a  majority  of  the  stock- 
holders shall  vote  for  the  increase  of  stock, 
the  same  may  be  increased  by  the  board  oi 
directors,  trustees  or  other  business  man- 
ager of  such  corporation;  and  upon  such  in- 
crease of  stock  being  made  in  accordance 
witli  the  by-laws,  the  date  and  amount  of 
such  increase  shall  be  certified  to  the  secre- 
tary of  State  by  the  directors  or  trustees, 
and  from  the  time  such  certificate  is  filed, 
the  increase  of  stock  shall  become  a  part  of 
the  capital  thereof.  Such  certificate  shall  be 
filed  and  recorded  in  the  same  manner  as 
the  chailer:  Provided,  That  co-operative  as- 
sociations organized  under  the  provisions  of 
this  act  may,  in  the  manner  hereinbefore 
provided,  further  increase  their  capital  stock 
to  any  amount  not  exceeding  one  hundred 
thousand  dollars. 

Corporation  may  issue  preferred  stock.  Act  of 
1895,  at  p.  20. 

[Stockholders  who  have  voted  for  an  unauthor- 
ized doubling  of  stock  by  their  company,  or  who 
have  voluntarily  accepted  benefits  of  such  action, 
or  who  bought  into  the  corporation  suosequent  to 
the  issuance  of  such  stock,  are  estopped,  as  against 
the  corporation,  to  contest  the  legality  of  such 
action.     Vcnner  v.  R.  R.  Co.,  28  Fed.  Rep.  .581.] 


§  1172.  Corporations  shall  have  power  to 
borrow  money  on  the  credit  of  the  corpora- 
tion not  exceeding  its  authorized  capital 
stociv,  and  may  execute  bonds  or  promissoi-y 
notes  therefor,  and  may  pledge  the  property 
and  income  of  the  corporation:  Provided, 
however,  That  the  pi'ovisions  of  this  section 
shall  not  apply  to  the  debentures  or  bonds  of 
any  loan  or  trust  company,  duly  incorpo- 
rated under  the  provisions  of  this  chapter, 
the  payment  of  which  debentures  or  bonds 
shall  be  secured  by  a  transfer  of  real  es- 
tate or  by  other  securities  for  the  benefit 
and  protection  of  purchasers  of  said  deben- 
tures or  bonds;  such  collaterals  to  be  at 
least  equal  in  amount  to  tlie  par  value  of 
such  bonds  or  debentures,  and  all  real  estate 


mortgage  securities  to  be  first  liens  on  tlie 
property  on  which  loans  are  made. 


General     powers.       §    1167.      Forgery. 
Preferred  stock.     Act  of  1895,  at  p.  29. 


§    2:i75. 


[A  loan  to  a  corporation,  duly  organized  under 
the  laws  uf  the  .State,  to  be  used  as  conditional 
stock,  with  tlu'  agreement  by  the  directors  of  the 
association  that  while  it  is  used  it  shall  have  the 
same  advantage  as  other  stock,  but  may  be  with- 
drawn at  any  time  by  giving  thirty  uays'  notice 
to  the  agent  in  writing.  Held,  that  after  giving 
tlie  notice  required  in  said  agreement,  plaintilt 
was  entitled  to  a  return  from  the  corporation  of 
the  mouev  so  loaned.  Ilinton  v.  Soc,  21  Kan. 
GU3.] 


§  1173.  Whenever  the  full  amount  of  the 
capital  stock  of  a  corporation  liaving  a  capi- 
tal stock  shall  not  have  been  already  sub- 
scribeil  in  good  faith,  the  directors  or  trustees 
named  in  the  cliarter,  or  a  majority  of  them, 
sliall  within  three  months  after  the  filing  of 
the  charter,  cause  boolvs  to  be  opened  for 
receiving  subscription  to  the  capital  stock  of 
the  corporation  at  such  time  or  times,  and 
at  such  place  or  places,  as  they  may  de- 
termine, after  having  given  at  least  thirty 
day.s'  notice,  in  a  newspaper  published  or 
generally  circulated  in  one  or  more  counties 
Avhere  books  of  subscription  are  to  be  opened, 
of  the  time  and  iilace  of  opening  books, 
which  books  sliall  be  kept  open  till  the  whole 
amount  of  capital  stock  is  subscribed. 

Payment  of  subscriptions.     §§   1186-ll8a 

[See  Hunt  v.  Bridge  Co.,  11  Kan.  412;  R.  R.  Co. 
V.  Comrs.,  36  id.  121;  s.  c,  12  I'ac.  Rep.  593. 

A  legislative  act  authorizing  certain  counties 
and  cities  to  subscribe  to  stock  of  coal  and  gas 
companies,  held  to  be  unconstitutional.  Geiieseo 
V.  (Jas  Co.,  55  Kan.  3.58;  s.  c.  40  I'ac.   Rep.  C55. 

An  indefinite  agreement  to  subscrilx?  for  caiiital 
stock  in  a  corporation  to  be  organized  which  does 
not  satisfy  the  amount  of  capital  stock  to  be  em- 
ployed, nor  state  what  proportion  of  the  stock 
subscribed  anyone  is  to  take,  nor  when  or  by 
whom  the  company  is  to  be  organized,  cannot  be 
enforced.  Coal  Co.  v.  Settle,  54  Kan.  424;  s.  c, 
38  Pac.  Rep.  483.] 


§  1174.  A  majority  of  the  directors  or  trus- 
tees shall  constitute  a  quorum,  and  be  com- 
petent to  fill  vacancies  in  the  board  and  to 
transact  all  business  of  the  coiiioration.  An 
annual  election  shall  be  held  for  directors  or 
trustees,  at  such  time  and  place  as  the  by- 
laws of  the  corporation  may  require. 

Voting,  manner  of.  §§  1155,  1185.  Failure  to 
hold  election.  §  1178.  Number  of  directors  may 
be  increased.     §  1177.     Powers  and  duties.    §  1180. 

[See  note  to  next  section.  The  general  rule  is, 
that  directors  have  no  Implied  authority  to  act 
singly;  they  can  act  only  as  a  board.  It  Is  also 
the  general  rule  that  where  no  provision  is  made 
in  the  statute,  or  in  the  by-laws  of  a  corporation, 
for  the  notice  required  for  regular  meetings  of 
directors,  or  the  mode  of  calling  special  meetings, 
all  meetings  must  be  called  by  special  notice,  to 
be  given  to  each  director.  Bank  v.  Shumway,  49 
Kan.  226;  s.  c,  30  Pac.  Rep.  411.] 


KAXSAS. 


13 


Directors;  by-laws  —  Stat.,  §§  1175-1180. 


S  1175.  The  directors  or  trustees  shall 
choose  one  of  their  number  president,  and 
shall  appoint  a  secretary  and  treasurer  of 
the  corporation.  The  directors  or  trustees, 
before  entering  uix)n  their  duties,  shall  each 
talve  an  oath  or  affirmation,  faithfully  to 
discharge  the  duties  of  his  otfice. 

Election  of  subordinate  oflBcers.  §  1667,  subd.  5. 
Annual  report  of  officers.  §  1181.  Treasurer's 
oflSce  must  be  within  the  State.     §  11D6. 

[A  member  of  board  of  directors  appointed  by 
said  board  to  act  as  treasurer,  secretary  or  other 
ministerial  officer  of  the  corporation,  is  prima  facie 
entitled  to  a  reasonable  compensation  for  his  ser- 
vices as  such.  Bank  v.  Drake.  29  Kan.  311.  If 
said  officer  assumes  the  duties  upon  an  express 
contract  as  to  compensation,  such  contract  con- 
trols.    Id. 

The  doctrine  that  directors  of  a  bank  are  con- 
clusively presumed  to  know  its  financial  condition, 
as  shown  by  its  records  and  books,  cannot  be  in- 
voked to  uphold  a  wrongful  appropriation  of 
money  by  an  officer,  which  appropriation  is  made 
and  entered  on  the  books  without  actual  knowl- 
edge of  directors.     Id. 

An  agent  of  a  corporation  who.  acting  as  an 
individual,  purchases  corporate  property  from  him- 
self as  agent,  is  liable  to  the  corporation  for  the 
actual  value  of  property  so  purchased.     Id. 

It  is  no  defense  to  an  action  brotight  by  a  bank 
against  its  late  cashier  for  a  wrong  appropriation 
of  moneys,  that  at  time  of  such  appropriation  he 
was  owner  of  four-fifths  of  the  stock  in  the  bank, 
and  has  since  that  time  sold  all  of  said  stock  to 
other  parties,  who  are  now  the  officers  and  manag- 
ing authority  of  the  bank.     Id. 

Parties  employed  by  the  president  of  a  corpora- 
tion appearing  as  an  active  agent  in  the  execu- 
tion of  any  work,  have  a  right  to  assume  that 
such  officer  is  acting  for  the  corporation,  and  that 
his  acts  in  that  respect  are  its  acts  and  binding 
upon  it.  R.  K.  Co.  v.  Jones,  30  Kan.  601;  s.  c,  2 
Pac.   Rep.   6.^.7. 

A  corporation  may  call  its  officers  to  account  for 
their  willful  abuse  of  the  trust,  or  for  misappli- 
cation of  corporate  funds,  or  for  any  profits  real- 
ized under  a  fraudulent  contract.  Ryan  v.  R.  R. 
Co..  21  Kan.  305. 

Irregularities  in  election  of  officers,  where  all 
the  stockholders  and  officers  of  the  corporation 
recognize  such  election  as  valid,  will  not  relieve 
a  stockholder  from  paying  his  subscription  to  the 
capital  stock.    Ginrich  v.   Mill   Co.,  21  Kan.   61. 

Authority  of  corporate  officers  to  execute  a  note, 
how  proved.  R.  R.  Co.  v.  Tiernan.  37  Kan.  606; 
s.  c.  15  Pac.  Rep.  544.  Compensation  of  officers, 
see  id. 

"When  the  offices  of  vice-president  and  treasurer 
are  vested  in  one  person,  who  is  at  the  same  time 
the  managing  and  controlling  officer,  his  relations 
to  creditors  and  stockholders  are  of  a  fiduciary 
character  and  will  not  permit  him  to  manage  cor- 
porate affairs  so  as  to  result  to  his  own  pecuniary 
advantage.  Thomas  v.  Sweet,  37  Kan.  183;  s.  c, 
14  Pac.   Rep.  .54.5. 

Where  it  is  understood  by  the  directors  of  a 
corporation  that  its  officers  are  to  be  paid  for 
services  though  no  salary  is  fixed,  a  note  given  at 
the  end  of  the  year  for  a  reasonable  sum  then 
agreed  upon  is  valid.  Stewart  v.  Ry.  Co.,  41  Fed. 
Rep.  736. 

Authority  of  officers  of  a  corporation  to  execute 
notes  and  "mortgages.  Baker  v.  Harpster,  42  Kan. 
511:   s.   c.   22  Pac.   Rep.  415. 

Those  who  deny  the  authority  of  president  and 
secretary  to  execute  a  contract  on  behalf  of  the 
corporation,  regular  on  its  face,  take  upon  them- 
selves the  burden  of  establishing  their  claim. 
Sherman  T.  Co.  v.  Swigart,  43  Kan.  292;  s.  c,  23 
Pac.   Rep.   569.] 

§  117G.  The  directors  or  trustees  may 
adopt  by-laws  for  the  government  of  the  cor- 
poration; but  such  by-laws  may  be  altered, 


changed  or  amended  by  a  vote  of  the  stoclc- 
holders,  at  an  election  to  be  ordered  for  tliat 
purpose,  1>y  the  directors  or  trustees,  on  the 
written  application  of  a  majority  of  the 
stoclcholders  or  members. 

See  §  1167,  subd.  6.  By-laws  may  prescribe 
method  of  paying  subscriptions.  §  1186.  And 
time  and  place  of  elections.  §  1174.  And  of  de- 
claring dividends.  §  1180.  And  of  transfer  of 
stock.     §  11&4. 

[A  by-law  of  a  corporation  can  have  no  effect 
upon  the  contract  of  a  corporation  with  other 
parties,  and  is  a  mere  rule  for  the  government  of 
the  officers  of  the  company  in  managing  their 
own  business.     Samuels  v.  Holliday,  M.  C.  C.  214. 

When  it  is  provided  by  the  by-laws  of  the  cor- 
poration that  compensation  of  officers  shall  be 
fixed  and  allowed  by  board  of  directors,  and  the 
board  has  not  fixed  any  compens.ition,  a  secretary 
who  has  rendered  services  Is  entitled  to  recover 
therefor,  unless  there  was  an  understanding  that 
he  was  to  render  such  services  without  compen- 
sation.    R.  R.  Co.  V.  Richards,  8  Kan.  101.] 

§  1177.  All  corporations  heretofore  created 
and  now  in  existence  under  any  law  in  [of] 
this  State,  are  hereby  authorized  to  increase 
the  number  of  directors  or  trustees  of  any 
such  corporation. 

§  1178.  In  case  it  should  happen  that  an 
election  for  directors  or  trustees  should  not 
be  held  on  the  day  appointed  by  the  by-laws 
of  any  corporation  formed  under  the  provi- 
sions of  this  act,  such  corporation  shall  not, 
for  that  reason,  be  deemed  to  be  dissolved, 
but  it  shall  be  lawful  on  any  other  day  to 
hold  a  meeting  and  elect  its  directors  or  trus- 
tees in  such  manner  as  shall  be  prescribed 
by  the  by-laws  thereof. 

See  §  1174. 

§  1179.  The  secular  affairs  of  a  religious 
corporation  shall  be  under  the  control  of  a 
board  of  trustees,  to  be  elected  by  the  mem- 
bers of  such  corporation,  and  the  title  to 
all  property  of  any  such  corporation  shall 
vest  in  such  trustees. 

§  IISO.  The  directors  or  trustees  shall  have 
the  general  management  of  the  affairs  of 
the  corporation,  and  may  dispose  of  the  resi- 
due of  the  capital  stock  at  any  time  remain- 
ing unsubscribed,  in  such  manner  as  the 
by-laws  may  prescribe.  They  shall  cause  a 
record  to  be  kept  of  all  stock  subscribe<l  and 
transferred,  and  of  all  business  transactions, 
and  their  Ixwks  and  records  shall,  at  all 
reasonable  times,  be  open  to  the  inspection 
of  any  and  eveiT  stockholder.  They  shall 
also,  when  required  by  one-third  of  the  stock- 
holders thereof,  present  reports  in  writing  of 
the  situation  and  amoimt  of  business  of  the 
corporation,  and  declare  and  make  such 
dividends  of  the  profits  from  the  business 
of  the  corporation,  as  they  shall  deem  expe- 
dient, or  as  the  by-laws  may  prescribe. 

Directors,  election  of.  §  1174.  Oath  of.  §  1175. 
Increase  of.  §  1177.  Individual  liability  of. 
§  1189.  Shall  be  trustees  of  dissolved  corporation. 
§§  1202-1203. 


14 


Animal  statement;  extension  of  existence  —  Stat.,  §§  1181-1183. 


TDircctors  of  a  corporation  are  its  primary 
acents.  and,  in  reference  to  corporate  property, 
act  in  tlie  relation  of  trustee,  buch  relation  ro- 
Quires  of  them  the  utmost  good  faith  in  their 
transactions  for  the  corporation  and  its  stock- 
holders, and  does  not  permit  them  to  manage  its 
affairs  for  their  personal  advantage.  Kyan  v. 
K    K.   Co.,   21  Kan.   305. 

When  stockholders  may  maintain  an  action 
against  officers.     Id.  k„.i,. 

The  officers  and  directors  of  a  corporate  bod.\ 
are  trustees  of  the  stockholders,  and  in  securing 
to  theiu'selves  an  advantage  not  common  to  all 
stockholders,  they  commit  a  plain  breach  of  diity. 
Bank  v.  Drake,  l-'O  Kan.  321;  Koehler  v.  Iron  Co., 
*'  Hlack  (U    S.)    715. 

"  The  relation  between  directors  and  stockholders 
Is  that  of  trustee  and  cestui  ijue  trust,  and  a  con- 
tract made  by  a  director  to  secure  personal  ad- 
vantage to  himself  is  either  void  or  inures  to  the 
beneflt  of  the  corporation.  Sargent  v.  K-  M.  K. 
R.  Co.,  48  Kan.  672:  s.  c.  29  Pae.  Kep.  106.^. 

Directors  of  an  insolvent  corporation,  who  are 
creditors  of  the  same,  cannot  take  advantage  of 
their  position  to  secure  a  preference  tor  them- 
selves and  must  share  ratably  with  the  other 
general  creditors  in  the  distribution  of_the  com- 
panv's  assets.  Havs  v.  Bank,  51  Kan.  535;  s.  c, 
33  i'ac.   Rep.  318.  .       .  ^.        ,„ 

Before  a  stockholder  can  maintain  an  action  in 
his  own  name  to  obtain  a  remedy  for  wrongs 
committed  against  the  corporation,  it  must  ap- 
pear that  he  has  in  good  faith,  but  without  suc- 
cess attempted  to  secure  action  by  the  directors 
or  managing  officers  of  the  corporation,  or  that 
demand  for  their  action  would  be  unavailing. 
R.  R.  Co.  V.  Sumner  Co.,  51  Kan.  617;  s.  c,  dd 
Pac.    Rep.   312.  .   ,    ^ 

Where  a  liability  or  debt  is  incurred  before  the 
organization  of  a  corporation  is  completed,  the 
persons  assuming  to  act  as  directors  are  personally 
liable.  Walton  v.  Oliver,  49  Kan.  10< ;  s.  c,  30 
Pac.   Rep.   172.  ,     ,^ 

In  all  elections  for  directors  of  the  corporation 
created  bv  or  existing  under  the  laws  of  Kansas, 
at  least  three  must  be  citizens  and  residents  of 
the  State.  Horton  v.  Wilder,  48  Kan.  222;  s.  c, 
29  Pac.  Rep.  566.] 


§  1181.  It  sliall  be  the  duty  of  the  presi- 
dent and  secretary  of  each  corporation  for 
profit,  annually,  on  the  first  day  of  January, 
to  prepare,  under  their  own  oaths,  and  de- 
I)Osit  in  the  ofiice  of  the  secretary  of  State 
of  this  State,  a  detailed  statement  of  the 
condition  of  such  company  on  the  thirtieth 
day  of  December,  then  next  preceding,  ex- 
hibiting the  followius:,  namely:  First,  The 
amount  of  the  capital  stock  of  the  company. 
Second,  The  property  or  assets  held  by  the 
company.  Third,  The  liabilities  of  such  com- 
pany. Fourth,  The  receipts  of  the  company 
during  the  preceding  year.  Fifth,  The  ex- 
penditures during  the  preceding  year.  Every 
corporation  for  profit,  created  under  any  law 
of  this  State,  failing  to  make  and  deposit 
such  statement,  shall  be  subject  to  a  penalty 
of  two  hundred  dollars,  and  an  additional 
two  hundred  dollars  for  every  month  that 
such  company  shall  continue  thei-eafter  to 
transact  business. 

§  1182.  The  duration  of  any  corporation 
may  be  continued,  and  its  coiToorate  existence 
extended,  under  and  subject  to  the  genex-al 
laws  of  this  State,  for  successive  periods  of 
twenty  years,  or  for  such  length  of  time  as 
may  be  stated  in  its  certificate  therefor,  by 
the  filing  with  the  secretary  of  State,  at  any 
time,  a  certificate  of  its  desire  and  intention 


to  extend  its  time  of  existence  as  aforesaid, 
signed  and  duly  acknowledged  before  some 
proper  oflicer,  by  the  president  and  secretary 
of  such  corporation,  after  being  authorized 
by  its  board  of  dU-ectors  or  its  trustees,  and 
approved  by  two-thirds  of  its  stockholders, 
in  writing,  or  by  a  two-thirds  vote  of  its 
stockholdei-s  present  at  any  meeting  duly 
and  legally  called  and  held  for  that  purpose; 
and  thereupon,  and  from  the  date  of  the 
tiling  of  said  certificate,  the  time  of  the 
existence  of  such  corporation  shall  be  con- 
tinued and  extended  for  a  further  period  of 
twenty  years,  or  for  such  period  as  may 
be  set  forth  in  said  certificate,  with  all  the 
powers,  rights,  and  franchises,  and  subject 
to  all  the  duties  and  obligations,  of  corpoi'a- 
tions  of  its  class  by  the  general  laws  of  this 
State:  Provided,  That  nothing  herein  con- 
tained shall  be  held  or  construed  to  extend 
or  continue  to  any  corporation  organized  or 
existing  under  any  special  charter  or  any 
general  or  special  law  of  the  territory  of 
Kansas,  any  special  franchise,  privilege,  im- 
munity, or  exemption  not  possessed  by  cor- 
lK)rations  organized  under  the  general  law; 
but  by  accepting  or  availing  itself  of  the 
provisions  of  this  act,  any  such  corporation 
shall  be  deemed  and  held  to  waive  and  sur- 
render any  and  all  such  special  franchises, 
privileges,  immunities,  and  exemptions. 

Limit  of  existence.     §  1667,  subd.   I,   and   cross- 
references. 

[See  State  v.  Bridge  Co.,  22  Kan.  43S.] 


§  1183.  No  corporation  created  under  the 
provisions  of  this  act,  shall  employ  its  stock, 
means,  assets,  or  other  property,  directly  or 
indirectly,  for  any  other  puiiDose  whatever, 
than  to  accomplish  the  legitimate  objects  of 
its  creation. 

General  powers.  §  1167.  How  corporate  power 
proved.  §  5279.  Ultra  vires,  penalty.  §§  47G6  et 
seq. 

[Legislature  of  State  where  a  corporation  is 
created  raav  confer  upon  it  additional  auxiliary 
powers.  R.'r.  Co.  v.  Fletcher,  35  Kan.  236;  s.  c, 
10  Pac.   Rep.  596. 

The  vice-president  and  secretary  of  a  manu- 
facturing corporation,  although  the  active  mana- 
gers of  its  business,  have  no  authority  to  bind  it 
by  a  promise  to  pay  the  debts  of  another  and 
distinct  corporation.  "  Rahm  v.  Mfg.  Co..  10  Kan. 
277;  see.  also,  Ehrgott  v.  Mfg.  Co.,  16  Kan.  4.S6. 

A  bank  organized  under  the  laws  of  Kansas 
cannot  purchase  its  own  stock,  except  in  some 
cases  to  secure  a  previously  existing  debt.  Bank 
V.   Wulfekuhler,  19  Kan.  60. 

The  directors  of  a  bank  have  no  power  to  pur- 
chase the  stock  of  such  bank.  Abeles  v.  Cochran, 
22  Kan.   405. 

A.  entered  into  a  verbal  contract  with  D..  a  di- 
rector of  a  bank,  to  purchase  fourteen  shares 
of  stock  in  the  bank,  at  i?140  per  share,  upon  the 
consideration  that  he  should  be  made  cashier. 
P.  refusing  to  carry  out  his  part  of  the  contract, 
N.  brought  this  action  to  recover  damages  for  the 
breach  thereof.  Held,  that  the  contract  was  void, 
being  against  public  policy.  Noel  v.  Drake.  28 
Kan.   265. 


KAXSAS. 


15 


Stock;  votes  for  directors;  installments  —  Stat.,  §§  1184^1187. 


The  owners  of  a  graded  railroad  bed  can  sell 
the  same  to  a  railroad  company,  whose  oflicers, 
directors  and  stockholders  are  composed  of  the 
owners  of  the  roadbed,  and  receive  in  payment 
therefor  shares  of  the  capital  stock  of  the  railroad 
company  at  a  time  when  those  who  sell  the  road- 
bed and"  own  and  control  the  railroad  company  are 
the  absolute  owners  of  all  the  stock  issued  by 
the  railroad  company,  and  where  the  transaction 
occurs  months  before  any  other  or  additional 
stock  is  issued  by  the  railroad  company.  R.  K. 
Co.  V.  Tiernan.  37  Kan.  600:  s.  c,  15  Pac.  Rep.  544. 

A  corporation  may  call  its  officers  to  account 
for  their  willful  abuse  of  the  trust,  or  for  any 
misapplication  of  the  funds  of  the  corporation,  or 
for  anv  profits  realized  under  a  fraudulent  con- 
tract.  "Ryan  v.   R.   R.  Co.,  21  Kan.  365.] 


§  11S4.  The  Stock  of  any  corporation  cre- 
ated under  this  act  shall  be  deemed  pei^sonal 
estate,  and  shall  be  transferable  only  on  the 
books  of  the  corporation,  in  such  manner  as 
the  by-laws  may  prescribe;  and  no  person 
shall,  at  any  election,  be  entitled  to  vote 
on  any  stock,  unless  the  same  shall  have 
been  standing  in  tiie  name  of  the  pei"son  so 
claiming  to  vote,  upon  the  books  of  the  cor- 
poration, at  least  thirty  days  prior  to  such 
election;  but  no  shares  shall  be  transfen-ed 
until  all  previotis  assessments  thereon  shall 
be  fully  paid. 

Power  to  regulate  transfers.  §  1667,  subd.  6. 
Stock  is  personal  estate  for  purposes  of  taxation. 
§  6847. 

[The  assignment  of  a  share  of  stock  from  one 
owner  to  another  conveys  and  transfers  not  only 
the  stock,  but  as  incident  thereto,  the  right  to 
share  in  the  profits  of  the  corporation,  in  the 
proportion  which  the  stock  so  transferred  bears 
to  the  whole  capital  stock  used  in  the  enterprise 
for  which  the  corporation  was  organized.  Rvan 
V.  R.   R.  Co.,  21  Kan.  :165. 

To  make  a  valid  transfer  of  stocic,  the  transfer 
must  be  made  on  the  books  of  the  corporation. 
Topeka  Co.  v.  Hale,  39  Kan.  23;  s.  c,  17  Pac. 
Rep.   6<il. 

A  valid  transfer  of  corporate  stock  can  only  be 
made  on  the  books  of  the  company,  and  the  mere 
assignment  and  delivery  of  stock  certincates  will 
not  divest  the  transferrer  of  individual  liability  on 
such  sale.  Plumb  v.  Bank,  48  Kan.  484;  s.  c,  29 
Pao.  Rep.  690. 

What  is  suftieient  record  of  transfers  within 
the  moaning  of  the  statute.     Id. 

Unless  prohibited  by  law.  a  corporation  may  be- 
come the  holder  of  a  portion  of  its  shares  of  stock. 
Johnson  Co.   v.   Thayer.  04   U.    S.   631. 

The  general  rule  is,  that  shares  of  stoek  are 
personal  property,  and  may  be  transferred  like 
any  other  property,  unless  the  transfer  is  re- 
strained by  the  charter  or  articles  of  assoeiation, 
and  that  a  bona  fide  transfer  terminates  the  lia- 
bility of  a  transferrer  either  to  the  company  or 
creditors.  Van  Demark  v.  Barons,  52  Kan.  779; 
s.  c,  35  Pac.  Rep.  798.] 

§  118.5.  In  all  elections  for  directors  or 
trustees  of  any  incorporated  company  each 
shareholder  shall  have  the  right  to  cast  as 
many  votes  in  the  aggregate  as  shall  equal 
the  number  of  sliaros  so  held  by  him  or  her 
in  said  company,  multiplied  by  the  number 
of  directors  or  tnisteos  to  be  elected  at  such 
election,  and  each  shareholder  may  cast  the 
whole  number  of  votes,  either  in  person  or 
by  proxy,  for  one  candidate,  and  sucli  direct- 
ors or  managers  shall  not  be  elected  in  any 


other  manner:  Provided,  however,  That  in 
the  election  of  directors  or  tinjstees  of  co- 
operative associations  that  have  or  may 
hereafter  by  their  by-laws  so  determine,  no 
stockliolder  shall  be  allowed  to  cast  more 
than  one  vote,  multiplied  by  the  number  of 
directors  or  trustees  of  any  such  association. 

Every  stockholder  shall  vote.     §  1155. 

§  118G.  The  board  of  directors  or  tru.stees 
of  any  corporation  may  require  the  subscrib- 
ers to  the  cai)ital  stock  of  the  cori>oration  to 
pay  tlio  amount  by  them  respectively  sub- 
scribed, in  such  manner,  and  in  such  in.stall- 
ments,  as  may  be  required  by  the  by-laws. 

See  §§  1173,  1192. 

[A  stockholder  will  not  be  relieved  from  paying 
amount  of  his  siibscription  to  stock  of  :i  "cor- 
poration created  to  build  and  maintain  a  flouring 
mill,  by  the  fact  that  it  is  expending  its  money 
in  building  a  mill  dam.  Ginrich  v.  Mill  Co.,  21 
Kan.  61.  Xor  by  reason  of  irregularities  in 
adopting  by-laws,  or  in  the  eler-tion  of  oflicers, 
where  all  stockholders  and  oflicers  recognize  .ind 
treat  such  by-laws  and  such  election  as  legal  and 
valid.     Id. 

AVhen  ten  per  cent,  of  the  capital  stock  of  a 
bridge  company  has  been  subscribed,  and  the 
company  has  organized  under  the  provisions  of 
said  act,  by  electing  directors  and  other  proper 
oflicers,  the  company  is  then  legally  organized 
for  the  transaction  of  all  business  of  tlie  cor- 
poration and  may  compel  each  stockholder  to  pay 
the  full  amount  of  his  stock  for  which  he  has 
subscribed,  although  only  ten  per  cent,  of  the 
capital  has  yet  been  taken  by  individual  stock- 
holders.    Hunt  V.    Bridge  Co..  11   Kan.   412. 

A  parol  agreement  made  at  the  time  of  sub- 
scribing for  stock,  and  inconsistent  with  the  writ- 
ten terms  of  the  subscription,  is  immaterial,  in- 
competent and  void.  Topeka  v.  Hale,  39  Kan.  23; 
s.  c,   17  Pac.   Rep.  601. 

An  agreement  to  pay  assessments  on  the  stock 
contained  in  book  of  subscription  and  signed  by 
the  parties  sought  to  be  charged,  will  bind  him, 
notwithstanding  some  verbal  understanding  or 
agreement  that  some  other  member  of  the  cor- 
poration will  relieve  such  party  from  snch  stock 
and  liability.      Id. 

A  subscription  for  shares  in  a  corporation  thercr 
after  to  be  formed  under  a  general  law,  may  be 
accepted  bv  the  board  of  directors  after  oriranlza- 
tion.  McCormick  v.  Gas  Co..  48  Kan.  614:  s.  c,  29 
Pac.  Rep.  1147.  Original  subscription  held  irrev- 
ocable.   Id. 

Where  property  is  conveyed  to  the  corporation 
in  payment  for  "shares  of  its  capital  stock,  and 
the  transaction  is  made  a  matter  of  record  and 
subsequently  approved  and  ratified  by  all  the 
oflScers  and  stockholders  of  the  corporation,  such 
shares  will,  in  the  absence  of  fraud,  be  treated 
as  fully  paid.  Wallmrn  v.  Chenault,  43  Kan.  352; 
s.  c,  23  Pac.   Rep.  657.] 


§  1187.  If  any  stockholder  shall  neglect  to 
pay  any  installment,  as  required  by  the 
board  of  directors  or  trustees,  the  directors 
or  trustees  may  declare  his  stock  and  all 
previotis  payments  forfeited  to  the  use  of 
the  company;  but  no  stock  shall  be  forfeited 
until  the  directors  or  trustees  have  caused 
a  notice,  in  writing,  to  be  served  on  him  per- 
sonally, or  by  depositing  the  same  in  the 
post-office,  properly  directed  to  him  at  the 
post  office  nearest  his  usual  place  of  resi- 
dence, stating  that  he  is  required  to  make 


16 


KAXSAS. 


Dividends;  general  office;  execution  —  Stat.,  §§  11S8-1192. 


such  payment  at  the  time  and  place  speci- 
fied iu  said  notice,  and  that  if  he  fails  to 
make  the  same,  his  stock,  and  all  previous 
payments  thereon,  will  be  forfeited  for  the 
use  of  the  company;  which  notice  may  l)e 
served  as  aforesaid,  at  least  thirty  days  pre- 
vious to  the  day  on  which  such  payment  is 
requii'ed  to  be  made. 

[Where  it  Is  claimed  by  a  stockholder  that  the 
stock  held  by  him  had  been  canceled,  but  no 
resolution  or  minute  is  adopted  by  the  board  of 
directors,  and  no  record  thereof  is  made,  and  it 
is  also  shown  that  the  stockholder  contiliued  to 
act  as  an  officer  of  said  company  after  such  claim 
of  cancellation,  the  question  of  cancellation  under 
such  circumstances  is  a  fact  to  bo  found  by  the 
court.  Topeka  Co.  v.  Hale,  39  Kan.  23;  s.  c,  17 
Pac.  Rep.  601. 

§^11SS.  All  bodies  coiporate  may  sue  for, 
recover  and  I'eceive  from  their  I'espective 
members,  all  arrears  or  other  debts,  dues 
and  other  demands,  which  now  are,  or  here- 
after may  l)e,  owing  to  them,  in  lilce  mode, 
manner,  and  form,  as  they  might  sue  for, 
recover  and  receive  the  same  from  any 
person  who  might  not  be  one  of  their,  body. 

[Court  may  permit  an  amended  petition  to  be 
filed,  showing  the  expiration  of  the  life  of  a  cor- 
poration, the  date  of  its  dissolution,  and  the  name 
of  its  sole  manager  at  the  time  of  such  dissolu- 
tion, in  an  action  commenced  by  the  sole  mana- 
ger of  the  corporation,  in  the  corporate  name 
after  its  dissolution  to  recover  certain  debts  and 
property  of  the  dissolved  corporation.  Upon  the 
filing  of  such  amended  petition,  the  action  must 
be  continued  in  the  name  of  the  manager  of  the 
late  corporation,  corresponding  with  the  allega- 
tion of  the  amended  petition.  Paola  Co.  v.  Krutz, 
22  Kan.   727.] 

§  1189.  If  the  directors  of  any  corporation 
shall  knowingly  declare  and  pay  any  divi- 
dend when  the  corporation  is  insolvent,  or 
any  dividend,  the  payment  of  which  wouM 
render  it  insolvent,  they  shall  be  jointly  and 
severally  lial>le  for  all  the  delits  of  the 
corporation  then  existing,  and  for  all  that 
shall  be  tliereafter  contracted,  as  long  as 
they  shall  respectively  continue  in  office. 
The  amount  for  which  they  shall  all  be  so 
liable  sliall  not  exceed  the  amount  of  such 
dividend;  and  if  any  of  the  directors  shall 
be  absent,  at  the  time  of  making  the  divi- 
dend, or  shall  object  thereto  at  the  time  sucli 
dividend  is  declared,  and  shall  file  their 
objection  in  writing,  witli  tlie  secretary  or 
other  officer  of  the  corjioration,  having 
chai'ge  of  the  books,  they  shall  be  exempted 
from  the  said  liability. 

See  S   1180. 

[Stockholders  of  a  corporation  are  not  entitled 
to  any  division  of  the  profits  and  moneys  of  the 
corporation  until  all  its  debts  are  paid.  "  Ryan  v. 
Ry.  Co.,  21  Kan.  365.] 


§  1190.  Every  corporation  created  by  or 
existing  under  the  laws  of  this  State,  shall 
have  and  keep  a  general  office  for  the  trans- 
action of  business,  and  shall  keep  such  office 


within  this  State,  and  shall  have  at  least 
three  of  its  directors  citizens  and  residents 
of  this  State;  and  in  case  such  corporation  is 
a  railroad  or  a  railway  company,  it  shall 
have  such  general  office  located  on  or  near 
the  main  line  of  its  road  or  route  mentioned 
in  its  charter.  At  such  general  office  shall 
be  Icept  the  records  and  books  of  Ihe  corpo- 
ration, and  also  of  tlie  office  of  the  super- 
intendent, general  manager  or  director, 
secretary,  auditor,  treasurer  and  paymaster, 
general  freight  agent  and  general  ticket 
agent,  under  wliatever  name  the  dutit.'S 
usually  pertaining  to  such  offices  may  be 
transacted,  together  with  all  books  of 
account  appertaining  to  the  business  of  such 
offices. 

Treasurer's  office  must  be  within  State.  §  1196. 
Certificate  must  state  principal  place  of  business. 
§  1161. 


§  1191.  Any  corporation  failing  or  I'efusing 
to  obey  any  of  tlie  provisions  of  the  first  sec- 
tion of  this  act  for  the  period  of  six  months, 
shall  be  deemed  to  have  forfeited  its  charter, 
and  such  forfeiture  may  be  decreed  by  any 
district  court  of  any  county  in  which  such 
corporation  may  do  lousiness,  or  into  which 
any  line  of  sucli  railroad  or  railway  may 
extend,  in  an  action  to  be  instituted  for  that 
purpose,  in  the  name  of  the  State  of  Kansas, 
by  the  county  attorney  of  the  county  in 
whicli  such  action  is  prosecuted. 

ARTICLE    IV.     MISCELLANEOUS    PROVISIONS. 

Sec.  1192.  When     execution     may     issue     against 
stockholder,      and      when      proceeded 
against  by  action. 
119.3.   Clerk    having   charge    of   books    to    fur- 
nish  names,   etc. 

1194.  Charter  may  be  extended,  -when. 

1195.  Petition  and  notice. 

1196.  Treasurer  to   keep   office   and   funds   in 

this   State. 

1197.  Misnomer  shall   not   defeat   gift,   grant, 

etc.;  change  of  name  not  prejudicial. 

1198.  How  corporations  may  convey   lands. 

1199.  Records    of    corporation,    or    authenti- 

cated copies,  shall  be  competent  evi- 
dence. 

§  1192.  If  any  execution  shall  have  been 
issued  against  the  property  or  effects  of  a 
corporation,  except  a  railway  or  a  religious 
or  charitable  corporation,  and  there  cannot 
be  found  any  property  whereon  to  levy  such 
execiition.  then  execution  may  be  issued 
against  any  of  the  stockholders,  to  an  ex- 
tent equal  in  amount  to  the  amount  of  stock 
by  him  or  her  owned,  together  witli  any 
amount  unpaid  thereon;  but  no  execution 
shall  issue  against  anj'  stockholder,  except 
upon  an  order  of  the  court  in  which  the  ac- 
tion, suit  or  other  proceeding  shall  have  been 
brought  or  instituted,  made  upon  motion  in 
open  court,  after  reasonable  notice  in 
writing  to  the  person  or  persons  sought  to 
be  charged;  and,  upon  such  motion,  such 
court  may  order  execution  to  issue  accord- 


KANSAS. 


17 


Execution;  public  improvement;  extension  of  time  —  Stat.,  §§  1193-1195. 


iiiglj-;  or  the  plaintiff  iu  tlie  execution  may 
proceed  by  action  to  cliarj^e  the  stoclvholilers 
with  the  amount  of  his  judgment. 

See  Const.,  art.  XII,  §  2,  and  cross-references. 

[Stockholders'  claims  are  sul)ordinate  to  those  of 
creditors.     Ryan  v.   Ry.  Co.,  21  Kan.  365. 

An  execution  may  issue  against  a  stockholder 
after  judgment  and  return  of  nulla  bona  against 
the  corporation  to  an  extent  ecjual  in  amount  to 
the  amount  of  stock  owned  by  such  stockliolder. 
Bank  v.  Soc,  28  Kan.   423. 

Where  the  cashier  of  a  bank  gives  a  credit  to 
a  person  having  an  overdrawn  account,  which  has 
been  overdrawn  for  several  months,  for  an  in- 
suflicient  and  illegal  consideration,  such  officer  is 
bound  to  know  the  same  within  less  than  several 
days  thereafter,  and  also  to  know  when  his  bank 
is  in  an  embarrassed  condition.  Bank  v.  Wulfe- 
knhlcr,   1!)  Kan.   60. 

The  acts  of  the  cashier  in  said  transaction  can- 
not estop  the  bank  as  against  W.,  who  is  a  di- 
rector and  the  vice-president  of  the  bank.     Id. 

Sutliciency  of  petition  to  establish  the  defend- 
ant's liabilitv  as  a  stockholder  in  a  corporation. 
Head  v.  Daniels,  38  Kau.  1;  s.  c,  1.5  Pac.  Rep.  911. 

The  notice  required  under  above  section  is  In 
the  nature  of  an  original  process,  and  must  be 
served  substantially  like  a  summons  in  a  per- 
sonal action.  The  service  of  such  notice  beyond 
the  jurisdiction  of  the  court  will  not  confer  juris- 
diction or  authorize  the  court  to  award  an  execu- 
tion against  the  property  of  stockholders  that 
mav  be  found  within  the  State,  (irund  v.  Tucker, 
5  Kan.  70;  Hentig  v.  James,  22  Kan.  326:  Howell 
v.   Manglesdorf,  33  id.   194;  s.  c,  5  Pac.   Rep.   759. 

As  to  proceedings  in  aid  of  executions  under 
above  section,  see  Hentig  v.  .Tames,  supra. 

A  judgment  creditor  of  an  insolvent  corporation 
who  first  moves,  in  conformity  to  the  provisions 
of  above  section,  to  charge  a  stockholder  on  his 
liability,  acquires  a  priority  of  right  to  recovery 
against  such  stockholder,  with  which  a  creditor 
subsequently  moving  cannot  rightfully  interfere. 
Wells  V.  Robb,  43  Kan.  201;  s.  c,  23  Pac.  Rep. 
158. 

What  is  sufficient  notice,  under  above  section, 
to  charge  stockholders.     Id. 

In  a  proceeding  by  a  creditor  of  a  corporation 
against  a  stockholder  thereof,  under  above  sec- 
tion, such  stockholder  cannot  i)urchase  claims 
against  the  corporation  at  a  discount,  and  then 
set  them  off  against  his  lialiility  at  their  face 
value.  He  can  only  set  off  such  claims,  in  dis- 
charge of  his  liability,  to  the  amoimt  actually 
paid  bv  him  therefor."  Abbey  v.  Long,  44  Kan. 
688;  s.  c.  -24  Pac.  Rep.  1111. 

If  the  stockholder  contests  his  liability,  and  the 
contest  is  decided  against  him,  it  is  not  error  to 
tax  the  cost  of  such  proceeding  against  him.     Id. 

No  appeal  from  order  of  justice  against  stock- 
holder under  above  section.  Healcv  v.  I)eei)water 
Co.,   4S  Kan.   617:  s.   c.  29  Pac.   Rep.    1088. 

Rights  of  stockholders  and  creditors  construed. 
I'ickens  v.  Taylor,  47  Kan.  294;  s.  c,  27  Pac.  Rep. 
986. 

Judgment  creditors  of  a  corporation  seeking  en- 
forcement of  their  rights  against  stockholders 
thereof,  under  above  section,  must  strictly  com- 
plv  with  its  provisions.  Hoyt  v.  Bunker,  50  Kan. 
574:  s.  c.  32   Pac.   Rep.   126. 

Such  creditors  cannot  resort  to  the  funds  in 
the  hands  of  the  stockholders  of  said  corporation 
to  satisfy  their  judgments  against  it  until  they 
have  exhausted  tlie  corporate  property.  Id.  The 
corporation  has  no  power  to  entertain  motions 
for  orders  allowing  executions  against  stockhold- 
ers, until  the  record  of  the  case  in  which  the 
motion  is  made  shows  that  the  corporate  property 
has  been  exhausted.  Id.  Priorities  among  cred- 
itors.    Id. 

In  order  to  charge  persons  as  stockholders  it 
must  be  shown  that  they  subscribed  to  the  stock 
of  the  particular  corporation  on  account  of  which 
the  liability  is  claimed,  or  that  they  have,  in  some 
manner,  recognized  their  liability  as  such  stock- 
holders. Bank  v.  Votaw,  51  Kan.  362;  s.  c,  32 
Pac.    Rep.    1111. 


The  mere  signing  of  subscription  paper  for 
stock  in  a  contemplated  company  held  not  to 
render  defendants  liable  to  creditors  of  the  cor- 
poration as  stockholders.     Id. 

The  liability  of  a  stockholder  against  whom  an 
execution  may  be  issued  under  provisions  of  above 
section  is  measured  by  the  number  of  shares  held 
by  him  at  time  execution  against  the  property 
of  the  corporation  is  found  to  be  ineffectual.  Van 
I>emark  v.  Bai-ons,  52  Kan.  779;  s.  c,  35  Pac. 
Rep.   798.     • 

A  motion  made  under  above  section,  for  execu- 
tion against  a  stockholder,  can  only  be  made  in 
a  court  where  the  judgment  against  the  corpora- 
tion was  rendered,  and  from  which  execution  on 
such  demand  might  issue.  McClelland  v.  Cragun, 
54  Kan.  .599;  s.  c.  38  Pac.  Rep.  776.  Notice  of  the 
motion  for  execution  in  such  case  may  be  served 
on  the  stockholder  in  any  county  in  this  State. 
Id.  What  is  sufficient  notice  to  confer  jurisdic- 
tion.   Id. 

An  agreement  to  purchase  stock  in  the  future 
which  has  not  been  acted  upon  for  three  years 
does  not  create  an  individual  liability  on  the  part 
of  the  signers  as  to  creditors  of  the  corporation. 
U.  S.   W.,  etc.,   Co.  V.   Davis,  42  Pac.   Rep.  590. 

Execution  against  a  stockholder  under  above 
section  cannot  be  granted  until  the  case  shows 
that  the  corporate  property  has  been  exhausted. 
Carey  Lumb.  Co.  v.   Neal,  42  I'ac.  Rep.  925. 

A  summary  process  to  enforce  the  liability  of  a 
stockholder  "in  an  insolvent  corporation  cannot  be 
legal  against  the  estate  of  a  deceased  stockholder. 
Achenbach  v.  Coal  Co.,  42  Pac.  Rep.  734;  Same 
v.  W.  N.   I^nion.  id. 

Two  or  more  creditors  of  an  insolvent  corpora- 
tion mav  proceed  together  against  the  stockholder 
to  enforce  his  statutory  liability.  Buist  v.  Bank, 
46  Pac.   Rep.   718. 

In  an  action  against  a  delinquent  stockholder 
of  an  insolvent  corporation,  he  may  show  that  he 
was  fraudulently  induced  to  subscribe  to  the 
capital  stock.     Beal  v.  Dillon,  47  Pac.  Rep,  317. 

An  assignee  of  an  insolvent  corporation  may 
sue  a  delinquent  stockholder  to  collect  an  unpaid 
subscription.     Id. 

In  proceedings  to  enforce  the  liability  of  stock- 
holders, a  creditor  cannot  include  several  judg- 
ments in  one  notice.  Bank  v.  Maguuson,  47  Pac. 
Rep.  518.] 

§  119.3.  The  clerli  or  otlier  officer  having 
cliarge  of  tlie  books  of  any  corporation,  on 
demand  of  the  plaintiff  in  any  execution 
against  the  corporation,  his  agent  or  attor- 
ney, shall  furnish  such  plaintiff,  his  agent 
or  attorney,  v^ith  the  names  and  places  of 
residence  of  the  stockholders  (so  far  as 
known),  and  the  amount  of  stock  held  by 
each,  as  shown  by  the  books  of  the  corpora- 
tion. 

§  1194.  Whenever  any  company  heretofore 
incorporated  for  the  purpose  of  erecting  any 
public  improvement  in  this  State,  whose 
charter  is  limited  as  to  the  time  for  com- 
pletion of  said  improvement,  and  when  any 
such  company  has  iteen  legally  organized 
and  has.  actually  commenced  and  has  in 
progress  towards  comi)letion  such  public  im- 
l»roTi-ement,  it  shall  be  lawful  for  any  such 
company  to  have  further  time  allowed  for 
the  finai  completion  of  said  work,  as  is  here- 
inafter provided. 

§  1195.  Upon  petition  being  filed  by  the 
directors  of  the  corporation  in  the 
probate  court  of  any  county  in  which 
the  principal  office  of  such  corporation 
is  located,  and  upon  giving  thirty  days' 
notice  by  publication  in  a  newspaper  of  gen- 
eral circulation  in  said  county,  of  the  object 


18 


ka:n'sas. 


Office  of  treasurer,  etc.;  dissolution  —  Stat.,  §§  1196-1202. 


and  prayer  of  .<jueh  petition,  said  court  shall, 
at  any  regular  term  after  publication  of  said 
notice,  on  good  cause  shown,  decree  the  ex- 
tension of  the  time  for  the  completion  of 
said  improvement,  to  sucli  period  as  shall 
appear  to  such  court  just  and  reasonable. 

§  119G.  All  corporations  or  joint-stock  com- 
panies of  every  description,  whether  organ- 
ized and  acting  under  a  special  charter  or 
the  general  law  of  the  State,  shall  keep  the 
office  of  their  treasurer,  or  other  otficer  or 
person  keeping  the  funds,  earnings  or  in- 
come of  the  corporation,  within  this  State; 
and  all  earnings,  income,  profits  and  moneys 
collected  by  any  corporation  or  joint-stock 
company  operating  under. tlie  law  of  tliis 
State,  until  the  same  is  disbursed  or  divided 
by  the  directors  or  other  officers  authorized 
to  make  division. 

General  office  must  be  within  State.  §§  1190 
1191. 


§  1197.  Xo  misnomer  of  any  corporation 
shall  defeat  or  vitiate  any  gift,  grant,  con- 
veyance, devise  or  bequest  to  the  same;  nor 
shall  a  change  in  the  name  of  a  corporation 
prejudice  any  person  not  having  actual  no- 
tice thereof. 

Corporate  name.  §  1162.  Change  of.  §§  11G9, 
1170. 


§  1198.  Any  corporation  may  convey  lands 
by  deeds,  sealed  bj-  the  common  seal  of  the 
corporation,  and  signed  by  the  president, 
vice-president,  or  presiding  member  or  trus- 
tee of  said  corporation;  and  such  deed,  when 
acknowledged  by  such  officer  to  be  the  act 
of  the  corporation,  or  proved  in  the  same 
manner  provided  for  other  conveyances  of 
lands,  may  be  recorded  in  like  manner  and 
with  the  same  effect  as  other  deeds.  And 
that  all  deeds  pun)orting  to  convey  real 
estate,  provided  by  this  section,  and  hereto- 
fore signed  and  acknowledged  by  the  vice- 
president  of  such  corporation,  and  sealed  as 
herein  stated,  shall  have  the  same  force  and 
effects  as  if  the  same  had  been  signed  by  the 
president  thereof. 

Power  to  convey.     §§   1113,   11G7,  subd.   4. 

§  1199.  The  records  of  any  company,  in- 
coniorated  under  the  provisions  of  any 
statute  in  (of)  this  State,  or  copies  thereof 
duly  authenticated  by  the  signature  of  the 
president  and  secretary  of  such  company, 
under  the  corporate  seal  thereof,  shall  be 
competent  evidence  in  any  action  or  pro- 
ceeding to  which  sucli  corporation  may  be 
a  party. 

[Parol  evidence  is  admissible  to  show  that  a 
resohition  of  the  board  of  directors  of  a  railroad 
company,  entered  upon  the  records  of  its  pro- 
ceedings, did  not  correctly  recite  the  amount  of 
money  found  due  in  order  to  be  paid  to  one  of 


its   officers.    R.    R.    Co.    v.    Tiernan,   .'57   Kan.    GuG; 
s.   c,   15  Pac.   Rep.   544. 

Corporate  records  and  minutes  are  not  compe- 
tent evideuce  as  between  strangers.  Dolan  v. 
Wilkerson,  48  I'ac.   Rep.  23.] 


ARTICLE     V.       DISSOLUTION     OF     COIlPuRA- 
TIOXS. 

Sec.  1200.  How   dissolved. 

1201.  Limit   for  commencing  operations. 

1202.  Directors  shall  be  trustees  in  the  case 

of  dis.solution,   when,  and  their  pow- 
ers  and   duties. 

1203.  Trustees   shall   be  responsible   to   cred- 

itors and   stockholders. 

1204.  Suit  may  be  brought  against  stockhold- 

ers,  when. 

1205.  May   compel   contribution,    when. 

1206.  Liable  to  what  amount. 

§  1200.  A  corporation  is  dissolved— first,  by 
the  expiration  of  the  time  limited  in  its 
charter,  second,  by  a  judgment  of  dissolu- 
tion rendered  1)y  a  court  of  competent  juris- 
diction; but  any  such  corporation  shall  be 
deemed  to  be  dissolved  for  the  purpose  of 
enabling  any  creditors  of  such  corporation 
to  prosecute  suits  against  the  stockliolders 
thereof  to  enforce  their  individual  liability, 
if  it  be  sliown  that  such  corporation  has  sus- 
pended business  for  more  than  one  year,  or 
that  any  corporation  now  so  suspended  from 
l>usiness  shall  for  three  months  after  The 
passage  of  this  act  fail  to  resume  its  usual 
and  ordinary  business. 

Time  limit.     §  1167. 

[The  statements  in  a  petition  that  an  incorpo- 
rated bank  has  long  since  ceased  to  transact 
Vmsiness,  is  insolvent,  and  has  no  pronertv  or 
assets  of  any  desc.-iption  out  of  which  money 
alleged  to  be  due  can  be  collected  by  execution 
or  otherwise,  are  not  ecjuiA-alent  to  an  allegation 
that  the  corporation  is  dissolved.  Bank  v.  Cong. 
Soc.  2S  Kan.  423. 

An  action  for  the  dissolution  of  a  corporation 
was  settled  by  the  parties  before  judgment  by  a 
written  stipulation  in  the  case:  a  petition  by  a 
third  part.v  to  be  made  a  party  defendant,  to  con- 
test plaintiff's  case  upon  its  merits,  was  prop- 
erly overruled.     Roller  v.   Snodgrass.   14  Kan.  .j83. 

Stockholders  who  organize  themselves  as  a  cor- 
poration, transact  business,  and  hold  themsi'lves 
to  the  world  as  such  corporation,  cannot  ileny 
their  liability  as  stockholders  therein  when  pro- 
ceeded against  b.v  creditors,  on  the  ground  that 
the  preliniinary  steps  of  the  organization  were 
irregular.  Aultman  v.  AVaddle,  40  Kan.  105:  s.  c, 
19  Pac.   P.ep.   7.30.     See  case  from  2S  Kan.   42(). 

Certain  facts  held  not  to  have  worked  a  dissolu- 
tion.    Eureka,  etc.,  Co.  v.  City,  4,8  Pac.  R^'p.  93.5.] 


§  1201.  Every  corporation  created  under 
this  act,  or  any  general  law  of  this  S'nte, 
shall  commence  active  operations  within 
five  years  after  filing  its  charter  with  the 
secretary  of  State,  and  in  default  thereof 
said  corporation  shall  become  and  be  dis- 
solved. 

See   §   llGo. 

§  1202.  Upon  the  dissolution  of  any  corpo- 
ration already  created  by  or  tuider  the  laws 
of  this  State,  unless  a  receiver  is  appointed 
bj'  some  court  or  competent  authority,  the 


KAXSAS. 


19 


Dissolution  —  Stat.,  §§  120^-1205. 


president  and  directors,  or  nianapors  of  the 
affairs  of  tlie  corporation,  at  tlie  time  of  its 
dissolution,  by  whatever  name  they  may  be 
known  in  law.  shall  be  trustees  of  the 
creditors  and  stoclcholders  of  such  corpora- 
tion, with  full  i)ower  to  settle  the  affairs, 
collect  the  outstanding  debts,  and  divide 
the  moneys  and  other  property  amon.c:  the 
stoclcholders.  after  payinjr  the  debts  due  and 
owinir  by  such  corporation,  at  the  time  of  its 
dissolution,  as  far  as  sucli  money  and  i)rop- 
erty  will  enable  them;  and  for  this  pun>ose 
they  may  maintain  or  defend  any  judicial 
proceeding. 

[An  action  brought  by  the  sole  manager  of  a 
corporation,  after  its  dissolution,  to  recover  its 
debts  and  property,  must  be  brought  in  name  of 
such  manager  and  not  in  corporate  name  of  the 
dissolved  corporation.  Paola  Town  Co.  v.  Krutz, 
22  Kan.  727. 

Unless  a  receiver  is  appointed  upon  dissolution, 
the  president  and   directors,    or   managers   of   the  | 
affairs    of    the    corporation,    are    the    trustees    of  j 
the  creditors  and  stockholders,  with  full  power  to 
settle    its    affairs,    and    may    maintain    or    defend 
any  judicial   proceeding  to  that   end.     Id. 

Actions  by  dissolved  corporation  against  its 
members.     Id. 

ITeld,  that  when  a  bridge  corporation  expired  bj- 
limitation,  its  franchises  and  license  to  deman'S 
toll  expired.     State  v.  Bridge  Co..  22  Kan.  4.38. 

It  is  not  error  for  the  trial  court,  in  its  discre- 
tion, to  refuse  to  enter  judgment  on  a  verdict  in 
favor  of  an  extinct  corporation,  and  to  set  aside 
the  verdict  and  grant  a  new  trial,  upon  the  pay- 
ment of  all  costs  by  the  defendant,  although 
existence  of  corporation  is  not  raised  in  the  plead- 
ings, and  expiration  of  charter  is  proved  by  docu- 
mentarv  evidence  offered  in  behalf  of  tlie  cor- 
poration.   Chair  Co.   v.   Kelsey.  23  Kan.   632. 

A  corporation  was,  by  its  charter,  to  continue 
its  existence  for  five  years.  At  the  end  of  that 
period,  S.  commenced  an  action  against  the  cor- 
poration and  others  to  recover  land  which  he  had 
conveyed  to  it,  claiming  that  the  corporation  had 
been  dissolved  by  lapse  of  time,  and  that  the  land 
had  reverted  to  him.  Held,  that  such  claim  was 
not  tenable.  Sword  v.  Wickersham.  29  Kan.  746. 
Trustees  or  directors  'of  a  dissolved  corporation 
cannot  act  for  their  own  private  advantage.  See 
note  to   §   IISO. 

Officers  and  stockholders  of  an  insolvent  cor- 
poration cannot  distribute  the  capital  and  assets 
among  themselves  in  payment  of  indebtedness  due 
them."  Any  excluded  creditor  will  be  entitled  to 
pursue  such  assets  into  the  hands  of  any  per- 
son who  has  taken  the  same  with  full  knowledge 
of  the  facts.  Bridge  Co.  v.  Fowler,  ^'i  Kan.  17; 
s.  c.  .39  Pac.  Rep.  727.  Directors  and  managers 
cannot  enter  into  an  arrnngement  to  secure  to 
themselves  preference  over  other  creditors.  Id. 
AX  here  a  receiver  of  a  corporation  brings  an  ac- 
action  upon  judgment  in  favor  of  said  corporation, 
the  statute  of  limitations  does  not  run  during  the 
pendency  of  such  action.    Id.] 


§  1203.  The  trustees  mentioned  in  the  Inst 
section  shall  be  severally  responsible  to  the 
creditors  and  stockholders  of  such  corpo- 
ration, to  the  extent  of  its  property  and 
effects  that  shall  have  come  into  their  hands. 

[Directors  of  corporations  in  reference  to  cor- 
porate property  act  in  the  relation  of  trustee's, 
and  can  make  no  division  of  such  property  which 
shall  not  give  to  each  stockholder  his  proportion- 
ate sharo.'    Hale  v.   Rep.    Co..   S  Kan.   406. 

While  a  trustee  is  not  an  insurer  he  i,s,  neverthe- 
less, bound  to  the  utmost  good  faith,  may  ac- 
quire no     interest  adverse  to  the  trust  and  must 


exercise  such  care  and  diligence  in  r<'sp<'ct  to 
the  discharge  of  the  trust  as,  under  all  circum- 
stances, having  regard  to  the  magnitude  of  the 
trust  and  interests  involved  and  the  consequences 
of  mistake,  would  be  reasonable.  Morrow  v. 
Saline  Co..  21  Kan.   484.] 


§  12(>4.  If  any  corporation,  created  under 
this  or  any  general  statute  of  this  State, 
except  rjulway  or  charitable  or  religious 
corporations.  l»e  dissolved,  leaving  debts  un- 
paid, suits  may  be  l»rought  against  any  per- 
son or  persons  who  were  stockholders  at  the 
time  of  such  dissolution,  without  joiniuir  the 
corporation  in  sucli  suit;  and  if  judgment  be 
rendered,  and  execution  satisfied,  the  de- 
fendant or  defendants  may  sue  all  who  were 
stockholders  at  the  time  of  dissolution,  for 
the  recovery  of  the  portion  of  such  debt  for 
which  they  were  lial)le.  and  the  execution 
upon  the  judgment  sliall  direct  the  collection 
to  be  made  from  property  of  each  stock- 
holder, respectively:  and  if  any  number  of 
stockholders  (defendants  in  the  case)  shall 
not  have  jiroperty  enough  to  satisfy  his  or 
their  portion  of  the  execution,  then  the 
amount  of  deficiency  shall  be  divided  equally 
among  all  the  remaining  stockholders,  and 
collections  made  accordingly,  deducting  from 
the  amoimt  a  sum  in  proportion  to  the 
amount  of  stock  owned  by  the  plai'ntifT  at 
the  time  the  company  dissolved. 

See   Const.,   art.   XII,    §   2,    and   cross-references. 

[In  an  action  brought  against  an  incorporated 
bank  to  recover  money  due  upon  a  certificate  of 
deposit  in  which  the  petition  fails  to  show  that 
the  bank  is  dissolved  or  that  primarily  there  is 
a  liability  against  the  stockholders  within  the 
terms  of  the  statute,  no  judsrment  can  be  rendered 
against  the  stockholders:  if  the  execution  issued 
thereon  against  the  property  of  the  corporation 
be  returned  nulla  bona,  execution  may  then  issue 
against  any  of  the  stockholders  to  an  extent  equal 
in  amount  to  the  stock  owned  by  him.  Bank  v. 
Soc,  28  Kan.  423. 

Stockholders  who  organize  themselves  as  a  cor- 
poration, transact  business,  and  hold  themsi-lvf>s 
out  to  the  world  as  such  corporation  cannot,  when 
proceeded  asrainst  by  creditors,  set  up  as  a  de- 
fense that  the  preliminary  steps  of  the  organiza- 
tion were  irregular:  nor  can  the.v  deny  their  lia- 
bility as  stockholders  therein.  ,\ultman  v.  Wad- 
dle. 40  Kan.  19.5:  s.  c.  19  Pac.  Rep.  730. 

Where  two  or  more  suits  are  commenced  under 
above  section,  and  judgments  are  obtained  against 
the  stockholders  in  such  suits  at  the  same  term, 
and  executions  are  issued  thereon  during  the  term 
or  within  ten  davs  thereafter,  the  funds  raised 
thereon,  or  upon  .-inv  one  of  such  executions,  must 
be  distributed  pro  rata  among  all  such  execution 
creditors.  Clevenger  v.  Hansen,  44  Kan.  1S2;  s.  c, 
24   Pac.    Rep.   61.  ^    ^     ,  ^   , , 

Under  above  section  the  liability  of  stockholders 
to  the  creditors  of  a  corporation  is  several  and 
not  ioint.  and  each  must  be  sued  separately.  Ab- 
bev  V  Drv  Goods  Co..  44  Kan.  415;  s.  c,  24  Pac. 
Rep  426:  Howell  v.  Bank,  52  Kan.  133;  s.  c,  34 
Pac.    Rep.   395.] 

§  120,"').  If  any  stockholder  pay  more  than 
his  due  proportion  of  any  debt  of  the  corpo- 
ration, he  may  compel  contribution  from  the 
other  stockholders  by  action. 

See  Const.,  art.  XII,  §  2,  and  cross-references. 


20 


KAIS^SAS. 


False  signatures;  pooling  —  Stat.,  §§  2275,  ^76,  2477. 


§  120(5.  No  stockholder  shall  be  liable  to 
pay  debts  of  the  corporation,  beyond  the 
amount  due  on  his  stock,  and  an  additional 
amount  equal  to  the  stock  owned  by  him. 

See  Const.,  art.  XII,  §  2,  and  cross-references. 


CHAPTER  XXXI. 

Crimes  and  Punishments. 

Art.     4.  Offenses  affecting  records,  cnrrencj",  writ- 
ten iustruinents  and  securities. 
0.  Miscellaneous  offenses. 
11.  General  provisions. 


ARTICLE  IV.  OFFEXSES  AFFECTIXG  REC- 
ORDS. CURREXCY,  WRITTEX  IXSTRUMEXTS 
AXD  SECURITIES. 


Sec. 


Affixing  pretended   signatures  to  notes, 
etc.,  of  corporations. 


§  2275.  The  false  making,  forging  or  coun- 
terfeiting of  any  evidence  of  debt  or  nego- 
tiable instrument,  issued  or  purporting  to 
have  been  issued  by  any  corporation  having 
authority  for  that  purpose,  to  which  shall 
be  fixed  the  pretended  signature  of  any 
person  as  an  agent  or  othcer  of  such  corpo- 
ration, shall  be  deemed  a  forgery,  in  the 
same  degree  and  in  the  same  manner  as  if 
such  person  was  at  the  time  an  otticer  or 
agent  of  such  corporation,  notwithstanding 
such  person  may  never  have  been  an  officer 
or  agent  of  such  corporation,  or  notwith- 
standing there  never  was  any  such  person  in 
existence. 

See  §  1172. 

ARTICLE    IX.      MISCELLAXEOUS    OFFEXSES. 

Sec.  2470.  Poroling. 
2477.  Penalty. 
247S.  Misdemeanors. 
2481.  Railroad   obstructing. 
24S2.   Conspiracy;   railroad. 
2483.  Construction. 

2499.  Trusts  and   combinations. 

2500.  Corporations. 
2."i01.  All  persons. 
2502.  Persons   injured. 
250:{.  Actions,  defenses. 
2.5W.  Violation. 

25(15.  Countv  attornev's  duty. 
2506.  Sheriff's  duty. 
2.507.  District  court's  duty. 
2506.  Repealing  clause. 

§  247G.  It  shall  be  unlawful  for  any  grain 
dealer  or  grain  dealers,  partnership,  com- 
pany, corporation  or  association  of  grain 
dealers,  or  aiiy  other  person  or  persons,  part- 
nership, company,  corporation  or  association, 
to  enter  into  any  agreement,  contract  or 
con^binntion  with  any  other  grain  dealer  or 
grain  dealers,  partnership,  company,  cor- 
poration or  association  of  grain  dealers,  or 
any  other  person  or  persons,  partnership, 
company.  coin)oration  or  association,  for  the 
pooling  of  prices  of  different  and  competing 
dealers  and  Iniyers.  or  to  divide  between 
them  the  aggregate  or  net  proceeds  of  the 


earnings  of  such  dealers  and  buyers,  or  any 
portion  thei-eof,  or  for  fixing  the  price  which 
any  grain  dealer  or  grain  dealers,  pai'tuer- 
ships,  company,  cox'poration  or  association 
of  grain  dealers,  or  any  other  person  or 
persons,  partnership,  company,  corporation 
or  association,  shall  pay  for  grain,  hogs, 
cattle,  or  stock  of  any  kind  or  nature 
whatever;  and  in  case  of  any  agreement, 
contract  or  combination  for  such  pooling 
of  prices  of  different  and  competing 
dealers  and  buyers,  or  to  divide  between 
them  the  aggregate  or  net  proceeeds  of  the 
earnings  of  such  dealers  and  buyers,  or  any 
portion  thereof,  or  for  fixing  the  price  which 
any  grain  dealer  or  grain  dealers,  partuei*- 
shij).  company,  corporation  or  association  of 
grain  dealers,  or  any  other  person  or  persons, 
partnership,  company,  corporation  or  asso- 
ciation, shall  pay  for  grain,  hogs,  cattle,  or 
stock  of  any  kind  or  nature  whatever,  each 
day  of  its  continuance  shall  be  deemed  a 
separate  offense. 

Anti-Trust  Act.     See  p.   30. 


§  2477.  That  in  case  any  grain  dealer  or 
dealers,  partnership,  company,  corporation 
or  association  of  grain  dealers,  or  any  per- 
son or  persons,  partnership,  company,  cor- 
poration or  association  suljject  to  the  provi- 
sions of  this  act,  shall  do  or  cause  to  be  done, 
or  permit  to  be  done,  any  act,  matter  or 
thing  in  this  act  prohibited  or  declared  to  be 
unlawful,  or  shall  omit  to  do  any  act,  matter 
or  thing  in  this  act  required  to  be  done,  such 
grain  dealer  or  grain  dealers,  partnership, 
company,  corporation  or  association  of  grain 
dealers,  or  any  other  person  or  persons, 
partnership,  company,  corporation  or  associa- 
tion, shall  be  liable  to  the  person  or  per- 
sons injured  thereby,  to  the  full  amount  of 
damages  sustained  in  consequence  of  any 
such  violation  of  the  provisions  of  this  act, 
together  with  a  reasonable  counsel  or  at- 
torney's fee.  to  be  fixed  by  the  court  in 
every  case  of  i-ecovery.  which  attorney's  fee 
shall  be  taxed  and  collected  as  a  pai"t  of 
the  costs  in  the  case;  and  in  any  such  action 
brought  for  the  recovery  of  damages  the 
court  before  whom  the  same  shall  be  pend- 
ing may  compel  any  grain  dealer  or  grain 
dealers,  partnership,  company,  corporation 
or  association  of  grain  dealers,  or  any  per- 
son or  persons,  partnership,  company,  corpo- 
ration or  association  subject  to  the  provisions 
of  tills  act,  or  any  director,  officer,  receiver, 
trustee,  agent,  employe,  or  clerk  of  them  or 
either  of  them,  defendant  in  such  suit,  to 
attend,  appear  and  testify  in  such  case,  and 
may  compel  the  production  of  the  lx)oks  and 
papm's  of  such  grain  dealer  or  grain  dealers, 
partnership,  company,  corporation  or  asso- 
ciation of  grain  dealers,  or  any  other  person 
or  persons,  partnership,  company,  corpora- 
tion or  as.sociation  party  to  such  suit.  The 
claim  that  any  such  testimony  or  evidence 
may  tend  to  criminate  the  person  giving  such 


KAXSAS. 


21 


rooliug;  obstruction  of  railroads;  trusts  —  Stat.,  §§  2478,  2481-2483,  2499-2501. 


evidence  shall  not  excuse  such  witness  fi'oni 
testifying,  but  such  evidence  or  testimony 
shall  not  be  used  against  such  person  in  the 
trial  of  any  criminal  proceeding. 

§  2478.  That  any  grain  dealer  or  grain 
dealers,  partnership,  company,  or  corpora- 
tion or  association  of  grain  dealers,  or  any 
other  person  or  persons,  partneruiip,  com- 
pany, corporation,  or  association  subject  to 
the  jirovisions  of  this  act.  or  any  director, 
officer,  or  any  receiver,  ti'ustee,  clerk,  or 
lessee  or  agent,  or  person  acting  for  or  em- 
ployed by  them,  or  either  of  them,  Avho  alone 
or  with  any  other  partnership,  company, 
corporation,  association,  person  or  party, 
shall  willfully  do  or  cause  to  be  done,  or 
shall  willfully  suffer  or  permit  to  be  done 
any  act.  matter  or  thing  in  this  act  pro- 
hibited or  declared  to  be  unlawful,  or  who 
shall  aid  or  abet  therein,  or  shall  wilfully 
omit  or  fail  to  do  any  act,  matter  or  thing 
in  this  act  reqiiired  to  be  done,  or  shall  cau-<e 
or  willingly  suffer  or  permit  any  act,  matter 
or  thing  so  directed  or  required  by  this  act 
to  be  done,  not  to  be  so  done,  or  shall  aid 
or  abet  such  omission  or  failure,  or  shall  be 
guilty  of  any  infraction  of  this  act,  or  shall 
aid  or  abet  therein,  shall  be  deemed  guilty 
of  a  misdemeanor,  and  shall  upon  conviction 
thereof  be  fined  in  any  sum  not  exceeding 
one  thousand  dollars,  or  imprisonment  in  the 
jail  of  the  county  not  exceeding  six  months, 
or  both,  in  the  discretion  of  the  court;  and 
shall  moreover  be  liable  to  the  suit  of  the 
party  injured  or  damaged. 

§  2481.  If  any  person  or  persons  shall 
wilfully  and  maliciously,  by  any  act  or  by 
means  of  intimidation,  impede  or  obstruct, 
except  by  due  process  of  law,  the  regular 
operation  and  conduct  of  the  business  of  any 
railroad  company,  or  other  corporation,  firm 
or  individual  in  this  State,  or  of  the  regular 
running  of  any  locomotive  engine,  freight  or 
passenger  train  of  any  such  company,  or  the 
labor  and  business  of  any  such  corporation, 
firm  or  individiial,  he  or  they  shall,  on  con- 
viction thereof,  be  punished  by  a  fine  of 
not  less  than  twenty  dollars,  nor  more  than 
two  hundred  dollars,  and  confined  in  the 
county  jail  not  less  than  twenty  days  nor 
more  than  ninety  days. 

§  24S2.  If  two  or  more  persons  shall  wil- 
fully and  maliciously  combine  or  conspire 
together  to  obstruct  or  impede  by  any  act, 
or  by  means  of  intimidation,  the  regular 
operation  and  conduct  of  the  business  of 
any  railroad  company,  or  any  other  corpo- 
ration, firm  or  individual  in  this  State,  or  to 
obstruit.  hinder,  or  impede,  except  by  due 
process  of  law,  the  regular  running  of  any 
locomotive  engine,  freight  or  passenger  train 
on  any  railroad,  or  the  labor  or  business  of 
any  such  conwration,  firm  or  individual,  such 
persons  shall  on  conviction  thereof  be  pun- 
ished by  fine  not  less  than  twenty  dollars, 
nor  more  than  two  hundred  dollars,  and  con- 
fined in  the  county  jail  not  less  than  twenty 
days  nor  more  than  ninety  days. 


§  2483.  This  act  shall  not  be  construed  to 
apply  to  cases  of  persons  voluntarily  quitting 
the  employment  of  any  railroad  company, 
or  such  other  ctjrporation,  firm  or  individual, 
whether  by  concert  or  action  or  otherwise, 
except  as  is  provided  in  section  one  of  this 
act.* 

§  2499.  That  all  arrangements,  contracts, 
agreements,  trusts  or  combinations  between 
persons  or  corporations  made  with  a  view 
or  which  tend  to  prevent  full  and  free  com- 
petition in  the  importation,  tran.sportation  or 
sale  of  articles  imported  into  this  State,  or 
in  the  product,  manufacture  or  sale  of  ar- 
ticles of  domestic  growtli  or  product  of 
domestic  raw  material,  or  for  the  loan  or  use 
of  money,  or  to  fi.x  attorney's  or  doctor's  fees, 
and  all  arrangements,  contracts,  agreements, 
trusts  or  combinations  between  persons  or 
corporation  designed  or  which  tend  to  ad- 
vance reduce  or  control  the  price  ur  the 
cost  to  producer  or  to  the  consumer  of 
any  such  products  or  articles,  or  to  control 
I  the  cost  or  rate  of  insurance,  or  which  tend 
j  to  advance  or  control  the  rate  of  interest  for 
the  loan  or  iise  of  money  to  the  borrower,  or 
any  other  services,  are  hereby  declared  to  be 
against  public  policy,  unlawful,  and  void. 

Payment  of  wages.     Act  of  1893,  at  p.  29. 

§  2.'500.  It  shall  not  be  lawful  for  any  cor- 
poration to  issue  or  to  own  trust  certificates, 
other  than  the  regularly  and  lawfully  au- 
thorized stock  thereof,  or  for  any  corporatiou, 
agent,  officer  or  employes,  or  the  directors  or 
stockholders  of  any  corporation,  to  enter  into 
any  combination,  contract  or  agreement  with 
any  person  or  i)ersons,  corporation  or  cor- 
porations, or  with  any  stockholder  or  di- 
rector thei-eof.  the  purpose  and  effect  of 
which  combination,  contract  or  agreement 
shall  be  to  place  the  management  or  control 
of  such  combination  or  combinations,  or  the 
manufactured  product  thereof,  in  the  hands 
of  any  trustee  or  trustees,  with  the  intent  to 
limit  or  fix  the  price  or  lessen  the  production 
and  sale  of  any  article  of  commerce,  use,  or 
consumption,  or  to  prevent,  restrict  or  dimin- 
ish the  manufacture  or  output  of  any  such 
article. 

§  2.j01.  That  all  persons  entering  into  any 
such  arrangement,  contract,  agreement,  trust, 
or  combination,  or  who  shall,  after  the  pas- 
sage of  this  act,  attempt  to  carry  out  or  act 
under  any  such  arrangement,  contract,  agree- 
ment, trust  or  combination  described  in 
sections  one  or  two  of  this  act,  either  on  his 
own  accoimt  or  as  agent  or  attorney  for 
another,  or  as  an  officer,  agent  or  stockholder 
of  any  corporation,  or  as  a  trustee,  commit- 
tee, or  in  any  capacity  whatever,  shall  be 
guilty  of  a  misdemeanor,  and  on  conviction 
thereof  shall  be  subject  to  a  fine  of  not  less 
than  one  hundred  dollars  and  not  more  than 
one  thousand  dollars,  and  to  imprisonment 
not  less  than  thirty  days  and  not  more  than 


*S  2480. 


22 


KANSAS. 


Trusts  and  combines  —  Stat.,  §§  2502-2508. 


six  months,  or  to  botli  such  fine  and  im- 
prisonment in  the  discretion  of  the  court. 

§  2502.  That  any  person  or  corporation 
injured  or  damaged  by  any  such  arrange- 
ment, contract,  agreement,  trust  or  combi- 
nation prescribed  in  sections  one  or  t^'o  of 
this  act,  may  sue  for  and  recover  in  iiuy 
i.-ourt  of  competent  jurisdiction  in  this  State, 
of  any  person  or  corporation,  the  full  con- 
sideration or  sum  paid  by  him  for  any  goods, 
wares,  merchandise  and  articles  included  in 
or  advanced  or  controlled  in  price  by  said 
combination,  or  the  full  amount  of  money  so 
borrowed. 

§  2503.  That  when  an  action  at  law  or  suit 
in  equity  shall  be  commenced  in  any  court 
of  this  State,  it  shall  be  lawful  in  the  defense 
thereof  to  plead  in  bar  or  in  abatement  that 
the  plaintiff  or  any  other  person  interested 
in  the  prosecution  of  the  case  is  a  member 
0;*  agent  of  an  unlawful  combination  as  de- 
scribed in  sections  one  or  two  of  this  act, 
or  that  the  cause  of  action  grows  out  of  such 
combination,  or  out  of  some  business  or 
transaction  thereof. 

§  2.j04.  That  the  purchase,  sale  or  manu- 
facture of  any  goods,  wares,  merchandise  or 
other  commodities  in  this  State  by  any  pei-- 
son  or  corpoi'ation  who  has  entered  into  any 
such  arrangements,  contracts,  agreements, 
trusts  or  combinations  in  any  other  State  or 
territory,  as  described  in  sections  one  or  two 
of  this  act,  for  the  purchase,  sale  or  manu- 
factiu'e  of  any  such  articles  by  any  agent  or 
attorney  for  such  person,  or  as  an  agent,  offi- 
cer or  stock  broker  of  any  such  corporation, 
as  a  trustee,  committee,  or  in  any  capacity 
whatever,  shall  constitute  a  violation  of  this 
act,  and  shall  subject  the  offender  to  the 
aforesaid  liabilities  and  penalties. 

§  2505.  It  shall  be  the  duty  of  the  county 
attorneys  to  diligently  prosecute  any  and  all 
per.sons  violating  any  of  the  provisions  of 
this  act  in  their  respective  counties.  If  any 
county  attorney  shall  fail,  neglect  or  refuse 
to  faithfully  perform  any  duty  imposed  upon 
him  by  this  act,  he  shall  be  deemed  guilty 
of  a  misdemeanor,  and  upon  conviction 
thereof  shall  be  fined  in  any  sum  not  less 
than  one  hundred  dollars  nor  more  than  five 
hundred  dollars,  and  be  imprisoned  in  the 
county  jail  not  less  than  ten  days  nor  more 
than  ninety  days;  and  such  conviction  shall 
operate  as  a  forfeiture  of  his  office,  and  the 
court  before  whom  such  conviction  may  be 
had  shall  order  and  adjudge  such  forfeiture 
of  office,  in  addition  to  the  fine  imposed  as 
hei'cin  provided.  And  whenever  the  county 
attorney  shall  be  unable  or  shall  neglect  oi- 
refuse  to  enforce  the  provisions  of  this  act  in 
his  county,  or  for  any  reason  whatever  the 
provisions  of  this  act  shall  not  be  enforced 
in  any  county,  it  shall  be  the  duty  of  the 
attorney-general  to  enforce  the  same  in  such 
coimty,  and  for  that  purpose  he  may  appoint 
as  many  assistants  as  he  shall  see  fit,  and 
he  and  his  assistants  shall  be  authorized 
to  sign,  verify  and  file  all  such  complaints. 


informations,  petitions  and  papers,  as  the 
county  attorney  is  authorized  to  sign,  verify, 
or  file,  and  to  do  and  perform  any  act  that 
the  county  attorney  might  lawfully  do  or 
perform;  and  for  such  services  he  or  his 
assistants  shall  receive  the  same  fees  that 
the  county  attorney  would  be  entitled  lo  for 
like  services,  to  be  taxed  and  collected  in 
tl!(>  same  manner. 

S  2500.  It  shall  be  the  duty  of  all  sheriffs, 
deputy  sherifts,  constables,  mayors,  marshals, 
police  judges  and  police  oflicers  of  any  city 
or  town,  having  notice  or  knowledge  of 
any  violation  of  the  provisions  of  this  act, 
to  notify  tlie  county  attorney  of  the  fact  of 
such  violation,  and  to  furnish  him  the  names 
of  any  witnesses  witliin  his  kuoAvledge  by 
whom  such  violation  can  be  proven.  If  any 
such  officer  sliall  fail  to  comply  with  the  pi"o- 
visions  of  this  section  he  shall  upon  convic- 
tion be  fined  in  any  sum  not  less  than  one 
hundred  dollars  nor  more  than  five  hundred 
dollars;  and  such  conviction  shall  be  a  for- 
feiture of  the  office  held  by  such  person,  and 
the  court  before  Avhom  such  conviction  is 
had  shall,  in  addition  to  the  imposition  of 
the  fine  aforesaid,  order  and  adjudge  the 
forfeiture  of  his  said  office. 

§  2507.  It  shall  be  the  duty  of  the  district 
courts  to  instruct  the  grand  juries  especially 
as  to  the  provisions  of  this  act. 

§  2508.  All  laws  or  parts  of  laws  in  con- 
flict with  the  provisions  of  this  act  are 
hereby  repealed. 

ARTICLE   XI.     GENERAL   PROVISIONS. 

Sec.  2588.  The  term  "  person,"  how  construed. 

§  2588.  When  the  term  "  person  "  is  used 
in  this  act  to  designate  the  party  whose  prop- 
erty may  be  the  subject  of  any  offense,  such 
term  shall  be  construed  to  include  *  *  * 
{iny  *  «  *  private  corporation,  Avhich 
may  lawfully  own  any  property  within 
this  State,  as  well  as  individuals. 

"  Corporation  "  defined.  §§  1152-1154;  Const., 
art.   XII,   §  6. 

CHAPTER   LXXX. 

Procedure  —  Civil. 

Art.     5.  The   county   in    which   actions    are   to    be 
brought. 

6.  Commencement    of   civil    actions. 

8.  I'leadings  in   civil  actions. 

11.  Attacliment. 

13.  Receivers.  • 

29.  Offices  and  franchises. 

ARTICLE    V.      THE    COUNTY    IN    WHICH    AC- 
TIONS  ARE   TO    BE   BROUGHT. 

Sec.  4128.  Where   to  be  brought  against   a   corpo- 
ration generally. 

4129.  Against  a   railroad  company,   etc. 

4130.  Against  a  turni)lke  company. 

4131.  Exception. 

4132.  Against  foreign  corporation. 

§  4128.  An  action,  other  than  one  of  those 
mentioned  in  the  first  three  sections  of  this 


KANSAS. 

Aotious,  where  brought;  service  of  summons  —  Stat..  §§  4128-^132,  4147-4149. 


23 


article.*  ajcainst  a  coi-poration  created  by  the 
laws  of  this  State  or  of  the  territory  of  Kan- 
sas, may  be  brought  in  the  ■ccninty  in  which 
it  is  situated,  or  Jias  its  jjrincipal  otticc  or 
place  of  business,  or  in  which  any  of  the 
principal  olHcers  thereof  may  reside,  or  may 
be  sinnmoned;  but  if  such  corporation  be  an 
Insurance  company,  tlie  action  may  be 
brought  in  the  county  where  the  cause  of 
action,  or  some  part  thereof,  arose. 

See  §  1167,  subd.  2,  cross-references. 

§  4121).  An  action  asainst  a  railroad  com- 
panj-,  or  an  owner  of  a  lino  of  mail  stages 
or  other  coaches,  for  any  injury  to  persons 
or  property  upon  the  road  or  line,  or  upon 
a  liability  as  a  can'ier,  may  be  brought  in 
any  county  through  or  into  which  said  road 
or  line  passes. 

[.\n  action  may  be  brought  against  a  foreign 
railroad  corporation  in  any  county  of  this  State 
wht-re  it  runs  its  trains  and  receives  and  lands  its 
passengers,  for  any  injury  to  persons  or  property 
uopn  its  road.  Kv.  Co.  v.  Kanaley,  39  Kan.  1; 
s.    c,    17   Pac.    Rep.   324.] 

S  41o0.  An  action,  other  than  one  of  those 
mentioned  in  the  first  three  sections  of  this 
article.*  against  a  turnpike  road  company, 
may  be  brought  in  any  county  in  which  any 
part  of  the  road  lies. 

S  4181.  The  provisions  of  this  article  shall 
not  apply  in  the  case  of  any  corporation 
created  by  a  law  of  this  State  or  the 
territory  of  Kansas,  whose  charter  prescribes 
tlie  place  Avhere,  alone,  a  suit  against  such 
coiiioration  may  be  brought. 

§  41.32.  An  action,  other  than  one  of  those 
mentioned  in  the  first  three  sections  of  this 
article,  against  a  non-resident  of  this  State 
or  a  foreign  corporation,  may  be  brought  in 
any  county  in  -wliicli  there  may  be  property 
of.  or  debts  owing  to,  said  defendant,  or 
where  said  defendant  may  be  found:  but 
if  said  defendant  be  a  foreign  insurance  com- 
pany, the  action  may  be  brought  in  any 
county  where  the  cause,  or  some  part  thereof, 
arose. 

[If  a  non-resident  corporation  appears  and  sub- 
mits its  case  to  the  court,  it  is  too  late  to  ques- 
tion want  of  jurisdiction.  R.  R.  Co.  v.  Akers, 
4  Kan.  470.] 

ARTICLE  VI.     COMMENCEMENT  OF  CIVIL 
ACTIONS. 

Sec.  4147.  How  served  on  corporation  generally. 

4148.  Duty  of  certain  corporations. 

4149.  The  same;  service  of  process  upon. 

4150.  Neglect     to     designate;     how     process 

served. 

4151.  Service  by  copy. 

4152.  On  insurance  company. 

4153.  On  foreign  corporation. 
41.55.  Service  by  publication. 
4156.   Affidavit  necessary. 

§  4147.  A  summons  against  a  corporation 
may  be  served  upon  the  president,   mayor. 


♦Actions  relating  to  realty  and  local  actions. 


chairman  of  the  board  of  directors,  or  trus- 
tees, or  other  chief  officer;  or,  if  its  chief 
othcer  is  not  found  in  the  county,  upon  its 
cashier,  treasurer,  secretary,  clei'k  or  man- 
aging agent;  or,  if  none  of  the  aforesaid  offi- 
cers can  be  found,  by  a  copy  left  at  the  office 
or  usual  place  of  business  of  such  corpora- 
tion, with  the  person  having  charge  thereof. 

See  §  4859. 

[Where  a  summons  served  on  a  corporation  by 
a  wrong  name,  and  the  corporation  fails  to  appear 
and  plead  the  misnomer  and  suffers  judgment  to 
1)0  taken.  It  is  concluded,  and  in  all  future  litiga- 
tion may  be  connected  with  the  action  in  all  proper 
averments,  and  when  such  averments  are  made 
and  proved,  such  corporation  Is  affected  as  though 
It  were  properly  named  therein.  Iloffleld  v.  Board 
.«  Kan.  644;  s.  c,  7  Pac.  Rep.  216. 

AVhen  the  summons  is  served  on  the  secretary 
return  should  state  that  president  or  other  officer 
was  absent  from  the  county,  or  could  not  be 
found.     Town  Co.  v.   Rucker,   McC.  147. 

Service  of  a  summons  on  a  person  who  keens 
books  for  a  corporation,  but  who  is  not  its  secre- 
tary or  clerk,  or  any  other  officer  or  agent  upon 
whom  a  legal  service  may  be  made,  is  not  a 
valid  service  upon  the  corporation.  Chambers  v. 
P.ridge  Co.,  16  Kan.  270.] 

§  414S.  Every  railroad  company  or  corpora- 
tion, and  every  stage  company  doing  busi- 
ness in  the  State  of  Kansas,  or  having  agents 
doing  business  therein  for  such  corporation 
or  comi^any,  is  hereby  required  to  designate 
some  person  residing  in  each  county,  into 
which  its  railroad  line  or  stage  route  may 
or  does  run,  or  in  whic!i  its  business  is  trans- 
acted, on  whom  all  process  and  notices  issued 
by  any  court  of  record  or  justices  of  the 
peace  of  such  cotmty  may  be  served. 

[The  service  of  a  summons  against  a  railroad 
company  upon  a  section  foreman,  as  "  a  local  su- 
perintendent of  repairs,"  where  it  appears  that 
the  company  has  not  designated  any  person  upon 
whom  service  could  be  made,  under  the  provisions 
of  section  68  of  the  Civil  Code,  is  a  valid  service 
upon  the  company.  Rv.  Co.  v.  De  Ford,  38  Kan. 
2!!!):   s.    c.    16   Pac.    Rep.    442. 

Summons;  copy  delivered  "  to  D.  W.  M.,  agent 
of  said  Ry.  Co.,  Manhattan,  Kas.,"  does  not  show 
that  said  M.  was  president  or  chairman  of  the 
board  of  directors,  or  other  chief  otlicer,  cashier, 
clerk  or  managing  agent,  and  is  not  good.  Rv. 
Co.  V.   Pillsbury,  29  Kan.  653.] 

§  4149.  In  every  case  such  railroad  com- 
pany or  corporation,  and  stage  company, 
shall  file  a  certificate  of  the  appointment 
and  designation  of  such  person,  in  the  office 
of  the  clerk  of  tlie  district  court  of  the  county 
in  which  such  person  resides;  and  the  ser- 
vice of  any  process  upon  the  person  so  desig- 
nated, in  any  civil  action,  shall  be  dr-rnied 
and  held  to  be  as  effectual  and  complete  as 
if  service  of  such  process  were  'uade  upon 
the  president,  or  other  chief  officer  of  such 
corporation  or  stage  company.  Any  railroad 
company,  corporation,  or  stage  company, 
may  revoke  the  api)ointmetit  and  designa- 
tion of  such  person  upon  whom  process  may 
be  served,  as  hereinbefore  provided,  by  ap- 
pointing any  other  person  qualified  as  above 
specified,  and  filing  a  certificate  of  such  ap- 


24 


KANSAS. 


Service  of  summons;  pleadings;  attachment  —  Stat.,  §§  4150-415G,  4193,  4273. 


pointment,  as  aforesaid;  but  every  second  or 
subsequent  api)ointment  shall  also  designate 
the  person  whose  place  is  filled  by  such  ap- 
pointment. 

§  4150.  If  any  railroad  or  stage  company, 
or  corporation,  fail  to  designat*^  and  appoint 
such  person,  as  in  the  preceding  sections  is 
provided  and  required,  such  process  may  be 
served  on  any  local  siiperintemleut  of  re- 
pairs, freight  ag'-nt.  agent  to  sell  tickets,  or 
station  keeper,  of  such  company  or  coipora- 
tion  in  such  county,  or  such  process  may  be 
served  by  leaving  a  c-opy  thereof,  certified 
by  the  otIi<'er  lo  v,hom  the  same  is  directed, 
to  be  a  true  copy,  at  any  depot  or  station 
of  such  company  or  corporation,  in  such 
county,  Avith  some  person  in  charge  thei-eof, 
or  in  the  employ  of  such  company  or  corpora- 
tion, and  such  service  shiiU  be  held  .and 
deemeil  complete  and  elTectual. 

[The  railway  company  having  designated  no 
person  in  the  county  upon  whom  summons  ma.v 
be  served,  such  service  may  be  made  by  the  sheriff 
leaving  a  copy  thereof  with  tue  person  in  charge 
of  the  depot,  and  it  is  not  necessary  to  specify 
in  express  terms  that  the  road  ruiis  into  that 
county  or  that  company  transacts  its  business 
therein.     Ry.  Co.  v.  Crowe,  9  Kan.  496. 

Where  a  raih-oad  company  has  not  designated 
any  person  upon  whom  service  of  summons  should 
be  made,  it  may  be  made  upon  its  section  fore- 
man, as  "  a  local  superintendent  of  repairs."  R. 
R.  Co.  V.  De  Ford,  38  Kan.  299;  s.  c,  16  Pac.  Rep. 
442.] 


§  4151.  In  all  cases  where  service  of  any 
pi-ocess  cannot  be  had  upon  the  person 
designated  by  such  company  or  corporation 
personally,  service  may  be  made  by  leaving 
a  certified  copy  of  such  process  at  "the  usual 
place  of  residence  of  such  person,  or  as  in 
the  last  preceding  section,  and  the  same  shall 
be  deemed  complete  and  effectual. 

§  4152.  Where  the  defendant  is  an  incor- 
porated insurance  company,  and  the  action 
is  brought  in  a  county  in  which  there  is  an 
agency  thereof,  the  service  may  be  upon 
the  chief  oflicer  of  such  agency. 

See   §  4S60. 


§  4153.  Where  the  defendant  is  a  foreign 
corporation,  having  a  managing  agent  in  this 
State,  the  service  may  be  upon  such  agent. 

See   §  4861. 

[A  corporation  for  jurisdictional  purposes  is  to 
be  treated  as  a  citizen  of  the  State  bj'  whose  laws 
it  was  created,  even  though  it  has  no  business 
office  in,  and  none  of  its  officers  are  in  such 
State.  Pac.  R.  R.  Co.  v.  M.  P.  Ry.  Co.,  5  McC. 
373.] 


§  4155.  Service  may  be  made  by  publica- 
tion in  either  of  the  following  cases:  In 
*  *  *  actions  brought  against  a  non-resi- 
dent of  the  State,  or  a  foreign  corporation, 
having  in  this  State  property  or  debts  owing 
them,  sought  to  be  taken  by  any  of  the  pro- 
visional remedies,  or  to  be  appropriated  in 


any  Avay;  in  actions  which  relate  to,  or  the 
subject  of  Avhich  is,  real  or  personal  property 
in  this  State,  where  any  defendant  has  or 
claims  a  lien  or  interest,  actual  or  contingent, 
therein,  or  the  relief  demanded  consists 
wholly  or  partly  in  excluding  him  from  any 
interest  therein,  and  such  defendant  is  a  non- 
resident of  the  State  or  a  foreign  corpora- 
tion;    *    *     * 

[Suit  being  instituted  against  a  foreign  corpo- 
ration, aud  its  treasurer  garnished;  no  funds  of 
said  corporation  being  found  in  his  hands  within 
this  State  the  court  acquires  no  jurisdiction. 
AVheat  v.  Ry.  Co.,  4  Kan.  370.] 

§  4156.  (As  amended  :Mareh  10,  1S91.)  Be- 
fore service  can  be  made  by  publication,  an 
affidavit  must  be  filed  stating  that  the  de- 
I'endant  or  defendants  are  non-residents  of 
the  State  of  Kansas,  and  that  personal  ser- 
vice of  summons  cannot  be  had  upon  said 
defendant  or  defendants  within  the  State  of 
Kansas,  or  that  the  plaintiff,  with  due  dili- 
gence, is  vuiable  to  malce  personal  service  of 
summons  upon  the  defendant  or  defendants 
to  be  served  by  publication  within  the  State, 
and  showing  tliat  tlie  case  is  one  of  those 
mentioned  in  the  preceding  section.  When 
such  atfidavit  is  filed,  the  party  may  proceed 
to  make  service  by  publication.  This  act 
shall  apply  to  domestic  coriiorations  which 
have  not  been  legally  dissolved  in  cases 
u'here  the  officers  thereof  have  departed  from 
the  State  or  cannot  be  found. 

[All  that  such  an  affidavit  is  required  to  show 
is,  that  personal  service  cannot  be  made  on  the 
defendant  within  the  State,  and  that  the  action 
is  one  in  which  service  by  publication  may  be 
had.     Gillespie  v.  Thomas,  23  Kan.  139.] 

ARTICLE  VIII.      PLEADINGS  IN  CIVIL  AC- 
TIONS. 

Sec.  4193.  One  of  several  parties  may  verify;  when 
corporation    is    a    party,    who     shall 

verif.v. 

§  4193.  *  *  *  When  a  municipal  or  other 
corporation  is  a  party,  the  verification  may 
be  made  by  an  officer  thereof,  its  agent  or 
attorney. 

ARTICLE   XI.    ATTACHMENT. 

Sec.  4273.  Grounds    of    attachment. 

4291.  Answer  of    corporation     summoned   as 

garnishee. 
4314.  Same. 

§  4273.  The  plaintiff  in  a  civil  action  for 
the  recovery  of  money  may,  at  or  after  the 
commencement  thereof,  have  an  attachment 
against  the  property  of  the  defendant,  and 
upon  the  grounds  herein  stated: 

First.  When  the  defendant,  or  one  oC 
several  defendants,  is  a  foreign  corporation, 
or  a  non-resident  of  this  State;  (but  no  oi'der 
of  attachment  shall  be  issued  on  the  ground 
or  grounds  in  this  clause  stated  for  any 
claim  other  than  a  debt  or  demand  arising 
upon  contract,  judgment  or  decree,  unless  the 


KAXSAS. 


25 


Receivers;  officers  and  franchises  —  Stat.,  §§  4291,  4314,  4349,  4766,  4768,  4772. 


cause  of  action  ai'ose  wholly  within  the 
limits  of  this  State,  which  fact  must  be  es- 
tablished on  the  trial;) 


See  §§  4874,  4884,  as  to  attachments  before  jus- 
tices. 

§  4291.  The  answer  of  a  corporation  sum- 
moned as  a  garnisliee  may  be  made  by  any 
ofiicer  thereof;  and  of  any  other  garnishee, 
by  any  ajjent  or  attorney,  in  his  behalf,  who 
shall  be  acquainted  witli  the  facts. 

§  4.S14.  "When  any  coii)oration  shall  be  noti- 
fied to  appear  and  answer  as  garnishee  of 
any  defendant,  pursuant  to  sections  200,  201 
and  202,  of  said  chapter  80,*  the  answer,  re- 
quired to  be  made  by  such  garnishee  by 
section  215  of  said  chapter,  shall  not  be  re- 
quired in  any  case  in  less  than  fifteen  days 
from  tlie  service  of  the  order  and  notice, 
and  inteiTOgatories.  if  any;  and  when  neither 
the  president  or  other  head  of  such  corpora- 
tion, nor  the  secretary,  cashier,  or  managing 
agent  thereof,  shall  reside  or  live,  or  keep 
his  .office  or  place  of  business  in  the  county 
when  (where)  the  action  is  pending,  the  an- 
swer of  such  garnishee  shall  not  be  required 
In  less  than  thirty  days  from  the  service 
of  the  order  and  notice,  and  interrogatories, 
if  any, 

ARTICLE  XIII.     RECEIVERS. 

Sec.  4349.  Appointment  of  receiver. 

§  4349.  A  receiver  may  be  appointed  by 

the  supreme  court,  the  district  court,  or  any 

judge  of  either,   or  in  the  absence  of   said 

judges    from    the    county,    by    the    probate 

judge: 

***  ****** 

Fifth.  In  the  case  provided  in  this  Code, 
and  by  special  statutes,  when  a  cori)oration 
has  been  dissolved,  or  is  insolvent,  or  in 
imminent  danger  of  insolvency,  or  has  for- 
feited its  corporate  rights. 

Sixth.  In  all  other  cases  where  receivers 
have  heretofore  been  appointed  by  the  usages 
of  the  courts  of  equity. 

See   §   1202. 

[Under  fifth  subdivision  of  above  section,  a  re- 
ceiver may  be  appointed  at  suit  of  a  stocliholder, 
where  corporate  affairs  have  been  so  mismanaged 
that  it  has  become  insolvent,  and  it  appears  that 
all  the  officers  and  directors  have  conspired  to 
divert  its  business  to  another  company,  distribute 
Its  funds,  and  fraudulently  apply  its  assets  to 
their  individual  benefit.  In  re  Lewis,  52  Kan. 
660;  s.   c,  35  Pac.   Rep.  287.] 

ARTICLE  XXIX.     OFFICES  AND  FRANCHISES. 

Sec.  4766.  Writ  of  quo  warranto  abolished. 

4767.  In  what  cases. 

4768.  In  what  name. 

4772.  Damages;  ouster. 

4773.  Costs. 

§  4766.  The  writ  of  quo  warranto,  and 
proceedings  by  information  in  the  nature  of 

•Provisions  relating  to  garnishees.  §§  4283,  4302. 
§  202  has  been  repealed. 

33 


quo  warranto,  are  abolished,  and  the  rem- 
edies heretofore  obtainable  in  those  forms 
may  be  had  by  civil  action. 

§  4767.  Such  action  may  be  brought  in  the 
supreme  coui-t  or  in  the  district  court,  in  the 
following  ■cases: 

First.  When  any  person  shall  usurp,  intrude 
into,  or  unlawfully  hold  or  exercise  any  pub- 
lic office,  or  shall  claim  any  franchise  within 
this  State,  or  any  office  in  any  corporation 
created  by  authority  of  this  State; 

Second.  Whenever  any  public  officer  shall 
have  done  or  sulfered  any  act  which,  by  the 
provisions  of  the  law,  shall  worli  a  forfeiture 
of  his  office; 

Third.  When  any  association  or  number  of 
persons  shall  act  within  this  State  as  a  cor- 
poration without  being  legally  incorporated; 

Fourth.  When  any  corporation  do  or  omit 
acts  whicli  amoimt  to  a  surrender  or  a  for- 
feiture of  their  rights  and  privileges  as  a 
corporation,  or  when  any  corporation  abuses 
its  power  or  exercises  powers  not  conferred 
by  law; 

Fifth.  Where  any  corporation  claims,  by 
virtue  of  a  congressional  grant,  any  of  the 
public  lands  or  Indian  lauds  to  which  the 
Indian  title  or  right  of  occupancy  has  been 
extinguished; 

Sixth.  For  any  other  cause  for  which  a 
I'emedy  might  have  been  heretofore  obtained 
by  writ  of  quo  warranto,  or  information  iu 
the  nature  of  quo  warranto. 

[.Judgment  of  dissolution  can  probably  be  ren- 
dered only  in  an  action  in  the  nature  of  a  quo 
warranto,' but  it  may  be  rendered  in  any  case  for 
a  long-continued,  wilful  and  persistent  misuser 
or  non-user  of  corporate  franchises.  State  v. 
Pipher,  28  Kan.  131. 

The  State  may  proceed  by  civil  action  in  quo 
warranto  against  any  corporation  created  under 
the  laws  of  the  State  which,  without  authority, 
assumes  to  carry  on  the  business  of  insurance. 
State  v.  Ins.  Co.,  30  Kan.  585;  s.  c,  2  Pac.  Rep. 
S40.] 

§  4768.  When  the  action  is  brought  by 
the  attorney-general  or  the  county  attorney 
of  any  county  of  his  own  motion,  or  when 
directed  to  do  so  by  competent  authority,  it 
shall  be  prosecuted  in  the  name  of  the  State, 
but  where  the  action  is  brought  by  a  person 
claiming  an  interest  in  the  office,  franchise 
or  corporation,  or  claiming  any  interest  ad- 
verse to  the  franchise,  gift  or  grant,  which 
Is  the  subject  of  the  action,  it  shall  be  prose- 
cuted in  the  name  and  under  the  direction, 
and  at  the  expense  of  such  person;    *     *     * 

[In  mandamus  or  quo  warranto,  an  individual 
person  can  no  longer  sue  in  the  name  of  the 
State,  but  must  prosecute  his  action  in  his  own 
name.    Crowell  v.  Ward.  16  Kan.  61.] 

§  4772.  When  judgment  is  rendered  in 
favor  of  the  plaintiff,  he  may,  if  he  has  not 
claimed  his  damages  in  the  action,  have  a 
separate  action  for  the  damages  at  any  time 
witliin  one  year  after  tlie  judgment.  The 
court  may  give  judgment  of  ouster  against 
the  defeiidant,   and   exclude   him    from   the 


26 


KANSAS. 


Actions  before  justices  —  Stat.,  §§  4773,  4859-4861,  4874,  4884,  4934,  5279. 


oflBce,  franchise  or  corporate  rights;  and  in 
case  of  corporations,  that  the  same  shall  be 
dissolvod. 

§  47T.">.  If  judgment  be  rendered  against 
any  corporation,  or  against  any  persons 
claiming  to  be  a  corporation,  the  court  may 
cause  tlie  costs  to  be  collected  by  execution 
against  the  persons  claiming  to  be  a  coniora- 
tion.  or  by  attachment  against  the  directors 
or  other  otticers  of  the  corporation,  and  may 
restrain  any  disposition  of  the  effects  of  the 
coriioration.  appoint  a  receiver  of  its  prop- 
erty and  effects,  talce  an  account,  and  make 
a  distribution  thereof  among  the  ci*editors 
and   persons   entitled. 


CHAPTER  LXXXI. 

Procedure  —  Civil,  Before  Justices. 

Art.  2.  Commencement  of  an  action. 
4.  Attachment. 
8.  Trial. 

ARTICLE    II.      COMMEN'CEMENT    OF    AN    AC- 
TION. 

Sec.  4859.   Service  of  summons  on  corporations. 

4860.  On  insurance  company. 

4861.  On  foreign  corporations. 

§  4859.  A  summons  against  a  cori>oration 
may  be  served  upon  the  president,  mayor, 
chairman  of  the  l^oard  of  directors  or  trus- 
tees, or  other  chief  otficer;  or,  if  its  chief  offi- 
cer is  not  found  in  tlie  county,  upon  its 
cashier,  treasurer,  secretary,  clerli  or  man- 
aging agent;  or,  if  none  of  the  aforesaid  offi- 
cers can  be  found,  by  a  copy  left  at  the  office 
or  usual  place  of  business  of  such  coiijora- 
tiou),  with  the  person  having  chai'ge  thereof. 

See  §  4147. 

[A  service  of  summons  upon  a  corporation  which 
does  not  show  that  person  served  was  either  presi- 
dent, chairman  of  board  of  directors,  or  other 
chief  officer,  clerl<  or  managing  agent,  is  not  good. 
R.   R.  Co.  V.  niisbury,  21)  Kan.  653.] 

§  4860.  ^Yhen  the  defendant  Is  an  incor- 
porated insurance  company,  and  the  action 
la  brought  In  the  county  in  which  there  is 
an  agency  thereof,  the  service  may  be  upon 
the  chief  officer  of  such  agency. 

See  §  4152. 

§  4861.  When  the  defendant  Is  a  foreign 
corporation,  having  a  managing  agent  in  this 
State,  the  service  may  be  upon  such  agent. 

See  §  4153. 


ARTICLE   IV.    ATTACHMENT. 

Sec.  4874.  Affidavit,  and  grounds  for. 
4884.  Service  of. 

§  4874.  The  plaintiff  in  a  civil  action  for 
the  recovery  of  money  may,  at  or  after  the 


commencement  thereof,  have  an  attachment 
against  the  property  of  the  defendant,  and 
upon  the  grounds  herein  stated: 

First.  AVlien  tlie  defendant  or  one  of  sev- 
eral defendiints  is  a  foreign  corporation  or 
non-resident  of  this  State;  (but  no  attachment 
shall  1k3  granted  on  the  ground  or  grounds 
in  this  clause  stated,  for  any  claim  other 
than  a  debt  or  demand  arising  n])on  contract, 
judgment  or  decree,  unless  the  cause  of  ac- 
tion arose  wholly  witliin  the  limits  of  this 
State,  Avldch  fact  must  be  established  on 
tlie  trial); 

1  ^^  ^i  *  *  *  Hr-  If 

See  §§  4273  et  seq. 


§  4884.  The  copy  of  the  order  and  notice 
shall  be  served  upon  the  garnishee  as  fol- 
lows: *  *  *  if  a  corporation,  they  shall 
be  left  with  the  president  or  other  head  of 
tlie  same,  or  the  secretarj*,  cashier  or  man- 
aging agent  thereof. 


ARTICLE  VIII.      TRIAL. 

Sec.  4934.  Denial  of  corporate  existence. 

§  4934.  In  all  actions,  allegations  *  *  * 
of  the  existence  of  a  eoii^oration  *  *  * 
shall  be  taken  as  true  unless  tlie  denial  of  the 
same  be  verified  by  the  affidavit  of  the  op- 
posite party,  his  agent  or  attol'neJ^ 

Proof  of  corporate  existence.     §§  1166,  5279. 

[In  a  Justice's  court  the  existence  of  a  corpora- 
tion may  be  put  in  issue  by  the  defendant  without 
a  denial  under  oath,  or  even  a  written  denial  of 
any  kind.     Stanley  v.    Bank,   17  Kan.   592. 

It  was  sufficiently  shown,  in  case  at  bar,  that 
the  National  Bank  "of  Springfield,  Ohio,  was  a  cor- 
poration. Mann  v.  Bank,  34  Kan.  746;  s.  c,  10 
Pac.    Rep.    150. 

"When  the  answer  denying  the  allegation  of  cor- 
porate existence  is  verified,  it  must  be  proved  upon 
the  trial;  and  it  Is  error,  with  such  an  answer 
in  the  case,  to  render  judgment  against  the  cor- 
poration without  any  proof  of  its  corporate  exist- 
ence. Jones  v.  Ross,  48  Kan.  474;  s.  c,  29  Pac. 
Rep.   680.] 

CHAPTER  LXXXn. 

Procedure  —  Criminal. 

Art.  11.  Trials,   Incidents  thereto. 


AIITICIjE  XI.     TRIALS,  INCIDENTS  THERETO. 

Sec.  5279.  Existence   of   corporation,    how   proved. 

§  .5279.  If.  on  trial  or  other  proceeding  in 
a  criminal  cause,  the  existence,  constitution, 
or  powers  of  any  banlcing  company  or  cor- 
poration shall  become  material,  or  be  in  any 
way  drawn  in  question,  it  shall  not  be  neces- 
sarj'  to  produce  a  cei-tified  copy  of  the  char- 
ter or  act  of  incorporation,  but  the  same 
may  be  provcnl  by  general  reputation,  or  by 
the  printed  statute  book  of  tlie  Slate,  govern- 


KAXSAS. 


27 


Taxation—  Stat.,  (J8i6,  6847,  G849,  6850,  6858,  6864,  6865. 


niein  or  country  by  which  such  corporation 
A\as  created. 

Proof  of  corporate  existence.  §  1166.  See 
§  4t»34. 

[In  the  trial  of  a  criminal  case,  the  de  facto 
existence  of  a  corporation  is  all  that  Is  necessary 
to  be  shown;  and  existence  of  a  railroad  corpora- 
tion may  be  proved  by  general  reputation.  State 
V.  Thompson,  23  Kan.   338.] 


CHAPTER  CVII. 

Taxation. 

Art.  1.  Property   subject   to  taxation. 

3.  Property,  when  and  by  whom  listed. 

5.  Merchants  and  manufacturers. 

6.  Banks. 


ARTICLE  I.     PROPERTY   SUBJECT  TO  TAXA- 
TION. 

Sec.  6S4fi.   I'ropert.v  subject  to  taxation. 

6847.   I'ersonai  property  includes  what. 

§  6M6.  All  proi)erty  lu  this  State,  real  and 
personal,  not  expressly  exempt  therefrom, 
shall  l)e  subject  to  taxation  in  the  manner 
prescribed  by  this  act. 

§  (>.S47.  *  *  *  The  term  "  personal  prop- 
erty "  sliall  include  *  *  *  the  capital 
stock,  undivided  jtrotits.  and  all  otlier  assets 
of  eveiy  company,  incorporated  or  unincor- 
porated, and  eveiT  sliare  or  interest  in  such 
stociv,  profit  or  assets,  by  whatever  name 
the  same  may  be  desiRiiated:  Provided,  The 
same  is  not  included  in  other  personal  prop- 
erty subject  to  taxation  or  listed  as  the 
property  of  individuals;     «     *     * 

stock  is  personal  estate.     §  1184. 


ARTICLE    III.      PROPERTY.    AVHEN    AND    BY 
^VHOM  LISTED. 

Sec.  0840.  What  property  to  be  listed.     By  whom. 
6850.  Money. 
6858.  Corporate  stock. 

§  6.S49.  Eveiy  person  of  full  ajre  and  sound 
mind,  accovmtant  officer,  or  otlier  person 
desijJTuated  by  any  person,  company  or  cor- 
poration, sliall  list  all  personal  property  sub- 
ject to  taxation,  of  wlilch  sucli  person,  com- 
pany or  corporation  is  the  owner,  lessee  or 
occupant,  having  any  interest  in  or  exercis- 
ing any  control  over  any  personal  property, 
including;  all  moneys  in  his  possession  or 
subject  to  his  order,  check  or  draft,  and  all 
credits  due  or  to  become  due  from  any  per- 
son, company  or  corporation,  whether  in  or 
out  of  the  county  or  State  in  wliicli  such 
person  may  reside  or  such  company  l)e  lo- 
cated, except  as  herein  otherwise  provided. 

[AVhere  the  stock  in  a  mining  corporation  is  as- 
sessed to  the  stockholders  for  the  respective  shares 
held  by  them,  the  assessment  of  the  tangible 
property  of  the  corporation,  and  the  payment  of 
the  taxes  delivered  thereon  does  not  relieve  the 
stockholders  from  liability  to  pay  taxes  on  the 
excess  of  the   valuation   of  the   entire   stock  over 


the  valuation  of  the  tangible  property  of  the  cor- 
l)oration.  Ryan  v.  Leavenworth,  30  Kan.  185;  s.  c, 
1'   I'ac.    Rep.    loG.} 

§  ()850.  Money  collected  by  any  agent  for 
any  person,  company  or  corporation,  which 
is  to  be  transmitted  immediately  to  such  per- 
son, company  or  corporation,  shall  not  be 
listed  by  such  agent;  l»ut  such  agent  shall, 
if  required  by  tlie  assessor,  state  under  oath 
the  amount  <jf  money  in  his  hands,  and  to 
whom  the  same  is  to  be  ti-ansmitted. 

§  6858.  No  person  sliall  be  required  to  in- 
clude in  the  list  of  personal  property  any 
portion  of  the  capital  stock  of  any  com- 
pany or  coii)oiation  wliich  is  recpiired  to  be 
listed  by  sucli  coini)any  or  t^rporation;  but 
all  incorporated  comi)anies.  except  banks  and 
banking  associations,  manufacturing  com- 
panies and  stock-yard  companies,  shall  be 
required  to  list  by  their  designated  listing 
agent,  in  the  township  or  city  where  the 
principal  office  of  such  company  is  kept,  the 
full  amount  of  stock  paid  in  and  remaining 
as  capital  st/ock,  at  its  true  value  in  money, 
and  such  stociv  shall  be  taxed  as  otlier  per- 
sonal property:  Provided,  That  such  amount 
of  stock  of  such  companies  as  may  be  in- 
vested in  real  or  personal  property  in  the 
State  of  Kansas,  which  at  the  time  of  listing 
said  cjipiUil  stoclc  shall  be  particularly  speci- 
fied and  given  to  tlie  assessors  for  taxation, 
shall  be  deducted  from  the  amount  of  said 
capital  stock. 


ARTICLE  Y. 


MERCHANTS  AND  MANUFAC- 
TURERS. 


Sec.  6Sfi4.  Report  to  county  clerk. 
6865.   Failure;   forfeiture. 
686K.   Manufacturer  defined. 
6867.   Manufacturer  shall  list  what. 

§  (kStU.  Every  person,  company  or  corpora- 
tion, who  shall  commence  merchandising, 
trading  or  freighting  in  any  town,  city  or 
village  in  this  State,  after  the  firet  day  of 
^larcli  and  before  the  first  day  of  November 
in  any  year  and  the  value  of  whose  personal 
liroperty,  so  employed,  sliall  not  have  been 
listed  iov  taxation  in  any  other  county  in 
tliis  State,  shall  report,  under  oatli,  to  tiie 
(•l(M-k  of  the  countv  In  wliich  such  person, 
company  or  coriioration  is  engaged  in  busi- 
ness, the  prol)able  amount  of  the  average 
value  of  personal  ])r«)perty  intended  by  sucli 
person,  company,  or  corporation  to  be  so  em- 
ployed; and  such  amount  shall  be  entered 
by  said  clerk  on  the  assessment-roll  of  the 
countv  in  which  such  business  may  l>e  car- 
ried on,  and  such  property  shall  be  taxed 
the  same  as  if  the  same  had  been  returned 
by  the  proper  assessor. 

§  G8(>5.  If  any  person,  company  or  corpora- 
tion shall  commence  merchandising,  trading 
or  freiglitiug.  as  designated  in  tlie  foregoing 
section,  and  shall  not,  within  one  month 
thereafter,  report  in  accordance  with  the  re- 
quirements of  section  lt>  of  this  ait.  such 
person,  company  or  corporation  shall  forfeit 


28 


KANSAS. 


Taxation  —  Stat.,  §§  6866-6868. 


and  pay  four  per  cent,  on  the  value  of  the 
personal  property  by  him  or  them  so  em- 
ployed; and  the  value  of  such  property  shall 
be  ascertained  by  the  testimony  of  witnesses 
called  by  the  the  treasurer  of  the  county 
in  Avhich  such  business  may  be  carried  on. 
And  the  said  forfeitures  shall  be  collected  by 
sucli  treasurer;  by  a  suit  before  any  justice 
of  the  peace  or  court  having  jurisdiction 
thereof;  and  \\-hen  sucli  forfeiture  shall  be 
collected,  the  amount  shall  be  distributed  in 
the  same  proportion  as  other  taxes:  Pro- 
vided, It  shall  be  the  dutj'  of  said  treasurer 
to  notify  such  merchant  of  the  above  require- 
ment of  law,  at  least  ten  days  before  the 
commencement  of  such  suit. 

§  6866.  Every  person,  company  or  corpora- 
tion who  shall  hold  or  purchase  personal 
property  for  the  puriiose  of  adding  to  the 
value  thereof,  by  any  process  of  manufac- 
turing, refining,  or  by  the  combination  of 
different  materials,  shall  be  held  to  be  a 
manufacturer,  and  when  such  company  or 
corporation  shall  be  required  to  malie  out 
a  statement  of  other  personal  property  for 
taxation,  he  or  they  shall  state  the  average 
amount  of  all  articles  purchased  or  held  for 
the  pvirpo^e  of  being  used  in  such  process 
of  manufactimng,  refining  or  combining 
which  he  or  they  shall  have  had  on  hand 
during  the  year  next  preceding  the  first  day 
of  ]\Iarch  preceding  the  time  of  mailing  such 
statement,  which  amount  shall  be  ascer- 
tained by  estimating  the  amount  of  such 
property  on  hand  in  each  month  of  the  pre- 
ceding year,  or  such  portion  thereof  as  he 
or  they  may  have  been  engaged  in  such  busi- 
ness, then  add  the  several  monthly  estimates, 
and  divide  the  aggregate  by  the  number 
of  months  he  or  they  have  been  engaged  in 
sucli  business,  and  such  statement  shall  be 
verified  on  oath,  as  required  in  other  cases: 
Provided,  That  the  property  so  listed  shall 
not  be  valued  or  assessed  at  any  higher  rate 
than  other  property, 

§  6867.  Every  manufacturer  shall  list  the 
value  of  all  engines,  tools  and  machinery  of 
every  description,  not  forming  part  of  any 
parcel  of  the  real  property,  used  or  desig- 
nated to  be  used  in  any  process  of  manu- 
facturing as  defined  in  this  act. 


ARTICLE  VI.     BANKS. 

Sec.  6868.  Stock   in   banks,    how   assessed. 

§  6868.  (As  amended  March  i;>.  ISlil.) 
Stockholders  in  banks  and  banking  associa- 
tions and  loan  and  investment  comi)anies  or- 
ganized luadcr  the  laws  of  this  State  or  the 
United  States,  shall  be  assessed  and  taxed 
on  the  true  A'alue  of  their  shares  of  stock  in 
the  city  or  township  where  such  banks, 
banlving  associations,  loan  or  investment 
companies  are  located;  and  the  president, 
cashier  or  other  managing  otficer  tliereof, 
shall,  under  oath,  return  to  the  assessor  on 
demand  a  list  of  the  names  of  the  stock- 
holders and  amount  and  value  of  stock  held 
by  each,  together  with  the  value  of  any  undi- 
vided profit  or  surplus;  and  said  banks, 
banking  associations,  loan  or  investment 
companies  shall  pay  the  tax  assessed  upon 
said  stock  and  undivided  profits  or  surplus, 
and  shall  have  a  lien  thereon  until  the  same 
is  satisfied:  Provided.  That  if  from  any 
causes  the  taxes  levied  upon  the  stock  of  any 
banking  association,  loan  or  investment  com- 
pany shall  not  be  paid  by  said  corporation, 
the  property  of  the  individual  stockholders 
shall  be  held  liable  therefor:  Provided 
further.  That  if  any  portion  of  the  capital 
stock  of  any  bank  or  banking  association  or 
loan  or  investment  company  shall  be  invested 
in  real  estate  and  said  corporation  shall  hold 
a  title  in  fee  simple  thereto,  the  assessed 
value  of  said  real  estate  shall  be  deducted 
from  the  original  assessment  of  the  paid-up 
capital  stock  of  said  corporation,  and  said 
real  estate  shall  be  assessed  as  other  lands 
or  lots:  And  provided  further.  That  bank- 
ing stock  or  loan  and  investment  company 
stock  or  capital  shall  not  be  assessed  at  any 
higher  rate  than  other  property:  And  pro- 
vided further.  That  the  provisions  of  tliis  act 
shall  apply  to  all  mutual  fire  and  life  insur- 
ance companies  or  associations  having  as- 
sets, accumulations,  moneys  or  credits,  and 
doing  business  imder  tlie  laws  of  this  State: 
And  provided  further.  That  sucli  assets, 
money  and  credits,  held  and  under  the  con- 
trol of'  such  mutual  fire  and  life  insurance 
companies  or  associations,  shall  be  subject 
to  assessment  and  taxation. 


KAISrSAS. 


29 


Wages;  preferred  stock,  etc.  — Acts  Mch.  10,  1893;  Mch.  9,  1895;  Feb.  18,  1897. 


LEGISLATIVE  ACTS  RELATING  TO  CORPORATIONS,  ENACTED 
SUBSEQUENTLY  TO  1889. 


1.  Providing  for  the  weekly  payment  of  wages. 

2.  Authoi-izing     corporations    to    issue    preferred 

stock. 

3.  Discrimination  against  labor  organizations. 

4.  To  secure  to  laborers  payment  of  their  wages. 

5.  Prohibiting  trusts. 

6.  Allowing    corporations   to    become   members    of 

insurance  companies. 

7.  To  prevent  black-listing. 

8.  Relating  to  employment  of  detectives. 


Act  1. 

AN  ACT  providing  for  the  weekly  payment 
of  wages  in  lawful  money  of  the  United 
States  by  certain  corporations,  and  provid- 
ing a  penalty  for  the  violation  thereof. 

Be  it  enacted  by  the  legislature  of  the 
State  of  Kansas: 

Section  1.  All  private  corporations  do- 
ing business  within  this  State,  except 
all  steam  surface  railways  and  except 
coiTporations  engaged  in  the  production  of 
farm  and  dairy  products,  shall  pay  to  their 
employes  the  wages  earned  eacli  and  every 
week  in  lawful  money  of  the  United  States, 
and  all  sucli  wases  shall  be  due  and  pay- 
able and  shall  be  paid  by  such  coii^ora- 
tion  not  later  than  Friday  of  each  week  for 
all  such  Avages  earned  the  preceding  week. 

§  2.  Whenever  such  corporation  fails 
to  pay  any  of  tJieir  employes,  as  provided  in 
section  one  of  tins  act.  then  a  penalty  shall 
attach  to  such  corporation  and  become  due 
to  such  employes,  as  follows:  A  sum  equiva- 
lent to  a  penalty  of  five  per  cent.  i>er  montii 
as  liquidated  damages,  a)id  such  penalty 
shall  attach  and  become  a  judgment  in  any 
court  of  competent  jurisdiction,  and  the  pen- 
alty sliall  continue  in  full  force  and  effect 
including  all  the  time  intervening  up  to 
time  of  final  payment. 

*;  3.  Whenever  any  employe  is  discharged 
from  the  employ  of  anj  sneh  corporation, 
then  the  wages  of  such  ein])loye  shall  be- 
come due  and  payable  iu  the  same  manner 
as  heretofore  described  in  section  two. 

§  4.  Any  employe  may  recover  all  such 
penalties  that  may,  by  violations  of  sections 
two  and  three  of  this  act,  have  accrued  to 
him  at  any  time  within  six  months  succeed- 
ing such  default  or  delay  in  tlie  payment 
of  such  wages. 

§  5.  Any  contract  or  agreement  made  be- 
tween any  such  coiporation  and  any  parties 
in  its  employ,  wlK>se  provisions  shall  be  in 
violation,  evasion  or  cir'cumveution  of  this 
act,  shall  be  unlawful  and  void  in  its  effects 
as  to  such  corporations. 

§  6.  TMiene^er  ajiy  such  corporation  shall 
contract  any  or  all  its  work  to  any  contrac- 


tor, then  it  shall  bec-ome  the  duty  of  such  cor- 
poration to  provide  that  the  employes  of  such 
corporation  or  contractor  shall  be  paid  ac- 
cording to  the  provisions  of  this  act,  and 
such  corporation  shall  become  responsible 
and  liable  to  the  employes  of  such  contractor 
in  the  same  manner  as  if  said  employes  were 
employed  by  such  corporation. 

§  7.  WJienever  it  shall  become  necessary  for 
emploj^es  lo  enter  or  maintain  a  suit  at  law 
for  the  recovery  or  ■collection  of  wages  due 
as  provided  by  this  act,  then  such  judgment 
shall  include  a  reasonable  attorney  fee,  to 
be  taxed  as  a  part  of  the  costs  in  the  case, 
and  collected  under  the  same  provisions  of 
law  as  such  judgment. 

§  8.  This  act  shall  take  effect  and  be  In 
force  from  and  alter  its  pul)licatioa  in  the 
official  State  paper. 

^Approved  March  10,  1893.) 

Act  2. 

AN  ACT  authorizing  corporations   to   issue 
preferred  stock. 

Be  it  enacted  by  the  legislature  of  the 
State  of  Kansas: 

Section  1.  It  shall  be  lawful  for  any 
corporation  now  organized  or  that  may 
be  hereafter  organized  under  and  by 
virtue  of  the  laAvs  of  the  territory  of  Kaa- 
sas  or  the  State  of  Kansas  to  issue  prefeiTed 
stock:  Provided,  All  the  stockholders  of  any 
corporation  so  issuing  preferred  stock  shall 
gi\'e  tlu'ir  assent  to  such  issue. 

§  2.  This  act  shall  take  effect  and  be  in 
force  from  and  after  its  publication  in  the 
official  State  paper. 

(Approved  March  9,  1895.) 

Act  3. 

AN  ACT  to  prevent  the  discrimination  of 
corporations  or  individuals  against  mem- 
bers of  lalxir  organizations,  and  providing 
penalties  for  the  violation  of  this  act. 

Be  it  enacted  by  the  legislature  of  the 
State  of  Kansas: 

Section  1.  That  it  shall  be  unlawful  for 
any  person,  company,  or  corporation,  or 
the  agent,  officer,  manager,  superintend- 
ent, master  mechanic,  or  foreman  of  any 
person,  company,  or  corporation,  to  pre- 
vent employes  from  joining  and  belonging 
to  any  la])or  organization,  and  any  such  per- 
son, company,  or  corijoration,  or  any  agent, 
manager,  superintendent,  master  mechanic, 
or  other  officer  of  anj^  person,  compan.v,  or 


30 


KAXSAS. 


Wages;  trusts  — Acts   of  March  2,  1897;  March  S.  1897. 


corporation  tliat  coerces  or  attempts  to 
coerce  employes  by  discharfriug  or  threaten- 
ing to  discharge  said  employes  lK>cause  of 
their  connection  vrith  sncli  lalx)r  organiza- 
tion, shall  be  deemed  guilty  of  a  misde- 
meanor and  upon  conviction  thereof  shall  be 
fined  in  any  sum  not  less  than  tifty  dollars 
nor  more  than  tive  himdred  dollars. 

§  2.  That  any  person,  company,  or  corpora- 
tion doinj;  any  of  the  acts  prohibited  by 
section  one  of  this  act.  shall  be  liable  to  the 
pei*son  injured,  in  exemplary  or  punitive 
damages  not  to  exceed  two  thousand  dol- 
lars, to  be  recovered  by  civil  action,  and  in 
addition  thereto  a  reasonable  attorney  fee 
to  be  recovered  in  said  civil  action  for 
damages. 

§  3.  This  act  shall  take  effect  and  be  in 
force  from  and  after  its  publication  in  the 
statute  book. 

(Approved  February  18,  1897.) 


Act  4. 

AN  ACT  to  secure  to  laborers  and  others  the 
payment  of  their  \\  ages,  and  prescribing  a 
penalty  for  a  violation  of  this  act,  and  re- 
pealing sections  2441.  2442.  and  2443  of 
the  general  statutes  .of  1889,  and  all  acts 
and  parts  of  acts  in  conflict  herewith. 

Be  it  enacted  by  the  legislature  of  the 
State  of  Kansas: 

Section  1.  It  shall  be  unlawful  for  any 
pel  son,  firm,  company,  corijoratiou,  or 
trust,  or  the  agent,  or  the  business  man- 
ager of  any  such  person.  lirm.  company,  cor- 
poration or  trust  to  sell,  give,  delivei",  or  in 
any  Avay  directly  or  indirectly  to  any  per- 
son employed  by  him  or  it,  in  payment  of 
wages  due  or  to  become  due,  any  scrip, 
token,  check,  draft,  order,  credit  on  any 
book  of  account  or  otlier  evidence  of  indebt- 
edness, payable  to  bearer  or  his  assignee, 
otherA\  ise  than  at  the  date  of  issue,  but  such 
wages  shall  be  paid  only  in  lawful  money  of 
the  United  States,  or  by  check  or  draft 
drawn  upon  some  bank  in  which  any  per- 
son, firm,  company,  corporation,  or  trust,  or 
the  agent,  or  the  business  manager  of  any 
such  person,  firm,  company,  c-orporatiou,  or 
trust,  has  money  upon  deposit  to  cash  the 
same. 

§  2.  All  contracts  to  pay  or  accept  wages 
in  any  other  than  lawful  money,  or  by  check 
or  draft,  as  specified  in  section  one,  of  this 
act,  and  any  private  agreement  or  secret  un- 
derstanding that  wages  shall  be  or  may 
be  paid,  in  other  than  lawful  money,  or  by 
such  i-heck  or  draft,  shall  be  void,  and  the 
procui-ement  of  such  laivate  agreement  oi- 
secret  understanding,  shall  be  unlawful  and 
con.strued  as  coercion  on  the  ijart  of  the 
employer. 

§  3.  If  any  person  shall  violate  any  of 
the  provisions  of  either  s^Mtion  one  or  two 
of  this  act,  or  shall  compel,  or  in  any  man- 


ner attempt  to  comi)el,  or  coerce  any  em- 
ploye of  any  coii)oratioii.  or  trust  to  pur- 
chase goods,  or  sui)i»lies.  from  any  particular 
person,  firm.  cx)ii)oration.  company  or  trust 
or  at  any  particular  store  or  place,  he  shall 
be  guilty  of  a  misdeiiicanor,  and  ui)on  con- 
viction thereof,  shall  be  fined  not  less  than 
one  hundred  doll.-irs  nor  more  than  live  hun- 
dred dollars,  or  be  iinprisoned  in  the  county 
jail  not  less  than  thirty  or  more  than  ninety 
days,  or  by  both  such  fine  and  imprisonment 
for  each  violation. 

§  4.  This  act  shall  apply  only  to  coiiJora- 
tions  or  trusts  or  their  agents,  lessees,  or 
business  managers,  that  employ  ten  or  more 
persons. 

§  5.  The  county  attorney  of  any  county 
upon  complaint  made  to  him  shall  proceed 
to  pi"osecnte  the  violators  of  this  act  as 
prescrilied  in  otlier  cases  of  misdemeanor. 

§  0.  That  sections  2441,  2442,  and  2443  of 
the  general  statutes  of  Kansas,  of  ISSi).  and 
all  acts  and  parts  of  acts  in  conflict  with  the 
provisions  of  this  act  are  hereby  repealed. 

§  7.  This  act  shall  take  effect  and  be  in 
force  from  and  after  its  publication  in  the 
official  State  paper. 

(Approved  March  2,  1897.) 

Act  5. 

AX  ACT  defining  and  prohibiting  trusts, 
providing  procedure  to  enforce  the  pro- 
A'isions  of  this  act.  and  providing  pen- 
alties for  violations  of  the  provisions  of 
this  act. 

Be  it  enacted  by  the  legislature  of  the 
State  of  Kansas: 

Section  1.  A  trust  is  a  combination  of 
capital,  skill,  or  acts,  by  two  or  more 
persons,  firms,  corporations,  or  associations 
of  persons,  or  either  two  or  more  of  tliem, 
for  either,  any  or  all  of  the  following  jiur- 
poses:  First.  To  create  or  carry  out  restric- 
tions in  trade  or  commerce  or  aids  to  com- 
merce, or  to  carry  out  restrictions  in  the 
full  and  free  pursuit  of  any  business  a.u- 
thori/ed  or  pex'initted  by  the  laws  of  this 
State.  Second.  To  increase  or  reduce  the 
price  of  mercliandise.  produce  or  commodi- 
ties, or  to  control  the  cost  or  rates  of  in- 
surance. Third.  To  prevent  competition  in 
the  manufacture,  making,  transportation, 
sale  or  purchase  of  merchandise,  produce  or 
commodities,  or  to  prevent  competition  in 
aids  to  commerce.  Fourth.  To  fix  any 
standard  or  figure,  whereby  its  pric6  to  the 
public  sliall  be,  in  any  manner,  controlled 
or  established,  any  article  or  commodity  of 
merchandise,  produce  or  commerce  intended 
for  sale,  use  or  consumption  in  this  State. 
Fifth.  To  make  or  enter  into,  or  execute 
or  carry  out  any  contract,  obligation  or 
agreement  of  any  kind  or  description  by 
which  they  shall  bind  or  have  to  bind  them- 
selves not  to  sell,  manufacture,  disjxise  of 
or   transport   any  article  or  commodity,    or 


KAXSAS. 


31 


Trusts  —  Act  of  March  8,  1897. 


article  of  trade,  use.  merchandise,  com- 
merce or  consiimptiou  below  a  common 
standard  figure  or  by  which  they  shall 
agree  in  any  manner  to  keep  the  price  of 
such  article,  commodity  or  transportation 
at  a  fixed  or  graded  figure,  or  by  which  they 
shall  in  any  manner  establish  or  settle  the 
price  of  any  article  or  commodity  or  trans- 
portation between  them  or  themselves  and 
others,  to  prechide  a  free  and  unrestricted 
competition  among  themselves  or  others  in 
transportation,  sale  or  manufacture  of  any 
such  article  or  commodity,  or  by  which  they 
shall  agree  to  pool,  combine  or  unite  any 
Interest  they  may  have  in  connection  with 
the  manufacture,  sale  or  transportation  of 
any  such  article  or  commodity,  that  its 
price  may  in  any  manner  be  affected.  And 
any  such  combinations  are  hereby  declared 
to  be  against  public  policy,  unlawful  and 
void. 

§  2.  All  persons,  companies,  or  corpora- 
tions, within  this  State  are  hereby  denied 
the  right  to  form  or  to  be  in  any  manner 
interested,  either  directly  or  indirectly,  as 
principal,  agent,  representative,  consignee 
or  otherwise  iu  any  trtist  as  defined  in  sec- 
tion one  of  this  act. 

§  3.  Any  corporation,  holding  a  charter 
under  the  laws  of  the  State  of  Kansas  which 
shall  violate  any  of  the  provisions  of  this 
act  shall  thereby  forfeit  its  charter  and 
franchise,  and  its  corporate  existence  shall 
cease  and  determine.  And  any  stockholder, 
director,  otticer.  agent.  represeut<ttive  or 
consignee  of  any  stich  corporations  shall  be 
subject  to  the  penalties  herein  prescribed. 

§  4.  For  a  violation  of  any  of  the  pro- 
visions of  this  act  by  any  corporation,  or 
any  of  its  officers  or  iigents  mentioned 
herein,  it  shall  be  the  duty  of  the  attorney- 
general  of  the  State,  or  county  attorney  of 
any  cotmty  in  which  said  violation  may  oc- 
cur, or  either  of  them,  ttpon  his  own  mo- 
tion, to  institute  an  action  in  any  court  in 
this  State,  having  jurisdiction  thereof,  for 
the  forfeiture  of  the  charter,  rights  and 
franchise  of  such  eoriwration,  and  the  dis- 
solution of  its  corporate  existence. 

§  5.  Every  iwrson.  company  or  corpora- 
tion within  or  without  this  State,  their  offi- 
cers, agents,  representatives  or  consignees, 
violating  any  of  the  provisions  of  this  act, 
within  this  State,  are  hereby  denied  the 
right,  and  are  hereby  prohibited  from  doing 
any  business  within  this  State,  and  all 
persons,  companies  and  corporations,  their 
officers,  agents,  representatives  and  con- 
signees within  this  State  are  hereby  denied 
the  right  to  handle  the  goods  of.  or  in  any 
manner  deal  with,  directly  or  indirectly,  any 
such  person,  company  or  corijoration,  their 
officers,  ageut.s.  representatives  or  con- 
signees, and  it  shall  be  the  duty  of  the  at- 
torney-general, and  the  county  attorney  of 
any  county  in  the  State  where  any  violation 
of  this  act  be  committed,  or  either  of  them, 
to  enforce  the  provisions  of  this  section  by 


injunction  or  other  proceeding;  and  all  per- 
sons, companies  and  corporations,  their  offi- 
cers, agents,  representatives  or  consignees, 
violating  any  of  the  provisions  of  this  sec- 
tion, either  directly  or  indirectly,  or  of 
abetting  or  aiding  either  directly  or  indi- 
rectly in  any  violation  of  any  provisions  of 
this  section,  shall  l>e  deemed  guilty  of  a 
misdemeanor  and  shall  be  fined,  not  less 
than  one  hundred  dollars  nor  mure  than  one 
thousand  dollars,  and  confined  in  jail  not 
less  than  thirty  days,  nor  more  tiian  six 
months,  and  shall  forfeit  not  less  than  one 
hundred  dollars  for  each  and  every  day 
such  violation  may  continue,  which  may  be 
recovered  iu  the  name  of  the  State  of  Kan- 
sas in  any  court  of  comi>etent  jurisdiction. 
§  G.  Each  and  every  per.son,  company  or 
corporation,  their  officers,  agents,  representa- 
tives or  consignees,  who,  either  directly  or 
indirectly,  violate  any  of  the  provisions  of 
this  act  shall  be  deemed  guilty  of  a  misde- 
meanor and  on  conviction  thereof  shall  be 
subject  to  a  fine  of  not  less  than  one  hun- 
dred dollars  nor  more  than  one  thousand 
dollars,  and  shall  l>e  imprisoned  not  less 
than  thirty  days  nor  more  than  six  months, 
and  in  addition  thereto  for  each  and  every 
day  thereafter  that  such  violation  shall  be 
committed  or  continued,  forfeit  and  pa.v  the 
sum  of  one  htuidred  dollars,  which  may  be 
recovered  in  the  name  of  the  State  of 
Kansas,  in  au.v  county  where  the  offense  is 
committed  or  where  either  of  the  offenders 
reside,  and  it  shall  be  the  duty  of  the  at- 
torne.v-general  of  the  State,  or  the  coimty 
attorney  of  any  cotmty  in  the  State,  in  which 
said  violation  shall  occur,  or  either  of  them, 
to  prosecute  and  enforce  the  provisions  of 
this  act 

§  7.  Anj'  contract  or  agreement  in  viola- 
tion of  any  of  the  provisions   of  this  act, 
shall    be    absoltitely    void    and    not   enforce- 
able in  any  of  the  courts  of  this  State,  and 
when  any  civil  action  sliall  be  commenced 
in  any  court  of  this  State,  it  shall  be  law- 
ful to  plead  in  the  defense  thereof,  tliat  the 
plaintiff  or  an.v    person   Interested     in    the 
prosecution  of  the  case  is  at  the  time  or  has 
within  one  .vear  next  preceding  the  date  of 
the  commencement  of  any  such  action,  been 
gtiUty  either  as  principal,  agent,  representa- 
[  five,  or  consignee,  directly  or  indirectl.v.  of 
a  violation  of  any  of  the  provisions  of  this 
act,  or  that  the  cause  of  action  grows  out 
of  any  business  transaction  in  violation  of 
this  act. 
§  8.   That  any   person,    firm,    company   or 
!  corporation  that   may  be   damaged  by  any 
I  such  agreement,  trtists  or  combinations  de- 
!  .scribed  iu  sections  one  and  two  of  this  act, 
may   stie   for  and   recover  in   any   court  of 
!  competent  jurisdictiou  in  this  State,  of  any 
i  person,  company  or  combination,  operating 
j  such  trust  or  combination,  such  damages  as 
they  have  sustained,  together  with  a  reason- 
able attorney  fee. 
i      §  9.  It  shall  be  the  duty  of  the  attorney- 


32 


KANSAS. 


Trusts;  blacklisting  —  Acts  of  March  8,  1897;  March  12,  1897. 


general  of  the  State,  and  the  county  attor- 
neys in  their  respective  counties  to  dili- 
j;eiitly  prosecute  any  and  all  persons  vio- 
lating any  of  the  provisions  of  this  act,  and 
it  shall  be  the  duty  of  all  State  and  county 
officials  having  notice  and  knowledge  of  any 
violation  of  the  provisions  of  this  act,  to 
notify  the  county  attorney  of  their  respect- 
ive counties,  and  the  attorney-general  of  the 
State,  of  the  fact  of  such  violation  and  lo 
furnish  them  with  the  names  of  any  wit- 
nesses by  whom  such  violations  can  bo 
proved;  if  any  such  officer  or  officers  shall 
fail  to  comply  with  the  provisions  of  this 
section  he  shall  upon  conviction,  be  fined 
in  any  sum  not  less  than  one  hundred  dol- 
lars nor  more  than  one  thousand  dollars, 
and  such  conviction  shall  be  a  forfeiture  of 
the  office  held  by  such  person,  and  the  court 
before  whom  such  conviction  is  had,  shall 
in  addition  to  the  impositions  of  the  fine 
afoi'esaid,  order  and  adjudge  the  forfeiture 
of  his  said  office. 

§  10.  The  several  disti'ict  courts  of  this 
State,  and  the  judges  thereof  shall  have 
jurisdiction,  and  it  shall  be  their  duty,  upon 
good  cause  shown  and  upon  written  appli- 
cation of  the  county  attorney  or  the  attorney- 
general,  to  cause  to  be  Issued  by  the  clerk 
of  said  court,  subpoenas  for  such  witnesses 
as  may  be  named  in  the  application  of  a 
coimty  attorney  or  the  attorney-general,  and 
to  cause  the  same  to  be  served  by  the  sher- 
iff of  the  county  where  such  subpoena  is 
issued;  and  such  witnesses  shall  be  com- 
pelled to  appear  before  such  court,  or  judge, 
at  the  time  and  place  set  forth  in  the  sub- 
poena, and  shall  lie  compelled  to  testify  as 
to  any  knowledge  they  may  have  of  the  vio- 
lations of  any  of  the  provisions  of  this  act. 
And  any  witness  who  fails  or  refuses  to 
attend  and  testify  shall  be  punished  as  for 
contempt,  as  provided  by  law.  Any  person 
subpoenaed  and  examined  shall  not  be  liable 
to  criminal  prosecution  for  any  violation 
of  this  act  about  which  he  may  testify. 
Neither  shall  the  evidence  of  any  such  wit- 
ness be  used  against  him  in  any  criminal 
proceeding.  The  evidence  of  all  witnesses 
so  subpoenaed  shall  be  taken  down  by  the 
reporter  of  said  court  and  shall  be  tran- 
scribed and  placed  in  the  hands  of  the 
county  attorney  or  the  attorney-general,  and 
he  shall,  in  the  proper  courts,  at  once  prose- 
cute such  violator  or  violators  of  this  act 
as  the  testimony  so  taken  sliall  disclose. 
Witnesses  subpoenaed  as  provided  for  in 
this  section  shall  be  compelled  to  attend 
from  any  county  in  the  State. 

§  11.  Nothing  in  this  chapter  shall  be  held 
or  construed  to  affect  any  action  or  prose- 
cution which  is  now  pending  under  the  pro- 
visions of  any  law  now  in  existence  in  this 
State. 

§  12.  This  act  shall  take  effect  and  be  in 
force  from  and  after  its  publication  in  the 
official  State  paper. 
(Approved  March  8,  1897.) 


Act  6. 

AN  ACT  to  allow  public  corporations,  quasi- 
public  corporations  and  private  corpora- 
tions of  the  State  of  Kansas  to  become 
members  of  mutual  fire  insurance  com- 
panies for  the  purpose  of  carrying  in- 
surance in  such  companies. 

Be  it  enacted  by  the  legislature  of  the 
State  of  Kansas: 

Section  1.  That  any  public  corporation, 
quasi-public  corporation,  or  private  corpora- 
tion of  the  State  of  Kansas  has  power  to  be 
a  member  of  a  mutual  fire  insurance  com- 
pany and  vote  as  such  member  and  to 
execute  premium  notes  for  its  insurance. 

§  2.  That  anj-  coiporation  or  quasi-corpora- 
tion may  vote  by  any  one  of  its  officers  at 
the  annual  meetings  of  mutual  fire  insiu-ance 
companies    of  which  it  is  a  member. 

§  3.  This  act  shall  take  effect  and  be  in 
force  from  and  after  its  publication  in  the 
official  State  paper. 

(Approved  March  12,  1897.) 


Act  7. 

AN  ACT  to  prevent  blacklisting  by  em- 
ployers of  labor,  providing  penalties  there- 
for, and  for  the  recovery  of  damages. 

Be  it  enacted  by  the  legislature  of  the 
State  of  Kansas: 

Section  1.  Any  employer  of  labor  in 
this  State,  after  having  discharged  any 
person  from  his  service,  shall  not  pre- 
vent or  attempt  to  prevent  by  word,  sign 
or  writing  of  any  kind  whatsoever,  any 
such  discharged  employe  from  obtaining 
employment  from  any  other  person,  com- 
pany or  corporation  except  by  furnishing, 
in  wi-iting,  on  request,  the  cause  of  such 
discharge. 

§  2.  That  any  employer  of  labor  in  this 
State  shall,  upon  the  request  of  a  dischai-ged 
enq)loye,  furnish,  in  writing,  the  true  cause 
or  reason  for  such  discharge. 

§  3.  Any  employer  of  labor,  his  agent  or 
employe  Miio  shall  violate  the  provisions 
of  this  act  shall  be  guilty  of  a  misdemeanor 
and  shall,  upon  conviction,  be  fined  for  each 
oft'ense  the  sum  of  one  hundred  dollars  and 
thirty  days  imprisonment  in  the  county 
jail. 

§  4.  Any  person,  firm,  or  corporation, 
found  guilty  of  the  violation  of  sections  one 
and  two  of  this  act,  shall  be  liable  to  the 
party  injured  to  an  amount  equal  to  three 
times  the  sum  he  may  be  injured,  and  such 
employers  of  labor  shall  also  be  liable  for 
a  reasonable  attorney  fee  which  shall  be 
taxed  as  part  of  the  costs  in  the  case. 

§  5.  This  act  to  be  in  full  force  and  effect 
from  and  after  its  publication  in  the  statute 
book. 

(Approved  March  12,  1897.) 


KANSAS. 


33 


Special  policemen  —  Act  of  March  13,  1897. 


Act  8. 

AN  ACT  relating-  to  the  appointment  of 
special  deputies  or  policemen  by  sheriffs, 
mayors  and  other  persons  authorized  by 
law  to  make  such  appointments,  and  pro- 
viding penalties  for  violation  thereof. 

Be  it  enacted  by  the  legislature  of  the 
State  of  Kansas: 

Section  1.  That  no  sheriff  of  a  county, 
mayor  of  a  city,  or  other  private  per- 
sons authorized  by  law  to  appoint  special 
deputies,  marshals  or  policemen  in  this 
State,  to  preserve  the  public  peace  and  pre- 
vent and  quell  public  disturbances,  shall 
hereafter  appoint  as  such  special  deputies, 
marshals  or  policemen  any  person  who  is  not 
a  resident  of  this  State. 

§  2.  That  it  shall  be  unlawful  for  any  per- 
son, company  or  association  or  corporation 
to  bring  or  import  into  this  State  any  per- 
son or  persons  or  association  of  persons  for 
the  purpose  of  discharging  the  duties  de- 
volving upon  sheriffs,  deputy  sheriffs,  police- 
men, constables  or  peace  officers  in  the  pro- 
tection or  preservation  of  public  or  private 
property,  or  in  the  punishment  of  any  per- 
son violating  the  criminal  laws  of  this 
State. 

§  3.  That  any  person  or  persons  who  shall 
in  this  State,  without  the  authority,  exer- 
cise  or   attempt  to   exercise   the   functions 


of  or  hold  himself  or  themselves  out  to  any 
as  a  deputy  sheriff,  marshal,  policeman, 
constable  or  peace  officer,  shall  be  deemed 
guilty  of  a  misdemeanor,  and  upon  convic- 
tion thereof,  shall  be  punished  by  imprison- 
ment for  a  period  of  not  less  than  three 
montlis  nor  more  than  one  year. 

§  4.  That  any  person,  company  or  corpora- 
tion guilty  of  violating  any  of  the  provisions 
of  said  section  two  of  this  act  shall  be 
liable  to  a  penalty  of  ten  thousand  dollars, 
to  be  recovered  in  the  name  of  the  State, 
for  the  use  of  the  school  fund  of  the  county 
where  such  private  armed  detective  forces 
were  used  by  such  corporation  or  persons; 
and  the  person,  officer  or  agent  employing 
such  private  detectives  shall  be  guilty  of 
felony,  and  on  conviction  thereof,  shall  be 
punished  by  imprisonment  at  hard  labor 
not  exceeding  five  years  and  not  less  than 
one  year,  and  every  day  that  private  armed 
detective  forces  are  employed  or  used  shall 
be  considered  a  separate  and  distinct  of- 
fense: Provided,  however.  That  nothing  con- 
tained in  this  act  shall  prevent  the  governor 
of  this  State  from  appointing  a  citizen  of 
another  State  to  serve  a  warrant  issued  on 
a  requisition  from  the  governor  of  another 
State. 

§  5.  That  this  act  shall  take  effect  and  be 
in  force  from  and  after  its  publication  in  the 
statute  books. 

(Approved  March  13,  1897.) 


mDEX  TO  KANSAS. 


ACTIONS:  Page. 

right  to  maintain   10 

to  recover  debts  clue  from  stocliholders 16 

against  stoelcholders,  upon  dissolution 19 

to  recover  damages  on  account  of  trusts  and  combinations 22 

against  a  corporation,  where  brought   22,  23 

a  railroad  company 23 

a  turnpike  company   23 

charter  may  prescribe  place 23 

a  foreign  corporation   23 

summons,  how  served  on  corporation   23,  26 

on  railroad  and  stage  corporation 23 

designation  of  person  for  service 23,  24 

service  of,  by  publication 24 

pleadings,  verification  of   24 

proceedings  in  nature  of  quo  warranto 25 

foi'  forfeiture  of  charter 25 

AGENTS: 

right  of  corporations  to  appoint  11 

forgery  of  name  of   20 

ATTACHMENT: 

grounds  for  24-26 

corporation  as  garnishee,  answer 25 

service  of  order  and  notice -6 

BANKS: 

stock  in,  how  taxed   2S 

stockholders,  list  of,  to  be  returned 28 

BLACKLISTING: 

of  employes  prohibited   32 

BONDS: 

corporations  may  issue 12 

BOOKS  OF  CORPORATION: 

to  bo  kept  at  principal  office lt> 

inspection  of,  by  creditors  1" 

BORROW: 

corporation  may,  and  issue  bonds,  etc 12 

BY-LAWS: 

corporation  may  make    H 

directors  may  adopt 13 

stockholders  may  change   13 

transfer  of  stock   15 

payment  of  subscriptions  15 

CAPITAL  STOCK: 

charter  to  state  amount  of 9 

number  of  shares  of 'J 

increase  of,  by  stockholders   12 

certificate  of,  to  be  filed 12 

subscriptions  to,  when  and  how  received 12 


36  INDEX  TO  KAISTSAS. 

CAPITAL  STOCK  — (Continued):  Page. 

subscriptions  to,  notice  of  receiving 32 

books  to  be  liept 13 

payment  of,  how  made 15 

neglect  to  pay  installments 1-^ 

personal  property,  for  taxation  27 

CATTLE: 

pooling  to  regulate  prices  of 20,  21 

CHARTERS,  CORPORATE: 

what  to  state ^ 

five  or  more  persons  to  subscribe 9 

may  be  amended  by  vote  of  stockholders 9 

amended,  to  be  subscribed  by  directors  9 

of  a  road  company,  what  to  state 9 

filed  in  ofiice  of  secretary  of  state 9 

copy  of,  as  evidence  9 

existence  of  corporation  to  date  from  filing 9 

dissolution  for  failure  to  commence  business  after  filing 18 

legislature  may  amend  or  repeal 5 

COMBINATIONS    (See  Trusts): 

for  fixing  prices  illegal 21,  22 

CONDEMNATION: 

of  real  property    (See  Eminent  Domain.) 

CONSPIRACY: 

to  obstruct  business 21 

voluntary  quitting  employment  not  deemed   21 

CONTRACTS: 

right  of  corporation  to  make 11 

CONTRIBUTION: 

from  stockholders  may  be  compelled 19 

CONVEYANCES: 

of  real  property,  by  corporations,  ratified 7 

right   of  corporation  to  make    11 

deed,  how  executed 18 

CORPORATIONS: 

not  to  be  created  by  special  act 5 

dues  from,  to  be  secured  by  individual  liability  of  stockholders 5 

term  includes  what  6 

classification  of 7 

public,  what  are 7 

private,  what  are  7 

how  created    7 

for   what    purposes    7,  8 

obstructing  business  of 21 

conspiracy  for,  a  crime  21 

voluntary  quitting  employment  not  deemed 21 

member  of  mutual  fire  insurance  company 32 

CRIMINAL  CAUSES: 

proof  of  corporate  existence  in 26 

DEBTS,  CORPORATE: 

to  be  secured  by  liability  of  stockholders 5 

directors  liable  for,  when  unlawful  dividend  is  declared 16 

liability  of  stockholders  for 16 

enforcement  of,  by  execution  16 


INDEX  TO  KA:N^SAS.  37 

DIRECTORS:  Page. 

charter  to  state  nunaber  of 9 

names  of,  for  first  year 9 

amended  charter  subscribed  by 9 

number  may  be  changed 11,  13 

affidavit  filed  with  secretary  of  state 11 

increase  of  capital  stock 12 

subscriptiong  to  capital  stock   1'2 

quorum  of,  majority  constitutes 12 

annual  election  of   12 

failure  to  hold,   not  to  dissolve    13 

manner  of  conducting 15 

votes  of  stockholders   15 

oaths  of  office  of 33 

election  of  president,  secretary  and  treasurer 13 

by-laws  adopted  by  13 

of  religious  corporations 13 

general  management 13 

capital  stock,  unsubscribed  for   13 

records  and  books   13 

report  upon  request  of  stockholders 13 

stockholders  vote  for    15 

payment  of  subscriptions,  may  require 15 

dividends,  liability  for  unlawful   16 

three  to  be  residents  of  state l(i 

petition  for  completion  of  public  work 17,  18 

trustees  upon  dissolution 18,  19 

liability  of,  to  creditors  and  stockholders 19 

liability  of,  for  pooling  to  regulate  prices 20 

not  to  enter  trusts  and  combinations 22 

DISSOLUTION  OF  CORPORATION: 

by   expiration    18 

to  enable  creditors  to  secure  payment  of  debts 18 

for  failure  to  commence  business 18 

directors  trustees  for  creditors  and  stockholders 18,  19 

liability  of 19 

actions  against  stockholders  for  unpaid  debts 19 

receivers  may  be  appointed 25 

DIVIDENDS: 

directors  may  declare   13 

liability  for  declaring,  when  corporation  is  insolvent 16 

DURATION: 

oi  corporate  existence,  charter  to  state 9 

when  not  limited  by  charter 10 

extension  of 14 

ELECTIONS: 

annual,  of  directors  12 

failure  to  hold,  not  to  dissolve 13 

right  of  stockholders  to  vote  at 15 

cumulative  voting  for  directors 15 

EMINENT  DOMAIN: 

rights  of  owners  of  land   (J 

EMPLOYE: 

wages  payable  weekly 29 

payable  in  money  ^^0 

belonging  to  labor  organizations  29 

blacklisting  of,  prohibited 32 


38  INDEX  TO  KA:NtSAS. 

EVIDENCE:  Page. 

certifietl  copy  of  charter 9 

time  of  filing  charter,  certificate  as 9 

certified  records  of  corporation IS 

EXECUTION: 

a^rainst  stockholders  for  corporate  debts 10 

plaintific  ma.v  examine  books  17 

EXISTENCE,  CORPORATE: 

duration  of,  charter  to  state y 

to  date  from  fiUng  of  charter 9 

extension  of 14 

certificate  to  be  filed 14 

denial  of 2ij 

proof  of,  in  criminal  causes 2U 

termination  for  entering  trusts 31 

FIRE  INSURANCE: 

corporations  may  become  members  of  mutual  companies 32 

FOREIGN  CORPORATION: 

action  against,  where  brought   23 

service  of  summons   24.  26 

attachment  against    24 

FORFEITURE: 

of  stock  for  failure  to  pay  installments 15 

notice  to  be  given  to  stockholder 15 

of  charter   16 

how  prosecuted    25 

judgment  of  ouster   25.  26 

of  charter  and  franchise  for  entering  trusts 31 

FORGERY: 

false  making,  etc.,  of  corporate  debts 20 

FRANCHISE: 

corporate,  action  for  forfeiture 25 

how  prosecuted   25.  26 

forfeiture  of,  for  entering  trusts 31 

GARNISHEE: 

answer  of  corporation  as 25 

service  of  notice  and  order  on 26 

GRAIN: 

pooling  to  regulate  prices  of 20,  21 

HOGS: 

pooling  to  regulate  prices  of 20,  21 

INCORPORATION: 

of  corporations,  for  what  purposes 7,  8 

INSOLVENCY: 

corporation  in,  not  to  declare  dividends 16 

INSTALLMENTS: 

of  subscriptions  to  capital  stock 15 

neglect  of  stockholders  to  pay 15 

LABORER,  (See  Employe.) 
LABOR  ORGANIZATIONS: 

members  of.  not  to  be  discriminated  against 29 


IXDEX  TO  KAISTSAS.  39 

LAWS:  Page. 

special,  when  not  to  be  enacted 5 

granting  corporate  powers,  not  to  be  passed 5 

general,  corporations  to  be  created  pursuant  to 5 

LEGISLATURE: 

may  repeal  or  amend  laws  granting  privileges 5 

special  laws,  when  not  to  be  enacted 5 

LIABILITIES: 

of  stockholders  for  corporate  debts  5,  IG,  20 

enforcement  of,  by  execution 16 

of  directors,  for  declaring  unlawful  dividends 16 

of  stockholders  upon  dissolution 19 

of  officers,  for  pooling  to  regulate  prices 20 

LISTING    (See  Taxation): 

of  personal  property  for  taxation 27 

money  collected  by  agent 27 

not  to  include  stock  listed  by  corporation 27 

by  manufacturers 28 

MANUFACTURERS: 

reports  of,  to  county  clerk  for  taxation 27 

failure  to  make 27,  28 

who  are 28 

property  to  be  listed  by 28 

MEMBERS: 

of  corporations,  recovery  of  dues  from 16 

MERCHANTS: 

reports  of  personal  property  to  county  clerk 27 

failure  to  make 27,  28 

AnSNOMER: 

of  corporation,  effect  of 18 

MORTGAGE: 

right  of  corporation  to  execute 11 

NAME  OF  CORPORATION: 

charter  to  state   9 

provision  regulating 9 

right  of  succession  under : 10 

stockholders  may  change   11 

affidavit  of  change  to  be  filed 31 

notice  of  change  of  name  to  be  published 11 

OBSTRUCTION: 

of  business  of  corporation ...  21 

conspiracy  for,  a  crime 21 

voluntary  quitting  employment  not  deemed 21 

OFFICE: 

principal.     (See  Place  of  Business.) 

of  treasurer  to  be  within  state ly 

OFFICERS: 

right  of  corporations  to  appoint H 

forgery  of  names  of   20 

liability  of,  for  pooling  to  regulate  prices   20,    31 

PERSON: 

when  deemed  corporation 22 

PLACE  OF  BUSINESS: 

charter  to  state 9 

to  be  kept  within  state iq 

books  and  records  to  be  kept  at jy 


40  INDEX  TO  KANSAS. 

PLEADINGS:  I'-i^e. 

verification  of,  by  corporation 24 

POLICE  OFFICERS: 

appointed  by  corporations,  to  be  residents 33 

POOLING: 

for  regulating  prices,  a  crime -0,  21 

PREFERRED  STOCK: 

when  to  he  issued '-') 

PRESIDENT    (See  Officers): 

directors  to  elect 13 

and  secretary  to  make  annual  report 14 

PRICES: 

of  grain,  cattle,  hogs  and  stock,  pooling  to  regulate 20,  21 

trusts  and  combines  for  fixing,  illegal 22 

what  are   30 

PRIVATE  CORPORATIONS: 

what  are   " 

how  created    7 

PRIVILEGES: 

granted  by  legislature  may  be  amended  or  repealed 5 

PROCEEDINGS.    (See  Actions.) 
PROOF: 

of  corporate  existence  in  criminal  causes 2i! 

PROPERTY: 

right  to  hold,  mortgage  and  convey 11 

corporations  may  borrow  on 12 

PUBLIC  CORPORATIONS: 

what  are 7 

PUBLIC  IMPROVEMENT: 

extension  of  time  for  completion  of 17 

petition  to  court  for 17,  IS 

PURPOSES: 

for  which  corporations  may  be  created 8 

charter  to  state 9 

employment  of  capital,  etc.,  for  other  than  lawful 14 

QUO  WARRANTO: 

writ  abolished 2f> 

proceedings  by  action   25 

RAILROAD: 

obstructing  operation  of 21 

conspiracy  for,  a  crime 21 

voluntary  quitting  employment  not  deemed   21 

actions  against,  where  brought 23 

service  of  summons  on  company 23 

designation  of  person   23 

REAL  PROPERTY: 

condemnation  of,  rights  of  owners 6 

corporations  may  convey 7 

conveyances  of,  by  corporation,  ratified    7 

deeds,  how  executed IS 

right  to  hold,  mortgage  and  convey 11 

RECEIVERS: 

when  appointed 25 

RECORDS: 

to  be  kept  at  principal  office 1(5 

copies  of,  as  evidence  18 


INDEX  TO  ka:^[sas.  4T 

REPORTS:  Page. 

directors   to   make,   to   stockholders    13 

annual,  of  president  and  secretary 14 

contents  of   14 

penalty  for  failure  to  make 14 

of  merchants  and  manufacturers  to  county  clerk 27 

failui-e  to  mako 27,  28 

RIGHT  OF  WAY    (See  Eminent  Domain): 

not  to  be  appropriated,  except  for  compensation 6 

SEAL,  COMMON: 

right  to  make  and  use 10 

SECRETARY    (See  Officers): 

directors  to  appoint   13 

president  and,  to  make  annual  report 14 

SERVICE: 

of   summons   on   corporations    23,  26 

designation  of  persons  for,  by  certain  corporations 23 

effect  of  failure  to  make   24 

when  person  designated  cannot  be  found 24 

by  publication   ■ 24 

upon  foreign  corporation   24,  26 

upon  insurance  corporation   26 

SHARES  OF  STOCK    (See  Stock;  Capital  Stock): 

charter  to  state  number 9 

personal  property  for  taxation 27 

STOCK: 

capital,  charter  to  state  amount  of 9 

increase  of,  by  stockholders   12 

certificate  of,  to  be  filed 12 

subscriptions,  when  received 12 

notice  of  receiving  to  be  published 12 

payment  of,  how  made 15 

unsubscribed  for,  directors  may  dispose  of 13 

payment  of,  in  installments 15 

personal  property,  for  taxation  27 

dividends  upon 13 

employment  of,  for  unlawful  purpose 14 

deemed  personal  estate 15 

forfeiture  of,  for  failure  to  pay  installments 15 

notice  to  be  served  on  stockholder 15,  16 

personal  property,  for  taxation 27 

when  not  listed  for  taxation  27 

in  banks,  how  assessed   28 

preferred,  when  issued   29 

STOCKHOLDERS: 

debts  of  corporations  to  be  secured  by  liability  of 5 

may  vote  by  proxy 7 

amendment  of  charter  by  vote  of 9 

change  of  name  by 11 

of  number  of  directors 11 

increase  of  capital  stock 12 

by-laws  amended  by   13 

reports  of  directors   13 

extension  of  corporate  existence 14 

right  to  vote  15 

neglect  to  pay  installments 15 

debts  to  corporation,  how  recovered   16 

execution  against,  for  corporate  debts 16 

liability  of,  for  corporate  debts   16'  -^ 

34 


42  mDEX  TO  KANSAS. 

STOCKHOLDERS  —  (Continued) :  Page. 

bookg  containing  names  of,  inspection 17 

directors  when  trustees  for,  on  dissolution 18 

action  against,  upon  dissolution 19 

contribution  may  be  compelled  19 

trusts  and  combinations,  not  to  enter 22 

bank,  bow  taxed 28 

list  of,  to  be  returned 28 

preferred  stock,  consent  to  issue 29 

SUCCESSION: 

corporation  to  have  right  of  10 

SUMMONS: 

services  of,  upon  corporation  23,  26 

designation  of  person,  by  certain  corporations  23 

effect  of  failure  to  make 24 

when  person  designated  cannot  be  found 24 

by  publication   24 

TAXATION:  i 

property  subject  to 27 

stock  personal  property  27 

listing  of  property  for 27 

stock,  when  not  listed 27 

reports  to  county  clerk  by  manufacturers,  etc 27 

failure  to  make 27,  28 

listing  by  manufacturers   28 

stock  in  banks 28 

TRANSFER: 

of  stock,  books  for  record  of 13 

how  made   15 

assessments  to  be  paid 15 

by-laws  to  provide  manner  15 

TREASURER    (See  Officers): 

directors  to  appoint  13 

office  of,  to  be  within  state 18 

TRUSTEES.    (See  Directors.) 

TRUSTS: 

for  fixing  prices  illegal   21,  22,  30 

actions  for  the  prosecution   of 22,  31 

what  are  30 

corporations  entering,  forfeiture 31 

liability  of  officers  for 31 

contracts  forming,  are  illegal 31 

damages  recovered  for  entering  31 

attorney-general  to  prosecute   32 

TURNPIKE  CORPORATION: 

action  against,  M-here  brought 23 

VERIFICATION: 

of  pleadings,  by  corporation 24 

VOTES: 

of  stockholders  at  elections    15 

by    proxy    7,  15 

WAGES: 

weekly  payment  of  29 

effect  of  failure  29 

to  ba  paid  in  money 30 

WEEKLY  PAYMENT: 

of  wages  29 

penalties,  how  recovered    29 


KENTUCKY. 


TABLE  OF  CONTENTS. 


CONSTITUTIONAIi  PROVISIONS.  Paga. 

Bill  of  rights 5 

Suffrage  aud  elections 5 

Revenue  and  taxation    5 

Corporations 5 

General  provisions 5 

STATUTES. 

Oh.     26.  Construction  of  statutes 9 

32.  Private  corporations   9 

Art.     1.  General  provisions   9 

3.  Appointment  of  receiver 22 

36.  Crimes  and  punishments 22 

Art.     3.  Felonies   22 

38.  Currency    22 

59.  General  assembly 23 

101.  Pools,  trusts  and  conspiracies 23 

106.  Revenue  and  taxation 24 

Art.     3.  Assessment  of  corporations   24 

9.  Tax  on  organization 27 

CIVIL  CODE. 

TITLE    IV.    COMMENCEMENT    OF    A    CIVIL    ACTION. 

Oh.     2.  Service  of  summons 27 

Art.  1.  Actual   service    27 

2.  Constructive  service    28 

TITLE   V.   VENUE    OF   CIVIL   ACTIONS. 
TITLE   VII.   PLEADINGS. 

Oh.     7.  General  rules    28 

TITLE    VIII.       PROVISIONAL      REMEDIES. 

Ch.     3.  Attachment   28 

TITLE   X.   SPECIAL   PROCEEDINGS. 

Oh.  13.  Repealing    charters   and    preventing   usurpation  of  franchises  29 

TITLE    XIV.    MISCELLANEOUS    PROCEEDINGS. 

29 

Ch.     1.  Security  for  costs  09 

2.  Motions  and  notices  

TITLE    XVII.    RULES    OF    CONSTRUCTION. 

SPECIAL   ACTS    ENACTED    SUBSEQUENTLY    TO    1894. 


KENTUCKY. 


CO^STITUTIOI^  OF  IvEll^'TUOKY- 1891. 


PROVISIONS  RELATING  TO  CORPORATIONS. 


Bill  of  Rights. 

Sec.     3.  Grant  of    exclusive    privileges.      Amend- 
ment of  charter. 
13.  Private  property  not  to  be  taken  without 

compensation. 
19.   Ex    post     facto,    or    law    impairing     con- 
tracts, forbidden. 

Suffrage  and  Elections. 

Sec.  150.  Penalty     upon     corporation      guilty      of 
bribery. 

Revenue  and  Taxation. 
Sec.  174.  Taxation   of  property   of  corporations. 

Corporations. 

8ec.  190.  Constitution  to  be  accepted  by  corpora- 
tion. 

191.  Charters  granted  prior  to  Constitution; 

forfeiture  of. 

192.  Business    unauthorized    by    charter    pro- 

hibited;  real  value. 

193.  Stocks  or  bonds  not  to  be  issued  unless 

for  value. 

194.  Agent  upon  whom  process  may  be  served 

to  be  located  in  State. 

195.  Right    of    eminent    domain    retained    by 

State. 

196.  Transportation;     charge     for;     common- 

law  liability. 

197.  Free    passes;    issual    or   acceptance    for- 

bidden. 

198.  Trusts    and     combinations    to    be    sup- 

pressed. 

199.  Telegraph  and  telephone  companies. 

200.  Domestic    corporation    does    not   become 

foreign  by  consolidation  with. 

201.  Common  carrier  not  to  consolidate  with 

or  purchase  parallel  line;  contracts  be- 
tween;  when   forbidden. 

202.  Foreign  corporations  subject  to  laws  re- 

lating to  domestic  corporations. 

203.  Sale   or   lease  of   franchise  does  not  af- 

fect existing  liabilities. 

204.  Bank;    penalty    for    officer   of   insolvent, 

receiving  deposits. 

205.  Forfeiture  of    charters    of    corporations 

guilty  of  abuses  of  power. 

206.  Elevators;  warehouses;   subject  to  legis- 

lative control;  inspection. 

207.  Directors;   election  of;  votes  that  stock- 

holder may  cast. 
206.  "  Corporation;  "  meaning  of  word. 

General  Provisions. 
Sec.  241.  Negligent  injury   resulting  in   death;  ac- 
tion for. 
242.  Private    property;    taking    of,    for    pub- 
lie  purposes;  appeal;  trial  by  jury. 
244.  Wage-earners     to     be     paid     in     lawful 
money. 

§  3.    *    *    *    No  grant  of  exclusive,  sepa- 
rate public  emoluments  or  privileges  shall 


be  made  to  anj-  man  or  set  of  men,  except 
in  consideration  of  public  services;  but  no 
property  shall  be  exempt  from  taxation  ex- 
cept as  provided  in  this  Constitutiou;  and 
every  grant  of  a  franchise,  privilege  or  ex- 
emption, shall  remain  subject  to  revocation, 
alteration  or  amendment. 

See  Const.,  §  19;  Statutes,  §§  559,  570,  4077  et 
seq.,  and  notes. 

[Grants  of  franchises  are  to  be  strictly  con- 
strued in  favor  of  the  public.  Maddox  v.  Graham, 
2  Met.  72;  R.  R.  Co.  v.  Warren  Co.  Ct.,  10  Bush, 
724. 

An  act  conferring  upon  a  corporation  the  power 
to  sell  land  in  the  foreclosure  of  mortgages,  with- 
out the  intervention  of  a  court,  the  company  hav- 
ing performed  no  public  service  to  the  State,  is 
unconstitutional  and  void.  Trust  Co.  v.  Lewis,  82 
Ky.  579.     It     is  class  legislation.     Id. 

Charter  immunity  from  taxation  is  not  a  vested 
right.     Bank  v.  Daviess,  39  S.  W.  Rep.  1030.] 

§  13.  *  *  *  Nor  shall  any  man's  prop- 
erty be  taken  or  applied  to  public  use  with- 
out the  consent  of  his  representatives,  and 
without  just  compensation  being  previously 
made  to  him. 

See  Const.,   §§  242,  195. 

§  19.  No  ex  post  facto  law,  nor  any  law 
Impairing  the  obligation  of  contracts,"  shall 
be  enacted. 

See  Const.,  §  3.  Amendment  of  articles  of  in- 
corporation.   Statutes,   §  559,   and  note;   §   1987. 

[Act  of  Incorporation  a  contract  within  mean- 
ing of  Constitution,  and  laws  Impairing  the  obli- 
gation of  such  contract  are  unconstitutional,  when 
right  to  amend  is  not  reserved.  Hamilton  v. 
Keith,  5  Bush,  461;  Slack,  v.  R.  R.  Co.,  13  B.  M. 
25. 

Right  conferred  by  charter  cannot  be  divested 
by  subsequent  legislation;  but  when  such  right  is 
claimed  by  construction  merely,  and  legislature 
has  passed  an  act  inconsistent  with  the  right  so 
claimed,  a  construction  should  not  be  given  which 
would  produce  a  conflict  unless  imperatively  de- 
manded by  the  scope  and  design  of  the  charter. 
M.  T.  Co.  v.  How,  14  B.  M.  432.  Legislature  may 
control  and  modify  remedies  given  to  corpora- 
tions to  same  extent  it  has  in  other  cases,  if  no 
vested  right  be  encroached  upon  nor  obligation  of 
contract  be  impaired.  Howard  v.  Ins.  Co.,  13 
B.  M.  285. 

Legislature  may  create  corporations,  and,  in 
consideration  of  their  assuming  liabilities  and  du- 
ties,  grant   them   rights   and    privileges   that   can- 


KEIsTTUCKY. 


Corporations  —  Const.,  §§  150,174,  lltO-lOS. 


not  afterward,  without  consent,  be  impaired  or 
diminislied.  R.  R.  Co.  v.  Comm.,  10  Bush,  47; 
CovinfTton  v.   Bridge  Co.,  id.  7G. 

A  contract  arising  out  of  the  passage  and  ac- 
ceptance of  a  charter  invests  the  corporation 
with  an  absolute  right  of  property  and  con- 
fers such  authority  as  vests  the  corporation 
with  such  interests  as  are  of  appreciable  value. 
R.  R.  Co.  V.  Kinner,  81  Ky.  221.  But  a  special 
reniedv  given  to  a  railway  company  for  the  con- 
demnation of  real  estate  contains  no  element  of 
a  contract  and  may  bo  repealed.     Id. 

A  right  to  amend  charter  of  a  private  corpora- 
tion does  not  reserve  to  the  general  assembly  the 
power  to  talie  away  from  corporators  the  control 
of  the  corporate  property.  Orr  v.  Bracken  Co. 
Ct.,  81  Ky.  593.  Nor  alter  the  right  to  select 
officers   under   the    charter.    Id. 

Provision  of  charter  releasing  a  corporation 
from  pavmeut  of  taxes  constitutes  a  binding  con- 
tract, from  which  State  cannot  recede  without 
consent  of  the  corporation,  unless  power  to  alter 
or  amend  is  expressly  reserved  in  the  charter  or 
in  a  general  law  in  force  at  the  time.  Franklin 
Co.  Ct.  v.  Bank,  87  Ky.  370;  s.  c,  9  S.  W.  Rep. 
212. 

§  1.50.  *  *  *  If  a,ny  corporation  shall, 
directly  or  indirectly,  offer,  promise  or  give, 
or  shall  authorize,  directly  or  indirectly,  any 
person  to  offer,  promise  or  give  any  money 
or  anything  of  value  to  influence  the  result 
of  any  election  in  this  State,  or  the  vote  of 
any  A-'oter  authorized  to  vote  therein,  or  who 
shall  afterward  reimburse  or  compensate,  in 
any  manner  whatever,  any  person  who  shall 
have  offered,  proniised  or  given  any  money 
or  other  thing  of  value  to  influence  the  re- 
sult of  any  election  or  the  vote  of  any  such 
voter,  such  coriioration,  if  organized  under 
the  laws  of  this  commonwealth,  shall,  on 
conviction  tliereof,  forfeit  its  charter  and 
all  rights,  privileges  and  immunities  there- 
under; and  if  chartered  by  another  State 
and  doing  business  in  this  State,  whether  by 
license,  or  upon  mere  sufferance,  such  corpo- 
ration upon  conviction  of  either  of  the  of- 
fenses aforesaid,  shall  forfeit  all  right  to 
carry  on  auj^  business  in  this  State;  and  it 
shall  bo  the  duty  of  the  general  assembly 
to  provide  for  the  enforcement  of  the  pro- 
visions of  this  section.    *    *    * 

§  174.  All  property,  whether  owned  by 
natural  persons  or  corporations,  shall  be 
taxed  in  proportion  to  its  value,  unless  ex- 
empted by  the  Constitution;  and  all  cor- 
porate property  shall  pay  the  same  rate  of 
taxation  paid  by  individual  property.  Noth- 
ing in  this  Constitution  shall  be  construed 
to  prevent  the  general  assembly  from  pro- 
viding for  taxation  based  on  income,  licenses 
or  franchises. 


See 


4077-4091,  and  notes;  §  4226. 


[Constitutionality  of  acts  of  legislature  author- 
izing taxation  in  aid  of  corporations.  Draining 
Co.  v.  Hooper,  2  Met.  354;  Fence  Co.  v.  McAllis- 
ter, 12  Bush.  314. 

Mere  imposition  of  taxes  when  charter  is 
granted  or  afterward  will  not  authorize  assumn- 
tion  that  legislature  has  contracted  that  no  addi- 
tional taxation  shall  be  imposed.  R.  R.  Co.  v. 
Comm.,  10  Bush,  48. 

The  imposition  of  a  State  tax  upon  property  of 
a  corporation  is  no  violation  of  the  contract  or 
privilege   given   by    the    charter,    unless    by    such 


charter  the  right  to  levy  the  tax  be  expressly  sur- 
rendered.    Canal  Co.  v.  Comm.,  7  B.   M.  161. 

Neither  national  nor  State  governments  can  tax 
a  corporation  legally  established  bv  either 
though  they  may  tax  its  funds  within  their 
Iwundaries.  Comm.  v.  Morrison,  2  Mar.  96;  see 
Comm.  T.  Milton,   12  B.  M.   228. 

An  intention  to  surrender  the  power  of  taxa- 
tion will  not  be  imputed  to  the  State  unless  the 
language  leaves  no  other  alternative.  R.  R.  Co. 
V.  Bourbon  Co.,  82  Ky.  497.  An  act  imposing 
additional  taxation  for  county  purposes  is  con- 
stitutional.   Id. 

The  property  of  a  corporation  Is  taxable  under 
a  statute  authorizing  the  taxation  of  the  property 
of  "  white  persons  "  for  graded  school  purposes, 
unless  the  corporation  claiming  that  it  is  exempt 
sliows  that  its  corporators  and  stockholders  are 
black  persons.    Board  v.   Bell   Co.,  96  Ky.   68.] 

§  190.  No  corporation  in  existence  at  the 
time  of  the  adoption  of  this  Constitution 
shall  have  the  benefit  of  future  legislation 
without  first  filing  in  the  office  of  tlie  sec- 
retary of  State  an  acceptance  of  the  pro- 
visions of  this   Constitution. 

Amendment  of  charters  of  old  corporations. 
§  574;  see,  also,  §  570. 

[The  court  will  not  presume  a  failure  to  com- 
pl.T  with  Constitution,  section  190,  requiring  an 
existing  corporation,  in  order  to  get  the  benefit  of 
future  legislation,  to  file  an  acceptance  of  such 
Constitution.  Elliott  v.  City  of  Louisville,  40  S. 
W.  Rep.  690.] 

§  191.  All  existing  charters  or  grants  of 
special  or  exclusive  privileges,  under  which 
a  bona  fide  organization  shall  not  have 
taken  place,  and  business  been  commenced 
in  good  faith  at  the  time  of  the  adoption 
of  this  Constitution  shall  thereafter  be  void 
and  of  no  effect. 

See  §S  559,  570. 


§  192.  No  corix)ration  shall  engage  in  busi- 
ness other  than  that  expressly  authorized 
by  its  charter,  or  the  law  under  which  it 
may  have  been  or  hereafter  may  be  organ- 
ized, nor  shall  it  hold  any  real  estate,  ex- 
cept such  as  may  be  proper  and  necessary 
for  carrying  on  its  legitimate  business,  for 
a  longer  period  tlian  five  years,  under  pen- 
alty of  escheat. 

Forfeiture  of  charters.  Const.,  §  205.  Trusts 
prohibited.  §S  3915-.3921.  General  powers  of  a 
corporation.    §  542  (6),  and  note. 

§  193.  No  corporation  shall  issue  stocks 
or  bonds  except  for  an  equivalent  in  money 
paid  or  labor  done,  or  property  actually  re- 
ceived and  applied  to  the  purposes  for  which 
such  corporation  was  created,  and  neither 
labor  nor  ])roperty  shall  be  received  in  pay- 
ment of  stock  or  bonds  at  a  greater  value 
than  the  market  price  at  tlie  time  said  labor 
was  done  or  proi^eri.v  delivered,  and  all  fic- 
titious increase  of  stock  or  indebtedness  shall 
be  void. 

See  §  544. 

[Where  corporation  issued  bonds  with  Interest 
coupons   attached,    and    after    insolvency    of    cor- 


KENTUCKY 


Corporations  —  Const.,  §§  194-201. 


poratiou  some  uncanceled  coupons  were  found  in 
possession  of  president,  his  claim  against  corpo- 
ration for  amount  of  tlioso  coupons,  upon  ground 
that  he  had  paid  them  out  of  his  own  means,  can- 
not be  sustained.  Lloyd  v.  AVagner,  93  Ky.  644- 
s.  c.  21  S.  "\V.  Rep.  3:34. 

AVhere  a  stockholder  has  paid  his  subscription 
in  full  by  a  transfer  of  land  which  proves  to  be 
•if  less  value  than  was  agreed  upon,  he  cannot  be 
made  liable  to  creditors  on  his  subscription  until 
the  land  has  been  exhausted.  Land  Co.  v.  Cooke. 
44  S.  W.  Rep.  391.] 

§  194.  All  corporatious  formed  under  the 
laws  of  this  State,  or  carrying  on  business 
in  this  State,  shall,  at  all  times,  have  one 
or  more  known  places  of  business  in  this 
State,  and  an  authorized  agent  or  agents 
there,  upon  whom  process  may  be  executed, 
and  the  general  a.ssembly  shall  enact  laws 
to  carry  into  effect  the  provisions  of  this 
section. 

See  Statutes,  §  571,  and  note.  Foreign  corpo- 
ration, suljject  to  laws  governing  domestic  cor- 
poration.    Const.,   §  202. 

§  195.  The  commonwealth,  in  the  exer- 
cise of  the  right  of  eminent  domain,  shall 
have  and  retain  the  same  powers  to  take 
the  property  and  franchises  of  incorporated 
companies  for  public  use  which  it  has  and 
retains  to  take  the  property  of  individuals, 
and  the  exercise  of  police  powers  of  this 
commonwealth  shall  never  be  abridged,  nor 
so  c-onstrued  as  to  permit  coiijorations  to 
conduct  their  business  in  such  manner  as 
to  infringe  upon  the  equal  rights  of  indi- 
viduals. 

See  Const.,   §|  13,  ^2. 

§  196.  Transportation  of  freight  and  pas- 
sengers by  railroad,  steamboat  or  other  com- 
mon carrier,  shall  be  so  regulated,  by  gen- 
eral law,  as  to  prevent  unjust  discrimina- 
tion. No  common  carrier  shall  be  permitted 
to  contract  for  relief  from  its  common-law 
liability. 

Consolidation  with  competitors  prohibited. 
Const.,  §  201.  Trusts  and  combinations  pro- 
hiuited.    Const.,    §   198;   Statutes,   §§  3915-3921. 

§  197.  No  railroad,  steamboat  or  other 
common  carrier,  under  heavy  penalty  to  be 
fixed  by  the  general  assembly,  shall  give  a 
free  pass  or  passes,  or  shall,  at  reduced 
rates  not  common  to  the  public,  sell  tickets 
for  transportation  to  any  State,  district, 
city,  town  or  county  officer,  or  member  of 
the  general  assembly,  or  judge:  and  any 
State,  district,  city,  town  or  county  officer, 
or  member  of  the  general  assembly,  or  judge, 
who  shall  accept  or  use  a  free  pass  or  pas.ses, 
or  shall  receive  or  use  tickets  or  transporta-  i 
tion  at  reduced  rates  not  common  to  the  ^ 
public,  shall  forfeit  his  office.  It  shall  be 
the  duty  of  the  general  assembly  to  enact 
laws  to  enforce  the  provisions  of  this  sec- 
tion. 

§  198.  It  shall  be  the  duty  of  the  general 
assemply   from   time   to   time,   as   necessity 


may  require,  to  enact  such  laws  as  may 
be  necessary  to  prevent  all  trusts,  pools. 
com1)inations  or  other  organizations,  from 
combining  to  depreciate  below  its  real  value 
any  article,  or  to  enhance  the  cost  of  any 
article  above  its  rftil  value. 

See  Statutes,  §§  3915-3921;  Const,  §§  196  201 
206. 

§  199.  Any  association  or  corporation,  or 
the  lessees  or  managers  thereof,  organized 
for  the  purpose,  or  any  individual,  shall 
have  the  right  to  construct  and  maint^tiu 
lines  of  telegraph  within  this  State,  and  to 
connect  the  same  with  other  lines,  and  said 
companies  shall  receive  and  transmit  each 
other's  messages  without  unreasonable  de- 
lay or  discrimination,  and  all  such  companies 
are  hereby  declared  to  be  common  carriers 
and  subject  to  legislative  control.  Tele- 
phone companies  operating  exchanges  in  dif- 
ferent towns  or  cities,  or  other  public  sta- 
tions, shall  receive  and  transmit  each  other's 
messages  without  unreasonable  delav  or  dis- 
crimination. The  general  assembly  .shall,  by 
general  laws  of  uniform  operation,  provide 
reasonable  regulations  to  give  full  effect  to 
this  section.  Nothing  herein  shall  be  con- 
strued to  interfere  with  the  rights  of  cities 
or  towns  to  arrange  and  control  their  streets 
and  alleys,  and  to  designate  the  places  at 
which,  and  the  manner  in  which,  the  wires 
of  such  companies  shall  be  erected  or  laid 
within  the  limits  of  such  city  or  town. 

§  200.  If  any  railroad,  telegraph,  express, 
or   other   corporation,    organized    under   the 
laws  of  this  commonwealth,   shall   consoli- 
date  by  sale  or  otherwise,    with   anv   rail- 
road,   telegraph,    express   or   other   con:)ora- 
tion  organized  under  the  laws  of  any  other 
State,    the  same   shall   not  thereby   become 
I  a  foreign  coiiwration,  but  the  courts  of  this 
I  commonwealth  shall  retain  jurisdiction  over 
j  that  part  of  the  coriwrate  propertv  -nithin 
the  limits  of  this  State  in  all  matters  which 
may  arise,  as  if  said  consolidation  bad  not 
taken  place. 

§  201.  No  railroad,  telegraph,  telephone, 
bridge  or  common  carrier  company  shall 
consolidate  its  capital  stock,  franchises  or 
property,  or  pool  its  earnings,  in  whole  or  in 
l>art,  with  any  other  railroad,  telegraph, 
telephone,  bridge  or  common  carrier  com- 
pany, owning  a  parallel  or  competing  line 
or  structure,  or  acquire  by  purchase,  lease  or 
otherwise,  any  parallel  or  competing  line 
or  structure,  or  operate  the  same;  nor  shall 
any  railroad  company,  or  other  common  car- 
rier combine  or  make  any  contract  with  the 
owners  of  any  vessel  that  leaves  or  makes 
port  in  this  State,  or  with  any  common  car- 
rier, by  which  combination  or  contract  the 
earnings  of  one  doing  the  carrying  are  to 
be  shared  by  the  other  not  doing  the  carrv- 
ing. 

See  Const.,  §§  196,  198;  Statutes,  |§  3915-3921. 
Service  of  summons  on  common  carrier.  Civ. 
Code,  §  51. 


8 


k:entucky. 


Corporations  —  Const.,  §§  202-208,  241,  242,  244. 


§  202.  No  corporatiou  orsanized  outside 
the'limit.s  of  this  State  shall  be  allowed  to 
transact  business  within  the  State  on  more 
favorable  conditions  than  are  prescribed  by 
law  to  similar  con)orations  organized  under 
the  laws  of  this  commonwealth. 

See  Const.,  §§  194,  200;  Statutes,  §  571,  and  note. 

[Corporation  established  by  laws  of  Ohio,  and 
same  corporation  established  by  statute  of  Ken- 
tucky are  agents  for  each  other  and  bound  by 
each  other's  transactions  of  their  common  busi- 
ness. Bridge  Co.  v.  Woolley,  78  Ky.  525.  Em- 
ployment by  the  Kentucky  corporation  of  an  at- 
torney binds  the  Ohio  corporation  for  the  pay- 
ment of  a  reasonable  fee.    Id.] 

§  203.  No  corporation  shall  lease  or  alien- 
ate any  franchise  so  as  to  relieve  the  fran- 
chise or  property  held  thereunder  from  the 
liabilities  of  the  lessor  or  grantor,  lessee 
or  grantee,  contracted  or  incurred  in  the 
operation,  use  or  enjoyment  of  such  fr-an- 
chise,  or  any  of  its  privileges. 

See  Statutes,  §  562. 

§  204.  Any  president,  director,  manager, 
cashier  or  other  officer  of  any  banking  insti- 
tution or  association  for  the  deposit  or  loan 
of  money,  or  any  individual  banker,  who 
shall  receive  or  assent  to  the  receiving  of 
deposits  after  he  shall  have  knowledge  of 
the  fact  that  such  banking  institution  or 
association  or  individual  banker  is  insol- 
vent, shall  be  individually  responsible  for 
such  deposits  so  received,  and  shall  be 
guilty  of  felony  and  subject  to  such  punish- 
ment as  shall  be  prescribed  by  law. 

See  Statutes,  §§  548-550. 

§  205.  The  general  assembly  shall,  by  gen- 
eral laws,  provide  for  the  revocation  or  for- 
feiture of  the  charters  of  all  corporations 
guilty  of  abuse  or  misuse  of  their  corporate 
powers,  privileges  or  franchise,  or  when- 
ever said  corporations  become  detrimental  to 
the  interest  and  welfare  of  the  common- 
Avealth  or  its  citizens. 

Causes  of  forfeiture.     Statutes,   §  569. 

§  200.  All  elevators  or  storehouses,  where 
grain  or  other  property  is  stored  for  a  com- 
pensation, whether  the  property  stored  be 
kept  separate  or  not,  are  declared  to  be 
public  warehouses,  subject  to  legislative  con- 
trol, and  the  general  assembly  shall  enact 
laws  for  the  inspection  of  grain,  tobacco 
and  other  produce,  and  for  the  protection 
of  producers,  shippers  and  receivers  of  grain, 
tobacco  and  other  produce. 

See  Const..    S   198. 

§  207.  In  all  elections  for  directors  or  man- 
agers of  any  corporation,  each  shareholder 
shall  have  the  right  to  cast  as  many  voles 
in   the    aggregate    as    he    shall    be    entitled 


to  vote  in  said  company  under  its  charter, 
multiplied  by  the  number  of  directors  or 
managers  to  be  elected  at  such  election;  and 
each  shareholder  may  cast  the  whole  num- 
ber of  votes,  either  in  person  or  by  proxy, 
for  one  candidate,  or  distribute  such  votes 
among  two  or  more  candidates,  and  such 
directors  or  managers  shall  not  be  elected 
in  any  other  manner. 

Election  of  directors.    Statutes,    §   551. 

§  208.  The  word  corporation  as  used  in 
this  Constitution  shall  embrace  joint-stock 
companies  and  associations. 

See  Statutes,  §  457. 

§  241.  Whenever  the  death  of  any  person 
shall  result  from  an  injury  inflicted  by  neg- 
ligence or  wrongful  act,  then,  in  every  such 
case,  damages  may  be  recovered  for  such 
death,  from  the  corporations  and  persons 
so  causing  the  same.  Until  otherwise  pro- 
vided by  law,  the  action  to  recover  such 
damages  shall  in  all  cases  be  prosecuted  by 
the  personal  representative  of  the  deceased 
person.  Tlie  general  assembly  may  provide 
how  the  recovery  shall  go  and  to  whom  be- 
long; and  until  such  provision  is  made  the 
same  shall  form  part  of  the  personal  estate 
of  the  deceased  person. 

[Contributory  negligence  not  a  defense  for  in- 
juries caused  by  wilful  neglect  of  defendant, 
unless  injury  received  was  caused  wholly  by 
plaintiff's  negligence.  Admr.  v.  R.  R.  Co.,  82  Ky. 
610.] 

§  242.  Municipal  and  other  corporations, 
and  individuals  invested  with  the  privilege 
of  taking  private  property  for  public  use, 
shall  make  just  compensation  for  property 
taken,  injured  or  destroyed  by  them;  which 
compensation  siiall  be  paid  before  such  tak- 
ing, or  paid  or  secured,  at  the  election  of 
such  corporation  or  individual,  before  sucli 
injury  or  destruction.  The  genei'al  assemljly 
shall  not  deprive  any  person  of  an  appeal 
from  any  preliminary  assessment  of  dam- 
ages against  any  such  corporation  or  indi- 
vidual made  by  commissioners  or  otherwise; 
and  upon  appeal  from  such  preliminary  as- 
sessment, the  amount  of  such  damages  shall, 
in  all  cases,  be  determined  by  a  jury,  ac- 
cording to  the  course  of  the  comonon  law. 

See  Const.,  §§  13,  195. 

[Power  of  private  corporation  to  take  private 
property  for  its  use,  being  a  delegation  of  sover- 
eign power,  must  be  construed  as  it  would  be  if 
delegated  to  a  nuinicipal  corporation.  R.  R.  Co. 
v.  Metcalfe,  4  Met.  205.] 

§  244.  All  Avage-earners  in  this  State  em- 
l)loyed  in  factories,  mines,  workshops,  or  by 
corporations  sliall  be  paid  for  their  lal-or 
in  lawful  money.  The  general  asseml)ly 
sliall  prescrilte  adequate  penalties  for  vio- 
lations of  this  section. 


KENTUCKY. 


Private  corporations  —  Stat,  §§  457,  538. 


THE  KEJ^TUCKY  STATUTES -1  894. 


CHAPTER  XXVI. 
Construction  of  Statutes. 
Sec.  457.  Construction  of  words. 

§  457.  *  *  *  The  word  "person"  may 
extend  and  be  applied  to  bodies  politic  and 
corporate,  *  *  *  as  well  as  individuals, 
partnerships,  persons  and  joint-stock  com- 
panies. The  words  '"  corporation,"  "  com- 
pany," may  be  construed  as  including  any 
corporation,  company,  person,  persons,  part- 
nership, joint-stock  company  or  association. 

See  Const.,  §  208;  Civ.  Code,  §  732. 

[A  corporation  is  "  a  person  "  within  meaning 
of  fourteenth  amendment  to  Constitution  of 
United  States,  and  no  State  can  deny  to  any 
corporation  the  equal  protection  of  the  law.  And 
corporations  are  also  embraced  by  Kentucliy  Bill 
of  Rights.  But  these  do  not  effect  police  power 
of  the  State.  Schoolcraft  v.  R.  R.  Co.,  92  Ky. 
233;  s.   c,   17  S.   W.   Rep.  5G7.] 

CHAPTER  XXXII. 

Private  Corporations. 

ARTICLE    I.        GENERAL     PROVISIONS     CON- 
CERNING  CORPORATIONS. 

Sec.  538.  Corporators;  number  necessary;  laws  ap- 
plicable. 

539.  Articles    of     incorporation;     what    they 

shall   specify. 

540.  Articles;   how    executed   and    recorded. 

541.  Direction      of     affairs      until      directors 

elected. 

542.  Business;    when    may   begin;   powers   of 

corporations. 

543.  Capital  stocl<;  amount  to  be  subscribed; 

how   collected. 

544.  Capital    stock;    when    corporation    may 

purchase  its  stocli. 

545.  Shares,      how    transferred;     liability    of 

purchaser. 

546.  Book    of   names,    addresses    and    shares 

of  stocljholders  and  transfers. 

547.  Stockholders;   liability  of;   action  to  en- 

force;   limitation. 

548.  Directors;  when  liable  for  debts  of  cor- 

poration. 

549.  Otficers  and  directors;  liability  for  false 

report. 
5.50.  Directors  and  officers;  penalty  for  viola- 
tion of  law. 

551.  Directors;   number  of;   manner  of  elect- 

ing;  stock  to  be  owned  by. 

552.  Stock;   who  may  vote;  number  of  votes 

that   may   be  cast. 

553.  Capital    stock;   manner  of  increasing   or 

reducing. 

554.  Organization    of   old    corporations   under 

this  ciiapter;  effect  of. 

555.  Consolidation    of    corporations;    how    ef- 

fected. 

556.  Rights     and     liabilities    of     consolidated 

corporation. 

557.  Actions  pending,  not  affected  by  a  con- 

solidation. 

558.  Stockholders    in    corporations     that   con- 

solidate; when  to  be  paid. 

559.  Amendment  of  articles  of  incorporation. 

560.  Liability  not  affected  by  sale,  consolida- 

tion or  amendment. 

561.  Termination  of  existence  of  corporation; 

how  effected. 


Sec.  562.  Sale  of  corporation;  purchasers  may  or- 
ganize new  corporation;  rights  *  and 
liabilities. 

563.  Sale  of,  under  decree:  requisites  of. 

504.  Shares  may  be  divided  into  classes; 
rights  of  each  class. 

565.  Time    in    which    corporation    must    com- 

mence business. 

566.  Organization;    want   of    legal    not    a    de- 

fense. 

567.  Business     corporation     may    engage    in; 

what  land  may  be  held. 

568.  Stock  or  bonds  not  to  be   issued  except 

for  value. 

569.  Forfeiture  of  charter;  causes  for. 

570.  Constitution,    provisions    of,    to    be    ac- 

cepted. 

571.  Agent  upon  whom  process  may  be  exe- 

cuted to  be  located  in  State';  penalty. 

572.  Action;    removal    to,    or    institution    in 

Federal  court  forbidden;  penalty. 

573.  Charters    in    conflict   with    this    chapter; 

provisions  relating  to;   penalty. 

574.  Amendment  of  charters  of  old   corpora- 

tions.' 

575.  Directors;    meaning   of    word. 

576.  Word     "  incorporated  "    to    be    used    by 

certain  corporations;  penalty. 

§  538.  Any  number  of  pereons,  not  less 
than  three,  may  associate  to  establish  a  cor- 
poration for  the  transaction  of  any  lawful 
business,  or  to  promote  or  conduct  any  legiti- 
mate object  or  purpose  under  the  provisions 
of,  and  subject  to  the  requirements  of,  this 
article;  but  bajiking,  building  and  loaii,  trust, 
insurance  and  railroad  corporations  shall,  in 
addition  to  the  provisions  of  this  article, 
which  are  not  inconsistent  with  the  laws  re- 
lating especially  to  them,  be  organized  in 
the  manner  and  subject  to  the  provisions  of 
such  laAvs. 

Grant  of  exclusive  or  unalterable  privileges  pro- 
hibited.    Const.,   §  3. 

[Whether  corporation  is  public  or  private, 
how  determined.  R.  R.  Co.  v.  Metcalfe,  4  Met. 
205;  Louisville  v.  Comm.,  Duv.  297.  It  does" 
not  alter  its  character  that  another  corporation, 
the  State,  or  the  United  States,  owns  a  portion 
of  its  stock.    Id. 

Lottery  privileges  granted  by  legislature  is  not 
an  act  of  incorporation,  nor  does  it  amount  to  a 
contract     Gregory   v.    Trustees,   2  Met.    597. 

Private  corporations  are  created  for  the  in- 
terest of  individuals,  and  they  may  make  by-laws, 
the  existence  of  which  the  public  are  not  re- 
quired to  take  notice.  Murphy  v.  Louisville,  9 
Bush.  196. 

Corporations  granted  entirely  by  the  crown  of 
England  before  the  Revolution  may  still  exist  in 
Kentucky.     Pendleton  v.   Bank,   1  Mon.   175. 

Courts  take  judicial  notice  of  an  act  of  the 
legislature  creating  a  corporation.  Lackey  v.  R., 
etc.,  Co.,  17  B.  M.  47;  Bank  v.  Newport  M.  Co., 
1  id.  14.  And  of  the  names  of  corporations.  Pen- 
dleton V.  Bank,  1  Mon.  175;  Bank  v.  N.  M.  Co., 
supra.  But  cannot  know  judicially  that  members 
of  a  corporation  are  citizens.  Lex.  M.  Co.  v. 
Dorr,  2  Litt.  257. 

Legislature  has  power  to  incorporate  a  company 
for  tlie  purpose  of  building  a  bridge  across  the 
Ohio  river,  withholding  the  power  of  organization 
until  the  Ohio  legislature  confirmed  the  act  of 
incorporation.  Covington  v.  Bridge  Co.,  10  Bush, 
73. 


10 


KEXTL'CKY, 


Articles  of  incorporation  —  Stat.,  §§  539-542. 


Lefrislatuic  lias  power  to  pass  all  acts  of  incor- 
poration or  delog.ito  the  power  to  others  to  do 
so.     Clieauey  v.   Ilooser,  9  B.  M.  334. 

Charter  enafted  subject  to  confirmation  in  an- 
other State  allowable.  Covington  v.  Bridge  Co., 
10  Bush.  73. 

Act  of  legislature  continuing  charter  privileges 
and  rights  bevond  the  time  fixed  by  the  original 
act.  does  not  have  the  elTect  of  creating  a  new 
charter,  but  merely  extends  the  life  of  the  one 
alreadv  in  existence.  Franklin  Co.  Ct.  v.  Bank, 
87  Kv".  371):  s.  c.  9  S.  W.  Rep.  212. 

Not  unconstitutional  for  legislature  to  empower 
a  corporation  to  act  as  the  statutory  guardian  of 
infants.  Johnson  v.  Johnson,  88  Ky.  27(5;  s.  c,  11 
S.  A\'.  Kep.  5. 

One  iHMSon  cannot  organize  a  corporation  under 
the  ceneral  law,  but  when  a  corporation  has  been 
created,  the  purchase,  in  good  faith,  by  one  stock- 
holder of  all  the  stock  does  not  destroy  existence 
of  corporation,  but  merely  suspends  its  franchise 
until  the  stock  mav  be  transferred  to  others. 
Banking  Co.  v.  Eisenmau,  94  Ky.  83;  s.  c,  21  S. 
W.  Rep.  .")31.  1(149. 

The  purchase  of  all  the  stock  of  a  corporation 
bv  a  single  stockholder  suspends  existence  of  the 
corporation  so  far  as  the  public  is  concerned.  G. 
T.  S.  Co.  V.  Taylor,  95  Ky.  651;  s.  c,  27  S.  W. 
Rep.  247.] 

§  539.  Such  pei-sous  shall  execute  articleg 
of   iucoiiioration,    which   shall   specify: 

First.  The  name  of  the  corpbratiou,  which 
shall  be  such  as  to  distinguish  it  from  any 
other  coiiioratiou  engaged  in  tlie  same  busi- 
ness, or  promoting  or  carrying  on  the  same 
objects  or  puiijoses  in  this  State. 

Second.  The  name  of  the  city  or  town  and 
county  in  Avhich  its  principal  office  or  place 
of  business  is  to  be  located. 

Third.  The  nature  of  the  business,  or  ob- 
jects or  puii^oses  proposed  to  be  transacted, 
promoted  or  carried  on. 

Fourth.  The  amount  of  its  capital  stock,  if 
any.  and  the  number  of  shares  into  which 
the  same  shall  be  divided. 

Fifth.  The  names  and  places  of  residence 
of  each  of  its  stoclcholders,  and  the  number 
of  shares  of  stock  subscribed  by  each. 

Sixth.  The  time  when  it  is  to  commence, 
and  the  period  it  is  to  continue. 

Seventh.  By  what  officers  or  persons  the 
affairs  of  the  corporation  are  to  be  conducted, 
and  the  time  and  place  at  which  they  are 
to  be  elected. 

Eighth.  The  liighest  amount  of  indebted- 
ness or  liability  which  the  corporation  may 
at  any  time  incur. 

Niutli.  Whether  the  private  property  of  the 
stockholders  not  subject  by  tlie  provisions  of 
the  law  under  wliich  it  is  organized  shall  be 
subject  to  the  payment  of  coiijorate  debts, 
and  if  so,  to  Avhat  extent. 

§  540.  1'he  aiticles  shall  be  signed  and 
acknowledged  by  tlie  parties  thereto,  before 
any  officer  authorized  to  take  acknowledg- 
ments to  deeds,  and  recorded  in  tlie  county 
clerk's  office  of  the  county  in  which  its  prin- 
cipal office  or  place  of  business  is  to  be  lo- 
cated, and  a  copy  thereof  shall  be  filed  and 
recorded  in  tlie  office  of  the  secretary  of 
State;  and  said  articles,  or  a  certified  copy 
thereof,  may  be  used  a.s  evidence  in  any  ac- 
tion   for   or    against    such    corporation;    and 


all  amendments  thereto  shall  become  a  part 
of  the  original   articles. 

"Want  of  legal  organization  not  a  defense.    §  56G. 

[Whether  or  not  a  cori)oration  was  properlj-  or- 
ganized according  to  its  charter  is  a  question  that 
cannot  be  made  collaterally,  but  must  be  by  di- 
rect proceeding  against  the  corporation.  Hughes 
V.  Bank,  5  Litt.  4G;  Wight  v.  R.  R.  Co.,  16  B.  M. 
7;  Gill  v.  Mining  Co.,  7  Bush,  (J39. 

One  may  put  in  issue  the  organization  of  a  na- 
tional bank,  when.  Huffaker  v.  Bank,  12  Bush. 
292. 

The  fact  that  a  bank  commenced  operations 
contrary  to  its  charter  will  not  absolve  a  debtor 
to  the  institution  from  the  payment  of  his  debt. 
Hughes  v.   Bank,  supra. 

Generally  one  dealing  with  a  corporation  Is  not 
permitted  to  deny  its  existence.  R.  R.  Co.  v. 
Leavell,  16  B.  M.  363.  And  it  is  very  questionable 
whether  one  who  participated  as  a  stockholder  in 
election  of  directors  may.     Id. 

Act  to  establish  private  corporation  must  be 
construed  strictly  as  against  the  corporation,  but 
liberally  in  favor  of  the  public.  Maddox  v. 
Graham,  2  Met.  72;  R.  R.  Co.  v.  Warren  Co.  Ct., 
10  Bush.  724. 

Corporation  created  under  the  general  law  may 
commence  business  as  soon  as  articles  are  tiled 
for  record  in  office  of  county  court  clerk,  and 
franchises  cannot  thereafter  be  declared  null  and 
forfeited  except  in  regular  proceeding  instituted 
for  that  purpose.  Defects  can  only  be  taken  ad- 
vantage of  in  a  direct  proceeding  to  annul  the 
franchise.  Walton  v.  Riley,  85  Ky.  413;  s.  c,  3 
S.  W.  Rep.  605;  T.  P.  Co.  v.  Bobb,  88  Kv.  226; 
s.  c.  10  S.  W.  Rep.  794;  Heinig  v.  Mfg.  Co.,  81 
id.  300,  is  overruled;  Walton  v.  Riley,  supra.  It 
is  not  essential  to  validity  of  acts  of  a  corporation 
that  the  newspaper  publication  required  by  the 
statute  should  have  been  made,  or  that  the  arti- 
cles of  incorporation  should  have  been  filed  with 
the  secretary  of  State.  Id.  Where  clerk  certi- 
fied that  articles  were  lodged  for  record  and 
duly  recorded,  it  is  to  be  presumed  that  they 
were  recorded  in  the  proper  book.  But  even  if 
they  were  recorded  in  a  deed  book,  the  acts  of 
the  corporation  were  thereby  rendered  invalid.    Id. 

A  corporation  doing  business  after  April  5,  1S93, 
without  complying  with  the  provision  of  the  law 
requiring  filing  of  statement  in  office  of  the 
secretary  of  State,  giving  the  location  of  its  prin- 
cipal office,  etc.,  cannot  escape  penalty  for  a 
violation  of  the  statute  upon  the  ground  of  ig- 
norance of  its  existence.  Coal  Co.  v.  Common- 
wealth, 96  Ky.  373.] 


§  541.  Until  the  directors  are  elected,  the 
signers  of  the  articles  of  incorporation  shall 
have  the  direction  of  the  affairs  of  the  cor- 
ganization  of  the  corporation,  and  may  take 
sucli  steps  as  are  proper  to  obtain  the  neces- 
sary suliscriptions  to  stock,  and  to  perfect 
the  organization  of  the  corporation. 

Election  of  directors.     §   551. 

[Presumption  in  favor  of  regularity  of  proceed- 
ings, nothing  to  the  contrary  appearing  on  the 
records.     Lexington  v.  Headley,   5  Bush,   511. 

X  corporation  hold  liable  for  contracts  entered 
into  bv  its  promoters.  Morton  v.  Hamilton  Col- 
lege,  ;«  S.   W.    Rep.    1. 

Where  land  was  purchased  by  promoter  for  the 
corporation  which  issued  stock,  to  the  promoter 
who  distributed  it  among  all  the  promoters,  held, 
that  there  was  a  full  payment  for  the  stock. 
Mercer  v.  Water  Co.,  38  S.  W.  Rep.  841.] 

§  542.  AVhen  the  articles  are  filed  and  re- 
corded as  provided,  and  the  license  tax  im- 
posed is  paid  to  the  State,  the  corporation 


KENTUCKY 


11 


Corporate  powers  —  Stat.,  §  542. 


shall  be  deemed  to  be  oi-franized  for  the  pur- 
pose of  transacting,  promoting  or  carrying 
on  the  business  or  purpose  for  which  it  was 
created:  and  ."^hall  thereupon  become  a  body- 
corporate,  and  be  known  by  its  corporate 
name,  and  as  such  may  adopt  and  use  a 
corporate  seal; 

Actions  in  corporate  name.  See  §  542  (1).  Gen- 
eral assembly  may  revoke  or  alter  charters. 
Const.,  §  205.  Want  of  organization  not  a  de- 
fense. §  566.  Termination  of  corporation. 
§S  561,  569.  Corporate  name  to  be  conspicuously 
posted.     §  576. 

[Defendant  having  executed  a  note  to  a  cor- 
poration by  Its  name,  is  sufficient  evidence  of 
its  existence  by  that  name.  Woodson  v.  Bank, 
4  B.  M.  203. 

In  this  State,  as  corporations  can  be  created 
only  by  legislative  act,  all  of  which  the  courts 
must  know,  they  may  be  bound  to  know  the 
names  of  all  so  created.  Pendleton  v.  Bank,  1 
Mon.  174. 

Existence  and  organization  admitted  by  sub- 
scription to  stock.     Lail  v.  Road  Co..  13  Bush,  34. 

Existence  of  corporation  not  put  in  issue  by 
plea  of  non-assumpsit  to  suit  it.  Taylor  v.  Bank, 
7  :\ron.  584. 

Plea  to  action  upon  a  note  given  to  a  corpora- 
tion averring  the  non-existence  of  the  corporation 
at  the  commencement  of  the  suit  should  show 
the  fact  by  which  it  ceased  to  exist.  Jones  v. 
Bank.  8  B.  M.   123. 

Grant  by  or  to  a  corporation  will  not  be  vitiated 
by  variation  from  precise  name  of  corporation 
when  true  name  can  be  collected  from  instrument 
or  is  shown  by  proper  averments.  Sem.  v.  Wal- 
lace,  15  B.   M.  44. 

In  actions  by  corporations  court  may  take 
Judicial  notice  of  their  name.  Pendleton  v.  Bank, 
1  Mon.  174. 

A  mere  change  of  a  corporate  name  does  not 
divest  title.  McCloskey  v.  Doherty,  30  S.  W.  Rep. 
649. 

A  corporation  has  no  power  of  itself  to  change 
or  alter  the  name  originally  selected  by  it  with- 
out recourse  to  such  form  of  proceedings  as  are 
prescribed  by  law;  and  where  such  change  has 
been  made  without  authority  of  law,  the  persons 
assuming  to  act  in  a  corporate  capacity  under  the 
new  name,  are  liable  as  partners.  Cincinnati  Co. 
v.    Bate,   96  Ky.   356. 

Generally,  contracts  of  a  corporation  must  be 
authenticated  by  its  seal:  but  to  this  rule  there 
are  many  exceptions.  Garrison  v.  Combs,  7  J. 
J.  M.  85.  For  corporation  to  pass  its  interest  in 
a  promissory  note  it  is  not  necessary  to  affix  cor- 
porate seal  to  the  assignment.  Id.  89.  In  regulat- 
ing itself  and  its  police  it  may  act  without  seal. 
It  may  elect  its  officers  and  agents  and  keep  rec- 
ords of  its  proceedings  without  affixing  a  seal. 
Waller  v.   Bank,  3  J.  J.  M.   203. 

Before  corporation  can  have  an  existence  under 
the  general  statute,  it  must  be  shown  that  its 
provisions  have  been  complied  with.  Heinig  v. 
Mfg.  Co.,  81  Ky.  300.] 

And  shall  have  power  to  CI)  to  sue  and 
be  sued; 

Agent  upon  whom  process  may  be  served  to  be 
located  in  the  State.  Const.,  §  194;  Statutes.  §  571. 
Action  for  negligent  injury.  Const.,  §  241.  Ac- 
tions against  stockholders.  §  547.  Actions  pend- 
ing not  affected  by  consolidation.  §  .557.  Certi- 
fied copy  of  articles  is  evidence.  §  540.  Want 
of  organization  not  a  defense.  §  566.  Removal 
of  action  to,  or  institution  in.  Federal  court  pro- 
hibited. §  572.  Appointment  of  receiver.  §  616. 
Service    of   summons.      Civ.    Code,    §§    51,    57,    58. 


Of  notices.  Id.,  §  628.  Venue.  Id.,  §  72.  Verifi- 
cation of  pleadings.  Id.,  §  117.  Attachment.  Id., 
§  194.  Security  for  costs.  Id.,  §  616.  Actions  to 
vacate  charters,  etc.     Id.,  |§  480-488. 

[Corporation  liable  to  individuals  for  injuries 
caused  by  negligence  of  its  agents  or  employes 
while  engaged  in  their  service.  D.,  etc.,  R.  Co. 
V.   Stewart,  2  Met.  122. 

Corporation  responsible  for  work  and  labor  done 
at  request  of  its  officers.  Underwood  v.  Lyceum, 
5  B.  M.  130.  And  may  be  responsible  "  for  a 
trespass.  If  by  its  officers  it  commands  it  or 
sanctions  It  after  done.  Id.  Liability  of  turn- 
pike company  for  iniiiry  caused  bv  its  "negligence. 
T.  P.  Co.  V.  Stewart.  2  Met.  122.  Inhabitant  of 
a  city  who  has  suffered  loss  by  fire  b.v  reason  of 
a  breach  of  contract  with  the  city,  niay  sue  the 
water  company  without  joining  the  citv.  Lumber 
Co.  v.  Water  Supply  Co.,  89  Kv.  340;  s.  c,  12  S. 
W.  Rep.  5.54;  13  S.  W.  Rep.  249. 

Corporation  may  be  compelled  by  court  of 
chancery  to  the  performance  of  trusts  confided 
to   it.    Chambers   v.    Baptist    Soc,   1    B.    M.    220. 

In  action  by  corporation  against  shareholders 
for  amount  of  stock  subscribed,  no  other  con- 
sideration need  be  averred  than  the  subscription. 
Instone  v.  Bridge  Co.,  2  Bibb.  576.  Where  given 
amount  of  stock  is  required  to  be  subscribed 
before  a  corporation  is  authorized  to  go  into 
operation,  it  is  necessary  to  allege  that  req.uisite 
amount  has  been  subscribed.  Fry  v.  B.  R.  Co., 
2  Met.  324.  But  upon  an  unconditional  promise 
to  pay  a  corporation  a  sum  certain,  either  as  a 
debt  or  as  a  subscription,  unnecessary  to  aver 
that  requisite  amount  of  stock  has  been  sub- 
scribed.   Lail  V.   Road  Co.,  13  Bush,  34. 

In  action  by  railroad  company,  against  sub- 
sci'iber,  defendant  ma.v  plead  as"  a '  counterclaim 
that  it  was  agreed  that  any  damage  done  his 
land  should  go  as  a  credit  on  his  subscription. 
R.   R.   Co.   V.   Thompson.   18  B.   M.   742. 

Action  lies  in  corporate  name,  after  company 
is  organized,  to  recover  stock  subscribed  to  cor- 
poration, payable  to  president  and  directors,  be- 
fore company  was  organized.  Lackey  v.  R.,  etc., 
Co.,  17  B.  M.  48. 

Corporations  suing  must  execute  bonds  for 
costs.  P.,  etc..  Works  v.  I.,  etc.,  Co.,  11  Bush, 
48.  But  now  reasonable  time  is  allowed  plain- 
tiff to  give  the  bond.    Code,    §  617. 

Chancellor  has  jurisdiction  to  enjoin  a  corpora- 
tion from  an  abuse  of  its  powers.  Dudle.v  v. 
Trustees.   12  B.   M.  61.5. 

In  actions  by  corporations,  court  may  take 
judicial  notice  of  their  name.  Pendleton  v.  Bank. 
1  Mon.  175.  Courts  may  know  by  the  name  of 
plaintiffs  that  they  are  extra-territorial,  and  are 
incorporations,  and  will  thereon  sustain  their  ac- 
tions.   Bank  v.   X.  M.   Co.,   1   B.  M.  15. 

Judgments  against  turnpike  road  company,  how 
enforced.    T.   P.    R.    Co.    v.    Vimont,   5   B.    M.    1. 

Mandamus  will  not  lie  against  a  private  cor- 
poration or  its  officers.  Cook  v.  College,  9  Bush, 
544.  ^       ^ 

Misnomer  of  corporation  by  omittmg  and  com- 
pany," not  fatal;  but  the  bond  recoverable  upon 
by  averring  it  was  executed  to  the  corporation. 
Pendleton    v.    Bank,    1    Mon.    175. 

To  authorize  a  corporation  created  by  statute 
to  sue.  not  necessarv  to  aver  its  regular  organiza- 
tion.   R.    R.    Co.    V.    Leavell.    16   B.    M.   358. 

Corporation  may  maintain  action  in  its  own 
name  on  official  bonds  of  its  officers,  though  exe- 
cuted to  president  and  directors,  if  it  was  exe- 
cuted for  protection  of  the  corporation.  Graves 
V.  liank.  10  Bush,  26.  Action  against  officers  for 
misconduct  as  such  should  be  brought  by  cor- 
poration itself,  but  if  it  be  still  in  hands  of  such 
officers,  stockholders  may  sue  instead.  Such  suit 
hv  stockholders  must  be  in  equity,  even  though 
it  be  founded  on  a  tort,  as  they  have  no  right 
to   sue   at   law.    Jones   v.    Johnson,    10   Bush,    660. 

In  bill  against  stockholders  of  a  defunct  cor- 
poration, ail  stockholders  should  be  made  parties, 
if  living;  if  dead,  then  their  personal  representa- 
tives, if  any;  if  none,  then  their  heirs.    A  decree 


12 


IvEXTUCKY. 


Corporate  powers  —  Stat.,  §  542. 


in  such  case  may  be  against  one  stockliolder,  if 
his  liability  as  a  corporator  exceed  tlae  amount 
decreed.    De  Wolf  v.   Mallett,  2  J.   J.    M.   402. 

Upon  rotnrn  of  nulla  bona  against  a  corpora- 
tion, creditor  may  maintain  bill  against  any  mem- 
ber or  director  who  holds  funds  of  the  corporation, 
without  making  all  members  of  corporation 
parties.     Gratz   v.   Redd,   4   B.   M.   197. 

.Joinder  of  president  with  other  directors  of  a 
bank  to  recover  for  loss  of  deposit  occasioned  by 
their  negligence  is  not  objectionable.  Shakers  v. 
Underwood,   0   Bush.    621. 

Oflicers  of  bank  not  necessary  parties  to  a  bill 
against   it.    Wood   v.    Bank,    5   Mon.    197. 

In  action  to  subject  to  sale  a  turnpike  road, 
with  its  franchises,  etc.,  if  the  stockholders  be 
necessarv  parties,  where  they  are  numerous  and 
it  is  impracticable  to  bring  them  all  before  the 
court,  one  or  more  may  be  allowed  to  defend  for 
all.    T.  P.  E.   Co.  V.   Ballard.  2  Met.   171. 

In  suit  by  bondholders  to  foreclose  mortgage 
upon  railroad  and  its  franchises,  to  compel  pay- 
ment of  interest  due  and  arrears,  if  the  property 
is  divisible,  a  sale  should  be  ordered  of  so  much 
as  might  satisfy  the  amount  due;  if  not  divisible, 
it  should  be  sold  or  leased  as  entirety;  in  the 
latter  case,  if  no  one  will  take  it  for  a  term  of 
years,  then  to  be  sold  absolutely,  the  company 
to  elect  whether  the  property  should  be  first 
offered  for  a  term  of  years.  R.  R.  Co.  v.  Met- 
calfe. 4  Met.  211.  If  leased,  lessee  should  be 
required  to  give  bond  to  keep  property  in  good 
repair,  and  court  should  cause  an  inventory  to 
be   made   by   a   commissioner.    Id. 

Action  mav  be  maintained  against  a  corporation 
upon  a  liability  Imposed  by  the  statute  creating 
it;  or  which  results,  by  implication  of  law,  from 
its  acts;  or  upon  a  judgment.  Blanchard  v.  T. 
P.   Co.,   1   Dana,   87. 

An  action  against  a  common  carrier,  whether 
a  corporation  or  not,  upon  a  contract  to  carry 
propertv,  must  be  brought  in  county  in  which 
defend.ant,  or  either  of  several  defendants  re- 
sides, or  in  which  the  contract  is  made,  or  in 
which  carrier  agrees  to  deliver  the  property.  Ex- 
press Co.  V.  Crenshaw,  78  Ky.  130.  And  the 
summons  may  be  served  where  the  action  is 
brought  upon  the  defendant's  chief  officer  or 
agent   who   resides   therein.    Id. 

President  and  directors  having  power  to  Insti- 
tute action  have  power  to  dismiss  it.  Shawhan 
V.  Zlnn.  79  Ky.  300.  To  enable  stockholder  to 
sue  for  the  corporation,  or  his  associate  stock- 
holders, where  the  rights  of  the  corporation  are 
involved,  he  must  allege  that  directors  decline 
to  sue,  or  refuse  to  permit  him  to  sue  in  the 
name  of  the  corporation,  and  the  corporation  must 
be  a  partv,  plaintiff  or  defendant.  Id.  Failure 
to  make  the  corporation  a  party  is  not  a  mere 
defect,  but  leaves  the  stockholder  without  a  cause 
of  action,  and  his  action  should  be  dismissed 
absolutely.    Id. 

To  maintain  an  action  against  a  corporation 
upon  a  note  signed  by  officers  without  special 
designation  attached,  it  would  be  necessary  to 
aver  a  mistake  in  its  execution,  and  ask  a  re- 
formation of  the  obligation.  McKensey  v.  Ed- 
wards, 88  Ky.  272;  s.  c,  18  S.  W.  Rep.  815. 

The  defendant  being  indicted  as  a  corporation, 
failure  to  show  that  it  was  such  was  fatal  to  the 
prosecution.  Coal  Co.  v.  Commonwealth,  96  Ky. 
218. 

A  corporation  may  recover  from  Its  stockholders 
assets  divided  among  them  under  a  belief  that 
the  corporation  was  solvent.  Grant  v.  Ross,  37 
S.    W.    Rep.    263. 

The  fact  that  stockholders  authorized  directors 
to  distribute  the  corporate  assets  among  them 
under  the  belief  that  the  corporation  was  solvent 
does  not  prevent  the  corporation  recovering  such 
assets.    Id. 

A  cause  of  action  to  recover  dividends  on  cor- 
porate stock  accrues  when  the  dividend  is  de- 
clared. Turnpike  Co.  v.  "Wickllffe's  Admr.,  38  S. 
W.    Rep.    866. 

A  declaration  of  a  dividend  by  a  corporation  Is 
an  obligation  in  writing  for  payment  of  money 
within    the    Statute    of    Limitations.    Id.] 


2.  To  contract  aucl  be  contracted  with; 

Contracts  in  restraint  of  competition  prohibited. 
Const.,  S§  196,  198,  201;  Statutes,  §§  3915-3921. 
Corporate  seal  not  essential  to  contract.  §  542, 
note. 

[A  contract  of  a  corporation  which  is  neither 
prohibited  by  law  or  its  charter,  and  not  foreign 
to  the  purposes  for  which  it  was  created,  is 
valid.    Bridge  Co.  v.   Frankfort,  18  B.   M.  46. 

A  corporation  may,  by  its  agents,  make  contracts 
beyond  limits  of  State  in  which  it  is  established, 
if  contracts  are  authorized  by  its  charter  and 
not  inconsistent  with  local  law.  Lathrop  v. 
Bank,  8  Dana,  115.  And  may  collect  and  secure 
by  contract  a  debt  due  to  it  by  virtue  of  a  con- 
tract made  in  the  State  under  whose  laws  it 
is  established.  Id.  118.  Corporation  may  bind 
itself  bv  unsealed  instruments  executed  bv  its 
agents.  Bank  v.  U.  M.  Co.,  1  B.  M.  14.  Parol 
agreement  made  by  directors  not  binding  on  cor- 
po»ation.    Hughes   v.    Bank,    5   Litt.   46. 

I^ialiility  of  corporation  on  contracts,  same  as 
that  of  natural  person.  Muir  v.  Canal  Co.,  8 
Dana,   161. 

Though  corporation  may  not  have  privilege  of 
issuing  notes  or  checks,  and  it  be  a  penal  offense 
to  do  so,  yet  it  is  bound  to  pay  for  plates  or 
checks  procured  by  their  officers  for  that  purpose. 
Underwood  v.  Lyceum,  5  B.  M.  130. 

Where  corporation  violates  contract  made 
through  its  agent,  the  right  of  the  injured  party 
to  recover  damages  is  unquestioned.  Murphy  v. 
Louisville,    9    Bush,    197. 

To  bind  corporation  by  implied  promise,  acts 
of  corpora*^ion  or  of  authorized  agent  within 
scope  of  his  authority,  from  which  promise  may 
be  implied,  must  be  shown.  T.  P.  Co.  v.  Looney, 
1   Met.    .552. 

There  is  an  implied  undertaking  by  every  cor- 
poration to  render  to  the  public,  as  far  as  it 
reasoual)ly  can,  that  service  for  which  it  was 
created,  and  not  voluntarilv  render  itself  unable 
to  perform  it.  Kenton  Co.  Ct.  v.  T.  P.  Co.,  10 
Bush,  532.] 


3.  To  pledge  or  mortgage  its  property,  real 
or  personal,  to  secure  the  fulfillment  of  its 
contracts; 

Corporation  may  hold   what  real  estate.    §  567. 

[At  common  law  corporations  may  contract  for 
land  as  well  as  for  anything  else.  They  have 
the  right  to  acquire  land  by  contract,  except 
so  far  as  restricted  by  the  objects  of  their  crea- 
tion or  bv  limitations  in  their  charter.  Lathrop 
v.    Bank,   8   Dana,   119. 

Railroad  company  authorized  to  borrow  money 
has  implied  power  to  make  a  mortgage,  though 
it  cannot  mortgage  its  corporate  existence  or 
any  prerogative  franchise  conferred  upon  it.  R. 
R.    Co.    V.    Metcalfe,    4    Met.    206. 

Corporation  may  have  the  common-law  right, 
without  the  intervention  of  a  court,  to  sell  mort- 
gaged property  in  execution  of  a  power  given  in 
the    mortgage.     Hahn    v.    Pindell,    3    Bush.    189. 

Power  to  pledge  franchises  and  rights  of  a  cor- 
poration implies  power  to  pledge  everything  neces- 
sarv to  the  enjovment  of  the  franchise.  Phillips 
V.   Winslow,   18  B.   M.  445. 

liCgislature  may  authorize  corporation  created 
by  it  to  borrow  money  by  mortgaging  its  prop- 
erty and  franchises  or  by  issuing  preferred  stock 
and  pledging  its  revenue  for  payment  of  dividend 
thereon  when  such  course  is  necessary  to  carry 
into  effect  the  object  for  which  the  corporation 
was  created.  Covington  v.  Bridge  Co.,  10  Bush, 
74. 

"  We,  the  directors  of  B.  B.  &  H.  T.  P.  Co., 
promise  to  pay  to  AV.  $1,500,"  etc.—  held  to  be 
the  individual  obligation  of  the  signers.  Pack  v. 
White,    78   Ky.    243.] 


KENTUCKY 


13 


Corporate  powers;  subscriptions — Stat.,  §§  542,  543. 


4.  Appoint,  remove  and  elect  officers,  de- 
fine tlieir  duties,  and  require  from  any  of 
tliem  a  bond  for  tlie  faitliful  discbarge  of 
tlieir  duties; 

See  §§  548-551. 

[The  law  implies  a  contract  on  part  of  ofHcers 
that  they  will  use  ordinary  care  and  act  honestly; 
and  a  suit  by  stockholders  to  settle  a  trust  in 
the  hands  of  assignee  of  corporation  may  be 
joined  with  an  action  against  the  officers  for 
negligence  and  fraudulent  management.  Jones  v. 
Johnson,    10    Bush,    658. 

Vote  or  resolution  appointing  agent  need  not  be 
entered  on  minutes  of  corporation  unless  required 
by  charter.    Covington  v.  Bridge  Co.,  10  Bush,  81. 

Those  who  deal  with  officers  of  a  corporation 
are  hound  to  take  notice  of  the  powers  conferred 
by  the  act  of  incorporation;  therefore  such  officers 
are  not  personally  liable  to  those  with  whom  they 
deal  in  matters  bevond  their  authority.  Sand- 
ford   V.    McArthur,    18   B.    M.    421. 

Officer  of  corporation  acting  within  scope  of  his 
authority  is  not  individually  bound.  Taylor  v. 
Williams,    17    B.    M.    494. 

To  bind  corporation  by  contract  made  by  presi- 
dent it  must  be  shown  that  he  had  power  by 
the  act  of  incorporation,  or  that  corporation  au- 
thorized him  or  snbsequentlv  ratified  the  contract. 
T.   P.  Co.  V.   Looney,   1  Met.   551. 

Presumption  in  favor  of  officers'  acts.  Louis- 
ville V.   Hyatt,  2  B.   M.    ISO. 

Officers  properly  elected  will  hold  until  succes- 
sors appointed,  notwithstanding  time  of  election 
shall    have   elapsed.    "Wier    v.    Bush,    4    Litt.    43:3. 

Corporation  may  appoint  an  agent  and  be  bound 
by   his  acts.    Garrison    v.    Combs,    7   J.   J.    M.    8Cy. 

An  agency  for  collecting  and  securing  the  debts 
of  a  corporation  may  be  created  without  the  use 
of  a  corporate  seal.  Lathrop  v.  Bank,  8  Dana, 
115. 

Parol  evidence  admissible  to  show  appointment 
of  agent  of  which  no  note  has  been  made  on  the 
records.    Covington    v.    Bridge    Co.,    10    Bush.    81. 

Resistance  by  corporation  to  an  attempt  to  re- 
cover property  acquired  by  its  agent  is  sufficient 
recognition  of  the  agency.  Lathrop  v.  Bank,  8 
Dana,    115. 

It  is  the  duty  of  bank  directors  to  use  ordinary 
diligence  in  acquiring  knowledge  of  business  of 
the  bank.  Where  directors  have  knowledge  of 
gross  negligence  or  carelessness  of  an  officer,  they 
will  be  personally  liable.  Shakers  v.  Underwood, 
9   Bush,    621. 

Want  of  diligence  of  directors  of  a  company 
constitutes  no  defense  by  cashier  for  his  negli- 
gence, and  he  and  his  sureties  are  liable. 
Batchelor  v.  Bank,  78  Ky.  443.  Right  of  bank 
directory  to  bind,  control,  and  direct  subordinates 
is  necessarily  implied.  Id.  Therefore  cashier  is 
not  an  Insurer  of  the  honesty  and  fidelity  of  his 
subordinates.    Id.    Duty   of   cashier    defined.       Id. 

Executive  officer  of  the  corporation,  whose  duty 
it  is  to  transact  its  general  business,  binds  the 
company  by  his  acts  done  within  the  scope  of 
the  general  usage,  practice  and  course  of  busi- 
ness of  the  corporation.  Ins.  Co.  v.  Bowman,  84 
Ky.  430:  s.  c,  1  S.  W.  Rep.  717. 

Treasurer  of  a  corporation  hns  no  authority  to 
issue  notes  in  the  name  of  the  corporation  in  the 
absence  of  express  authority.  Bank  v.  Wagner, 
93  Ky.   525. 

An  agent  of  a  corporation  may  bind  it  if  he 
acts  under  Immediate  instruction  from  some 
superior  agent  authorized  to  thus  act,  or  from 
board  of  directors.  Bank  v.  Wagner,  93  Ky.  525; 
s.  c,  20  S.  W.  Rep.  535.] 


5.  To  prescribe  by  its  board  of  directors 
by-laws  for  the  government  of  the  coi'pora- 
tion  not  inconsistent  with  law; 

See  §  545. 


[Corporation  may  pass  by-laws,  elect  officers 
and  agents,  and  keep  record  of  its  proceedings; 
and  they  are  all  valid  without  affixation  of  seal. 
Waller  v.   Bank,  3  J.  J.  M.   »«. 

The  power  to  make  by-laws  is  limited  by  the 
nature  of  the  corporation  and  the  laws  of  the 
country.  It  can  make  no  rule  contrary  to  law, 
good  morals  or  public  policy.  Sayre  'v.  Assn., 
1  Duv.   144. 

By-laws  held  to  bo  in  conflict  with  statutes. 
Herbert  v.  B.  &  S.  Assn.,  11  Bush,  297.] 


6.  And  to  exercise,  subject  to  law,  such 
powers  as  may  be  necessary  to  conduct  the 
business  or  promote  and  can-y  on  the  objects 
and  purposes  for  which  it  Avas  organized. 

Corporation  may  engage  in  what  business. 
§  567.  Forbidden  to  loan  money  or  discount  bills. 
§  1391.  Unauthorized  business  prohibited.  Const., 
§   192. 

[The  act  of  incorporation  gives  to  the  body 
corporate  all  the  power  it  possesses.  Maddox  v. 
Graham,   2   Met.   72. 

Corporations  have  the  implied  power  to  deal 
on  credit  and  borrow  money,  and  bind  themselves 
by  the  usual  evidences  of  credit,  bills  and  notes. 
Hank  v.  N.   M.  Co.,  1  B.  M.  14. 

A  corporation  may  receive  the  deliverv  of  a 
deed  and  livery  of  seisin,  or  what  is  equivalent. 
Pendleton  v.   Bank,   1   Mon.    188. 

Corporations  have  such  powers  as  are  expressly 
given  them  by  their  charters,  or  such  as,  by 
fair  implication,  are  necessary  to  the  execution 
of  their  object.  R.  R.  Co.  v.  Lit.  Soc,  91  Kv. 
395;  s.  c.  15  S.  W.  Rep.  1065;  R.  R.  Co.  v.  aiet- 
cafe,  4  Met.  206. 

Assignment  of  note  may  be  made  by  a  corpora- 
tion by  an  entry  to  that  effect  in  its  registry. 
Garrison  v.   Combs,  7  J.  J.   M.  88. 

Corporation  must  exercise  its  functions  strictly 
according  to  the  letter  of  the  statute  creating  it. 
Bank   v.    Norvell,   2  Mar.   102. 

A  banking  corporation  being  a  creature  of  stat- 
ute has  only  the  power  conferred  by  its  charter. 
Thweatt  v.  Bank,  81  Ky.  1.  A  stock  corporation 
has  no  implied  power  to  buy  and  sell  real  estate, 
e-xcept  to  obtain  buildings  in  which  to  transact 
its    legitimate    business.    Id. 

Purchase  of  lands  by  lumber  company  not  ultra 
vires,  when.  Lumber  Co.  v.  Green.  87  Kv.  2.57; 
s.  c,  8  S.  W.  Rep.  439.  Or  of  note  by  a  bank  at 
"  lumping  discount."  Nicholson  v.  Bank,  92  Kv. 
251;  s.  c,  17  S.  W.  Rep.  627.] 


§  543.  At  least  fifty  per  cent,  of  the  capital 
stock  of  each  corporation  shall  be  in  good 
faith  subscribed  before  it  shall  be  authorized 
to  transact  any  business  with  the  persons 
other  than  its  stoclvholders;  and  the  capital 
stock  shall  be  paid  in  such  amounts  and  at 
such  times  as  the  directors  may  require;  and 
when  any  corporation  is  authorized  to  com- 
mence business,  it  may,  if  its  whole  capital 
stock  has  not  been  subscribed,  open  books 
for  additional  subscriptions  to  its  capital 
stock;  and  when  any  stockholder  fails  to 
pay  any  installment  on  the  stock  when  re- 
quested by  the  directors,  they  may  sell  a  suf- 
ficiency of  the  stock  of  such  delinquent  at 
public  sale  to  pay  the  amount  due.  with  costs 
and  interest,  having  first  given  him  twenty 
days'  notice  in  writing,  if  he  reside  in  the 
county,  or,  if  not,  by  letter  mailed  to  his 
last  known  address,  of  the  time  and  place 
when  and  where  the  stock  will  be  sold,  or 
they  may  collect  it  by  action;  if  no  bidder 


14 


KENTUCKY. 


Subscriptions;  lien  on  stock  —  Stat.,  §§  544,  545. 


can  be  foiuul  to  pay  the  amount  dne  on  the 
stock,  and  it  cannot  be  collected,  the 
amount  previously  paid  in  by  the  delinquent 
on  the  stoc-k  shall  be  forfeited  to  the  cor- 
poi-atiou,  by  order  of  the  board  of  directors, 
and  such  stock  sold  by  it  within  one  year 
from  the  time  of  such  forfeiture;  if  the  stock 
is  sold,  and  there  remains  a  suiijlus  after 
the  payment  of  the  amount  due,  with  in- 
terest and  costs,  such  surplus  shall  be  paid 
to  the  origiual  owner  of  the  stock,  his  heirs 
or  assigns. 

Liability  of  stooliholdcrs.  §  547.  Transfer  of 
shares.  §  545.  Shares  divided  into  three  classes. 
§  564.  Increase  of  stock.  §  553.  Not  to  be  issued 
except  for  value.    §  568. 

[Right  of  company  to  take  a  forfeiture  of  stock 
does  not  interfere  with  the  common-law  right 
and  remedv  of  enforcing  the  payment  of  the  stock 
subscribed.'    Gratz  v.  Redd,  4  B.   M.  193. 

Remedy  against  delinquent  subscribers  is  to  en- 
force payment  by  a  judgment  for  the  money, 
and  not  bv  a  forfeiture  or  sale  of  the  stock. 
Gill  V.  Mining  Co..  7  Bush,  640. 

Taking  stock  creates  a  contract,  express  or 
implied,  to  pav  for  it  in  mode  prescribed  by  the 
charter.    Gill   V.    Min.    Co.,    7    Bush,    638. 

No  defense  to  action  to  recover  amount  of 
subscription  that  no  certificate  of  stock  has  been 
tendered.    Smith   v.    Gower,   2   Duv.    19. 

Subscriptions  before  incorporation  not  mutually 
binding  upon  the  subscribers.  Goff  v.  College,  6 
Bush.   447. 

Where  charter  prescribes  form  of  subscription 
for  stock  as  to  president  and  directors,  subscrip- 
tion is  valid,  although  company  was  not  organized 
when  it  was  made;  It  takes  effect  so  soon  as 
obligees  come  into  existence.  Lackey  v.  R.,  etc., 
Co.,   17   B.   M.  48. 

Order  of  county  court,  by  which  county  was 
pledged  for  .$;j,006  to  continue  a  turnpike,  there 
being  then  no  company  organized,  not  valid  as 
a  subscription  of  stock  in  the  company.  W.,  etc., 
Co.   V.   Clarke   Co.    Ct..    3  Met.   144. 

In  all  essential  particulars  the  provisions  of  an 
act  authorizing  a  municipal  corporation  to  sub- 
scribe for  stock  in  a  railroad  company,  and  to 
issue  bond  in  payment  thereof,  must  be  com- 
plied with,  and  if  not  followed  the  bond  will  be 
void  unless  the  defect  is  cured  by  subsequent 
legislation.  Id.;  Shelby  Co.  Ct.  v.  R.  R.  Co., 
8  Bush,  216. 

Company  had  the  right  to  accept  the  condi- 
tional subscription  of  county  court  for  stock  in 
a  turnpike  company,  the  money  subscribed  to  be 
used  in  erecting  a  certain  bridge;  and  the  subse- 
quent destruction  of  the  bridge  did  not  affect 
this  subscription,  but  was  the  loss  of  company. 
Mercer  Co.   Ct.  v.   S.,   etc.,   Co.,   10  Bush,   2.57. 

Subscriptions  of  stock  by  a  county  court  must 
be  made  in  substantial  conformity  to  mode  pre- 
scribed in  the  law.  County  courts  under  the  law 
can  only  act  through  their  orders  made  of  record. 
W.,  etc.,  Co.  V.  Clark  Co.  Ct.,  3  Met.  143;  Mer- 
cer Co.  Ct.  V.  Nav.  Co..  8  Bush,  307.  Such  sub- 
scriptions   binding,    when.    Id. 

County  court  has  no  authority  to  appoint  an 
agent  to  make  subscription,  when.  Mercer  Co. 
Ct.    V.    Nav.    Co.,   8   Bush,    .307. 

No  general  power  is  conferred  on  county  courts 
to  issue  bonds  or  to  subscribe  stock  in  Ijehalf  of 
the  county  in  aid  of  corporations,  and  when  this 
extraordinary  power  Is  conferred  by  legislative 
enactment  it  will  be  strictly  pursued.  Bullock  v. 
Curry,   2  Met.    174. 

An  order  of  county  court  directing  county  judge 
to  suV)Scribe  for  stock  in  a  corporation  upon  con- 
tingencies therein  named  did  not  of  itself  amount 
to  a  subscription.  R.  R.  Co.  v.  Barren  Co.  Ct., 
10   Bush,   614. 

Want  of  authority  of  county  court  to  subscribe 
stock  is  no  reason  for  corporation  refusing,  after 


receiving  the  money  on  the  subscription,  to  com- 
ply with  its  agreement  to  issue  to  county  cotirt 
certificates  for  the  stock  subscribed  and  paid  for. 
Mercer   Co.    Ct.   v.    S.,    etc.,    R.    Co.,   8    Bush,    218. 

Charter  authorizing  county  court  to  make  sub- 
scription for  stock  may  be  changed  or  restrained 
by  legislature  at  any  time  after  the  election  had 
been  held  and  before  subscription  was  actuallv 
made.  R.  R.  Co.  v.  Barren  Co.  Ct.,  10  Bush,  <;u2. 
The  mere  vote  to  subscribe  did  not  form  such  a 
contract  with  corporation  as  would  be  protected 
by  article  1,  section  10,  Federal  Constitution; 
until  subscription  was  actually  made,  contract 
was   unexecuted.    Id. 

Subscriptions  for  stock  in  railroad  affording  pe- 
culiar local  benefits  to  subscribers,  when  made  in 
pursuance  of  legislative  authority,  may  now  be 
regarded  as  of  unquestionable  constitutionalitv. 
Shelby  Co.  Ct.  v.  R.  R.  Co.,  8  Bush,  215. 

Subscription  by  county,  city,  precinct,  etc.; 
submission  to  vote,  when  and  how  made.  Al- 
lison V.   L.,    etc.,    R.    Co.,   9   Bush,   248. 

Money  collected  by  illegal  taxation  on  a  void 
subscription  to  turnpike  is  a  trust  fund  for  benefit 
of   taxpayers.     Blair  v.    T.    P.    Co.,   4   Bush,    1.".7. 

Trustees  of  a  town  cannot  avoid  responsibilit.v 
for  stock  subscribed  on  ground  that  their  agent 
exceeded  his  authority,  unless  they  show  that 
company  had  knowledge  of  those  facts.  Trustees 
V.    T.    P.    Co.,    1    Met.    57. 

When  charter  defines  terms  of  subscription  for 
stock  it  is  only  necessary  that  the  writing  signed 
by  the  subscriber  should  show  an  Intention  to 
become  stockholders  and  the  number  of  shares 
subscribed  for.  Fry  v.  R.  R.  Co.,  2  Met.  31G; 
Gill  V.  Mining  Co.,  7  Bush,  638. 

Subscription  by  one  to  capital  stock  is  a  good 
consideration  for  the  subscription  of  others.  T. 
P.  Co.  V.  Lancaster,  79  Ky.  552.  Distinction  be- 
tween agreement  to  subscribe  and  a  subscription. 
Id. 

An  issue  of  stock  by  a  corporation  which  Is 
not  be.vond  the  amount  authorized  by  charter, 
but  which  is  brought  about  by  fraud  of  the 
beneficiary,  is  not  ultra  vires,  and  neither  the 
corporation  nor  the  stockholder  will  be  allowed 
to  claim  that  it  is  void  against  a  bona  fide  holder. 
Nail  Co.  V.  Bayless,  91  Ky.  94;  s.  c,  15  S.  W. 
Rep.  10.  If  a  stockholder  claims  that  an  issue  of 
stock  is  fraudulent,  but  there  is  an  unreasonable 
dela.v  in  taking  steps  to  annul  it,  parties  cannot 
be  placed  in  statu  quo,  and  court  of  equity  will 
not  interfere.     Id. 

One  who  purchases  stock  from  president  of 
corporation  on  faith  of  public  statement  of 
officers  as  to  condition,  which  is  false,  is  entitled 
to  rescission  of  the  contract.  Prewitt  v.  Trim- 
ble, 92  Ky.  176;  s.  c,  17  S.  W.  Rep.  ;^56. 

AVhere  agreement  provides  that,  unless  a  certain 
amount  be  subscribed,  previous  subscriptions  shall 
be  void,  the  petition  to  enforce  the  subscription 
must  allege  a  subscription  of  the  sum  specified. 
Mill  Co.   V.  Mattingly,  3.j  S.  W.   Rep.   1114.] 

§  544.  No  corporation  sliall  take,  as  security 
for  any  delit,  a  lien  upon  any  part  of  its 
capital  stock,  or  be  the  lioldcr  or  purchaser 
of  any  part  tliereof,  unless  such  lien  or  pur- 
chase shall  be  necessary  to  inx'vent  loss  upon 
a  debt  previously  contracted;  and  stock  so 
purchased  shall  in  no  case  be  held  by  the 
coiqioration  for  a  longer  time  than  one  year. 

[The  charter  lien  of  a  corporation  on  shares  to 
secure  the  stockholders'  indebtedness  to  It  is 
superior  to  that  of  a  pledgee  of  the  shares,  and  is 
not  waived  bv  taking  other  security.  Bank  v. 
Trust  Co.,  40  S.  W.  Rep.  4.58.] 

§  545.  The  shares  of  stock  shall  be  trans- 
ferred on  the  books  of  the  corporation  in 
such  manner  as  the  by-laws  thereof  may 
direct,  and  every  person  becomin.g  a  stock- 


KENTUCKY. 


15 


Transfers;  liability  of  stockholders  —  Stat.,  §§  5i6,  547. 


holder  by  such  transfer  shall,  in  proportion 
to  his  shares,  sncceod  to  all  the  rights  and 
liabilities  of  prior  stockholders. 

Liability  of  stockholder.      §   547. 

[Certificate  of  stock  on  its  face  transferable; 
there  is  no  lien  upon  it  for  any  debt  due  the  cor- 
poration. Fitzhugh  V.  Bank,  3  Mon.  128.  Lien 
provided  by  charter  only  exists  where  stock- 
holder becomes  indebted  to  the  bank;  lien  can- 
not be  created  after  notice  of  transfer  of  the 
stock.     Bank  v.   McNeil,  10  Bush,  58. 

Where  stock  is  assignable  by  transfer  on  books, 
assignment  of  certificate  with  written  power  to 
assignee  to  transfer  the  stock  to  himself  is  a 
symbolical  delivery  affecting  those  who  have  no- 
tice thereof.     Bank  v.   McNeil,  supra. 

Purchaser  of  stock  may  compel  corporation  to 
permit  a  transfer  on  its  books.  Fitzhugh  v.  Bank, 
3  Mon.  128. 

Seal  not  necessary  to  the  scrip  or  certificates 
of  stock  in  a  corporation.  Fitzhugh  v.  Bank, 
supra. 

Bank  has  no  lien  on  stock  of  one  indebted  to 
It  in  preference  to  other  creditors.  A  lis  pendens 
gives  preference  to  such  creditors.  Dana  v. 
Brown.  1  J.  J.  M.  304. 

Where  charter  provides  that  stock  may  be 
transferred  on  the  books,  but  that  no  transfer 
shall  be  made  by  any  stockholder  indebted  to  the 
company  until  his  debt  is  paid  or  secured,  com- 
pany h.TS  a  lien  on  the  stock,  and  cannot  be  de- 
feated by  the  transfer  except  in  the  manner 
pointed  oiit  in  the  charter.  Ins.  Co.  v.  Bowman. 
84  Ky.  430;  s.  c.  1  S.  W.  Rep.  717.  Such  lien  not 
waived  by  taking  mortgage  on  other  property  to 
secure  the  indebtedness^  unless  it  clearly  appears 
that  there  was  an  indebtedness  to  waive  the  lien. 
Id. 

Transfers  of  stock  in  corporation  organized  un- 
der general  law  are  valid,  not  only  between  the 
parties,  but  as  against  creditors,  although  not  en- 
tered upon  the  books  of  the  company.  Thurber 
v.  Crump,  86  Ky.  408;  s.  c,  6  S.  W.  Kep.  145. 
Provision  requiring  transfers  to  be  made  upon 
the  books  is  for  the  protection  of  the  corpora- 
tion and  purchaserB.  and  not  of  creditors  of  the 
stockholders.  Id.;  Nail  Co.  v.  Bayless,  91  Ky.  94; 
s.  c.  15  S.  W.  Rep.  10. 

A  contract  of  sale  of  stock  passes  the  rights  of 
the  vendor,  and  vendee  mav  compel  transfer  upon 
the  iH.oks.  Nail  Co.  v.  Bayless.  91  Ky.  94;  s.  c,  15 
S.  W.  Rep.  10.] 


§  .546.  A  book  shall  be  kept  by  every  cor- 
poration in  its  principal  ofBce.  in  which  shall 
be  entered  the  name,  post-office  address  and 
number  of  shares  of  stock  held  by  each 
stockholder,  and  the  time  when  each  person 
became  a  stockholder,  also  all  transfers  of 
stock,  stating  when,  the  number  of  shares 
transferred,  and  by  and  to  whom.  This 
book  shall,  at  all  times  during  business  hours, 
be  subject  to  the  inspection  of  all  stock- 
holders and  persons  doing  business  with  the 
corporation. 

See  §  545. 

§  547.  The  stockholders  of  each  corpora- 
tion shall  be  liable  to  creditoi-s  for  the  full 
amount  of  the  unpaid  part  of  the  stock  su-b- 
scribcd  for  by  theiu,  and  stockholders  of  cor- 
porations not  organized  for  educational,  re- 
ligious, charitable  or  benevolent  purposes,  or 
for  the  puri^ose  of  building,  constructing  or 
operating  turnpikes  or  bridges,  lines  of  rail- 
road, telegraph  or  telephone,  or  developing 
or  improving  lands,  mines  or  waterways,  or 


corstructing  or  operating  water,  gas  or 
electric  plants,  or  operating  for  petroleum, 
natural  gas  or  salt  water,  shall  be  indi- 
vidually responsible,  equally  and  ratably,  and 
not  one  for  the  other,  for  all  contracts  and 
liabilities  of  such  corporation  to  the  extent 
of  the  amount  of  their  stock  at  par  value, 
in  addition  to  the  amount  of  such  stock;  but 
persons  holding  stock  as  fiduciaries  shall  not 
be  personally  liaijle  as  stockholdei-s,  but  the 
estates  in  their  hands  shall  be  liable,  in  the 
same  manner  and  to  the  same  extent  as 
the  property  of  other  stockholders;  and  no 
transfer  of  stock  shall  operate  as  a  release 
of  any  such  liability  existing  at  the  time  of 
such  transfer:  Provided.  The  action  to  en- 
force such  liability  shall  be  commenced 
within  two  yoai-s  from  the  time  of  transfer. 

See   g§  543,   564. 

[Stockholder  may  deal  with  corporation  and  be- 
come a  creditor  as  any  other  individual,  and  mav 
be  secured  as  a  preferred  creditor  in  an  assicrn. 
mont  by  the  corporation.  Ins.  Co.  v  Paee  ^17 
B.   M.  4.39.  ^-".     V.    jTdge,    ±i 

Where  one  subscribes  for  stock  in  the  names  of 
infants.  ,ind  receives  the  dividend  and  enjoys  all 
the  benefits  from  the  stock,  he  is  individually  re- 
sponsible.   Castleman  v.    Holmes,   4  J.  J    M  '  7 

Where  execution  against  corporation  has  been 
returned  nulla  bona,  the  creditor  mav  maintain 
action  in  equity  against  all  stockholders  jointly. 
Bank   v.    Dallam.   4   Dana,    574. 

Individual  liability  does  not  authorize  seizure  of 
a  stockholder's  goods  upon  execution  against  the 
corporation,  but  imposes  a  personal  liabilitv  to 
contribute  to  payment  of  the  debt,  which  may 
be  enforced  in  equity  against  all  or  in  action  of 
debt  against  each.     Id. 

Improper  to  decree  against  Individual  member 
of  company  whose  stock  had  been  forfeited  to 
company,  to  satisfy  a  judgment  against  company. 
R.   R.   Co.  V.  Bridges,  7  B.   M.  564. 

Every  stockholder  contracts  that  the  will  of 
majority  shall  govern  in  all  corporate  matters. 
Dudley  y.  High  School.  9  Bush,  578. 

Notice  of  time  and  place  of  meetings  of  stock- 
holders, to  be  effectual,  must  be  given  in  the 
mode  prescribed  by  charter.  Stockholders  v.  R. 
R.   Co..   12  Bush.   63. 

Where  project  Is  abandoned,  lapse  of  time  and 
changed  circumstances  may  release  subscribers  to 
stock.     T.  R.  Co.  v.  Jewell,  8  B.  M.  147. 

Conditional  subscription;  not  to  be  paid  till  a 
certain  amount  subscribed;  unpaid  subscriptions 
of  insolvents,  infants,  or  married  women  not  to  be 
considered.  Phillips  v.  Bridge  Co.,  2  Met.  223. 
Such  subscription  void  unless  proper  amount  of 
private  subscriptions  has  been  made.  Clav  v. 
Nicholas  Co.   Ct..  4  Bush,   155. 

Where  there  is  danger  of  misapplication  of  funds 
subscribed,  a  court  of  equity  or  of  law  should  re- 
fuse to  enforce  a  subscription  until  corporation 
properly  secures  the  appropriation  ^f  the  bonds 
or  their  proceeds  in  accordance  with  the  terms 
of  the  subscription.  R.  R.  Co.  v.  Judge,  10  Bush, 
575. 

Failure  to  complete  work,  and  fact  that  corpo- 
ration is  insolvent  and  defunct,  is  no  defense  to 
action  on  bonds  issued  by  a  city  or  county  to  the 
company  in  payment  of  its  stock  subscriptions. 
Maddox  v.   Graham.  2  Met.  84. 

And  innocent  holders  of  such  bonds  may  en- 
force their  payment,  though  they  be  not  valid 
as  between  the  original   parties.     Id. 

Change  of  route  of  railroad  will  exonerate  sub- 
scribers from  pavment  of  their  subscriptions.  Fry 
v.  R.   R.   Co.,  2  Met.  317. 

As  between  corporation  and  a  creditor,  the  lat- 
ter could  compel  the  payment  of  the  entire  stock, 
if  necessary  to  satisfy  his  demands.  Haldman  v. 
Alnslie,  82  Ky.  3f»5.     But  if  a  member  of  the  cor- 


16 


KENTUCKY. 


Directors;  dividends;  false  statements,  etc. —  Stat.,  §§  548-551. 


poration  knowlnply  contracts  debts  hoyond  the 
limits  of  the  articles,  without  couseut  of  the 
stockholders,  and  pay  said  debts,  he  cannot  re- 
cover beyond  the  limit  fixed  in  the  articles,  un- 
less the  "stockholders  unanimously  agreed  to  the 
creation  of  the  debt.     Id. 

As  to  right  to  sue  corporators  in  equity  for  an 
accounting,  see  LaureJ  Co  Ct.  v.  Trustees,  93 
Ky.  370;  s.  c.  120  S.  \V.  Rep.  2.58. 

Claim  of  corporation  against  a  stockholder  for 
stock  subscribed  and  not  paid  In,  forms  part  of 
assets  of  corporation,  and  may  be  subjected  by 
its  corporators.  Banking  Co.  v.  Eisenmau,  {>4  Ky. 
83;  s.  c,  21  S.  W.  Itep.  531,  104!>. 

Stockholders  of  corporation  organized  under  law 
are  personally  liable  to  amount  of  unpaid  install- 
ments on  stock  subscribed  b.v  them;  but  a  cred- 
itor of  the  corporation  may,  by  special  contract, 
waive  his  right  to  look  to  the  Individual  stock- 
holders, and  oral  testimony  is  competent  to  show 
such  contract.  Bush  v.  Robinson,  95  Ky.  492;  s.  c, 
21  S.   AV.   Rep.  531,   1049.] 


§  54S.  If  tliQ  directoi-s  of  any  incorporated 
company  shall  declare  and  pay  any  dividend 
when  tlie  corpt)ratiou  is  insolvent,  or  any 
dividend  the  payment  of  wliicli  wonld  ren- 
der it  insolvent,  or  which  would  diminish  the 
amount  of  its  capital  stock,  they  shall  be 
jointly  and  severally  individually  liable  for 
all  debts  of  the  coiiioratiou  then  existing, 
and  foi-  all  that  sliail  be  thereafter  incurred 
while  they,  or  a  majority  of  them,  continue 
in  office. 

See   §§  549,   550.    1175,   118(5. 

[Where  directors  fail  to  interpose  a  proper  de- 
fense In  n  suit  against  the  corporation,  such 
failure  will  not  protect  one  of  the  faithless  di- 
rectors in  his  profits  realized  bv  such  breach  of 
official  duty.    R.   R.  Co.  v.   Bowler,  9  Bush.  482. 

Chancellor  cannot,  at  the  instance  of  minority 
of  ciirpf)rntlon.  Interpose  to  prevent  application 
of  corporate  funds  to  purposes  for  which  It  was 
raised,  against  decision  of  majority  of  the  mana- 
gers, whatever  he  might  do  at  instance  of  ma- 
jority.    F.,   etc.,   R.   Co.   V.   Jewell,   8  B.  M.   144. 

Affairs  of  corporation  are  always  controlled  by 
a  majority  in  Interest,  unless  charter  provides 
otherwise.     Covington  v.   Bridge  Co..   10  Bush,  76. 

-'i'aplt.'il  stock  paid  in  for  the  purpose  of  con- 
structing a  railroad,  on  being  forfeited  by  the 
holder,  does  not  become  profit  and  liable  to  dis- 
tribution as  profit  before  the  object  of  its  pay- 
ment had  been  accomplished.  Gratz  v.  Redd,  4 
B.  M.  187. 

Illegal  dividends  may  be  reclaimed  by  directors, 
or  by  a  trustee  to  whom  coritoration  has  made 
an    assignment.      Ins.    Co.    v.    Page,    17   B.    M.    442. 

By  receiving  dividend,  stockholders  do  not  ratify 
Illegal  acts  of  directors.     Id. 

Directors  may  rely  ui)on  lapse  of  time  to  shield 
themselves  from  liability  to  creditors  for  divi- 
dends improperly  paid  out.  R.  R.  Co.  v.  Bridges, 
7  B.   M.   562. 

Corporation  cannot  treat  as  profits,  subject  to 
be  divided,  premiums  received  upon  unexpired 
risks,  when  It  had  not  a  fund  sufficient  independ- 
ent thereof  to  meet  all  liabilities  that  might  ac- 
crue on  the  pending  risks.  Ins.  Co.  v.  Pago,  17 
B.  M.  442. 

Directors  have  no  power  to  submit  to  arbitra- 
tion the  propriety  of  their  former  action  In  de- 
claring dividends  without  consent  of  company 
when  the  charter  confers  no  such  power.  Gratz 
V.   Redd,  4  B.   M.  186. 

Directors  are  trustees,  and  funds  In  their  hands 
are  liable  to  the  debts  of  the  corporation,  and 
may  be  subjected  by  the  chancellor;  and  for  a 
fraudulent  misapplication  of  that  fund  they  are 
personally  llal)lf,  or  the  fund  Itself  may  be  pur- 
sued into"  the  hands  of  one  not  an  Innocent  holder. 
Gratz  v.   Redd,  4   B.   M.   196. 


Quere,  might  not  creditors  maintain  suit  at  law 
against  trustees  for  mismanagement  of  corporate 
funds,  in  Improperly  declaring  dividends  when 
there  were  no  profits  to  divide?  R.  R.  Co.  v. 
Bridges,  7  B.  M.  559. 

It  Is  a  fraud  upon  the  community  to  permit  a 
corporator  to  escape  responsibility  b.v  taking  the 
stock  in  the  name  of  infants.  Castleman  v. 
Homes,  7  Men.  591;  Roman  v.  Fry,  5  J.  J.  M. 
034. 

Capital  stock  of  railroad  compan.v  a  trust  fund 
in  hands  of  company  and  liable  to  payment  of 
debts.  Dudley  v.  Price,  10  B.  M.  86.  To  sub- 
ject such  fund  creditor  must  show  his  legal  rem- 
ed.v  has  been  exhausted.     Id. 

Provision  In  charter  requiring  tolls  to  be  re- 
duced when  road  pays  greater  dividend  than  al- 
lowed bv  law,  construed.  T.  P.  Co.  v.  Phelps,  81 
Ky.   613. 

Dividends  are  non-apportionable.  Therefore, 
when  stock  is  devised  to  one  person  for  life,  re- 
mainder to  another,  if  dividend  is  declared  after 
the  life  tenancy  has  begun,  the  whole  of  it  be- 
longs to  the  life  tenant.  Kite's  Devisees  v.  Hite's 
Exr.,  93  Ky.  257;  s.  c,  20  S.  W.  Rep.  778.  And 
this,  whether  dividend  be  declared  in  cash  or  In 
stock;  but  not  if  dividend  is  declared  out  of 
profits  made  by  sale  of  real  estate  with  a  corpo- 
ration owned  at  testator's  death.     Id. 

An  informal  understanding  among  stockholders 
that  a  land  bonus  should  be  treated  as  a  dividend 
will  not  bind  a  corporation  where  no  action  was 
taken  hv  the  directors.  Wire  Nail  Co.  v.  Gedge, 
29   S.   W.   Rep.   363.] 

§  549.  If  the  directors  or  officers  of  any  cor- 
poration sliall  Ivuowinjjly  cause  to  be  pub- 
lished or  given  out  any  statement  or  report 
of  the  condition  or  business  of  the  corpora- 
tion that  is  false  in  any  material  respect,  the 
officers  and  directors  causing  such  report 
or  statement  to  be  published  or  given  out,  or 
assenting  thereto,  shall  be  jointly  and  sev- 
erally individually  liable  for  any  loss  or  dam- 
age resulting  therefrom. 

See  §§  54«.  r,oO,   1175,   IISG. 

[Intangible  corporation  not  allowed  to  commit 
frauds  bv  its  visible  agent.  T.  P.  Co.  v.  Churchill, 
6  Mon.   429. 

Director  of  corporation  organized  under  general 
law,  who  has  given  notice  of  existence  of  debts 
beyond  th«  capital  stock,  will,  nevertheless,  be 
liable  for  debts  subseijuently  created  by  the  cor- 
poration with  his  assent,  express  or  implied. 
Cornwall  v.   Eastham,  2  Bush,   562  (§  516). 

§  550.  If  the  directors  or  officers  of  any 
corporation  sliall  fail  or  refuse  to  comply 
with,  or  shall  violate  any  of  the  provisions 
of,  this  article,  those  so  failing,  refusing  or 
violating  sliall  be  jointly  and  severally  in- 
dividually liable  for  any  loss  or  damage  re- 
sulting to  any  person  from  such  failure, 
refusal  or  violation,  and,  in  addition  thereto, 
the  persons  so  lialile  shall  be  each  punished 
by  a  fine  of  not  less  than  one  hundred  nor 
more  than  one  thousand  dollars. 


See 


548,   549,   573,   1175,   1186. 


§  5."»1.  The  affairs  of  each  corporation  shall 
be  managed  by  a  board  of  not  less  than  three 
directors,  ea<h  of  whom  shall  own,  in  his 
own  right,  not  less  than  three  shares  of  capi- 
tal stock:  they  shall  hold  office  until  their 
successors  are  resjiectively  elected  and  quali- 
fied, and  a  majority  of  them  shall  constitute 


KENTUCKY. 


17 


Directors;  increase,  etc.,  of  capital  stock  —  Stat.,  §§  552^54. 


a  quorum  for  the  transaction  of  business. 
All  elections  for  directors  shall  he  by  ballot, 
and  shall  be  held  in  this  State;  and,  in  the 
fii-st  instajice.  the  directors  shall  be  elected 
at  a  meeting  held  before  the  corporation  is 
authorized  to  commence  business,  and  there- 
after at  an  annual  meeting:  of  the  stock- 
holdei-s  to  be  held  on  the  day  named  in  the 
by-laws,  and  which  shall  not  be  changed 
within  sixty  days  next  before  the  day  on 
which  the  election  is  to  be  held;  and  notice 
of  any  change  shall  be  given  to  eacli  stock- 
holder twenty  days  before  the  election  is 
held:  and  if,  for  any  cause,  an  election  is 
not  held  on  the  day  named  in  the  by-laws, 
a  special  meeting  for  that  piu'pose  shall  be 
called  within  thirty  days  thereafter,  of  which 
due  notice  shall  be  given  to  each  stockholder 
in  person  or  by  letttn*  mailed  to  his  last 
known  address.  A  stockholder  may  vote  at 
any  meeting  by  proxy  in  writing  signed  by 
him.  and  attested  in  such  manner  as  the 
by-laws  may  prescribe;  and  a  vacancy  in 
the  board  of  directors  shall  be  filled  by  the 
board,  and  the  directors  so  appointed  shall 
hold  office  until  the  next  annual  election. 
The  directors  of  any  corporation  may,  by  a 
vote  of  the  stockholders,  be  divided  into  one, 
two  or  three  classes,  the  term  of  office  of 
those  of  the  first  class  to  expire  at  the  an- 
nual election  next  ensuing,  of  the  second 
class  one  year  thereafter,  and  of  the  third 
class  two  years  thereafter;  and  at  each  an- 
nual election  held  after  such  classification 
ilirectors  shall  be  chosen  for  two  or  three 
years,  as  the  case  may  be,  to  succeed  those 
whose  terms  expire.  But  each  director  of 
a  banlving,  trust  or  insurance  company,  or 
building  and  loan  association,  must  own  in 
his  own  right  five  shai*es  of  capital  stock, 
and  a  majority  of  them  must  be  residents  of 
Kentucky  during  their  tenns  of  office. 

Sf-e  Const.,  §  207.  Officers  of  corporation.  See 
f  542  (4);  see  §§  548-550.  Meaning  of  word  "di- 
rectors."    §  575. 

[Notice  to  one  director  not  regarded  as  notice 
to  hoard,  when.     Lvne  v.  Bank,  5  J.  J.   M.  500. 

The  chancellor  has  the  power  to  require  an  elec- 
tion of  directors  upon  the  presentation  of  a  proper 
case.    Orr  v.    Bracken   Co.    Ct.,   81   Ky.    594. 

If  a  director,  bv  an  agreement  with  his  codirect- 
ors.  sells  the  bonds  of  a  corporation  on  his  own 
private  account,  he  will  be  required  to  account  for 
all  profits  realized.  Widrig  v.  Ry.  Co.,  82  Ky.  511. 
He  is  a  trustee  for  both  creditors  and  stockhold- 
ers and  thev  will  be  protected  against  such  bar- 
gains. Id.  'So,  a  director  advancing  money  for 
his  fo-directors  may  have  contribution  from  them. 

Itl-  .  ■     * 

The  directors  mav  maintain  action  against  a 
corporation  to  collect  their  demands  against  It, 
and  to  subject  Its  property  to  mortgage  to  secure 
their  demands:  and  neither  the  judgment  nor  the 
purchase  of  the  property  under  It  by  plalntlir 
will  be  held  to  be  fraudulent,  or  in  trust  for 
their  creditors.  McMurtry  v.  Mass.  Tern.  Co.,  8b 
Kv.  200;  s.  c,  5  S.  W.  Rep.  570.  ,   ^      ^  , 

Putips  and  liabilities  of  directors  defined  and 
discussed.  Jones  v.  Johnson,  86  Ky.  »30:  Bank 
V.  Caperton,  87  id.  306;  s.  c.  8  S.  W.  Rep.  SSo. 

Individual  stockholders  have  no  power  as  such 
to  represent  the  body  corporate.  The  board  or 
directors  can  onlv  bind  corporation  when  acting 
as    a    body:    and   no   understanding   or   agreement 


among  individual  members  of  the  board  is  bind- 
ing on  the  corporation.  American  Co.  v.  Gedge, 
96  Ky.  513.] 

§  552.  Persons  holding  stock  in  a  fiduciary 
capacity  shall  be  entitled  to  vote  the  shares 
so  held,  and  pei-sons  whose  stock  is  pledged 
shall  be  entitled  to  vote,  unless  the  right  to 
vote  be  expressly  given  in  writing  to  the 
pledgee;  and  in  all  elections  for  directors  or 
managers  of  any  corporation  each  stock- 
holder shall  have  the  right  to  cast  as  many 
votes  in  the  aggregate  as  lie  shall  be  en- 
titled to  vote,  multiplied  by  the  number  of 
directora  or  managers  to  be  elected  at  such 
election;  and  each  shareholder  may  cast  the 
whole  number  of  votes,  either  in  person  or 
by  proxy,  for  one  candidate,  or  distribute 
such  votes  among  two  or  more  candidates; 
and  such  directors  shall  not  be  elected  in  any 
other  manner. 

[It  is  a  fraud  upon  the  community  to  permit  a 
corporator  to  escape  responsibility  by  taking  stock 
in  name  of  Infants.  Castleman  v.  Homes,  7  Mon. 
591;  Roman  v.   Fry,  5  J.  J.   M.  634.] 

§  553.  Any  corporation  may  increase  or  re- 
duce its  capital  stock  at  any  time  by  a  vote 
of,  or  by  the  written  consent  of,  stock- 
holders representing  two-thirds  of  its  capi- 
tal stock,  and  after  notice  of  the  proposed 
increase  or  decrease  has  been  mailed  to  the 
address  of  each  stockholder  at  least  twenty 
davs  before  the  meeting  is  held  for  that  pur- 
pose; and  a  statement  of  the  increase  or  re- 
duction shall  be  signed  and  acknowledged 
by  the  president  and  a  majority  of  the  di- 
rectors, and  filed  and  recorded  in  the  same 
manner  as  articles  of  incori)oration;  but  no 
Increase  of  the  capital  stock  of  a  banking  or 
trust  company  shall  be  valid  until  the 
amount  tliereof  has  been  bona  fide  sub- 
scribed, and  one-half  thereof  actually  paid 
in,  and  the  remainder  shall  be  paid  in 
within  one  year. 

Amount  required  to  be  subscribed.  §  543.  Stock 
not  to  be  Issued  except  for  value.     §  568. 

§  554.  Any  corporation  created  by,  and 
existing  under,  the  laws  of  this  State,  may 
organize  under  the  provisions  of  this  chap- 
ter, by  executing  and  recording,  as  provided, 
articles  of  incorporation,  and  when  the  re- 
quirements of  this  chapter,  and  other  laws 
relating  to  it,  are  complied  with,  it  may  com- 
mence business,  and  become  a  coii^oration 
under  this  chapter,  and  thereupon  all  busi- 
ness effects,  assets  and  property,  real  and 
personal,  of  such  corporation  shall  be  vested 
in,  and  become,  without  deed  or  transfer,  the 
pi'oi)erty  of  the  new  coriwration,  subject  to 
all  liabilities  existing  against  the  corpora- 
tion, its  officei-s  or  stockholders,  at  the  time 
of  their  reorganization.  But  no  conwration 
reorganized  under  this  act  shall  ever  charge, 
exact  or  receive  any  greater  toll,  fare  or 
compensation  than  permitted  by  its  charter 
before  such  reorganization;  and  all  penalties 


18 


KENTUCKY. 


Consolidation  of  corporations;  amendments  —  Stat.,  §§  555-559. 


denounced  by  such  charter  for  exacting 
more  toll,  fare  or  conii>ensation  than  permit- 
tetl  l)y  such  charter  may  be  enforced  not- 
withstanding such  reorganization. 


See   Const., 
574. 


190,   191;   Statutes, 


570,    573, 


§  "i.'j.l.  Any  two  or  more  corporations  or- 
ganized under  this  chapter  or  the  laws  of 
this  State,  may  consolidate  into  a  single  cor- 
poration; the  directoi-s,  or  a  majority  of 
them,  of  such  coiTK)rations  as  desire  to  con- 
solidate, may  enter  into  an  agreement, 
signed  by  them,  prescribing  the  terms  and 
conditions  of  consolidation,  the  mode  of 
carrying  the  same  into  effect,  and  stating  such 
other  facts  as  are  necessary  to  be  set  out 
in  articles  of  incorporation,  as  herein  pro- 
vided, as  well  as  the  manner  of  converting 
the  sliares  of  tlie  old  coriioration  into  the 
new.  with  such  other  details  and  provisions 
as  ai-e  deemed  necessary.  Written  notice  of 
the  intention  to  consolidate  shall  be  mailed 
to  the  address  of  each  stockholder  of  each 
coi-poration  at  least  twenty  days  previous  to 
entering  into  such  agreement,  and  such  no- 
tice shall  be  published  at  least  two  weeks 
In  some  newspaper  printed  and  circulated  in 
the  county  of  its  principal  place  of  business, 
and  the  written  consent  of  the  owners  of  at 
least  two-thirds  of  the  capital  stock  of  each 
corporation  shall  be  necessaiy  to  the  validity 
of  such  agreement. 

Competing  common   carriers  not  to  consolidate. 
Const.,    §   201.      Consolidation    of   foreign    and    do-  ' 
mestic  corporation.     Const.,  §  200;  see  §§   556-5.58. 
Pools  and  trusts  prohibited.    ?5   3915-3921.  ', 

[In  absence  of  authority  in  charter,  legislature  ! 
has  no  authority  to  provide  for  consolidation  of  I 
one  corporation  with  another,  created  for  a  dlf-  I 
ferent  purpose,  unless  by  unanimous  consent  of  | 
stockholders.  Botts  v.  T.  P.  R.  Co.,  88  Ky.  54;  I 
s.  c,  10  S.  W.  Rep.  134.]  ' 

§  556.  When  the  agreement  Is  signed,  ac-  ' 
knowledged  and  recorded  in  the  same  man- 
ner as  articles  of  incorporation  are  required 
to  be,  the  separate  existence  of  the  constit-  : 
uent  corporations  shall  cease,  and  the  con-  j 
solidated  corporations  shall  become  a  single  ! 
corporation    in    accordance    with    the    said  ! 
agreement,  and  subject  to  all  the  provisions  ! 
of  tliis  chapter,  and  other  laws  relating  to  I 
it,  and  shall  be  vested  with  all  the  property, 
business,   credits,  assets  and  effects  of  the 
constituent    corporations    without    deed    or 
transfer,  and  shall  be  bound  for  all  their  con- 
tracts and  liabilities. 

[Where  one  corporation  sells  to  another  all  Its 
property,  franchises,  etc.,  under  authority  con- 
ferred by  its  charter,  a  bona  fide  purchaser  for 
Talue  takes  the  property  free  from  the  claims  of 
creditors  of  the  vendor,  but  have  no  lien  upon 
the  property,  just  as  if  it  were  an  individual  trans- 
action. R.  R.  Co.  V.  Griest,  85  Ky.  619;  s.  c,  4 
S.  W.  Rep.  273.  When  a  corporation  has  so  sold 
all  Its  property,  etc.,  and  thus,  in  effect,  been  dis- 
solved, the  creditors  of  a  corporation  may  enforce 
their  demands  in  a  court  of  equity,  the  proceeds 


of  the  property  being  recorded  as  assets  in  the 
hands  of  stockholders  for  the  payment  of  debts. 
Id. 

Where  one  corporation  purchases  property  and 
franchises  of  another,  it  holds  the  property  free 
from  the  claims  of  creditors  of  vendor  as  if  It 
had  been  an  Individual  transaction.  Trustees  v. 
R.  R.  Co.,  94  Ky.  377;  s.  c,  SJ.  S.  W.  Rep.  6«W.] 

§  557.  Any  action  or  proceeding  pending'by 
or  against  either  of  the  corporations  con- 
solidated may  be  prosecuted  to  judgment,  as 
if  such  consolidation  had  not  taken  place,  or 
the  new  corpoi-ation  may  be  substituted  in 
its  place. 

§  558.  If  any  stockholder  in  either  cor- 
poration consolidating,  who  objected  thereto 
in  writing,  shall,  within  twenty  days  after 
tlae  agreement  of  consolidation  has  been  re- 
corded, demand  in  writing  from  the  consoli- 
dated corporation  payment  of  his  stock,  such 
consolidated  corporation  shall,  within  three 
months  thereafter,  pay  to  him  the  market 
value  of  the  stock  at  the  date  of  consolida- 
tion; and  stock  so  purchased  shall  be  dis- 
posed of  within  the  time  hereinbefore  pro- 
vided. 

[A  subscriber  to  stock  of  a  corporation  formed 
under  general  laws  held  to  have  notice  of  pro- 
vision of  its  charter  authorizing  its  subscription 
to  stock  of  other  corporations.  Oil  Citv  Land  Co. 
v.   Porter,  35  S.  W.  Rep.  643.] 

§  559.  Any  corporation  may.  liy  the  con- 
sent in  writing  of  the  ownei-s  of  at  least  two- 
tnirds  of  its  capital  stock,  change  or  amend 
any  of  the  articles  of  its  incorporation,  and 
such  alteration  or  amendment  shall  be  signed 
and  acknowledged  by  the  directors,  or  a  ma- 
joritj-  of  them,  and  tiled  and  recorded  as  ar- 
ticles of  incorporation  are  required  to  be. 

See  §  574. 

[Xot  indispensable  that  vote  of  acceptance  of  a 
charter  amendment  appear  of  record  on  books  of 
corporation.  Such  acceptance  may  be  inferred 
from  acts  of  corporation  or  otherwise.  Covington 
V.  Bridge  Co.,  10  Bush,   71. 

Acceptance  of  amendment,  like  acceptance  of 
original  charter,  may  be  proved  by  showing  that 
the  corporation  has  done  corporate  acts  as  author- 
ized by  the  amendment.  Kenton  Co.  Ct.  v.  Turn- 
pike Co.,  10  Bush,  5.35. 

If  a  corporation,  by  its  conduct,  accepts  bene- 
fits of  an  act  amending  its  charter,  it  must  take 
it  as  a  whole,   with  its  burdens  also.     Id. 

Amendment  of  charter  is  a  part  of  charter  as 
much  as  if  incorporated  in  the  original  grant. 
R.  R.  Co.  V.  L.,  etc.,  Co.,  2  Duv.  178. 

Acceptance  of  amendment  to  charter  by  pro- 
ceeding as  authorized  by  amendment.  Bridge  Co. 
T.   Douglass,  12  Bush,  673. 

Reservation  of  right  to  amend  charter  does  not 
confer  upon  the  legislature  power  to  create  new 
trustee  or  add  to  the  number  of  trustees  without 
their  consent.     Sage  v.   Dillard,  15   B.  M.   356. 

All  rharters  and  grants  of,  or  to  corporations, 
shall  be  subject  to  amendment  or  repeal  at  the 
will  of  the  legislature,  unless  a  contrary  intent 
be  therein  plainly  expressed.  R.  R.  Co.  v.  Bar- 
ren Co.  Ct.,  10  Bush,  008.  Provision  that  cor- 
poration "  shall  have  perpetual  succession  "  does 
not  plainly  express  an  intent  not  to  reserve  power 
to  amend  or  repeal.     Id. 

Charter  mav  be  amended  without  consent  of 
shareholders,  in  so  far  as  necessary  to  carry  Into 
effect  purpose  for  which  it  was  obtained.  Fry  v. 
R.  R.  Co.,  2  Met.  321;  Covington  v.  Bridge  Co., 
10  Bush.  76. 


KENTUCKr. 


19 


Sales  of  property  and  franchises  —  Stat.,  §§  560-564. 


Amendment  which  materially  changes  respon- 
sibilities and  duties  of  company,  or  which  super- 
addis  an  entirely  new  enterprise,  may  be  resisted 
by  the  stocljholders  unless  such  amendments  are 
provided  for  in  the  charter  itself  or  in  the  gen- 
eral laws.    Fry  v.  R.  R.  Co.,  supra.] 

§  500.  Any  liability  of  corporations,  or  the 
stocklioklers  or  officers  thereof,  or  the  rights 
or  remedies  of  the  creditors  thereof,  or  of 
persons  doing  or  transacting  business  with 
the  corporations,  shall  not  in  any  way  be 
lessened  or  impaired  by  the  sale  thereof,  or 
by  the  increase  or  decrease  in  the  capital 
stoclv  of  any  coii^oration,  or  by  the  consolida- 
tion of  two  or  more  corporations,  or  by  any 
change  or  amendment  in  the  articles  of  in- 
corporation. 

§  561.  Any  corporation  organized  under  this 
chapter  may,  by  the  consent  in  writing  of 
the  owners  of  a  majority  of  its  shares  of 
stock,  unless  otherwise  provided  in  tlie  ar- 
ticles of  incorporation,  or  amendments 
thereto,  close  its  business  and  wind  up  its 
affairs;  and  when  any  corporation  expires 
by  the  terms  of  the  articles  of  incorporation, 
or  by  the  voluutaiy  act  of  its  stoclcholdei*^, 
it  maj'  thereafter  continue  to  act  for  the 
puriJose  of  closing  up  its  business,  but  for  no 
other  purpose;  and  it  shall  be  the  duty  of  the 
officers  to  settle  up  its  affairs  and  business 
as  speedily  as  possible;  and  they  shall  cause 
notice  to  be  published,  for  at  least  once  a 
week  for  four  consecutive  weeks,  in  some 
newspaper  printed  and  published  in  the 
county,  if  any,  of  tlie  fact  that  it  is  closing 
up  its  business;  and  all  debts  and  demands 
against  the  corporation  shall  be  paid  in  full 
before  the  offlc-ers  x'eceive  anything. 

See  §  569. 

[Dissolution  of  corporation  does  not  dissolve  its 
contracts,  and  creditors  may  enforce  their  claims 
against  any  property  which  may  not  have  passed 
to  bona  fide  assignee.  Dudley  v.  Price,  10  B.  M. 
85. 

Corporation  cannot,  by  Its  own  act,  dissolve  It- 
self, and  thereby  avoid  any  responsibility  in- 
curred before  such  attempted  dissolution.  Port- 
land, etc.,  Co.  V.  Trustees,  12  B.  M.  79.  Corpora- 
tion, bow  dissolved  in  Kentucy.     Id.] 

§  502.  If  the  franchise  and  property  of  any 
corporation  is  sold,  the  persons  who  may  be- 
come the  piu-chasers,  at  private  sale,  or 
under  the  .iu-lgment  of  the  court,  may  or- 
ganize a  coiijoration  for  the  construction, 
operation  and  management  of  the  same;  and 
such  corporation.  T\iien  organized,  shall  have 
tlie  same  rights,  privileges  and  franchises  as 
have  boon  granted  to  or  acquiretl  by  the  cox"- 
porati(m  purcliased;  and  shall  be  subject  to 
all  the  limitations,  restrictions  and  liabilities 
imposed  upon  it;  and,  in  addition  thereto, 
sliall  be  subject  to  all  the  provisions  of  this 
chapter.  Such  coriioration  shall  be  formed 
by  articles  of  incorporation  e.xecuted  by  the 
purchaser  and  his  associates,  and  which 
shall,  in  addition  to  the  requirements  of  sec- 
tion two  of  this  article,  set  forth  a  description 
of  the  property  sold,  and  the  decree  under 


which  the  sale  was  made,  If  it  was  sold 
under  a  judgment,  or  if  not,  the  deed  con- 
veying the  property;  the  amount  paid,  or  to 
be  paid,  and  to  and  by  whom,  and  such  other 
statements  as  may  be  deemed  necessary. 
The  articles  shall  be  signed  by  the  purchaser 
and  his  associates,  if  any,  and  a  copy  thereof 
rcicorded  in  the  office  of  the  secretaiT  of 
►State;  and  if  a  railroad,  in  the  office  of  the 
railroad  commission;  and  when  a  certificate 
of  such  fact  is  delivered  to  the  purchaser, 
the  corporation  shall  be  deemed  to  be  organ- 
ized, and  shall  have  all  the  rights,  powers  and 
privileges,  and  be  subject  to  all  restrictions, 
limitations  and  liabilities  of  other  similar 
corporations  organized  under  this  chapter. 

See  Const.,  J  203.     Statutes,  §  563. 

[Sale  of  the  franchises  and  propertv  under  a 
decree  to  satisfy  a  mortgage  does  not  pass  to  the 
purchaser  debts  duo  the  corporation,  nor  destroy 
the  corporate  existence  of  the  company.  Smith 
V.  Gower.  2  Duv.  19. 

As  to  liability  of  corporation  for  acts  of  its 
vendors  where  there  has  been  transfer  of  cor- 
porate privileges,  see  Stlckley  v.  R.  R.  Co.,  93 
Ky.  323;  s.  c,  20  S.  W.  Rep.  261.] 

§  563.  Sales  of  the  property  and  franchises 
of  coiiDorations  that  maybe  sold  under  decree 
of  court  shall  be  made  after  such  notice  of 
the  time  and  place  as  the  court  may  deem 
proper;  and  if  such  sales  are  made  in  the 
foreclosure  of  one  or  more  mortgages  or 
deeds  of  trust,  the  court  may  order  such  sale 
to  be  made  for  the  whole  amount  of  the  out- 
standing bonds  and  interest  secured  by  such 
deeds  of  trust  or  mortgage;  or  if  the  prop- 
erty and  franchises  will  produce  so  much, 
then  for  the  amount  of  interest  due  under 
said  deed  or  deeds  of  trust  or  mortgage,  or 
any  of  them,  subject  to  the  payment  by  the 
purchaser  of  the  outstanding  bonds  and  in- 
terest secured  thereby  as  they  become  due; 
and  in  the  latter  event  may,  by  proper  or- 
ders, secure  the  assumption  thereof  by  the 
purchaser;  but  where  a  sale  shall  be  ordered 
to  bo  made,  subject  as  aforesaid,  the  court 
shall  direct  the  officer  making  such  sale,  in 
the  event  that  the  property  and  franchises 
offered  do  not  sell  for  enough  to  pay  the 
amount  aforesaid,  to  sell  the  same  free  from 
incumbrances.  Sales  under  this  section  shall 
be  made  on  such  credits  as  the  court  may 
deem  proper. 

See  S  562. 

§  564.  Any  corporation,  »)rganized  under 
this  law,  may  divide  its  shares  into  classes, 
such  as  preferred,  common  and  defeiTed 
shares,  or  as  may  be  otherwise  designated, 
and  it  may  give  to  each  of  the  several  classes 
such  priority  of  riglit  in  the  payment  of  divi- 
dends, and  in  tlie  redemi)tion  of  the  shares, 
as  may  bo  prescribed  in  the  rules  and  regu- 
lations adopted  l)y  the  sliareliolders.  But  no 
preferred  stock  shall  be  issued  except  for 
cash  or  its  equivalent,  nor  for  less  than  the 


20 


ke:j^tucky. 


Forfeiture  of  charter;  issue  of  stock;  acceptance  —  Stat.,  §§  565^571. 


par  value  of  the  shares;  and  the  holders 
thereof  shall  be  entitled  to  receive  quarterly, 
senii-anual  or  annual  dividends  thereon  at 
such  i-ate  as  may  be  prescribed  in  its  issue, 
payable  before  any  dividends  shall  be  de- 
clai-ed  on  the  common  stock.  AVhich  shall  be 
stated  in  tlie  certiticates  representing  the  pre- 
ferrwl  and  common  stock  respectively.  On 
the  dissolution  of  the  company,  voluntarily 
or  otherwise,  the  holders  of  the  prefeiTed 
stock  shall  be  entitled  to  have  their  shares 
redeemed  at  par  before  any  distribution  of 
any  part  of  the  assets  of  the  company  shall 
be' made  to  the  holders  of  common  stock. 

§  565.  Any  corporation  organizing  under 
this  chapter  shall  forfeit  all  i-ights,  privileges 
and  franchises  obtained  thereunder,  if  it  shall 
fail,  for  two  years  after  its  organization,  to 
commence  in '  good  faith  the  business,  or 
to  promote  the  objects  or  purposes  for  which 
it  was  organized;  but  the  rights,  privileges 
or  fi-anchises  shall  not  be  forfeited  by  the 
failure  to  elect  officers  or  hold  meetings  at 
the  time  specified. 

Organization  complete,  when.     §  542. 

§  566.  No  corporation  organized  under  this 
chapter  shall  be  permitted  to  set  up  or  rely 
upon  the  Avant  of  legal  organization  as  a 
defense  to  any  action  against  it;  nor  shall 
any  person  transacting  business  with  such 
corporation,  or  sued  for  injuiT  done  to  its 
property,  be  permitted  to  rely  upon  such 
want  of  legal  organization  as  a  defense. 


Organization. 


539-542. 


neither  lalwr  nor  property  shall  be  received 
in  payment  of  stoclv  or  bonds  at  a  greater 
value  than  the  market  price  at  the  time 
said  labor  was  done  or  property  delivered; 
and  all  fictitious  increase  of  stock  shall  lie 
void. 


See 


543,  544. 


[I'erson  dealing  with  a  corporation  must,  at  his 
peril,  take  notice  of  its  charter  or  articles  of  in- 
corporation. Bank  v.  Milling  Co.,  95  Ky.  97;  s.  c, 
23  S.  "VV.  Rep.  675. 

Generally  one  dealing  with  a  corporation  is  not 
permitted "  to  denv  Its  existence.  R.  R.  Co.  v. 
Leavell,  10  B.  ^^.  36.S.  And  it  is  very  questionable 
whether  one  who  participated  as  a  stockholder  in 
election  of  directors  may.     Id.] 

§  567.  No  corporation  shall  engage  in  busi- 
ness other  than  that  expressly  authorized 
by  its  articles  of  incoi-poration  or  amend- 
ments thereto;  nor  shall  any  corporation, 
directly  or  indirectly,  engage  in  or  carry 
on  in  any  way  the  business  of  banking,  or 
insurance  of  any  kind,  unless  it  has  become 
organized  under  the  laws  relating  to  bank- 
ing and  insurance;  nor  shall  any  coi'pora- 
tion  hold  or  own  any  real  estate,  except 
such  as  may  be  necessary  and  proper  for 
carrying  on  its  legitimate  business,  for  a 
longer  period  than  five  years  under  penalty 
of  escheat. 

Business  unauthorized  by  charter  prohibited. 
Const..  §  192.  Powers  of  corporation.  See 
§  542  (G). 

§  568.  No  corporation  shall  issue  stock  or 
bonds  except  for  an  equivalent  in  money 
paid  or  labor  done,  or  property  actually 
received  and  applied  to  the  purposes  for 
which    such   corporation    was   created,    and 


§  569.  Whenever  any  corporation  has 
failed,  or  shall  fail,  to  perform  or  comply 
with  any  requirement  or  provision  of  its 
charter  under  which  it  does  business  in 
this  State,  or  shall  be  giiilty  of  an  abuse  or 
misuse  of  its  corporate  powers,  privileges  or 
franchises,  or  shall  become  detrimental  to  the 
interest  and  welfare  of  the  commonwealth 
or  its  citizens,  it  shall  be  the  duty  of  the 
attorney-general  of  the  State  to  institute 
such  proceedings  as  may  be  proper  and  nec- 
essary to  have  forfeited  and  revoked  the 
charter,  powers,  franchises  and  privileges  of 
such  corporation. 

See  Const.,  §  205. 

[General  assignment  of  all  property  and  effects 
in  trust  for  the  payment  of  debts  will  not.  of 
itself,  have  the  legal  effect  of  producing  dissolu- 
tion of  a  corporation.  Ins.  Co.  v.  Page,  17  B. 
M.  457.] 

Courts  of  equity  have  no  power  to  revoke  or  an- 
nul acts  of  incorporation.  F.  F.  T.  P.  Co.  v. 
Jewell,  8  B.  M.  142.  And  no  jurisdiction  to  declare 
a  forfeiture  of  charter  of  a  corporation  or  inquire 
into  the  misfeasance  or  non-feasance  of  its  offi- 
cers for  that  purpose.  Chambers  v.  Baptist  Soc, 
1  B.  M.  216. 

That  charter  of  a  corporation  has  been  forfeited, 
must  be  ascertained  by  a  direct  proceeding,  and 
not  collaterally.  But  that  it  has  expired  by  Its 
terms  may  be  shown  by  the  charter.  Bank  v. 
Trimble,  6  B.   M.  GOl. 

A  charter  privilege  is  not  to  be  regarded  as  for- 
feited in  a  collateral  proceeding  unless  there  has 
been  a  forfeiture  judicially  pronounced  by  a 
proper  proceeding.  Harrison  v.  B.  R.  Co.,  9  B. 
M.    470. 

The  order  of  a  chancellor  placing  the  books, 
papers  and  assets  of  a  corporation  in  the  hands 
of  a  commission  to  wind  up  its  affairs,  operated 
to  suspend  its  corporate  functions,  although  there 
may  have  been  no  direct  proceedings  for  tlie  for- 
feiture of  its  charter.  Sanford  v.  Bank,  1  Met. 
109.] 

§  570.  No  law  shall  be  passed  for  the  bene- 
fit of,  or  in  the  interest  of,  any  corporation 
heretofore  created  or  organized  by  or  under 
the  laws  of  this  State  or  any  other  State; 
nor  shall  any  corporation  avail  itself  of 
the  provisions  of  this  chapter,  unless  such 
corporation  shall  have  previously,  by  a  reso- 
lution adopted  by  its  board  of  directors,  and 
filed  in  the  office  of  the  secretary  of  this 
State,  accepted  the  provisions  of  the  Con- 
stitution of  this  State;  and  such  resolu- 
tion, or  a  certified  copy  thereof,  shall  be  evi- 
dence for  and  against  such  corporation. 

See  Const.,   §§  3,  190,  191,   and   notes. 

§  571.  All  corporations  formed  under  the 
laws  of  this  or  any  other  State,  and  carry- 
ing on  any  business  In  this  State,  sliall  at 
all  times  have  one  or  more  known  places  of 


I^XTUCKY. 


21 


Designation  of  agent;  suits  in  federal  courts  —  Stat.,  §§  572,  573. 


business  in  this  State,  and  an  authorized 
agent  or  agents  thei'eat,  upon  ■whom  pro- 
cess can  be  served;  and  it  shall  not  be  lawful 
for  any  coiijoration  to  carry  on  any  busi- 
ness in  this  State  until  it  shall  have  filed 
in  the  office  of  the  secretary  of  State  a 
statement,  signed  by  its  president  or  seci-e- 
tary,  giving  the  location  of  its  office  or  of- 
fices in  this  State,  and  the  name  or  names 
of  its  agent  or  agents  thereat  upon  whom 
process  can  be  served;  and  when  any  change 
is  made  in  the  location  of  its  office  or  of- 
fices, or  in  its  agent  or  agents,  it  shall  at 
once  file  with  the  secretary  of  State  a  state- 
ment of  such  change:  and  the  former  agent 
shall  remain  agent  for  the  purpose  of  ser- 
vice, until  statement  of  appointment  of  the 
new  agent  is  filed;  and  if  any  corporation 
fails  to  comply  witli  the  requirements  of 
this  section,  such  corporation,  and  any  agent 
or  employe  of  such  corporation,  who  shall 
transact,  carry  on  or  conduct  any  business 
in  this  State  for  it,  shall  be  severally  guilty 
of  a  mis<^lemeanor,  and  fined  not  less  than 
one  hundred  nor  more  than  one  thousand 
dollars  for  each  offense. 

See  Const,   5  194. 

[One  State  has  no  power  to  charter  a  company 
to  act  within  the  jurisdictional  limits  of  another 
State.  Atterbury  v.  Knox,  4  B.  M.  90;  Ins.  Co. 
V.  Comm.,  5  Bush,  75. 

Every  power  of  a  corporation  depends  for  Its 
validity  upon  laws  of  sovereignty  in  which  it  is 
exercised;  and  corporations  created  in  one  State 
can  make  no  valid  contract  in  another  without 
its  sanction,  express  or  implied.  Id.;  Gill  v.  Min- 
ing Co.,  7  Bush,  635.  And  when  such  sanction  Is 
obtained,  the  fact  that  some  law  or  constitutional 
provision  of  such  State  Is  in  conflict  with  an 
amendment  to  the  charter  of  the  corporation  can- 
not destroy  validity  of  amendment.  Covington  v. 
Bridge  Co.,   10  Bush,   78. 

Though  a  corporation  must  live  and  have  its 
being  in  that  State  only  in  which  It  was  created, 
it  does  not  follow  that  its  existence  will  not  be 
recognized  in  other  places.  Martin  v.  R.  R.  Co., 
7  Bush,  123. 

Rights  secured  to  corporations  of  other  States 
bv  the  Federal  Constitution.  Comm.  v.  Milton,  12 
B.   M.  219;  Ins.   Co.   v.   Co.,   5   Bush,  70. 

Foreign  corporations  entitled  to  sue  in  Kentucky 
courts.  Pendleton  v.  Bank,  1  Mon.  175.  And  to 
contract  In  Kentucky,  but  the  contract  or  suit 
must  not  be  repugnant  to  the  local  law.  Bank  v. 
Trimble,  6  B.  M.  604.  But  not  where  the  charter 
of  the  company  has  by  its  terms  expired.     Id. 

Not  necessary  in  action  by  foreign  corporation, 
on  trial  of  plea  of  non-assumpsit,  to  produce  its 
charter  or  otherwise  prove  Its  existence.  Taylor 
V.  Bank,  7  Mon.  585. 

Corporation  cannot  bo  sued  and  its  property  at- 
tached on  the  ground  that  it  is  a  foreign  corpora- 
tion.    Martin  v.   R.   R.    Co.,   7   Bush,   llS. 

Citizens  of  other  States  exercising  corporate 
powers  in  Kentucky,  granted  by  other  States, 
are  liable  to  taxation  in  Kentucky.  Comm.  v. 
Milton,  12  B.  M.  218. 

A  corporation  cannot  have  two  domiciles  at  same 
time.  It  obtains  residence  only  by  the  legislative 
authoritv  which  fixes  the  requisites  of  residence. 
Bridge  Co.  v.  "VVoolley,  78  Ky.  525.  A  corporation 
created  in  Ohio  is  properly  sued  as  a  non-resi- 
dent.    Id. 

In  case  of  railroad  corporation,  the  residence 
of  its  president,  if  there  be  one,  in  the  State,  or, 
if  not,  its  vice-president,  if  there  be  one  in  the 
State,  must  be  treated  as  the  residence  of  the 
corporation    in    determining    jurisdiction     of    de- 


fendant. Harper  v.  Newport,  etc.,  Co.,  90  Ky. 
350;  s.  c,  14  S.  W.  Rep.  ,'^46. 

Since  above  section  does  not  declare  any  special 
jurisdiction  for  the  recovery  of  a  penalty,  nor 
that  suit  shall  be  prosectited  by  attorney-general, 
its  recovery  is  to  be  regulated  by  general  laws, 
and  may  be  by  indictment  or  by  action  in  the 
name  of  the  commonwealth.  Co.  v.  B.  &  L.  Assn., 
30  S.  W.  Rep.  626. 

A  non-resident  corporation  doing  business  in  this 
State  may  be  sued  here  as  other  litigants,  when 
properly  summoned.  Chesapeake  v.  Cowherd,  96 
Ky.  113.] 

§  572.  If  any  foreign  corporation  shall, 
without  the  consent  of  the  adverse  party, 
remove  to  a  Federal  court  any  action  pend- 
ing against  it  in  any  court  of  tliis  State,  or 
institute  an  action  against  a  citizen  of  this 
State  in  a  Federal  court  of  tliis  State,  such 
action  on  the  part  of  the  corixjration  shall 
forfeit  its  right  to  transact  or  carry  on  any 
business  in  this  State,  and  such  corporation, 
•  and  any  officer,  agent  or  employe  thereof, 
who  shall  thereafter  transact  or  engage  in 
any  lousiness  or  employment  for  such  cor- 
poration in  this  State,  sliall  be  severally 
guilty  of  a  misdemeanor,  and.  upon  indict- 
ment and  conviction  in  the  circuit  court  of 
any  county  in  whicli  such  corporation,  or 
any  officer,  ageut  or  employe  thereof,  trans- 
acts or  engages  in  any  business,  be  fined  for 
each  offense  not  less  than  five  hundred  nor 
more   than   one  thousand  dollars. 

[Above  section  does  not  authorize  an  action  to 
recover  fine  imposed  before  an  indictment  or  con- 
viction of  the  corporation.  Comm.  v.  Min.  Co.,  30 
S.  W.  Rep.  611.] 

Is  not  this  section  unconstitutional?  Barron  v. 
Buruside,  121  U.  S.  186;  s.  c,  7  Sup.  Ct.  Rep.  931.] 

§  573.  The  provisions  of  all  charters  and 
articles  of  incorporation,  whether  granted 
by  special  act  of  the  general  assembly,  or 
obtained  under  any  general  incorjioiation 
law,  which  are  inconsistent  with  the  pro- 
visions of  this  chapter  concerning  similar 
corporations,  to  the  extent  of  such  conflict, 
and  all  powers,  privileges  or  immimities  of 
any  such  coiiioration  which  could  not  be 
obtained  imder  the  provisions  of  this  chap- 
ter, shall  stand  repealed  on  September  28, 
1897;  and  If  the  officers,  managers  or  agents 
of  sucli  corporations  shall,  after  said  date, 
exercise  any  powers,  privileges  or  immuni- 
ties repealed  by  this  section,  or  inconsistent 
with  the  provisions  of  this  chapter,  relat- 
ing to  similar  cori>orations,  or  which  could 
not  be  obtained  under  this  chapter,  the  offi- 
cer, manager  or  agent  so  offending,  and  the 
corporation  for  which  he  acts,  sliall  each 
be  guilty  of  a  misdemeanor,  and  fined  for 
each  offense  not  less  than  one  hundred  nor 
more  than  one  thousand  dollars,  and  upon 
the  conviction  of  the  corporation,  the  trial 
jury  may,  at  their  discretion,  direct  the  for- 
feiture of  its  charter  or  articles  of  incor- 
poration, in  whicli  case  the  court  shall  so 
adjudge.  After  the  28th  day  of  September, 
1897,  the  provisions  of  this  chapter  shall  ap- 
ply to  all  conwrations  created  or  organized 
under  the  laws  of  this   State,   if  said  pro- 


22 


KEXTUCKY 


Receivers;  false  stateiueuts;  entries,  etc.— Stat.,  §§  574^570,  616,  1175,  11$6,  1187. 


visious  would  be  applicable  to  them  if  or- 
ganized under  this  chapter. 

See  §  550. 

§  574.  The  chaiter  or  articles  of  incor- 
poration of  any  coriroration  heretofore  cre- 
ated or  organized  under  or  by  the  laws  of 
this  State  may,  after  such  c(iri)oration  has 
accepted,  as  herein  provided,  the  pro- 
visions of  the  Constitution,  be  amendeil  in 
the  manner  provided  for  tiie  amendment  of 
the  articles  of  incorporation  of  corporations 
organized  under  this  chapter  and  the  la^^s 
relating  to  such  corporations. 

See  Const.,  §§  190,  191;  Statutes,  §  559. 

§  575.  The  word  "  directors  "  used  iu  this 
article  includes  managers  or  trustees. 

Duties  and  liabilities  of  directors.     §§  548-551. 

§  576.  Every  corpcn-ation  organized  under 
the  laws  of  this  State,  and  every  corporation 
doing  business  in  this  State,  shall,  in  a  con- 
spicuous place,  on  its  principal  place 
or  places  of  business,  in  letters  suflfi- 
ciently  large  to  be  easily  read,  have 
painted  or  printed  the  corporate  name 
of  such  corporation,  and  immediately  un- 
der the  same,  in  like  manner,  shall  be 
printed  or  painted  the  word  "  Incorporated." 
And  immediately  under  the  name  of  such 
corporation,  upon  all  printed  or  advertising 
matter  used  by  such  corporation,  shall  ap- 
pear in  letters  sufficiently  large  to  be  easily 
i*ead  the  word  "  Incorporated."  Any  coii)o- 
ration  which  shall  fail  or  refuse  to  comply 
with  the  provisions  of  this  section  shall  be 
subject  to  a  fine  of  not  less  than  one  hun- 
dred dollars,  and  not  more  than  live  hun- 
dred dollars. 

Corporate  name.     See  §  542. 

ARTICLE    III.    APrOIXTMENT    OF    RE- 
CEIA'ERS. 

Sec.  616.  Receiver;    when    niaj-    be    appointed    for 
a  corporation. 

§  616.  The  secretary  of  State,  upon  becom- 
ing satisfied  that  any  bank  or  corporation 
has  become  insolvent,  or  that  its  capital 
has  become,  and  is  permitted  to  remain,  im- 
paired, or  that  it  has  violated  any  of  the 
provisions  of  the  law  under  which  it  was 
organized,  may.  with  the  approval  of  the 
attorney-general,  apply  to  the  circuit  court, 
or  judge  thereof  iu  vacation,  of  the  county 
in  which  the  bank  or  corporation  is  located, 
for  the  appointment  of  a  receiver,  who, 
under  the  direction  of  the  court  or  judge, 
shall  take  possession  of  books,  papers  and 
assets  of  every  description,  and  all  business 
of  the  bank  or  coi-poration,  and  collect  all 
collectible  debts  and  demands,  and  sell  or 
compound,  under  the  f)r(ler  of  the  court,  all 
bad  de1)ts,  and  sell  all  the  real  and  personal 
property  of  the  bank  or  corporation,  on  such 


terms  as  the  court  may  direct.  The  receiver 
shall  be  resident  of  the  county  in  which  the 
action  is  pending,  and  give  bond,  with  good 
surety,  to  be  approved  by  the  court,  and 
settle  his  accounts  under  the  general  laws. 

CHAPTER  XXXVI. 

Crimes  and  Punishments. 
ARTICLE   III.      FELONIES. 

Sec.  1175.  Swearing  falsely  to  statement  required 
of   corporation. 

1180.  Otlicer  of  corporation  altering  or  de- 
stroying boolis  or  writings. 

1187.  Counterfeiting  oorporate  seal. 

§  1175.  If  any  certificate  or  written  state- 
ment be  made  or  written  notice  given,  by  the 
officers  of  any  company  incorporated  by  the 
laws  of  this  commonwealth,  which  is  re- 
quired to  be  verified  on  oath,  and  is  so  sworn 
to,  be  false  in  any  material  part,  each  person 
who  swore  to  the  same,  knoAving  it  to 
be  false,  shall  be  guilty  of  false  swearing, 
and,  on  conviction,  be  confined  in  the  peni- 
tentiary not  less  than  one  nor  more  than  five 
years. 

Liability   of  ofBcor.s.     §§   549-5.^1. 

§  1186.  If  any  officer  or  employe  of  any 
joint-stock  company,  bank  or  corporation 
shall,  with  the  intention  of  cheating  or  de- 
frauding the  joint-stock  company,  bank  or 
corporation,  or  any  person  doing  business 
with  it,  erase,  mutilate  or  alter  any  book  or 
paper  or  evidence  of  debt,  or  any  part 
thereof,  owned  by  or  iu  the  custody  or  un- 
der the  control  of  the  joint-stock  company, 
bank  or  corporation,  or  shall  destroy  the 
same,  or  shall  make  any  false  entry,  or  omit 
to  make  an  entry  iu  auj^  such  book  or  paper, 
he  shall  be  confined  in  the  penitentiary  not 
less  than  two  nor  more  than  ten  years. 

See  §§  549-551. 

§  1187.  If  any  person  shall  fraudulently 
make  or  counterfeit  any  instrument  for 
stamping  an  impression  iu  the  figure  or  like- 
ness of  the  seal  *  *  *  of  any  corporation 
or  officer  thereof,  *  *  *  or  if  he  have  in 
his  possession  any  such  instrument,  and  con- 
coal  the  same,  knowing  it  to  be  falsely  made 
and  counterfeited,  or  use  the  false  impres- 
sion made  by  such  instrument  and  utter  and 
publish  it  as  true,  knowing  it  to  be  falsely 
made  and  counterfeited,  he  shall  be  confined 
in  the  penitentiary  not  less  than  five  nor 
more  than  fifteen  yeai-s. 


CHAPTER  XXXVIII. 
Currency. 

Sec.  1391.  Corporation  forbidden  to  loan  money  or 
discount  bills,  unless  so  authorized. 

§  1301.  No  corporation,  not  expressly  au- 
thorized  by   law  of   this   State,    shall   loan 


KEXTUCKY. 


23 


Charters  subject  to  repeal;  pools;  trusts,  etc.— Stat.,  §§  1987,  3915-3^17. 


mouey,  discount  any  evidence  of  debt,  or 
deal  in  the  buying  and  selling  of  exchange. 
Every  person  acting  as  an  officer,  servant  or 
agent  of  a  coi-poration  -who  shall  aid  such 
corporation  in  a  violation  of  this  section 
shall,  for  every  snch  offense,  be  fined  from 
fifty  to  five  hundred  dollars.  All  contracts 
made  in  violation  of  this  section  shall  be 
void,  and  all  money  paid  by  way  of  interest, 
discount,  or  for  difference  of  exchange,  in 
violation  thereof,  may  be  recovered  back  uy 
the  party  paying,  or  his  creditor. 

Powers  of  a  corporation  defined.     §  542. 

CHAPTER  LIX. 

General  Assembly. 

Sec.  1987.  Charters  granted  since  1856  subject  to 
repeal. 

§  1987.  All  charters  and  grants  of  or  to 
corporations,  or  amendments  thereof,  en- 
acted or  granted  since  the  fourteenth  of 
February,  one  thousand  eight  hundred  and 
fifty-six,  and  all  other  statutes,  shall  be  sub- 
ject to  repeal  at  the  will  of  the  general  as- 
sembly, unless  a  contrary  intent  be  therein 
plainly  expressed:  Provided,  That  whilst 
privileges  and  franchises  so  granted  may  be 
repealed,  no  repeal  shall  impair  other  rights 
previously  vested. 

See  Const.,   §§  3,  19. 

[A  charter  provision  that  the  corporation  "  shall 
have  perpetual  succession  "  does  not  plainly  ex- 
press an  intent  that  the  legislature  shall  not  have 
power  to  amend  the  charter.  R.  R.  Co.  v.  County, 
10  Bush,  604. 

The  purpose  of  above  section  was  to  secure  the 
rights  of  beneficiaries  and  others  that  had  vested 
under  the  charter  before  its  amendment  or  re- 
peal, and  does  not  affect  the  mere  power  to  repeal 
the  franchise.     Griffin  v.  Ins.  Co.,  3  Bush,  592. 

The  legislature  may  create  corporations  whereby 
certain  liabilities  and  duties  are  assiimed  by  the 
corporation,  in  consideration  of  which,  rights  and 
privileges  are  granted  that  no  legislature,  with- 
out the  consent  of  the  parties,  can  impair  or 
diminish.  R.  R.  Co.  v.  Comm.,  10  Bush,  43;  see, 
also,  Franklin  f'o.  Ct.  v.  Bank,  87  Ky.  370;  s.  c, 
9  S.  "\V.  Rep.  212. 

Although  the  right  to  amend  a  charter  may  be 
reserved,  it  does  not  confer  power  upon  the  legis- 
lature to  take  from  the  corporators  control  of 
corporate  property,  nor  to  change  the  objects  of 
the  corporation.  Orr  v.  County,  81  Ky.  593;  see, 
also,  Citv  v.  L'niversity,  15  B.  M.  642;  Sage  v.  Dil- 
lard,  15  id.  340.] 

CHAPTER  LXXXIX. 

Municipal  Corporations. 
Sec.  3243.  Stock  in  corporation  voted  by  mayor. 

§  3243.  Any  stock  owned  or  held  by  the 
city  in  any  corporation  shall,  in  all  stock- 
holders' meetings,  be  voted  by  the  mayor  un- 
der the  direction  of  the  common  council. 


CHAPTER  CI. 

Pools,   Trusts   and  Conspiracies. 

Sec.  3915.  Pools,     trusts     and     conspiracies;     de- 
fined   and   prohibited. 
3916.  Trust  certificates;  when  sale  of,  unlaw- 
ful. 


Sec.  3917.  Penalties  imposed  on  corporations  and 
oflioers. 

3918.  Contract  in  violation  of  law  void. 

3919.  Charter   of   corporation    forfeited    upon 

conviction. 

3920.  Judges  to  charge  grand  jury  concerning. 

3921.  Appeals;   how   regulated. 

§  SOl.'j.  That  if  any  corporation  under  the 
laws  of  Kentucky,  or  under  the  laws  of  any 
other  State  or  country,  for  transacting  or 
conducting  any  kind  of  business  in  this 
State,  or  any  partnership,  company,  firm  or 
individual,  or  other  association  of  persons, 
shall  create,  establish,  organize  or  enter  into, 
or  become  a  member  of,  or  a  party  to,  or  in 
any  way  interested  in  any  pool,  trust,  com- 
bine, agreement,  confederation  or  under- 
standing with  any  other  corporation,  part- 
nership, individual  or  person,  or  association 
of  persons,  for  the  purpose  of  regulating  or 
controlling  or  fixing  the  price  of  any  mer- 
chandise, manufactured  articles  or  property 
of  any  kind,  or  shall  enter  into,  become  a 
member  of,  or  party  to,  or  in  any  way  inter- 
ested in  any  pool,  agreement,  contract,  un- 
derstanding, combination  or  confederation, 
having  for  its  object  the  fixing,  or  in  any 
way  limiting  the  amount  or  quantity  of  any 
article  of  property,  commodity  or  merchan- 
dise to  be  produced  or  manufactured,  mined, 
bought  or  sold,  shall  be  deemed  guilty  of  the 
crime  of  conspiracy,  and  punished  therefor 
as  provided  in  the  subsequent  sections  of 
this  act. 

See   Const.,    §   198. 


§  3916.  It  shall  not  be  lawful  for  any  cor- 
poration to  issue  or  to  own,  have  or  sell  any 
trust  certificates  or  stocks,  or  for  any  corpo- 
ration's agent,  officer  or  employe,  agent  or 
director,  or  any  corporation  to  enter  into, 
either  verbally  or  in  writing,  any  combina- 
tions, contract,  agreement  or  understanding 
with  any  person  or  persons,  corporation  or 
corporations,  or  with  any  director,  agent  or 
officer  thereof,  the  purpose  or  effect  of  which 
combination,  contract,  agreement  or  under- 
standing would  be  to  place  the  management, 
control  or  any  part  of  the  business  of  such 
combination  or  association,  or  the  manufac- 
tured product  thereof,  in  the  hands  or  under 
the  control,  in  whole  or  in  part,  of  any  trus- 
tee or  trustees,  or  agents,  or  any  person 
whatever,  with  the  intent,  or  to  have  the 
effect  to  limit,  fix,  establish  or  change  the 
price  of  the  pi'oductlon  or  sale  of  any  article 
of  property  or  of  commerce,  or  to  prevent, 
restrict,  or  in  any  way  diminish  the  manu- 
facture or  output  of  any  such  article  or  prop- 
erty. 

§  3917.  If  any  corporation,  company,  firm, 
partnership  or  person,  or  association  of  per- 
sons, shall,  by  court  of  competent  jurisdic- 
tion, be  found  guilty  of  any  violation  of  any 
of  the  provisions  of  this  act,  such  guilty 
party  shall  be  punished  by  a  fine  of  not  less 
than  five  hundred  dollar.s,  and  not  more  than 
five  thousand  dollars.    Any  president,  mana- 


24 


KENTUCKY 


Pools;  trusts,  etc.;  franchise  tax  —  Stat.,  §§  3918-3921,  4077. 


ger,  (lireetor  or  other  ottictM*  or  agent,  or 
receiver  of  any  corporation,  company,  firm, 
partnei'ship  or  any  coi^oration,  company, 
firm  or  association,  or  meml»er  of  any  cor- 
poration, firm  or  association,  or  any  member 
of  any  company,  firm  or  other  association,  or 
any  individnal  found,  by  a  court  of  compe- 
tent jurisdiction,  guilty  of  any  violation  of 
this  act  shall  be  punished  by  a  fine  of  not 
less  than  five  hundred  dollars  or  more  than 
five  thousand  dollars,  or  may  be  imprisoned 
in  tJie  county  y.\\\  not  less  than  six  months 
nor  more  than  twelve  months,  or  may  be 
both  so  fined  and  imprisoned  in  the  discre- 
tion of  the  court  or  jury  trying  the  case. 

[A  corporation  is  liable  to  iiidictmont  whenever 
offense  consists  either  of  misfeasance  or  non- 
feasance of  dnty  to  the  pnblic.  If  penalty  for 
offense  be  both  fine  and  imprisonment,  the  stat- 
ute is  inoperative  as  to  imprisonment,  from  the 
nature  of  the  offender.  Comm.  v.  A.  &  M.  Assn., 
92  Ky.  197;  s.  c,  17  S.  W.  Rep.  442.] 

§  3918.  Any  contract  or  agreement  or  un- 
derstanding in  violation  of  the  provisions  of 
the  preceding  sections  of  this  act  shall  be 
null  and  void:  and  any  purchasers  of  prop- 
erty or  article,  or  of  any  commodity,  from 
any  individual,  firm,  company  or  corporation 
transacting  business  contrary  to  the  pre- 
ceding sections  of  this  act,  shall  not  be  liable 
for  the  price  or  payment  of  such  article  or 
commodity  or  property,  and  may  plead  and 
rely  on  this  act  as  a  complete  defense  to  any 
suit  for  such  price  or  payment. 

§  3919.  If  any  corporation  ci'eated  or  or- 
ganized by  or  under  the  laws  of  this  State 
shall  be  indicted  and  convicted  for  any  vio- 
lation of  any  of  the  provisions  of  this  act, 
such  indictment,  trial  and  conviction  in  any 
court  of  competent  jurisdiction  shall  have 
the  effect  to  forfeit  the  chax'ter  of  such  corpo- 
ration without  any  further  proceedings  on 
the  subject  of  the  foi-feiture  of  its  charter; 
but  any  corporation  whose  charter  is  so 
forfeited  shall  have  the  right  of  appeal  as  is 
provided  in  other  cases,  and  the  filing  of 
the  bond  as  is  required  by  law  shall  sus- 
pend the  judgment  of  forfeiture  until  the 
same  is  passed  upon  by  the  court  to  which 
the  case  is  appealed. 

§  .3920.  It  shall  be  the  duty  of  the  circuit 
judges,  and  other  judges  of  similar  jurisdic- 
tion in  tills  State,  to  give  tlie  iirnvisions  of 
this  act  in  charge  to  the  grand  juries  at  each 
term  of  their  courts. 

§  3921.  The  provisions  of  the  Code  of 
Practice  regulating  appeals  in  other  cases 
shall  apply  to  appeals  under  this  act. 

CHAPTER  CVril. 

Revenue  and  Taxation. 

ARTICLE    III.      ASSESS>rENT    OF    CORPORA- 
TIONS. 

Sec.  4077.  Franchise    taxed:    board    of    valuation 
to  determine  where  tax  shall  be  paid. 
4078.  Franchise:    reports    by   corporations   to 
determine    value. 


Sec.  4079. 
40S0. 
4081. 

4082. 
4083. 
40S4. 
4085. 

4086. 

4087. 

4088. 

4089. 
4090. 

4091. 


Franchises:  reports  if  lines  e.xtend  be- 
yond State  or  county. 

Foreign  corporations:  value  of  fran- 
chise,   how   determined. 

Franchise  of  carrier,  when  taxed  in 
each  district  throujrh  which  line  pas- 
ses. 

Franchise  of  persons  engaged  In  cer- 
tain business:  how  value  determined. 

Notice  to  corporations  of  value  of 
fr;iiichise:    board   may    change. 

Value  of  franchise  to  be  reported  to 
counties  entitled  to  tax. 

I'rnpt>rty  assessed  in  name  of  corpora- 
tion: penalty  for  failure  to  report; 
stockholders,    when   exempt. 

Corporations  to  pay  taxes  as  individ- 
ual. 

I'enalty  for  failure  of  corporation  to 
make    reports. 

Stockholders  exempt  from  tax  on  stock 
when  corporation   pays. 

Receiver    of    corporation    to    report. 

Corporation  failing  to  report;  board 
shall   fix   value. 

Taxes  except  of  banks  and  trust  com- 
panies, when  due;  penalty. 


§  4077.  Eveiy  railway  company  or  corpora- 
tion, and  every  incorporated  bank,  trust  com- 
pany, guarantee  or  security  company,  gas 
company,  Avater  company,  ferry  company, 
bridge  company,  street  railway  company,  ex- 
press company,  electric  light  company,  elec- 
tric power  company,  telegraph  company, 
press  dispatch  company,  telephone  company, 
turnpike  company,  palace-car  company,  din- 
ing-car companj ,  sleeping-car  company, 
chair-car  company,  and  eveiy  other  like  com- 
pany, corporation  or  association,  also  every 
other  corijoratiou,  company  or  association 
having  or  exercising  any  special  or  exclusive 
privilege  or  franchise  not  allowed  by  law  to 
natural  persons,  or  performing  any  public 
service,  shall,  in  addition  to  the  other  taxes 
imposed  on  it  by  law,  annually  pay  a  tax  on 
its  franchise  to  the  State,  and  a  local  tax 
thereon  to  the  county,  incorporated  city, 
town  and  taxing  district,  where  its  franchise 
may  be  exercised.  The  auditor,  treasurer 
and  secretary  of  State  are  hereby  constituted 
a  board  of  valuation  and  assessment,  for 
fixing  the  value  of  said  franchise,  except  as 
to  turnpike  companies,  which  are  provided 
for  in  section  foiu*  thousand  and  ninety-five 
of  this  article,  the  place  or  places  where  such 
local  taxes  are  to  be  paid  by  other  corpora- 
tions on  their  franchise,  and  how  appor- 
tioned, where  more  than  one  jurisdiction  is 
entitled  to  a  share  of  such  tax,  shall  be  de- 
termined by  the  board  of  valuation  and 
assessment,  and  for  the  discharge  of  such 
other  duties  as  may  be  imposed  on  them  by 
this  act.  The  auditor  shall  be  chairman  of 
said  board,  and  shall  convene  the  same  from 
time  to  time,  as  the  business  of  the  board 
niay  require. 

See  Const.,  §§  .%  174:  Statutes,  §  4226. 

[The  property  of  corporations  Is  sub.iect  to  as- 
sessment for  street  Improvement.  Ludlow  v.  R. 
n.  Co.,  78  Ky.  .^'i7:  Z:il)le  v.  Orphans'  Home.  92 
id.  89:  s.  c.   17  S.  "W.   I-'eri.  212. 

Kentucky  has  .I'urisdiction  over  all  kinds  of 
property,  and  the  ritrht  to  the  soil  under  the 
water  to  low-water  mark  on  the  northwest  side  of 


KENTUCKY. 


25 


Franchise  tax  —  Stat.,  §§  4078-4080. 


the  Ohio  river.  Therefore  bridge  over  said  river  is 
entitled  to  the  protection  of  the  laws  of  Kentucky, 
and  is  bound  to  pay  revenue  to  the  State.  Bridge 
Co.    V.    Louisville,    81   Ky.    189. 

Property  of  vsater  companies,  like  railroads  and 
turnpikes,  cannot  be  seized  by  collecting  otflcevs 
and  sold,  so  as  to  deprive  the  public  of  its  bene- 
fits. Water  Co.  v.  Comni.,  89  Kv.  244:  s.  c,  12 
S.  W.  Rep.  300;  Water  Co.  v.  Hamilton,  81  Ky. 
517.  So  also  of  gas  companies.  Gas  L.  Uo.  v. 
Covington,  84  Ky.  95. 

Where  a  railroad  charter  contains  an  immunity 
from  taxation,  it  is  only  a  personal  privilege, 
pertaining  alone  to  the  original  company,  and 
cannot  be  transferred.  Comm.  v.  R.  R.  Co.,  81 
Ky.   572. 

There  can  be  no  question  as  to  the  liability  of 
railroads  for  county  taxes.  R.  R.  Co.  v.  Coram., 
85  Ky.  198;  ».  c,  3  S.  W.  Rep.  139.  A  provision 
of  statutes  as  to  proceedings  against  taxpayers 
who  have  failed  to  list  their  property  with  the 
assessor  are  applicable  to  railroads.    Id. 

The  mere  fact  that  a  corporation  Is  required  to 
pay  into  the  State  treasury,  as  taxes,  a  certain 
sum  upon  each  share  of  its  capital  stock,  does 
not  manifest  an  intention  to  exempt  it  from 
municipal  taxation.  Ins  Co.  v.  Covington,  86 
Ky.  214;  s.  c,  5  S.  W.  Rep.  401. 

The  capital  stock  and  the  shares  of  capital  are 
distinct  things,  and  both  may  be  taxed.  So  also 
the  franchise,  surplus  earnings  and  real  estate 
are  things  distinct  from  the  capital  stock  and 
from  each  other,  and  the  State  may  tax  the  cor- 
poration under  each  of  those  heads  without  being 
guilty  of  imposing  double  taxation.  Franklin  Co. 
Ct.  V.  Rank,  87  Ky.  371;  s.  c..  9  S.  W.  Rep.  212. 

Statute  requiring  license  tax  of  express  com- 
panies doing  business  between  this  State  and 
other  States  is  a  regulation  of  interstate  com- 
merce, and  In  violation  of  the  Federal  Constitu- 
tion. Comm.  V.  Smith;  Comm.  v.  Express  Co.,  92 
Ky.  38;  s.  c,  17  S.  W.  Rep.  187.  Also,  tax  upon 
telegraph  conjpanies  of  one  dollar  per  mile  for 
the  line  of  poles  and  first  wire.     Id. 

An  exemption  from  taxation  In  charter  of  a 
railroad  company  Is  a  personal  privilege,  and  does 
not  follow  the  title  to  the  property.  Comm.  v.  R. 
R.  Co..  93  Ky.  430;  s.  c,  20  S.  W.  Rep.  383.  Lease 
of  railroad  property  for  a  thousand  years  was 
such  a  transfer  as  defeated  exemption  from  taxa- 
tion.    Id.] 

§  4078.  In  order  to  determine  the  value  of 
the  franchises  mentioned  in  tlie  next  i^re- 
ceding  section,  the  corpoi'atious,  companies 
and  associations  mentioned  in  tlie  next  pre- 
ceding section,  except  banlvs  and  trust  com- 
panies wltose  statements  shall  be  filed  as 
hereinafter  re<iuired  by  section  four  thou- 
sand and  ninety-two  of  this  article,  shall 
annually,  between  the  fifteenth  day  of  Sep- 
temlier  and  first  day  of  October,  make  and 
deliver  to  tlie  auditor  of  public  accounts  of 
this  State  a  statement,  verified  by  its  presi- 
dent, casliier,  secretary,  treasurer,  manager, 
or  otlier  chief  otficer  or  agent,  in  such  form 
as  the  auditor  may  prescribe,  showing  the 
following  facts,  viz.:  The  name  and  princi- 
pal place  of  business  of  the  corporation,  com- 
pany or  association;  tlie  Ivind  of  business  en- 
gaged in;  the  amount  of  capital  stock,  pre- 
feri'ed  and  common;  the  number  of  sliares  of 
each;  the  amount  of  stock  paid  up;  the  par 
and  real  value  thereof;  tlie  highest  price  at 
which  such  stock  was  sold  at  a  bona  fide 
sale  within  twelve  months  next  before  the 
fifteenth  day  of  September  of  the  year  in 
which  the  statement  is  required  to  be  made; 
the  amount  of  surjilus  fund  and  undivided 
profits,  and  the  value  of  all  other  assets;  the 


total  amount  of  indebtedness  as  principal, 
the  amount  of  gross  or  net  earnings  or  in- 
come, including  interest  on  investments,  and 
incomes  from  all  other  sources  for  twelve 
months  next  preceding  the  fifteenth  day  of 
September  of  the  year  in  which  the  state- 
ment is  required;  the  amount  and  kind  of 
tangible  property  in  this  State,  and  where 
situated,  assessed,  or  liable  to  assessment 
in  this  State,  and  the  fair  cash  value  thereof, 
estimated  at  the  price  it  would  bring  at  a 
fair  voluntary  sale,  and  such  other  facts  as 
the  auditor  may  require. 

§  4079.  AVhere  the  line  or  lines  of  any  such 
corporation,  company  or  association  extend 
beyond  the  limits  of  the  State  or  county,  the 
statement  shall,  in  addition  to  the  other  facts 
hereinbefore  required,  show  the  length  of  the 
entire  lines  operated,  owned,  leased  or  con- 
trolled in  this  State,  and  in  each  county,  in- 
corporated city,  town  or  taxing  district,  and 
the  entire  line  operated,  controlled,  leased  or 
owned  elsewhere.  If  the  corporation,  com- 
pany or  association  be  organized  under  the 
laws  of  any  other  State  or  government,  or 
organized  and  incorporated  in  this  State,  but 
)iierating  and  conducting  its  business  in 
other  States  as  well  as  in  this  State,  the 
statement  shall  show  the  following  facts,  in 
addition  to  the  facts  hereiuliefore  required: 
The  gross  and  net  income  or  earnin.gs  I'e- 
ceived  in  this  State  and  out  of  this  State,  on 
business  done  in  this  State,  and  the  entire 
gross  receipts  of  the  corporation,  company 
or  association  in  this  State  and  elsewhere 
during  the  twelve  months  next  before  the 
fifteenth  day  of  September  of  tlie  year  in 
which  the  assessment  is  required  to  be  made. 
In  cases  where  any  of  the  facts  above  re- 
quired are  impossible  to  be  answered  cor- 
rectly, or  will  not  afford  any  valuable 
information  in  determining  the  value  of  the 
franchises  to  be  taxed,  the  said  board  may 
excuse  the  officer  from  answering  such  ques- 
tions: Provided.  That  said  board,  from  said 
statement,  and  from  such  other  evidence,  as 
it  may  have,  if  such  corporation,  ctjmpany  or 
association  be  organized  under  the  laws  of 
this  State,  shall  fix  the  value  of  the  capital 
stock  of  the  corporation,  company  or  asso- 
ciation, as  provided  in  the  next  succeeding 
section,  and  from  the  amount  thus  fixed  shall 
deduct  the  assessed  value  of  all  tangi])le 
propertj'  assessed  in  this  State,  or  in  the 
counties  where  situated.  The  remainder 
thus  found  shall  be  the  value  of  its  corporate 
franchise  subject  to  taxation  as  aforesaid. 

§  4080.  If  tlie  corporation,  company  or  as- 
sociation be  organized  under  the  laws  of  any 
other  State  or  government,  exce;)t  as  \)yo- 
vided  in  the  next  section,  the  board  sliall 
fix  the  value  of  the  capital  stock  as  herein- 
before provided,  and  will  determine  from 
the  amount  of  the  gross  receijits  of  su'ch  cor- 
poration, company  or  association  in  this 
State  and  elsewhere,  the  proportion  which 
the  gross  receipts  in  this  State,  within 
twelve  months  next  before  the  fifteenth  day 


26 


KENTUCKY. 


Franchise  tax  —  Stat.,  §§  4081-4089. 


of  ScptiMiiber  of  the  year  in  Avliicli  the  assess- 
ment Avas  made,  bears  to  the  entire  jrross  re- 
ceipts of  the  company,  the  same  pi'oportion 
of  the  value  of  the  entire  capital  stock,  less 
tlie  assessed  value  of  the  tangible  property 
assessed,  or  liable  to  assessment.  In  this 
State,  shall  be  the  correct  value  of  the  corpo- 
rate franchise  of  such  corporation,  company 
or  association  for  taxation  in  this  State. 

Consolidation  of  foreign  and  domestic  corpora- 
tion.   §  200. 

[Citizens  of  other  States  exercising  corporate 
powers  in  Kentucky,  granted  by  otlier  States,  are 
lialde  to  taxation  in  Kentucliy.  Comm.  v.  Milton, 
12  B.   M.   218.] 

§  4081.  If  the  corporation  organized  under 
the  laws  of  this  State  or  of  some  other  State 
or  government  be  a  railroad,  telegraph, 
telephone,  express,  sleeping,  dining,  palace 
or  chair-car  company,  the  lines  of  which  ex- 
tend beyond  the  limits  of  this  State,  the  said 
board  will  fix  the  value  of  the  capital  stock 
as  hereinbefore  provided,  and  that  propor- 
tion of  the  value  of  the  capital  stock,  which 
the  length  of  the  lines  operated,  owned, 
leased  or  controlled  in  this  State,  bears  to 
the  total  length  of  the  lines  owned,  leased 
or  controlled  in  this  State,  and  elsewhere, 
shall  be  considered  in  fixing  the  value 
of  the  corporate  franchise  of  such  corpora- 
tion liable  for  taxation  in  this  State;  and 
such  corporate  franchise  shall  be  liable  to 
taxation  in  each  county,  incorporated  city, 
town  or  district  through,  or  into  which,  such 
lines  pass,  or  are  operated,  in  the  same  pro- 
portion that  the  length  of  the  line  in  such 
county,  city,  town  or  district  bears  to  tlie 
whole  length  of  lines  in  the  State,  less  the 
value  of  any  tangible  property  assessed,  or 
liable  to  assessment,  in  any  such  county, 
city,  town  or  taxing  district. 

§  4082.  W]ienever  any  person  or  associa- 
tion of  persons  not  being  a  coriDoration  nor 
having  capital  stock,  shall,  in  this  State,  en- 
gage in  the  business  of  any  of  the  corpora- 
tions mentioned  in  the  first  section  of  this 
article,  then  the  capital  and  property,  or  the 
certificates  or  other  evidences  of  the  rights 
or  interests  of  the  holders  thereof  in  the 
Imsiness  or  capital  and  property  employed 
therein,  shall  be  deemed  and  treated  as  the 
capital  stock  of  such  person  or  association 
of  persons  for  tlio  punwses  of  taxation  and 
all  other  purposes  under  this  article,  in  like 
manner  as  if  such  person  or  association  of 
persons  were  a  corporation. 

§  4083.  It  sliall  be  the  duty  of  the  auditor, 
immediately  after  fixing  such  values  by  said 
board,  to  notify  the  conioration  of  the  fact; 
and  all  such  corporations  shall  have  thirty 
days  from  the  time  of  receiving  the  notice 
to  go  before  sucli  board  and  ask  a  change 
of  the  valuation,  and  may  introduce  evidence, 
and  the  chairman  of  the  board  is  hereby 
authorized  to  summon  and  sweai*  witnesses, 
and  after  hearing  such  evidence    the  board 


may  change  the  valuation  as  it  may  deem 
proper,  and  the  action  of  the  board  shall 
be  final. 

§  4084.  The  auditor  shall,  at  the  expira- 
tion of  thirty  days  after  the  final  determina- 
tion of  such  values,  certify  to  the  county  clerk 
of  the  counties,  when  any  portion  of  the  cor- 
porate franchise  of  any  such  con^oration, 
company  or  association  shall  be  liable  to 
local  taxation  as  herein  provided,  the  amount 
thereof  liable  for  county,  city,  town  or  dis- 
trict tax;  and  such  certificate  shall  be  by 
each  county  clerk  filed  in  his  office,  and  be 
by  him  certified  to  the  proper  collecting  offi- 
cer of  the  county,  city,  town  or  taxing  district 
for  collection. 

§  4085.  The  property  of  all  corporations, 
except  Avhere  herein  differently  provided, 
shall  be  assessed  in  the  name  of  the  corpo- 
ration in  the  same  manner  as  that  of  a 
natural  person,  except  that,  Avhen  legally 
called  on,  the  chief  officer  shall  report  a  full 
statement  of  the  property  of  such  corporation 
for  taxation,  and,  for  a  failure,  shall  be  sub- 
ject to  the  penalties  in  this  article  provided; 
and  so  long  as  said  corporation  pays  the  taxes 
on  all  its  property  of  every  kind,  the  indi- 
vidual stockholders  shall  not  be  required  to 
list  their  shares  in  said  corporation. 

§  4086.  All  coii)orations  and  other  persons 
who  are  required  to  make  reports  to  the 
auditor  of  public  accounts  shall  pay  all  the 
taxes  due  the  State  from  them  into  the  treas- 
ury at  the  same  time,  and  sliall  be  liable  for 
and  pay  the  same  rate  of  interest  and  penal- 
ties as  defaulting  individuals,  except  where 
otherwise  specially  provided. 

§  4087.  Any  corporation,  or  officer  thereof, 
willfully  failing  or  refusing  to  make  reports 
as  reciuired  by  this  chapter  shall  be  deemed 
guilty  of  a  misdemeanor,  and  for  each  offense 
shall  be  fined  one  tiiousaud  dollars,  and  fifty 
dollars  for  each  day  tiie  same  is  .not  made 
after  October  first  of  each  year. 

§  4088.  The  indi\  idual  stockholdei-s  of  the 
corporation  Avhich  are,  by  this  article,  re- 
quired to  report  and  pay  taxes  upon  the 
corporate  franchise  sliall  not  be  required  to 
list  their  shares  in  such  companies  so  long 
as  tlie  corporation  pays  the  taxes  on  the  cor- 
]iorate  property  and  franchises  as  herein  pro- 
vided. 

Under  our  statutes  corporations  are  required  to 
list  their  property  for  taxation,  and  stockholders 
are  exempt  from  taxation  upon  their  stock.  And 
the  fact  that  a  corporation  has  failed  to  list 
its  property,  or  that  its  property  is  situated  in 
a.iother  State,  and,  therefore,  not  subject  to 
taxation  here,  does  not  deprive  stockholder  of 
ihis  exemption.  Whitaker  v.  Brooks,  'JO  Ky.  68; 
s.  c,  13  S.  W.  Rep.  355.  To  constitute  double 
taxation  property  must  be  twice  taxed  within  the 
same  jurisdiction.  To  tax  i)roperty  here  which 
lias  been  taxed  in  another  State  does  not  consti- 
tute double  taxation.     Id. 

§  4089  Should  any  corporation  required  to 
make  tlio  report  as  hereinbefore  provided  be 
in  the  hands  of,  or  under  the  control  of,  a 
receiver  or  other  person,  it  shall  be  the  duty 


ItENTUCKY. 


27 


Franchise  tax  —  Stat.,  §§   4090,  4091,  4226.      Service  of  summons  —  Civ.  Code,  §  51. 


of  such  receiver  or  other  person  to  make  the 
returns  and  valuations  as  hereinbefore  re- 
quired. 

§  4090.  Should  any  corporation  fail  to  make 
the  reports  as  required  herein  on  or  before 
the  first  day  of  October  of  each  year,  the 
said  board  shall  proceed  to  ascertain  the  facts 
and  values  as  required  by  this  ai'ticle,  in  such 
manner  and  by  such  means  as  it  deems 
proper,  at  the  cost  of  the  company  failing  to 
make  the  report,  and  shall  fix  the  values  of 
the  coriwrate  franchise  liable  for  taxation 
as  aforesaid,  and  the  corporation  shall  be 
taxed  accordingly. 

§  4091.  All  taxes  assessed  against  any  cor- 
poration, company  or  8s.sociation  under  this 
article,  except  banks  and  tiiist  companies, 
shall  be  due  and  payal)le  thirty  days  after  no- 
tice of  same  ha*;  been  ai-\en  to  said  coniora- 
tion,  company  or  association  by  the  auditor; 
and  every  such  corporation,  company  or  as- 
sociation failing  to  pay  its  taxes,  after  re- 
ceiving thirty  days'  notice,  shall  be  deemed 
delinquent,  and  a  penalty  of  ten  per  cent,  on 
the  amouut  of  the  tax  shall  attach,  and 
thereafter  such  tax  shall  bear  interest  at  the 
rate  of  teu  per  cent,  per  annum;  any  such 
corporation,  company  or  association  failiug 
to  pay  its  taxes,  iienalty  and  interest,  after 


becoming  delinquent,  shall  be  deemed  guilty 
of  a  misdemeanor,  and,  on  conviction,  shall 
be  fined  fifty  dollars  for  each  day  the  same 
remains  unpaid,  to  be  recovered  by  indict- 
ment or  civil  action,  of  which  the  Franklin 
circuit  court  shall  have  jurisdiction. 

ARTICLE  IX.     TAX  ON  ORGANIZATION. 

Sec.  4226.  Amount  of  organization  tax,  when  due; 
oftect  of  failure  to  pay. 

§  422G.  Every  corporation  which  may  be 
incorporated  by  or  under  the  laws  of  this 
State,  having  a  capital  stock  divided  into 
shares,  shall  paj'  into  the  State  treasury  one- 
tenth  of  one  per  centum  upon  the  amouut 
of  capital  stock  which  such  corporation  is 
authorized  to  have,  and  a  like  tax  upon  any 
subsequent  increase  thereof.  Such  tax  shall 
be  due  and  payable  on  the  incorporation  of 
the  company  and  on  the  increa.se  of  the 
capital  thereof,  and  no  such  corporation  shall 
have  or  exercise  any  corporate  powers  until 
the  tax  shall  have  been  paid;  and  upon  pay- 
ment, they  shall  file  a  statement  thereof  with 
the  secretary  of  State. 

Corporation    not    deemed    organized    until    tliis 
tax   is   paid.     §    542. 


CIVIL  CODE. 


TITLE    IV.    COMMENCEMENT    OF    A    CIVIL. 
ACTIOX. 

CHAPTER  II. 

Service  of  Summ.ons. 

Art.  1.  ActnnI    service. 

2.  Constructive   service. 

ARTICLE  I.     ACTUAL  SERVICE. 

Sec.  51.  Service  of  summons  on  counties  and  cor- 
porations. 

§  .51.  (3.)  In  an  action  against  a  private  cor- 
poration the  summons  may  be  served,  in  any 
cotmty,  upon  the  defendant's  chief  officer, 
or  agent,  v\ho  may  be  found  in  this  State;  or 
it  may  be  seiwed  in  the  county  wherein  the 
action  is  brought  upon  the  defendant's  chief 
officer  or  agent  who  may  be  found  therein. 
(Or  if  the  defendant  operate  a  railroad.  It 
may  be  served  upon  the  defendant's  passen- 
ger' or  freight  agent  stationed  at  or  nearest 
to  the  countv  seat  of  the  county  in  which 
the  action  is  brought.     [Act  1893.  p.  588.]) 

(4.)  (In  every  action  [Act  1808,  p.  1207]) 
against  a  common  carrier,  the  summons  may 
be  served,  in  any  county,  upon  the  defend- 
ant's chief  officer  or  agent;  or  it  may  be 
served  in  the  county  wherein  the  action  is 
brought,  upon  the  defendant's  chief  officer 
or  agent  who  resides  therein;  or.  if  the  de- 
fendant operate  a  railroad,  it  may  be  served 


upon  defendant's  passenger  or  freight  agent 
station  at.  or  nearest  to,  the  county  seat  of 
the  county  in  which  the  action  is  brought. 

[Where  the  defendant  corporation  is  the  owner 
or  the  lessee  of  a  railway  in  this  State,  or  the 
builder  or  constructor  of  a  railway  in  this  State, 
and  cannot  be  served  with  summons  under  ex- 
isting laws,  then  the  person  or  corporation  con- 
trolling or  operating  the  railway  so  owned  or 
built  or  constructed  shall  be  treated  as  the  repre- 
sentative of  the  defendant,  and  service  of  sum- 
mons upon  such  of  the  otticers  or  agents  of  the 
persons  or  corporation  operating  or  controlling 
the  railway  as  would  be  required  if  such  con- 
troller or  operator  were  the  party  sued,  shall 
be  a  sufficient  service  of  summons  upon  the  de- 
fendant to  the  action;  but  such  service  must  be 
twenty  days  before  the  commencement  of  the 
term,  and  the  facts  authorizing  the  same  must 
be  made  to  appear  by  the  return  of  the  olHcer 
or  the  affidavit  of  some  person  other  than  the 
plaintiff  in  the  action,  and  the  appearance  of 
the  defendant  to  move  for  the  quashal  of  the 
service  of  the  summons  shall  operate  as  an  ap- 
pearance for  all  the  purposes  of  the  action,  and 
the  same  shall  stand  for  trial  at  the  succeeding 
term  of  the  court,  in  case  the  motion  to  quash 
shall  prevail.    Act  of  May  10.  1890. 

In  actions  against  the  individual  residing  in 
another  State,  or  a  partnership,  association,  or 
joint-stock  company,  the  members  of  which  re- 
side in  another  State,  engaged  in  business  in  this 
State,  the  summons  may  be  served  on  the  man- 
ager, or  agent  of.  or  person  In  charge  of  such 
business  in  this  State  in  the  county  where  the 
business  is  carried  on.  or  in  the  county  where 
the  cause  of  action  occurred.    Act   189.3,    p.   Oil. 

Service  of  proeess  against  a  corporation  must 
be  upon  its  head  officer  unless  charter  otherwise 
directs.    De  Wolfe  v.   Mallett,  3  Dana,  217. 

Delivery  of  summons  to  president,  he  not  being 
a  party  to  the  action,  was  but  service  upon  com- 


28 


ICExNTTUCKY. 


Service  of  summons;  pleading;  attachment  —  Civ.  Code,  §§  57,  58,  72,  167,  194. 


panv    itself.    Bridge    Co.    v.    Douglass,    12    Bush, 

"11- 
A   nou-rcsldent  corporation  operating  a   railroaa 

in    this   State,    properl.v    suninionoci    i)y   service    of 

process    on    Its    local    ticket    agent    in    county    in 

which    suit    Is   brought,    he    being   the   only    agent 

of  the  carrier  In  the  county,  and  managing  agt-nt 

of  the  dephrtment  of  which  he  had   contrcjl.   and. 

therefore.   "  chief  officer  or  agent  "   in  the  county 

within    meaning    of    above    section.      Chesapeake 

V.   Cowherd,  96  Ky.   113.] 

ARTICLE  II.     CONSTRUCTIVE  SERVICE. 

See.  57.  "U'hen     constructive     service     is     allowed, 
and  how  made. 
58.  Same. 

§  57.  If  the  defendant  — 

1.  Be  a  coi-poration  having:  no  agent  in 
this  State,  knoAvn  to  tlie  plaintiff,  npon  whom 
a  summons  can  lie  lawfully  served;  or. 

7.  *  *  *  The  clerk  shall,  subject  to  the 
provisions  of  section  58.  make  Tipou  tlie  peti- 
tion an  order  warninfr  the  defendant  to  de- 
fend the  action  on  the  first  day  of  the  next 
term  of  the  court,  wliich  does  not  commence 
within  sixty  davs  after  the  making  of  the 
order. 

§  58.  The  clerk  shall  not  make  such  warn- 
ing order  upon  any  of  tlie  grounds  mentioned 
in  subsections  1,  2.  3.  4  and  7,  of  section  57, 
except  upon  an  affidavit  of  the  plaintiff;  or  of 
his  agent  or  attorney,  if  he  be  absent  from 
the  county;  or  of  his  guardian,  ciu-ator,  com- 
mittee, or  next  friend,  if  he  be  under  disa- 
bility; or  of  the  attorney  of  either  of  them, 
if  absent  from  the  county,  stating  the  ground 
of  the  applicatioi'  for  such  order. 

2.  Nor  shall  the  clerk  make  such  order  on 
any  of  the  grounds  mentioned  in  subsections 
1.  2,  and  4  of  section  57.  unless  the  affidavit 
also  state  in  what  country  tlie  defendant,  or, 
if  the  defendant  be  a  corporation,  in  what 
coinitry  its  chief  officer  or  agent  resides  or 
may  lie  foimd,  and  the  name  of  the  place 
wherein  a  post-office  is  kept  nearest  to  the 
place  where  the  defendant  or  its  chief  officer 
or  agent,  resides  or  may  be  found;  or  unless 
the  affidavit  state  the  affiant's  ignoi'ance  of 
such  of  those  facts  as  he  does  not  know. 

?>.  Nor  shall  the  clerk  make  such  order 
upon  an  affidavit  of  aii  agent  or  attorney  of 
the  plaintiff,  stating  any  of  the  grounds  men- 
tioned in  subsections  1.  2,  4  and  7,  of  section 
57.  unless  the  affidavit  state  the  affiant's 
belief  that  the  plaintiff  is  ignorant  of  such 
of  the  facts  as  are  unknown  to  the  affiant. 

fi.  An  affidavit  made  pui-suant  to  the  fore- 
going provisions  of  this  section,  unless  it 
be  controverted  by  the  defendant's  affidavit, 
shall  be  sufficient  evidence  of  the  facts 
therein  stated  for  the  supfxirt  of  the  action 
as  well  as  of  the  warning  order. 

TITLE    V.       THE    COUNTY    IN    AVHICH     AN 
ACTION    MIST    OR    MAY    BE    BROUGHT. 

Sec.  72.  Against   corporations. 

§  72.  Excepting  the  actions  mentioned  in 
sections  62  to  06,*  both  inclusive,  and  in  scc- 


•Actions  relating  to  real  estate,  wills,  etc. 


tions  68,  70,  71,  73,  75,  axid  77,t  an  action 
against  a  corporation  which  has  an  office  or 
place  of  business  in  this  State,  or  a  chief 
officer  or  agent  residing  in  this  State,  must 
be  brought  in  the  county  in  Avhich  such 
office  or  place  of  business  is  situated,  or  In 
Avhich  such  officer  or  agent  resides;  or,  if 
it  be  upon  a  contract,  in  the  above-named 
■county,  or  in  the  county  in  which  the  con- 
tract is  made  or  to  be  performed;  or,  if  it  be 
for  tort,  in  the  first-named  county,  or  the 
county  in  which  the  tort  is  committed. 

[An  action  against  a  common  carrier,  whpther 
a  corporation  or  not,  upon  a  contract  to  carr.v 
property,  must  be  brought  in  the  county  in  which 
the  defendant,  or  eitlier  of  several  defendants, 
resides,  or  in  whicli  the  contract  is  made,  or  in 
which  the  carrier  agrees  to  deliver  the  property. 
Express  Co.  v.   Crenshaw,   78  K.v.   136. 

Answer  to  the  merits  of  an  action  waives  ob- 
jection to  jurisdiction  of  tlie  court  as  to  local- 
ity of  the  corporation  or  its  officers.  Baker  v. 
R.    R.    Co.,    4   Bush.    619. 

Action  against  corporation  may  be  brought  in 
county  In  wliich  contracts  sued  on  were  to  lie 
performed.  Covington  v.  Limerick,  40  S.  W.  Rep. 
254.] 

TITLE    VII.      PLEADINGS. 

CHAPTER  VII. 
General  Rules  of  Pleading. 
Sec.  117.   Pleadings   must   be    verified   by   whom. 

§  117.  Pleadings,  the  verification  of  which 
is  required  by  this  Code,  must  be  verified 
as  follows: 

2.  That  *  *  *  of  a  municipal  or  private 
corporation,  must  be  verified  by  its  chief 
officer  or  agent,  upon  whom  a  summons  in 
the  action  is  lawfully  served,  or  might  be  law- 
fully served  if  it  were  a  defendant;  or,  if  it 
have  no  such  officer  nor  agent  residing  in  the 
county  in  which  the  action  is  brought,  or  is 
pending,  it  may  be  verified  by  its  attoi'uey. 


TITLE    VIII.       PROVISIONAL    REMEDIES. 

CHAPTER  in. 

Attachment. 
Sec.  194.  Grounds  of  attachment. 

§  194.  The  plaintiff  may,  at  or  after  the 
commencement  of  an  action,  have  an  attach- 
ment against  the  jiroperty  of  the  defendant, 
including  garnishees  as  provided  in  section 
227,  as  a  security  for  the  satisfaction  of  such 
judgment   as    may   be   recovered  — 

I.  In  an  action  for  the  recovery  of  money 
against  — 

1.  A  defendant,  who  is  a  foreign  corpora- 
tion, or  a  non-resident  of  the  St;i.te;  or, 

8.  *  *  *  But  an  attachment  shall  not 
be  granted  on  tlie  ground  that  the  defendant 
is  a  foreign  corjioration.  or  a  non-resident  of 
this  State,  for  any  claim  other  than  a  debt 
or  demand  arising  upon  a  contract,  express 
or  implied,  or  a  judgment  or  award. 

t  Actions  against  l)ankss  insurance  conipanies 
and  common   carriers. 


ia:N^TUCKY. 


29 


Vacating  charters;  costs;  construction  —  Civ.  Code,  §§  480-488,  616,  628,  732. 


TITL,K  X.     SPECIAL  PROCEEUINGS. 

CHAPTER  XIII. 

Repealing  or  Vacating  Charters,  and  Pre- 
venting the  Usurpation  of  an  (Jffice  or 
Franchise. 

Sec.  480.  Action,    ordinary,    may    be    brought    for. 
4S1.  Action,   to  repeal   charter,    how   brought. 

482.  Action,    what    to    be    brought    only    by 

order  of  legislature. 

483.  Action,     who     may     bring     to     prevent 

usurpation. 

484.  Action    to    be    brought    by    attorney    for 

commonwealth. 

485.  Attorney-general. 

486.  Action,  for  usurjiatiDn.   what  authorizes. 

487.  Usurper,    judgment    against. 

488.  Usurper,    fees    of,    provision    concerning. 

§  480.  In  lieu  of  tlie  writs  of  scire  facias 
and  quo  warranto,  or  of  an  information  in 
the  nature  of  a  quo  warranto,  ordinary  ac- 
tions may  be  brought  to  vacate  or  repeal 
charters,  and  to  prevent  the  usurpation  of 
an  otfice  or  franchise. 

§  481.  The  action  to  repeal  or  vacate  a 
charter  sliall  be  in  tlie  name  of  tlie  common- 
wealtli,  and  be  brouglit  and  prosecuted  by 
the  attorney-general,  or  under  liis  sanction 
and  direction  by  an  attorney  for  the  common- 
wealth. 

§  4S2.  Actions  to  repeal  or  vacate  the  cliar- 
ters  of  municipal  corporations,  banks,  rail- 
road, turnpike  road,  and  internal  improve- 
ment companies,  shall  only  be  instituted  by 
order  of  the  legislature,  unless  otlierwise  ex- 
pressly provided. 

§  483.  If  a  person  usurps  an  office  or  fran- 
chise, the  person  entitled  tliereto.  or  the  com- 
monwealth, may  prevent  the  usurpation  by 
an  ordinary  action. 

[A  franchise  is  a  particular  privilpge  conferred 
by  grant  from  the  gfncrnment  and  vested  in 
individuals,  and  an  action  for  usurpation  of  it 
can  be  maintained  only  by  the  commonwealth. 
C'omm.  V.  Lexington,  etc.,  6  B.  M.  397;  Same  v. 
City,    13    Bush,    185. 

As  to  enjoining  usurpation  of  franchise,  see 
Newport  v.  Taylor's  Exrs.,  16  B.  M.  779;  Citizens' 
Gaslight  Co.  v.  Louisville  Gas  Co.,  81  Ky.  263; 
Turnpike  Co.  v.  Ratlift',  85  id.  244;  s.  c,  3  S.  W. 
Rep.  148.] 

§  484.  It  shall  be  tlie  duty  of  tlie  several 
commonwealtii  attorneys  to  institute  the  ac- 
tions mentioned  in  this  chapter  against  usurp- 
ers of  county  offices  or  francliises,  if  no 
person  be  entitled  tliereto.  or  if  the  person 
entitled  fail  to  institute  the  same  during 
three  months  after  tlie  usurpation. 

§  48").  I-"oi"  usurpation  of  otlier  than  county 
offices  or  francliises.  the  action  by  the  com- 
monwealtii shall  be  instituted  and  prosecuted 
by  the  attorney-general. 

§  4S<>.  A  person  who  continues  to  exercise 
an  office  after  having  committed  an 
act,  or  omitted  to  do  an  act.  the  commis- 
sion or  omission  of  which,  by  law,  creates  a 
forfeiture  of  his  office,  may  be  proceeded 
against  for  usuniation  thereof. 

§  487.  A  person  adjudged  to  have  usurped 
an  office  or  francliise  shall  be  deprived 
thereof  by  the  judgment  of  the  court,  and  the 


person  adjudged  entitled  thereto  shall  be 
lilaced  in  possession  thereof;  but  no  one  shall 
l)eadjudged  entitled  thereto,  unless  the  action 
lie  instituted  by  him.  And  the  court  shall 
have  power  to  enforce  its  judgment  by  caus- 
ing the  tKJoks  and  papers,  and  all  other  things 
pertaining  to  the  office  or  frandilso.  to  be 
surrendered  by  the  usuiijer;  and  by  prevent- 
ing him  from  further  exercising  or  using  the 
same;  and  may  enforce  its  orders  by  fine 
and  imprisonment  until  obeyed. 

§  488.  If  the  usurper  have  received  fees 
and  emoluments  arising  from  the  office  or 
franchise,  he  slia,ll  be  liable  tlierefor  to  the 
person  entitled  thereto,  who  may  claim  the 
same  in  the  action  brought  to  deprive  him 
of  the  office  or  franchise,  or  in  a  sei)arate  ac- 
tion. If  no  one  be  entitled  to  tliem,  tliey  may 
be  recovered  by  the  commonwealth,  and 
sliall  be  paid  into  the  public  treasury. 

TITLE    XIV.    MISCELLAXEOUS    PROCEED- 
INGS. 

Ch.  1.  Security  for  costs. 
2.  Motions    and    notices. 

CHAPTER  I. 

Security  for  Costs. 
Sec.  016.  Surety   for   costs,    who    must   give. 

§  616.  A  plaintiff  who  is  a  non-resident  of 
tliis  State,  or  a  corporation  other  tlian  a  bank 
created  by  the  laws  of  this  State,  before 
commencing  an  action,  shall  file  in  the  clerk's 
office  a  bond  of  a  sufficient  surety,  to  be  ap- 
proved by  the  clerk,  for  the  payment  of  all 
costs  which  may  accrue  in  tlie  action  in  tlie 
court  in  which  it  is  brought,  or  in  any  other 
to  which  it  may  be  can-ied.  either  to  the  de- 
fendant or  to  the  officers  of  the  courts. 

CHAPTER  II. 

Motions  and  Notices. 
Sec.  628.  Notice  how  served  on  corporations. 

§  628.  A  notice  to  a  coi-poration  may  be 
served  on  its  cliief  officer  or  agent,  or  on  its 
attorney. 

TITLE    XVII.      RLLES    OF    COXSTRUCTIOX. 

Sec.  732.  Construction    of    certain    words. 

§  732.  In  construing  the  provisions  of  this 
Code,  tliese  rules  shall  prevail,  unless  a  dif- 
ferent intention  be  expressed,  or  Ije  shown  by 
the  context; 

5.  The  word  "  person  "  includes  a  corpo- 
ration. 

21.  Tlie  words  "  other  country,"  "  foreign 
coii)oration,"  and  words  of  lilve  import,  refer 
to  any  part  of  tlie  world  out  of  this  State. 

.32.  The  words  "  residence."  "  reside," 
mean,  with  reference  to  a  coi*poration,  ltd 
chief  office,  or  place  of  business. 

33.  1'lie  chief  officer  or  agent  of  a  corpora- 
tion which  has  any  of  tlie  officers  or  agents 
herein  mentioned  is,  1.  Its  president;  2.  Its 
vice-president;  3.  Its  secret^iry  or  librarian; 
4.  Its  cashier  or  treasurer;  5.  Its  clerk;  6.  Its 
managing  agent. 
See  Statutes,   §  457. 


30 


KEXTUCKY. 


Franchise  tax  in  cities  —  Act  of  March  19,  1898. 


SPECIAL  ACTS  ENACTED  SUBSEQUENTLY  TO  1894. 


1.  Conoerning   assessment   and   taxation    of   fran- 

chJsps. 

2.  Relating  to  foreign  news  corporations. 

Act  1. 

AN  ACT  concemin.ff  the  assessment  and 
valuation  for  taxation  of  corporate  fran- 
chises and  intangible  property  by  cities  of 
the  first  and  second  class. 

Be  it  enacted  by  the  sreneral  assembly  of 
the  Commonwealth  of  Kentucky: 

Section  1.  That  the  franchise  of  every  in- 
corporated bank,  trust  company,  jsruarantee 
or  secuinty  company,  gas,  water,  ferry, 
bridge,  street  railway,  express,  electric 
light,  electric  power,  telegraph,  press  dis- 
patch, telephone,  turnpike,  palace  car.  dining 
car.  sleeping  car.  and  chair  car  company  and 
every  other  like  company,  corporation  or  as- 
sociation, having  or  exercising  any  special 
or  exclusive  privilege  or  franchise,  not  al- 
lowed by  law  to  natural  pei-sons,  or  per- 
forming any  public  service,  shall  hereafter 
be  valued  and  assessed  for  city  taxes,  in  the 
manner  hereinafter  prescribed  by  the  city 
assessor  in  cities  of  the  first  and  second 
class,  wherein  such  franchise  is  exercised, 
to  the  extent  and  in  the  proportion  the  same 
is  therein  exercised:  Provided,  however. 
That  no  assessment  for  city  taxes  shall  be 
made  by  any  assessor  or  board  of  valuation 
and  assessment  of  the  franchise  of  any  pri- 
vate business,  mercantile,  or  manufacturing 
corporation,  whose  property  is  not  devoted 
to  a  public  use. 

§  2.  In  order  to  determine  the  value  of  the 
franchises  mentioned  or  referred  to  in  the 
next  preceding  section,  the  corporations, 
companies,  and  associations,  therein  men- 
tioned or  referred  to.  shall  each  annually  be- 
tween September  first,  and  October  first, 
make  and  deliver  to  the  assessor  of  cities 
of  the  first  and  second  class,  wherein  its 
franchise  is  exercised,  a  statement  verified 
by  its  president,  cashier,  secretary,  treasurer, 
manager,  or  other  chief  officer  or  agent,  in 
such  form  as  the  city  assessor  may  prescribe, 
showing  the  following  facts,  viz.:  The  name 
and  principal  place  of  business  of  the  cor- 
poration, company  or  association;  the  kind 
of  business  engaged  in,  the  amount  of  capital  j 
stock,  preferred  and  common;  the  number  i 
of  shares  of  each;  the  amount  of  stock  paid 
up;  the  par  and  real  value  thereof;  the  high- 
est price  at  which  such  stock  was  sold  at  a 
bona  fide  sale  within  twelve  months  next 
before  the  first  day  of  September  of  the 
year  in  which  the  statement  is  required  to 
be  made:  the  amovmt  of  surplus  fund  and 
individual  profits,  and  the  value  of  all  other  j 
assets;  the  total  amount  of  indebtedness  as  | 


principal,  the  amount  of  gross  or  net  earn- 
ings or  income,  including  interest  on  invest- 
ments, and  incomes  from  all  other  sources 
for  twelve  months  next  preceding  the  first 
day  of  September,  of  the  year  in  which  the 
statement  is  required;  the  amoimt  and  kind 
of  tangible  property,  and  where  situated,  as- 
sessed, or  liable  to  assessment  and  the  fair 
cash  value  thereof,  estimated  at  the  price  it 
would  bring  at  a  fair  voluntary  sale,  and 
such  other  facts  as  the  city  assessor  may 
require. 

§  3.  Where  the  line  or  lines  of  any  such 
corporation,  company,  or  association  extend 
beyond  the  limits  of  the  city,  the  statement 
shall,  in  addition  to  the  other  facts  herein- 
after required,  show  the  length  of  the  entire 
lines  operated,  owned,  leased,  or  controlled 
in  the  city,  and  the  entire  lines  operated, 
owned,  leased,  or  controlled  elsewhere.  If 
the  coi-poration.  company  or  association, 
oi>erates  or  conducts  its  business  in  other 
States,  as  well  as  in  this  State,  the  state- 
ment shall  show  the  following  facts,  in  ad- 
dition to  the  facts  hereinafter  required:  The 
irross  and  net  income  or  earnings  received 
in  the  city,  and  out  of  the  city  on  business 
done  in  the  city,  and  the  entire  gross  re- 
ceipts of  the  conioration.  company,  or  asso- 
ciation, in  the  city  and  elsewhere,  during  the 
twelve  months  next  before  the  first  day  of 
September  of  the  year  in  which  the  assess- 
ment is  required  to  be  made.  In  cases 
where  any  of  the  facts  above  required  are 
impossible  to  be  answered  correctly,  or  will 
not  afford  any  valuable  information  in  de- 
termining the  value  of  the  franchise  to  be 
taxwl.  the  city  assessor  may  excuse  the  offi- 
cer from  answering  such  questions;  Pro- 
vided, That  the  city  assessor,  from  said 
statement,  and  from  such  other  evidence  as 
he  may  have,  if  such  corporation,  company, 
or  association  be  organized  under  the  laws 
of  this  State,  shall  fix  the  value  of  the  capi- 
tal stock  of  the  corporation,  company,  or 
association,  as  provided  in  the  next  succeed- 
ing section,  and  from  the  amount  thus  fixed 
shall  deduct  the  assessed  value  of  all  tan- 
gible property  assessed  in  this  State  or  in 
the  counties  where  situated.  The  remainder 
thus  found  shall  be  the  value  of  its  corixt- 
rate  franchise  subject  to  taxation  as  afore- 
said. 

§  4.  If  the  coiTXtration.  company  or  asso- 
ciation be  organized  under  the  laws  of  any 
other  State  or  government,  except  as  pro- 
vided in  the  next  section,  the  city  assessor 
shall  fix  the  value  of  the  capital  stock,  as 
hereinafter  provided,  and  will  determine 
from  tlie  amoimt  of  the  gross  receipts  of 
such  corjwration,  company,  or  association  in 
the  city  and  elsewhere,  the  proportion  which 


KENTUCKY. 


31 


Franchise  tax  in  cities  —  Act  of  March  19,  1898. 


the  gross  receipts  in  the  city,  within  twelve 
months  next  before  the  first  day  of  Septem- 
ber of  the  year  in  which  the  assessment  was 
made,  bears  to  the  entire  gross  receipts  of 
the  company;  the  same  proportion  of  the 
value  of  the  entire  capital  stocli,  less  the 
assessed  value  of  the  tangible  property  as- 
sessed, or  liable  to  assessment,  shall  be  the 
correct  value  of  the  coii>orate  franchise  of 
such  corporation,  company  or  association  for 
taxation  in  the  city. 

§  5.  If  the  corporation  organized  under  the 
laws  of  this  State,  or  some  other  State  or 
government  be  a  street  railway,  telegraph, 
telephone,  exjjress,  sleeping,  dining,  palace 
or  chair  car  company,  the  lines  of  which 
extend  beyond  the  limits  of  the  city,  the 
<;ity  assessor  will  fix  the  value  of  the  capital 
stocli,  as  hereinafter  provided,  and  that  pro- 
portion of  the  value  of  the  capital  stock, 
which  the  length  of  the  lines  operated, 
owned,  leased  or  controlled  in  the  city, 
bears  to  the  total  length  of  the  lines 
owned,  leased  or  controlled  in  the  city  and 
elsewhere,  shall  be  the  value  of  the  corpo- 
rate franchise  of  such  corporation  liable  for 
taxation  in  the  city;  and  such  corporate 
franchise  shall  be  liable  to  taxation  in  each 
city  of  the  first  class,  through,  or  into  which 
such  lines  pass,  or  are  operated,  in  the  same 
proportion  that  the  length  of  the  line  in  such 
city  bears  to  the  whole  length  of  the  lines 
elsewhere. 

§  6.  Whenever  any  person  or  association 
of  persons,  not  being  a  corporation  nor  hav- 
ing capital  stocli,  shall,  in  this  State,  en- 
gage in  the  business  of  any  of  the  coriDO- 
rations  mentioned  and  made  subject  to  as- 
sessment in  the  first  section  of  this  act.  then 
the  capital  and  property,  or  the  certificates 
or  other  evidences  of  the  rights  or  interests 
of  the  holders  thereof  in  the  business  or 
capital  and  property  employed  therein,  shall 
be  deemed  and  treated  as  the  capital  stocli 
of  such  person  or  association  of  persons  for 
the  purpose  of  taxation,  and  all  other  pur- 
poses, imder  this  act  in  like  manner  as  if 
such  person  or  association  of  persons  were 
a  corporation. 

§  7.  It  shall  be  the  duty  of  the  city  asses- 
sor, immediately  after  fixing  such  value,  to 
notify  the  coi-porations,  companies  or  asso- 
ciations of  the  fact;  and  all  such  coi-pora- 
tions,  companies  or  associations  shall  have 
at  least  ten  days  from  the  time  of  receiving 
such  notice  to  go  before  the  board  of  equali- 
zation of  the  city  and  ask  a  change  of  the 
valuation,  and  may  introduce  evidence,  and  [ 
the  chainnan  of  said  board  is   hereby  au- 
thorized to  summon   and   swear  witnesses,  j 
and  after  hearing  such  evidence,   the  said  j 
board  may  change  the  valuation  as  it  may  i 
deem  proper,  and  the  action  of  said  board 
shall  be  final. 

§  8.  The  city  assessor  shall  make  out  and 
authenticate  the  tax  bills  on  the  assessments 
of  franchises,  as  provided  in  this  act,  as  well 
as  on  all  assessments  hereafter  made  by  the 
board  of  valuation  and  assessment,   which 

36 


shall  have  the  same  effect  as  tax  bills  made 
out  and  authenti(-ate<l  by  him  on  assessments- 
of  other  property,  and  shall  list  the  same 
I  with  the  tax  receiver  for  collection,  and  said 
'  tax  bills  shall  be  due  and  payable  at  the 
same  time,  subject  to  the  same  discounts  and 
i  i>enalties,  and  be  collectible  by  distraint,  gar- 
nishment and  suit,  as  now  provided  by  law 
with  respect  to  other  tax  bills  due  the  city. 

§  9.  Any  cori)oration,  or  officer  thereof, 
willfully  failing  or  refusing  to  make  reports 
as  required  by  this  act,  shall  be  deemed 
guilty  of  a  misdemeanor,  and  for  each  of- 
fense shall  be  fined  one  hundred  dollars  and 
five  dollars  for  each  day  the  same  is  not  made 
after  October  first  of  each  year,  to  be  re- 
covered by  indictment  or  civil  action,  in  the 
name  of  tlie  city,  in  the  circuit  court  of  the 
county  in  whicli  such  city  is  situated. 

§  10.  The  individual  stockholders  of  the 
corporation,  Avhich  is  by  this  act  required 
to  report,  and  pay,  city  taxes  upon  the  cor- 
porate franchises,  shall  not  be  required  to 
list  their  shares  in  such  corporation  so  long 
as  the  coi-poration  pays  the  city  taxes  on  the 
corporate  property  and  franchises  as  herein 
provided. 

§  11.  Should  any  corporation  required  to 
make  the  repoit,  as  hereinbefore  provided, 
be  in  the  hands  of.  or  under  the  control  of 
a  receiver,  or  other  person,  it  shall  be  the 
duty  of  such  receiver  or  other  person  to 
make  the  returns  and  valuations,  as  required 
by  this  act. 

§  12.  Should  any  coriJoration,  company  or 
association,  fail  to  make  the  report  as  re- 
quired herein,  on  or  before  the  first  day  of 
October  of  each  year,  the  city  assessor  shall 
proceed  to  ascertain  the  facts  and  values  as 
required  by  this  act  in  such  manner  and  by 
such  means  as  he  deems  proper,  at  the  cost 
of  the  corporation,  company  or  association 
failing  to  make  the  report  and  shall  fix  the 
values  of  the  corporate  franchise  liable  for 
taxation,  as  provided  in  this  act,  and  the 
coi*poration,  company  or  association  shall  be 
taxed  accordingly. 

§  13.  This  act  shall  not  apply  to  railroad  or 
other  corporations  required  by  law  to  be  as- 
sessed by  the  railroad  commission. 

(Approved  March  19,  1898.) 


Act  2. 

AX  ACT  to  fix  the  conditions  upon  which 
foreign  corporations  formed  for  the  pur- 
pose of  or  engaged  in  the  business  of  buy- 
ing, gathering  or  accumulating  information 
or  news  or  vending,  supplying,  distributing 
or  publishing  the  same  may  carry  on  or 
transmit  such  or  any  part  thereof  in  this 
State  and  fixing  penalties  for  violation 
thereof. 

Be  it  enacted  by  the  general  assembly  of 
the  Commonwealth  of  Kentucky: 

Section   1.    That   all   foreign   corporations 
formed  for  the  purpose  or  engaged  in  the 


32 


KENTUCKY. 


Foreign  news  corporations  —  Act  of  March  10,  1898. 


business  of  buying,  gathering  or  accumulat- 
ing information  or  news,  or  vending,  sup- 
plying, distributing,  or  publishing  the  same 
shall  as  a  condition  of  cariying  on  any  part 
of  said  business  in  this  State,  at  all  times, 
vend.  sni)iily.  distribute  and  publisli  the  news 
andinfdrniation  bought,  gatlun-ed  or  accumu- 
lated by  such  foreign  *  all  persons,  firms 
and  corporations  organized  under  the  laws 
■of  this  State,  or  carrying  on  in  this  State  the 
"business  of  conducting  or  publishing  a  news- 
paper, ■  Avhen  such  pei-son,  firm  or  corpora- 
tion desires  to  buy  or  be  supplied  with  such 
news  and  information  so  bought,  gathered 
or  accumulated  by  such  foreign  corporation, 
and  in  vending,  supplying,  distributing  and 
publishing  the  news  and  information  so 
bought,  gathered  or  accumulated  by  such 
foreign  coiitoration,  no  discrimination  in 
charges  or  prices  shall  be  made  by  such  for- 
eign corporation  between  any  of  the  persons, 
firms  or  corporations  doing  business  in  this 
State  and  desiring  to  purchase  or  be  supplied 
with  such  information  and  news. 

§  2.  It  shall  not  be  lawful  for  any  for- 
eign corpoi'ation  or  any  agent  or  employe 
of  such  conioration  formed  for  the  purpose 
or  engaged  in  the  business  of  buying,  gather- 
ing or  accumulating  information  or  news,  or 
vending,  supplying,  distributing  or  publish- 
ing the  same,  to  transact  any  of  the  busi- 
ness of  such  coiTDoration  shall  have  refused 
to  vend,  supply,  distribute  or  publish  the  in- 
formation or  news  bought,  gathered  or  ac- 
cumulated by  it  to  anj'  person,  firm  or  cor- 
poration engaged  in  this  State  in  carrying 
on  the  business  of  conducting  or  publishing 
a  newspaper,  when  such  person,  firm  or  cor- 
IX)ratJon  has  notified  such  foreign  coi-pora- 
tion  or  any  agent  upon  whom  process  can 
be  served  under  the  laws  of  this  State  of  his, 
their  or  its  desire  to  purchase  or  to  be  sup- 
plied with  said  news  or  information  so 
bought,  gathered  or  accumulated  by  such 
foreign  corporation  and  upon  his,  their  or 
its  oifer  to  pay  same  charges  or  prices  there- 
for which  are  exacted  by  said  foreign  cor- 
poration against  other  persons,  firms  or  cor- 
porations engaged  in  this  State  in  the  busi- 
ness of  conducting  or  publishing  a  news- 
paper, and  any  such  foreign  coi'poration,  and 
any  agent  or  employe  of  such  foreign  cor- 
poration, or  any  other  person  who  shall  carry 
on,  transact,  or  cause  to  be  conducted  any 
business  in  this  State  for  such  foreign  cor- 


poration after  it  shall  have  failed  or  refused 
to  comply  with  any  of  the  requirements  of 
this  act  shall  be  severally  guilty  of  a  mis- 
demeanor and  upon  conviction  fined  not  less 
than  one  hundred  nor  more  than  one  thou- 
sand dollars  for  such  offense,  and  each  day's 
continuance  of  anj^  part  of  the  business  of 
such  foreign  coi-poration  in  this  State  after 
it  shall  have  failed  to  comply  with  any  of 
the  provisions  of  this  act  shall  constitute  a 
separate  offense. 

§  3.  A  violation  of  the  provisions  of  this 
act  shall,  upon  conviction,  operate  to  forfeit 
the  charter  of  the  coi'poration,  or  proceedings 
may  be  instituted  by  the  attorney  for  the 
Commonwealth  in  any  district  within  the 
State  to  forfeit  the  charter  of  any  cdiijora- 
tion  violating  the  provisions  of  this  act  and 
to  subject  the  party  charged,  if  found  guilty, 
to  the  penalty  imposed  in  section  two  of  this 
act. 

§  4.  Evei-y  telegraph  company,  every  tele- 
phone company,  or  every  association,  or  com- 
pany engaged  in  the  buying,  gatheiing,  or 
transmitting  of  dispatches  shall  afford  the 
same  and  equal  facilities  to  all  publishers 
of  newspapers  and  furnish  to  all  parties  col- 
lected by  them  for  publication,  in  any  county 
or  locality,  to  all  newspapers  there  published 
on  the  same  condition  as  to  terms,  payment, 
and  delivery  and  for  a  violation  of  any  of 
the  provisions  of  this  section,  shall  for  such 
violation  be  guilty  of  a  misdemeanor  and 
upon  conviction  shall  be  fined  not  less  than 
one  hundred  dollars  nor  more  than  one  thou- 
sand dollars,  and  if  a  corporation  or  asso- 
ciation shall  upon  conviction  forfeit  its 
charter. 

§  5.  Inasmuch  as  grievous  discrimination 
are  now  made  by  foreign  corpoi'ations  regu- 
lated by  this  act;  and  inasmuch  as  monopo- 
lies have  been  created  by  such  corporations, 
there  is  an  emergency  that  this  act  take  im- 
mediate effect,  and  this  act  shall  talie  effect 
iipon  its  approval  by  the  governor  or  pas- 
sa*''e. 

(Vetoed  by  the  Governor  March  10,  1898.) 

Passed  the  House  of  Representatives 
March  10,  1898,  the  objections  of  the  gov- 
ernor to  the  contrary  notwithstanding. 

Passed  the  Senate  March  10,  1898,  the  ob- 
jections of  the  governor  to  the  contrary  not- 
withstanding. 


*So    in    original    law. 


INDEX  TO  KEI^TTUOKY. 


ACCEPTANCE:  Page, 

of  provisions  of  constitution,  by  existing  corporations G,  20 

ACTIONS: 

against  corporations,  where  brought  28 

pleadings,  verification  of   28 

to  vacate  charter  and  to  prevent  usurpation  2',) 

in  name  of  commonwealth 2t) 

judgment  of  ouster  29 

security  for  costs,  when  required 29 

AGENTS: 

corporations  to  have  within  state,  for  service  of  process 7,  20,  21 

statement  of  name  to  be  filed 21 

of  change  of,  to  be  filed 21 

AGREEMENT: 

to  consolidate  corporations,  directors  to  execute   18 

to  be  signed,  acknowledged  and  recorded 18 

AMENDMENT: 

of  articles  of  incorporation,  how  effected 18 

of  existing  corporations   22 

ARTICLES  OF  INCORPORATION    (See  Charter): 

contents  specified    10 

signed  and  acknowledged  10 

signers  to  have  direction  of  affairs,  etc 10 

of  existing  corporation,  for  reorganization 17 

amendment  of,  how  effected  18 

of  persons  purchasing  franchises  and  property 19 

business  not  authorized  by,  not  to  be  transacted 20 

of  existing  corporations,  provisions  inconsistent  with  law,  repealed 21 

subject  to  amendment 22 

ATTACHMENT: 

grounds  of,  affidavit   28 

against  foreign  corporation   28 

BANKING  COMPANY: 

oSicers  receiving  deposits  after  insolvency  8 

BONDS: 

not  to  be  issued  except  for  money,  labor,  property 6,  20 

BOOK: 

stock,  containing  names  of  stockholders,  etc It) 

to  be  open  to  inspection 15 

BUSINESS: 

nature  of,  articles  to  state 10 

failure  to  begin,  forfeiture  of  charter 20 

not  to  be  transacted  unless  authorized  by  articles 20 

BY-LAWS: 

corporation  may  adopt   13 

CAPITAL  STOCK: 

amount,  articles  to  state 10 

one-half  to  be  subscribed  before  commencing  business 13 

subscriptions  to,  how  paid  13 


34  INDEX  TO  KENTUCKY. 

CAPITAL  STOCK  —  (Continued):  Page. 

increase  or  decrease  of,  meetings  for 17 

statement  of,  to  be  recorded 17 

not  to  affect  liabilities   19 

organization  tax  on 27 

CERTIFICATES: 

falsely  swearing  to,  by  officers 22 

CERTIFICATES  OF  STOCK: 

trust,  sale  of,  illegal 23 

CHARTER    (See  Articles  of  Incorporation). 

forfeited  for  contributing  to  election  funds  6 

existing,  void  unless  business  has  been  commenced 6 

general  assembly  to  provide  for  forfeiture  for  mis-use 8 

forfeiture,  for  mis-use  of  franchises,  etc 20 

existing,  may  be  amended   22 

granted  since  1856,  repealed 23 

forfeiture  of,  for  entering  trusts 2i 

action  to  vacate,  for  what  brought 29 

COMBINATIONS: 

general  assembly  to  prevent 7 

to  regulate  prices  and  prevent  competition,  illegal 23 

penalties  imposed  for  entering 23 

contracts  of,  when  void 24 

forfeiture  of  charter  for  entering 24 

COMPETITION: 

trusts  to  prevent,  prohibited.     (See  Trusts) 23,  24 

CONSOLIDATION: 

of  corporations,  agreement  for  18 

written  notice  of,  to  be  given  to  stockholders 18 

consent  of  stockholders  necessary  18 

agreement  to  be  signed,  acknowledged  and  recorded 18 

actions  pending,  not  affected  by 18 

stockholder  dissenting  to  be  paid  value  of  stock 18 

CONSTITUTION: 

acceptance  of  provisions  of,  when  necessary H,  20 

CONSTRUCTION:  '  ; 

of  statutes,  rules  for 29 

CONTRACTS: 

laws  impairing  obligation  of 5 

corporations  may  make    12 

CORPORATION: 

term  includes  what   9 

CORPORATORS: 

number  required  to  form  corporation 9 

COSTS: 

security  for,  when  required 29 

DIRECTORS: 

of  banks,  liability  for  receiving  deposits  when  insolvent 8 

election,  right  of  stockholder  to  vote 8 

by-lawa  adopted  by  13 

dividends  not  to  be  declared  when  insolvent 16 

liability  to  creditors  for 16 

false  statements  and  reports,  liability  for 16 

violating  provisions  of  law,  liability  for 16 

number,  term,  qualifications 16,  17 

majority  a  quorum 16,  17 

election,  when  and  how  held 17 

special  meetings  for 17 


iXDEx  TO  ke:n^tucky.  35 

DIRECTORS  —  (Continued) :  Page. 

election,  stockholders  may  vote  by  proxy 17 

rights  of  stockholders  to  vote  at 17 

vacancy,  how  filled 17 

divided  into  classes   17 

consolidation  of  corporations,  agreement  for 18 

acceptance  of  constitution  by  resolution 20 

falsely  swearing  to  statements  22 

DISCOUNT: 

by  corporations,  when  prohibited 22,  23 

DISSOLUTION: 

of  corporation,  continuance  of  existence   19 

oflicers  to  settle  affairs   19 

preferred  stock  to  be  first  paid 20 

DIVIDENDS:  > 

not  to  be  declared  when  insolvent 16 

unlawful,  liability  of  directors  for 16 

ELECTION  OF  DIRECTORS.    (See  Meetings;  Directors.) 
ELECTIONS: 

corporations  not  to  contribute  to  influence  votes  at 6 

ELEVATORS: 

declared  public  warehouses 8 

EMPLOYES: 

wages  to  be  paid  in  money 8 

EVIDENCE   OF   DEBT: 

corporation  not  to  discount 22,  23 

EXISTENCE,  CORPORATE: 

articles  to  state  duration  of 10 

dissolution  on  expiration  of   19 

FALSE: 

statements  and  reports,  liability  of  directors  for 16 

entries  in  books  and  papers  by  officers 22 

FEDERAL  COURT: 

foreign  corporation  not  to  remove  action  into 21 

FOREIGN  CORPORATION: 

not  to  transact  business  within  state  on  more  favorable  terms,  etc 8 

not  to  remove  action  to  federal  court 21 

franchise  tax,  how  assessed   26,  27 

attachment,  against,  grounds  for 28 

for  gathering  news,  regulations 31,  31 

FORFEITURE: 

of  charter  for  giving  money  to  influence  votes 6 

of  franchises,  etc.,  for  failure  to  begin  business 20 

for  mis-use  of  powers,  franchises,  etc 20 

of  charter  for  entering  trusts,  etc 24 

FRANCHISE: 

subject  to  revocation ^ 

state  may  take  for  public  use ''' 

lease  of,  limited ° 

sale  of,  purchasers  may  incorporate 1" 

under  decree  of  court 1" 

forfeiture,  for  failure  to  begin  business   20 

for  mis-use  of  corporate  rights,  etc -0 

usurpation  of,  action  to  prevent 29 

by  whom  instituted  29 

judgment  of  ouster 29 


36  IKDEX  TO  KENTUCKY. 

FRANCHISE  TAX:  Page. 

levied  on  certain  corporations 24 

value  of  franchise,  how  ascertained 24 

statement  to  be  made,  for  ascertaining 25 

on  railroad,  telegraph  lines,  etc.,  extending  out  of  state 25,  26 

on  foreign  corporations,  how  fixed 25,  26 

notification  to  corporations 26 

failure  of  corporation  to  make  report 26,  27 

in  cities  of  the  first  and  second  classes 30,  31 

GRANT: 

of  exclusive  privileges  not  to  be  made  for  public  services 5 

INCORPORATED: 

word  to  be  contained  in  sign,  etc 22 

INDEBTEDNESS: 

highest  amount,  articles  to  state 10 

INJURY,  PERSONAL: 

right  of  action  for 8 

INSOLVENT  CORPORATION: 

appointment  of  receiver  for 22 

receiver  to  receive  books,  etc.,  collect  debts 22 

LIABILITY: 

of  stockholders  for  corporate  debts 15 

of  directors  for  declaring  dividends  when  insolvent 16 

for  false  statements  and  reports 16 

for  violations  of  act  16 

LIABILITIES: 

of  corporations,  officers  or  stockholders,  not  affected  by  sale,  etc 19 

LIEN: 

on  stock,  when  corporation  not  to  take 14 

LOAN: 

of  money  by  corporation,  when  prohibited 22,  23 

MANAGERS.    (See  Directors.) 

MEETINGS: 

of  stockholders,  to  elect  directors  16,  17 

notice  of,  how  given  17 

when  to  be  held 17 

special  may  be  called,  when  regular  not  held 17 

right  of  stockholders  to  vote  at 17 

for  increase  or  decrease  of  capital  stock 17 

MORTGAGE: 

corporation  may  make   12 

NAME,  CORPORATE: 

articles  to  state 10 

sign  containing,  to  be  posted  at  place  of  business 22 

NEWS: 

corporations  organized  for  gathering,  regulations  31 ,  32 

OFFICE,  PRINCIPAL: 

articles  to  state  location 10 

OFFICERS: 

articles  to  state  by  whom  corporation  is  to  be  managed 10 

corporation  may  elect  or  appoint 13 

falsely  swearing  to  statement  or  certificate 22 

mutilation,  destruction  or  false  entries  in  books,  etc 22 

penalties  for  entering  trusts,  etc 23,  24 

contracts  of,  when  void 24 


IXDEX  TO  KEXTUOKY.  37 

ORGANIZATION  TAX:  Page, 

on  incorporation  and  increase  of  capital 27 

PASSES: 

free,  to  public  officers  unlawful 7 

PERSON: 

term  includes  corporation   9 

PLACE  OF  BUSINESS: 

all  corporations  to  have  within  state 7.  20.  21 

statement  of  location  to  be  filed  21 

of  change  of  location  to  be  filed 21 

name  to  be  printed  on  sign  and  posted  at 22 

PLEADINGS. 

verification  of,  by  corporation  28 

POOLS: 

general  assembly  to  prevent 7 

to  regulate  prices  and  prevent  competition  illegal 23 

penalties  imposed  for  entering 23 

contracts  of,  when  void 24 

forfeiture  for  entering   24 

POWERS,  CORPORATE: 

exercise  of,  limited  to  charter  and  laws ■ 6 

specified  generally  11,  12 

implied,  for  promotion  of  business  13 

PREFERRED  STOCK: 

to  be  issued  for  cash  or  equivalent   19,  20 

dividends  on,  how  paid    20 

to  be  first  redeemed  on  dissolution   20 

PRICE: 

trusts  to  regulate,  prohibited.     (See  Trusts)  23.  24 

PRIVILEGE: 

subject   to   revocation    5 

PROPERTY:  if' 

private,  not  to  be  taken  without  compensation  5 

municipal  and  other  corporations  may  take   8 

mortgage  or  pledge,  corporation  may  make   , 12 

PROXY: 

right  of  stockholders  to  vote  by 17 

QUORUM: 

of  directors,  majority  constitutes 16,  17 

RAILROADS: 

rates,  etc.,  regulated  by  general  law   7 

free  passes  to  officers  unlawful   7 

consolidated  with  foreign,  not  to  become  foreign   "i 

not  to  consolidate  with  competing  lines   • 

statement,  where  lines  extend  beyond  state  -^ 

REAL  ESTATE: 

not  necessary  for  corporate  purposes,  not  to  be  held 20 

RECEIVER: 

appointment  of,  for  insolvent  corporation 22 

REORGANIZATION:  • 

of  existing  corporation,  under  general  law 17 

REPEAL: 

of  provisions  of  charter  or  articles  inconsistent  with  law   21 

of  charters  granted  since  1856  23 

REPORTS: 

false,  liability  of  directors  for 16 


38  INDEX  TO  KENTUCKY. 


SEAL,  CORPORATE:  Page. 

corporation  may  have   11 

fraudulently   counterfeiting    22 

SERVICE:  i 

of  summons.    (See  Summons)   27,  28 

of  notice  on  corporation 29 

STATEMENTS: 

false,  liability  of  directors  for 16 

swearing  falsely  to   22 

STOCKS: 

not  to  be  issued  except  for  money,  etc 6,  20 

sale  of,  to  pay  installments 13 

lien  on,  corporation  not  to  take,  when 14 

shares,  how  transferred ^■^<  15 

book,  containing  names  of  stockholders,  etc 15 

open  to  inspection   15 

may  be  divided  into  common,  preferred  or  deferred 19,  20 

preferred,   dividends  on    20 

to  be  first  redeemed  on  dissolution   20 

owned  by  municipal  corporation,  how  voted  23 

trust  certificates  of,  sale  of,  unlawful 23 

capital,  amount,  articles  to  state  10 

one-half,  to  be  subscribed  before  commencing  business 13 

subscriptions  to,  how  paid   13 

increase  or  decrease  of,  meetings  for 17 

statement  of,  to  be  recorded   17 

not  to  affect  liabilities 19 

organization  tax  on   27 

STOCKHOLDERS: 

right  to  vote  for  directors   8 

names  and  addresses,  articles  to  state ; 10 

book  containing  names,  etc 15 

open  to  inspection  15 

liability  of,  for  debts  of  corporation 15 

election  of  directors  by    16,  17 

may  vote  by   proxy    17 

right  to  vote  at    17 

consent  to  consolidation  of  corporations   18 

purchase  of  stock,  if  dissenting  to  consolidation   18 

STOREHOUSES: 

declared  public  warehouses   8 

SUBSCRIPTIONS: 

to  capital  stock,  how  paid  13 

opening  books  for  receiving   13 

installments,  sale  of  stock  to  pay 13 

SUB  AND  BE  SUED: 

corporation  may   ,   .  .v, 11 

SUMMONS: 

service  of,  on  corporation 27 

when  corporation  has  no  agent  within  state 28 

TAXATION: 

property  not  exempt  except  as  provided  in  constitution 5 

of  corporate  property 6 

of  franchises  of  corporations   24 

value  of  franchise,  how  determined 24 

statement  of  corporation,  for  ascertaining  value  of  franchise. 25 

where  lines  extend   beyond  state   25 

of  railroad,  telegraph,  etc.,  companies,  in  cities,  etc 26 

notification  of  values  fixed  to  be  given  to  corporations   26 


IISTDEX  TO  KENTUCKY.  39 

TAXATION  —  (Continued) :  Page. 

certificate  to  county  clerk  of  franchise  taxable  in  county 26 

property  of  corporation  taxable  as  natural  person 26 

shares,  when  need  not  be  listed 26 

failure  of  corporation  to  make  report 26,  27 

on  organization  and  increase  of  capital  27 

franchises,  in  cities  of  first  and  second  classes  30,  31 

TELEGRAPH   COMPANIES: 

may  construct  lines  within  state  7 

to  transmit  each  others  messages "^ 

legislature  may  regulate    "7 

consolidated  with  foreign  corporation  not  to  become  foreign 7 

not  to  consolidate  with  competing  line "^ 

statement,  for  determining  franchise  tax 25 

taxed  in  each  city,  town,  etc 26 

TELEPHONE  COMPANIES: 

to  transmit  each  other's  messages 7 

not  to  consolidate  with  competing  line 7 

taxed  on  franchise  in  each  district  26 

TRANSFER: 

of  shares  of  stock,  how  made 14,  15 

not  to  release  liability  ;of  stockholder 15 

TRUSTEES.    (See  Directors.) 

TRUSTS: 

general  assembly  to  prevent 7 

to  regulate  prices  and  prevent  competition  illegal 23 

penalties  imposed  for  entering  23 

contracts  of,  when  void 24 

forfeiture  of  charter  for  entering    24 

VERIFICATION: 

of  pleadings  by  corporation 28 

WAGES: 

of  employes  paid  in  lawful  money 8 

WAREHOUSES: 

elevators  and  storehouses  declared  public 8 


LOUISIANA, 


TABLE  OF  CONTENTS. 


CONSTITUTIONAL  PROVISIONS.  Page. 

Legislative  department .5 

General   provisions  a 

Revenue  and  taxation 6 

Corporations  and  corporate  rights  8 

REVISED  STATUTES. 

Attorney-general   10 

Corporations •   10 

Domicile 18 

Governor 1*^ 

Offenses  and  quasi-offenses 19 

Office,  usurpation  of  19 

CIVIL  CODE. 

Book  I.     Of  Persons. 

TITLE    X.    OF    CORPORATIONS. 

Ch.  1.  The  nature  of  corporations,   etc   20 

2.  Rights,   privileges  and  incapacities    20 

3.  Dissolution   23 

CODE  OF  PRACTICE. 
Part  I.     Of  Civil  Actions. 

TITLE    I.       OF    ACTIONS    IN    GENERAI<. 

Ch.  5.  Who    entitled    to    bring    actions 24 

6.  Against  whom  actions  may  be  brought 24 

Part  II.     Rules  in  Civil  Actions. 

TITLE      I.      OF      PROCEEDINGS      BEFORE    COURTS   OF   ORIGINAL  JURISDICTION. 

Ch.     2.  Ordinary  proceedings    24 

10.  Orders  which  courts  may  render   - 

Sec.  4.   Writ  of  quo   warranto 

TITLE   IV.      OF   PROCEEDINGS   BEFORE   JUSTICES   OF   THE   PEACE. 

Ch.  1.  Jurisdiction,    civil    

LEGISLATIVE    ACTS    PASSED     SUBSEQUENTLY      TO      1870. 


24 


LOUISIANA. 


OO^^STITUTIOX  OF  LOUISIAFA- 1898. 


PROVISIONS  RELATING  TO  CORPORATIONS. 


Legislative  Department. 

Art.  48.  General    assembly    not    to    pass    local    or 
special  laws  in  certain  cases. 

49.  Same. 

50.  Same:  proviso. 

51.  Xo  law  shall  fix  price  of  labor. 

58.  Funds  or  credit  of  State  not  to  be  loaned. 

59.  Obligations  of  corporations  not  to  be  re- 

leased. 

General  Provisions. 

Art.  166.  Obligations  of  contracts  and  vested 
rights,   inviolate. 

167.  Private  property  not  to  be  taken  with- 
out   compensation. 

176.  Laws  regarding  arbitration  shall  be 
passed. 

190.  Trusts  and  combinations  prohibited. 

Revenue  and  Taxation. 

Art.  228.  Power  to  tax  corporations  not  to  be  sur- 
rendered. 

229.  License  tax  upon  corporations. 

230.  Exemptions. 

242.  Foreign   corporations,   taxation  of. 

Corporations  and  Corporate  Hights. 

Art.  2G2.  Relative   to   forfeiture   of   charters. 

2t>3.  Corporations  not  to  infringe  on  rights  of 

individuals. 
264.  Foreign   corporations   shall   have  one  or 

more  known  agents  for  process. 
263.  Business  limited   to   that  authorized   by 

charter. 

266.  Stock  or  bonds  not  to  be  issued  except 

for  value. 

267.  Stock    not    to    be    increased    except    In 

pursuance  of  general   laws. 

268.  "  Corporations  "    defined. 

269.  Relative   to    bank    officers    receiving   de- 

posits after  bank  is  insolvent. 

270.  Taxes  may   be   levied   in   aid   of   certain 

corporations,   when. 

271.  Any   railroad  corporation  may  construct 

and  operate  a  railroad  in  this  State. 
And  may  intersect  or  cross  any  other 
railroad. 

272.  Railroads  are  public  highways. 

27o.  Railroad  corporation  must  have  office 
for  transaction  of  general  business. 

274.  Consolidation  of  railroads.    Not  to  affect 

jurisdiction. 

275.  General  laws  for  creation  of  corporations 

shall   be  enacted. 

Legislative  Department. 

Art  48.  The  general  assembly  shall  not 
pass  any  local  or  special  law  on  the  follow- 
ing specified  subjects:  *  *  * 


Incorporating  bridge  or  ferry  companies, 

except  for  the  erection  of  bridges  crossing 

streams    which    form    boundaries    between 

this  and  any  other  State.         *  *  * 

***** 

Authoiizing  the  constructing  of  street  pas- 
senger railroads  in  any  incorporated  town 
or  city. 

Regulating  labor,  trade,  manufacturing  or 
agriculture. 

Creating  corporations  or  amending,  renew- 
ing, extending  or  explaining  the  charters 
thereof:  Provided,  This  shall  not  ap])ly  to 
municipal  corporations  having  a  population 
of  not  less  than  twenty-five  hundred  inhab- 
itants, or  to  the  organization  of  levee  dis- 
tricts and  parishes. 

Granting  to  any  corporation,  association, 
or  individual  any  special  or  exclusive  right, 
privilege    or    immunity        *         *        *         * 


Exempting  property  from  taxation. 
Filing  the  rate  of  interest  * 


Laws  impairing  obligation  of  contracts  pro- 
hibited. Art.  166.  General  laws  for  creating  cor- 
porations shall  be  enacted.     Art.  275;  see  art.  51. 


Art.  49.  The  general  Assembly  shall  not 
indirectly  enact  special  or  local  laws  by  the 
partial  repeal  of  a  general  law;  but  laws 
repealing  local  or  special  laws  may  be 
passed. 

Art.  50.  Xo  local  or  special  law  shall  be 
passed  on  any  subject  not  enumerated  in 
article  forty-eight  of  this  Constitution,  un- 
less notice  of  the  intention  to  apply  therefor 
shall  have  been  published,  without  cost  to 
the  State,  in  the  locality  where  the  matter 
or  thing  to  be  affected  may  be  situated, 
which  notice  shall  state  the  substance  of  the 
contemplated  law,  and  shall  be  published  at 
least  thirty  days  prior  to  the  introduction 
into  the  genernl  .Tssciiilily  nf  sudi  bill,  and 
in  the  same  manner  provided  by  law  for  the 
advertisement  of  judicial  sales.  The  evi- 
dence of  such  notice  having  been  published, 
shall  be  exhibited  in  the  general  assembly 


LOUISIAI^A. 


General  provisions;  taxation  —  Const.,  Arts.  51,  58,  5f),  16G,  1G7,  176.  190,  228. 


before  such  act  shall  be  passed,  and  every 
such  act  shall  contain  a  recital  that  such 
notice  has  been  {riven. 

Alt.  51.  No  law  shall  be  passed  fixing  the 
price  of  manual  labor. 

See  art.  48. 

Art.  58.  The  funds,  credit,  property-  or 
things  of  value  of  the  State,  or  of  any  politi- 
cal coi"poration  thereof,  shall  not  be  loaned, 
pledged  or  granted  to  or  for  any  person  or 
persons,  association  or  corporation,  public  or 
private;  nor  shall  the  State,  or  any  political 
coi-poration,  purchase  or  subscribe  to  the 
capital  or  stoclv  of  any  corporation  or  asso- 
ciation whatever,  or  for  any  pi-ivate  enter- 
prise. Nor  shall  the  State,  nor  any  political 
corporation  thereof,  assume  the  liabilities  of 
any  political,  municipal,  pai-ochial,  private  or 
other  corporation  or  association  whatsoever; 
nor  shall  the  State  undertake  to  carry  on 
the  business  of  any  such  corporation  or  as- 
sociation, or  become  a  part  owner  therein; 
Provided.  The  State,  through  the  general  as- 
sembly, shall  have  power  to  grant  the  right 
of  way  through  its  public  lands  to  any  rail- 
road or  canal;  *  *  *  * 


[The  State  cannot  give  aid  to  company,  except 
in  certain  cases  and  under  certain  limitations. 
State  V.  Burgess,  23  La.  Ann.  226.] 

Art.  59.  The  general  assembly  shall  have 
no  power  to  release  or  extinguish,  or  to  au- 
thoi'ize  the  releasing  or  extinguishment,  in 
whole  or  in  part,  of  the  indebtedness,  liabil- 
ity or  obligation  of  any  corporation  or  indi- 
vidual to  the  State,  or  to  any  parish  or  mu- 
nicipal cori)oration  thereof;  Provided,  The 
heirs  to  confiscated  propex'ty  may  be  re- 
leased from  all  taxes  due  thereon  at  the 
date  of  its  reversion  to  them. 

General  Provisions, 

Art.  166.  No  ex-post  facto  law,  nor  any 
law  impairing  the  obligations  of  contracts, 
shall  be  passed,  nor  vested  rights  be  di- 
vested, unless  for  purposes  of  public  utility, 
and  for  adequate  compensation  previously 
made. 

Special  laws  proliibited.  Art.  48.  No  law  shall 
fix  price  of  labor.  Art.  51.  Laws  shall  provide 
for  creation  of  corporations.     Art.  275. 

[No  fundamental  change  in  charter,  vitally  af- 
fecting established  rights,  can  be  forced  by  the 
acts  of  the  majority  upon  an  unwilling  stock- 
holder.   Hoey  V.  Henderson,  32  La.  Ann.  1069. 

Although  corporations  possess  inherent  power  of 
dissolution  at  law,  that  right  does  not  carry  with 
it  authority  of  impairing  the  obligation  of  con- 
tracts. Schleider  v.  Dieluian,  44  La.  Ann.  462; 
s.  c,  10  So.  Rep.  934. 

The  existing  law  of  the  State  is  a  part  of  the 
contract,  so  far  as  applicable,  in  every  act  of 
Incorporation.    State   v.    Gas   Co.,    2    Rob.    529. 

If  charters  be  contracts,  they  are  contracts 
which  the  legislature  may,  in  certain  cases,  dis- 
solve.   Palfrey  v.   Paulding,  7  La.   Ann.   363. 

If  an  act  amending  a  charter  Involve  the  de- 
struction of  a  vested  right,  or  impair  an  obligation. 


It  will  be  declared  void.  Boisdere  v.  Banlc,  9 
La.  511;  Gas  Co.   v.   Bennett,  6  La.   Ann.   4.57. 

When  a  corporation  is  the  mere  creature  of 
legislative  will,  the  legislature  may,  at  pleasure, 
modify  its  charter.  Academy  v.  George,  14  La. 
395. 

But  where  individuals  are  incorporated,  with 
perpetual  succession,  and  power  to  acquire  prop- 
erty by  donation  or  otherwise,  such  a  charter 
is  in  the  nature  of  a  contract,  which  cannot  be 
altered  by  a  subsequent  act  of  the  legislature, 
contrary  to  wishes  of  corporators.  Id.;  Boylcin 
V.   Shaffer,  13  La.   Ann.   129. 

The  capacity  of  contracting  is  generally  within 
the  power  of  the  legislature  in  reference  to  future 
contracts;  and  remedies  may  be  modified  at  its 
will.    Hyde  v.   Banlj,  8  Rob.  416. 

Although  a  charter  contains  no  provision  for 
the  liquidation  of  the  corporation  in  case  of  its 
dissolution,  the  omission  may  be  supplied  by 
subsequent  legislation,  without  impairing  the  ob- 
ligation of  the  contract  between  the  State  and  the 
corporators,  conceding  the  charter  to  be  such. 
Haynes  v.  Carter,  9  La.  Ann.  265.] 


Art.  107.  Private  property  shall  not  be 
taken  nor  damaged  for  public  puri^oses  with- 
out just  and  adequate  compensation  being 
first  paid. 

See  art.  271. 

[It  is  not  necessary  to  establish  actual  trespass 
or  physical  taking  of  the  property  itself;  it  is 
sufficient  if  property  has  been  substantially 
damaged.  Griffin  v.  R.  R.  Co.,  41  La.  Ann.  808; 
s.  c,  6  So.  Rep.  624. 

This  article  adds  the  requirement  of  compensa- 
tion for  damage  to  private  property  to  former  re- 
quirement of  compensation  for  the  taking  of 
property.  The  compensation  in  both  cases  is  re- 
stricted to  and  measured  by  the  value  of  the 
property  itself,  being  the  whole  value  when  taken 
diminished  by  value  when  damaged.  McMahou  v. 
R.  R.  Co.,  41  La.  Ann.  827;  s.  c.  6  So.  Rep.  640. 

Private  property  cannot  be  taken  for  public  use 
without  securing"  to  the  owner  the  compensation 
the  jury  of  freeholders  find  allowable.  Calder  v. 
Police  jury.  44  La.  Ann.  173;  s.  c,  10  So.  Rep.  726. 

Companies  incorporated  for  a  particular  object, 
without  specifying  their  powers  and  mode  of  ob- 
taining the  property  of  individuals,  must  proceed 
according  to  the  general  law.  Mabire  v.  Canal 
Bank,  11  La.  Ann.  86.] 

Art.  176.  It  shall  be  the  duty  of  the  gen- 
eral assembly  to  pass  such  laws  as  may  be 
proper  and  necessary  to  decided  differences 
by  arbitration. 

Art.  190.  It  shall  be  unlawful  for  persons 
or  corporations,  or  their  legal  representa- 
tives, to  combine  or  conspire  together,  or  to 
unite  or  ik)o1  their  interests  for  the  purpose 
of  forcing  up  or  down  the  price  of  any  agri- 
cultural product  or  article  of  necessity,  for 
speculative  purposes;  and  the  legislature 
shall  pass  laws  to  suppress  it. 

See  art.  205.  Trusts  prohibited  by  Act  of  1892, 
at  p.  28. 

B^venue  and  Taxation. 

Art,  228.  The  power  to  tax  corporations 
and  corporate  property  shall  never  be  sur- 
rendered nor  suspended  by  act  of  the  gen- 
eral assembly. 

See  art.  207.  Property  of  corporation  where 
assessed.    R.  S.,  §§  733,  734.    Foreign  corporation, 


LOUISIANA. 


Taxation  —  Const.,  Arts.  229,  230. 


entry  of  corporation  on  assessment-roll,  etc. 
R.  S.,  §§  735-738.  See  Revenue  Act  of  1888  at 
p.  26. 

Art.  229.  The  general  assembly  may  levy 
a  license  tax,  and  in  such  case  shall  gradu- 
ate the  amount  of  such  tax  to  be  collected 
from  the  persons  pursuing  the  several  trades, 
professions,  vocations  and  callings.  All  per- 
sons, associations  of  persons  and  corpora- 
tions pursuing  any  trade,  profession,  busi- 
ness or  calling,  may  be  rendered  liable  to 
such  tax,  except  clerks,  laborers,  clergymen, 
school  teachers,  those  engaged  in  mechani- 
cal, agricultural,  horticultural  and  mining 
pursuits,  and  manufacturers  other  than 
those  of  distilled,  alcoholic  or  malt  liquors, 
tobacco,  cigars,  and  cotton-seed  oil.  No 
political  coxTJoration  shall  impose  a  greater 
license  tnx  than  is  imposed  by thegeneral  as- 
sembly for  State  purposes.  This  restriction 
shall  not  apply  to  dealers  in  distilled,  alcho- 
holic  or  malt  liquors. 

The  general  assembly  shall  have  authority 
to  provide  that  municipalities  levying  license 
taxes  equal  in  amount  to  those  levied  by 
police  juries  for  parochial  purjioses,  shall 
be  exempted  from  the  payment  of  such  paro- 
chial licenses. 

[Amount  of  license  tax  is  regulated  br  Act  127, 
Laws  of  1898.] 

License  of  corporations  domiciled  out  of  State. 
Art.  242. 

[A  license  is  a  tax,  but  not  a  property  tax. 
Parish  v.  Brigham,  41  La.  Ann.  665;. s.  c,  6  So. 
Rep.  257. 

The  Constitution  contemplates  two  kinds  of 
taxes,  viz.:  the  property  tax  and  the  license  tax. 
Tax  Collector  v.  Ins.  Co.,  42  La.  Ann.  428;  s.  c, 
7  So.  Rep.  599. 

The  tax  imposed  on  the  gross  receipts  of  foreign 
insurance  companies  by  Act  of  1886  is  not  a 
license  tax,  but  a  property  tax.    Id. 

A  tax  on  "  gross  receipts  "  is  not  a  tax  on  the 
"  capital  "  or  "  capital  stock  "  of  the  corporation; 
it  is  an   "  income  tax."    Id.] 

Art.  2.30.  *  *  *  * 

There  shall  also  be  exempt  from  parochial 
and  municipal  taxation  for  a  period  of  ten 
years  from  the  first  day  of  January,  nine- 
teen hundred,  the  capital,  machinery  and 
other  property  employed  in  mining  opera- 
tions, and  in  the  manufacture  of  textile 
fabrics,  yarns,  rope,  cordage,  leather,  shoes, 
harness,  saddlery,  hats,  clothing,  flour,  ma- 
cliinery,  articles  of  tin.  copper  and  sheet 
iron,  agricultural  implements,  and  furniture 
and  other  articles  of  wood,  marble  or  stone; 
soap,  stationery,  inli  and  paper,  boat  build- 
ing and  fertilizers  and  chemicals;  Provided. 
That  not  less  than  five  hands  are  employed 
in  any  one  factory;  Provided,  That  nothing 
herein  contained  shall  affect  the  exemptions 
provided  for  by  existing  constitutional  pro- 
visions. 

There  shall  also  be  exempt  from  taxa- 
tion for  a  period  of  ten  years  from  the  date 
of   its   completion    anv    railroad   or   part  of 

37 


such  railroad  that  may  hereafter  be  con- 
structed and  completed  prior  to  January 
first,  nineteen  hundred  and  four;  Provided, 
That  when  aid  has  heretofore  been  voted 
by  any  parish,  ward,  or  municipality  to  any 
railroad  not  yet  constructed,  such  railroad 
shall  not  be  entitled  to  the  exemption  from 
taxation  herein  established,  unless  it  waives 
and  relinquishes  such  aid  or  consents  to  a 
resubmission  of  the  question  of  granting 
such  aid  to  a  vote  of  the  property  taxpayers 
of  the  parish,  ward  or  municipality,  which 
has  voted  the  same,  if  one-third  of  such 
property  taxpayers  petition  for  the  same 
within  six  months  after  the  adoption  of  this 
Constitution. 

And  provided  further.  That  this  exemp- 
tion shall  not  apply  to  double  trades, 
sidings,  switches,  depots  or  other  improve- 
ments or  betterments,  which  may  be  con- 
structed by  railroads  now  in  operation 
within  the  State,  other  than  extensions  or 
new  lines  constructed  by  such  railroads; 
nor  shall  the  exemption  hereinabove  granted 
apply  to  any  railroad  or  part  of  such  rail- 
road, the  construction  of  which  was  begun 
and  the  road-bed  of  which  was  substantially 
completed  at  the  date  of  the  adoption  of  this 
Constitution.  *  *  *  * 


[The     capital,     machinery     and     material      em- 
ployed in  the  manufacturing  of  cordage,  rope  and 
twine   is   exempt   from   taxation.       VV'aterburv   v 
Cordage  Co.,  42  La.  Ann.  723;  s.  c,  7  So.  Rpp.'783. 

Temporary  interruptions  in  operation  of  factory 
employed  in  manufacturing  articles  above  men- 
tioned do  not  sul)ject  property  and  machinery  em- 
ployed  therein  to  taxation.    Id. 

But  where  the  factory  is  leased,  and  the  object 
of  the  lease  is  to  prevent  the  manufacture  of  the 
articles  required  to  be  manufactured  to  exempt 
their  property  or  machinery  from  taxation,  the 
object  of  the  lease  is  in  direct  opposition  to  pro- 
vision of  above  article,  and  the  property  and 
machinery  become  subject  to  taxation.    Id. 

From  the  fact  that  above  article  exempts  for  a 
time  the  capital,  machinery  and  other  property 
employed  in  the  manufacture  of  machinery,  etc., 
it  does  not  follow  that  merchandise  and  cash 
assessed,  and  not  affirmatively  shown  to  have 
been  thus  employed,  enjoyed  the  immunitv.  Ivens 
V.  Tax  Collector,  42  La.  Ann.  1103;  s.  c.,  8  So. 
Rep.  399.  Exemption  laws  are  strictlv  interpreted. 
Id. 

Capital,  machinery  and  other  property  employed 
in  manufacturing  paper  boxes  are  not  exempt 
from  taxation  under  above  article.  Washburn  v. 
City,  43  La.  Ann.  226;  s.  c,   9  .So.  Rep.   37. 

So,  also,  capital  employed  in  manufacture  of 
"  shoe  uppers,"  Is  not  employed  in  the  manu- 
factiu'e  of  "  leather,"  nor  of  "  shoes,"  and  13 
not  exempt.  And  manufacture  of  wire  furniture 
is  not  exempt.  Gast  v.  Assessors,  43  La.  Ann. 
1104;  s.  c,  10  So.  Rep.   184. 

Articles  manufactured  in  this  State  for  agri- 
cultural purposes  when  more  than  five  hands  are 
employed,  are  exempt  from  taxation  under  above 
article.  But  articles  and  goods  not  manufactured 
here,  and  carried  in  stock  with  that  manufactured 
here,  are  subject  to  taxation.  Iron  Works  v. 
City.  44  La.  Ann.  .">4:  s.  c.   11  So.  Rep.  3. 

The  word  "  employed  "  means  invested.  State 
V.  Assessors,  46  La.  Ann.  859;  s.  c,  15  So.  Rep. 
384. 

The  exemption  from  taxes  of  certain  manufac- 
turing corporations  held  not  affected  by  the  fact 
that  the.v  also  engaged  in  business  distinct  from 
manufacturing.  Chemical  &  Fertilizing  Co.  v. 
Board  of  Assessors,  21  So.  Rep.  31.] 


8 


LOUISIANA. 


Corporations  and  corporate  rights  —  Const.,  Arts.  242,  262-267. 


Art.  242.  Corporations,  companies  or  asso- 
ciations organized  or  domiciled  out  of  the 
State,  but  doing  business  tliereiu.  may  be 
licensed  and  taxed  by  a  mode  different  from 
that  provided  for  home  corporations  or  com- 
panies; Provided,  Said  different  mode  of 
license  shall  be  uniform,  upon  a  gradiiated 
system,  and  said  different  mode  of  taxation 
shall  be  equal  and  uniform  as  to  all  such 
corporations,  companies  or  associations  that 
transact  the  same  kind  of  business. 

License  tax  upon  corporations.     Art.  229. 

[Above  article  has  no  reference  to  domestic 
corporations.  Citv  v.  R.  R.  Co.,  41  'La.  Ann.  519; 
s.  c.  7  So.  liep.  83.] 

Corporations  and  Corporate  Rights. 

Art.  202.  The  general  assembly  shall  not 
remit  the  forfeiture  of  the  charter  of  any 
corporation  now  existing,  nor  renew,  alter 
or  amend  the  same,  nor  pass  any  general  or 
special  law  for  the  benefit  of  such  corpora- 
tion, except  upon  the  condition  that  such 
corporation  shall  thereafter  hold  its  charter 
subject  to  the  provisions  of  this  Constitution. 

Duties  of  attorney-general  as  to  forfeiture.  R.  S., 
§  131.  Charter  forfeited  for  insolvency.  R.  S., 
§  6SS.  Proceedings  on  forfeiture,  R.  S.,  §  731, 
Same  by  violation  of  charter.    R.  C.   C,   art.  447. 

Art.  263.  The  exercise  of  the  police  power 
of  the  State  shall  never  be  abridged  nor  so 
construed  as  to  permit  corporations  to  con- 
duct their  business  in  such  manner  as  to 
infringe  the  equal  rights  of  individuals  or 
the  general  well-being  of  the  State. 

See  R.   C.   C,   art.  445. 

Art.  264.  No  domestic  or  foreign  corpora- 
tions shall  do  any  business  in  this  State 
without  having  one  or  more  known  places 
of  business  and  an  authorized  agent  or 
agents  in  the  State  upon  whom  process  may 
be  served. 

See  art.  273. 

Domicile  of  corporation.  R.  S.,  §  740.  To  file 
declaration  of  place  of  domicile.  Act  of  1890  at 
p.  27. 

[A  corporation  may  be  created  by  the  laws  of 
several  States  and  become  a  distinct  corporation 
la  each,  domiciled  therein,  and  may  be  sued  In 
such  cases  as  a  distinct  corporation  in  the  courts. 
Gulnauit  v.  R.  R,  Co.,  41  La.  Ann.  571;  s.  c,  6 
So.   Rei>.  KA). 

Where  a  suit  Is  brought  against  a  corporation  In 
the  courts  of  this  State,  and  affidavit  for  re- 
moval alleges  that  the  corporation  is  a  citizen  of 
another  State,  it  Is  insufficient  in  not  stating 
that  the  corporation  is  not  domiciled  in  Louis- 
iana.   Id. 

Our  Constitution  does  not  deny  to  citizens  of 
Louisiana  the  privilege  of  borrowing  money  from 
foreign  corporations,  nor  does  It  prohibit  such  cor- 
porations from  lending  money  to  our  citizens, 
provided  only  that  such  transactions  are  not  made 
in  the  course  of  business  carried  on  by  tlie  cor- 
porations In  the  State,  without  complying  with 
the  requirement  of  above  article.  Reeves  v. 
Harper,  43  La.  Ann.  516;  s.  c,  9  So.  Rep.  104. 


Foreign  companies  do  not,  in  appointing  a  board 
of  directors  to  act  as  their  agents,  localize  their 
business  any  more  than  those  companies  which 
manage  their  affairs  thi-ough  agencies  not  or- 
ganized into  boards.  Ins.  Co.  v.  .\ssessors,  44  La. 
Ann.  7(J(i;  s.  c,  11  So.   Rep.  91. 

A  foreign  corporation,  authorized  to  contract  In 
this  State,  nia.v  contract  according  to  its  laws, 
where  the  charter  contains  no  prohibition.  Fra- 
zier  v.  AVillcox,  4  Rob.  517. 

if  tlie  State  ciiooses  to  allow  foreign  corporations 
to  transact  business  in  their  corporate  name 
through  agents,  within  our  limits,  it  may  attach 
any  conditions  it  sees  fit  to  the  privilege.  State 
V.  Lathrop,   10  La.  Ann.  398. 

It  is  a  confusion  of  ideas  to  place  foreign  cor- 
porations on  the  same  footing  with  domestic,  or 
to  claim  for  them  the  personal  and  constitutional 
rights  of  citizens  of  the  several  States  of  the 
Union.    Id. 

The  legislature  may  prohibit  foreign  corporations 
from  contracting  in  the  State:  but  until  it  does, 
contracts  so  made  will  be  enforced.  Frazicr  v. 
Willcox,  supra.] 


Art.  265.  No  corporation  shall  engage  in 
any  business  other  than  that  expressly  au- 
thorized in  its  charter  or  incidental  thereto, 
nor  shall  it  take  or  hold  any  real  estate  for 
a  longer  period  than  ten  years,  except  such 
as  may  be  necessary  and  proper  for  its 
legitimate  business  or  purposes. 

Charter  to  contain  what.  R.  S..  §  685.  Trusts 
and   combinations   prohibited.    Act  of  1892,   at   p. 

28. 

[A  corporation  cannot  subscribe  for  stock  in 
another  company  whose  objects  are  foreign  to  its 
own.  Steamship  Co.  v.  Dry  Dock  Co.,  28  La.  Ann. 
173. 

The  Investment  of  tlie  profits  of  insurance  com- 
panies in  loans  secured  by  mortgage  cannot  be 
considered  as  banliing  business,  and  is  not  pro- 
hibited by  law.  Life  Assn.  v.  Levy,  33  La.  Ann. 
1203. 

A  corporation  possesses  only  those  powers  which 
its  charter  confers,  either  expressly  or  as  in- 
cidental to  its  existence.  Bank  v.  Nav.  Co.,  3 
La.    Ann    294. 

The  construction  put  upon  a  charter  by  acts  ol 
stockholders  themselves,  where  there  is  a  doubt, 
is  a  safe  rule  of  Interpretation,  and  will  be  fol- 
lowed, as  in  the  case  of  conventional  obligation. 
Purton  v.  Carrollton  Co.,  3  La.  Ann.  19;  Bank  v. 
Guice,    2  id.    249;    Bermudez   v.    Bank,   7    id.    62. 

If  possible,  every  clause  of  a  charter  should 
be  construed  so  as  to  harmonize  with  every  other 
clause  thereof.  Mcintosh  v.  Merchants'  Co.,  9  La. 
Ann.    403. 

The  act  of  Incorporation  of  a  corporation  limited 
must  show  the  limitation.  Lehman  v.  Knapp, 
20  So.   Rep.  674.] 


Art.  266.  No  corporation  shall  issue  stock 
or  bonds,  except  for  labor  done  or  money  or 
property  actually  received,  and  all  fictitious 
issues  of  stock  shall  be  void,  and  any  cor- 
poration issuing  such  fictitious  stock  shall 
forfeit  its  charter. 

Power  to  issue  bonds  secured  by  mortgage. 
R.  S.,  §  692. 

Art.  207.  The  stock  shall  neither  be  in- 
creased nor  decreased,  except  in  pursuance 
of  general  laws,  nor  without  consent  of  per- 
sons holding  the  larger  amount  in  value  of 
the   stock,    first   obtained    at   a   meeting  of 


LOUISIANA. 


Corporations  and  corporate  rights  —  Const.,  Arts.  268-275. 


stockholders  to  be  held  after  thirty  days' 
notice  given  in  pursuance  of  law. 

Increase  or  decrease  of  capital  stock.  See  Act 
No.  11,  at  p.  30. 

Art.  26S.  The  term  corporation,  as  used  in 
this  Constitution,  shall  be  construed  to  in- 
clude all  joint-stock  companies  or  associa- 
tions having  any  power  or  privilege  not 
possessed  by  individuals  or  partnerships. 

"  Corporation  "  defined.  R.  C.  C,  art.  427. 
Political  and  private  corporation  defined.  R.  C. 
C,  art.  429.  Civil  and  religious  corporation  de- 
fined.   R.   C.  C,  art.  431. 

[Companies  whose  stock  is  owned  by  private  In- 
dividuals are  essentially  private  corporations. 
State  V.  Gas  Co.,  2  Rob.  529.] 

Art.  269.  It  shall  be  a  crime,  the  punish- 
ment of  which  shall  be  prescribed  by  law, 
for  any  president,  director,  manager,  cashier, 
or  other  officer  or  owner  of  any  private  or 
public  bank  or  banking  institution  or  other 
corporation  accepting  deposits  or  loans  to  as- 
sent to  the  reception  of  deposits,  or  the  cre- 
ation of  debts  by  such  banking  institutions, 
after  he  shall  have  had  knowledge  of  the 
fact  that  it  is  insolvent  or  in  failing  circum- 
starfces;  any  such  officer,  agent  or  manager, 
shall  be  individually  responsible  for  such  de- 
posits so  received  and  all  such  debts  so 
created  with  his  assent. 

See  R.  C.  C,  art.  439. 


Art.  270.  The  general  assembly  shall  have 
power  to  enact  general  laws  authorizing  the 
parochial,  Avard  and  municipal  authorities  of 
the  State,  by  a  vote  of  the  majority  of  the 
property  ta:s:payers  in  number  entitled  to 
vote  under  the  provisions  of  this  Constitu- 
tion and  in  value,  to  levy  special  taxes  in 
aid  of  pulilic  improvements  or  railway  en- 
terprises: Provided.  That  such  tax  shall  not 
exceed  the  rate  of  five  mills  per  annum,  nor 
extend  for  a  longer  period  than  ten  years; 
And  provided  further,  That  no  taxpayer 
shall  be  permitted  to  vote  at  such  election 
unless  he  shall  have  been  assessed  in  the 
parish,  ward  or  municipality  to  be  affected 
for  property  the  year  previous. 

Art.  271.  Any  railroad  corporation  or  as- 
sociation organized  for  the  pun:)ose  shall 
have  the  right  to  construct  and  operate  a 
railroad  between  any  points  within  this  State, 
and  connect  at  the  State  line  vrith  railroads 
of  other  States.  Every  railroad  company 
shall  have  the  right  with  its  road  to  intersect, 
connect  with  or  cross  any  other  railroad, 
and  shall  receive  and  transport  each  other's 


passengers,    tonnage    and    cars,     loaded    or 
empty,  without  delay  or  discrimination. 

See  art.  167.  Consolidation  of  railroads.  Art. 
274.  Streets  not  to  be  used  without  consent  of 
authorities.    R.   S.,    §   689. 

[The  legislature  has  power  to  authorize  build- 
ing of  a  railroad  on  a  street  of  a  city,  and  may 
directly  exercise  the  power  or  devolve  it  upon 
the  municipal  authorities.  Harrison  v.  Ry.  Co., 
34  La.   Ann.  462.] 

Art.  272.  Railways  heretofore  constructed, 
or  that  may  hereafter  be  constructed  in  this 
State,  are  hereby  declared  public  highways, 
and  railroad  companies  common  carriers. 

Art.  273.  Every  railroad  or  other  corpora- 
tion, organized  or  doing  business  in  this 
State,  under  the  laws  or  authority  thereof, 
shall  have  and  maintain  a.  public  office  or 
place  in  this  State  for  the  transaction  of  its 
Inisiness.  where  transfers  of  stock  shall  be 
made,  and  where  shall  be  kept  for  public 
inspection  books  in  which  shall  be  recorded 
the  amount  of  capital  stock  subscribed,  the 
names  of  owners  of  stock,  the  amounts 
owned  by  them  respestively,  the  amount  of 
stock  paid,  and  by  whom,  the  transfers  of 
said  stock,  with  the  date  of  transfer,  the 
amount  of  its  assets  and  liabilities,  and  the 
names  and  places  of  residence  of  its  officers. 

See-  art.   264,  and  cross-references. 

Art.  274.  If  any  railroad  company,  organ- 
ized under  the  laws  of  this  State,  shall  con- 
solidate, by  sale  or  otherwise,  with  any 
railroad  company  organized  under  the  laws 
of  any  other  State  or  of  the  United  States, 
the  same  shall  not  thereby  become  a  foreign 
corporation,  but  the  courts  of  this  State  shall 
retain  jurisdiction  in  all  matters  which  may 
arise,  as  if  said  consolidation  had  not  taken 
place.  In  no  case  shall  any  one  consolidation 
take  place  except  upon  public  notice  of  at 
least  sixty  days  to  all  stoclv;holders,  in  such 
manner  as  may  be  provided  by  law. 

See  R.   S.,    §   684,  subd.   2,    and   cross-references. 

Consolidation     of  manufacturing     corporations. 

Act    of   1874,    at   p.  2.5.     Combinations   and   trusts 

prohibited.     Act  of  1892,  p.  28. 

Art.  275.  General  laws  shall  be  enacted 
providing  for  the  i-reation  of  private  corpo- 
rations, and  shall  therein  provide  fully  for 
the  adeqtiate  protection  of  the  public  and 
of  the  individual  stockholder. 

Special  laws  prohibited.  Arts.  48-50.  Formation 
of  corporations.  R.  S.,  §  683.  Same.  Act  of  1882, 
at  p.  26.  Formation  of  corporation  for  certain 
purposes.     Act   of   1888,   at   p.   26. 


10 


LOUISIANA. 


Attorney-general;  formation  of  corporations  —  R.  S.,  §§  131,  683. 


REVISED  STATUTES  OF  LOUISIAE-A- 1870. 


Attorney-General. 

Sec.  131.  Duties  of,   regarding   corporations. 

§  131.  It  shall  be  the  duty  of  the  attorney- 
general  *  *  *  to  Institute  proceedings 
against  all  banlciug  or  other  corporations 
chartered  bv  the  State,  and  situated  in  the 
first  judicial  district;  to  obtain  the  forfeiture 
of  their  charters  in  cases  of  violation  of 
the  same,  where  no  provision  has  been 
made  by  law  for  the  forfeiture  of  their 
charter;    *    ♦    * 

See  Const.,  art.  262,  and  cross-references. 

[The  writ  of  quo  warranto  Is  only  Issued  In 
relation  to  the  offices  of  corporations.  Terry  v. 
Stauffer,    17   La.    Ann.    306. 

No  one  but  the  attorney-general  can  urge  the 
forfeiture  of  a  bank's  charter.  Riggin  v.  Bank, 
18  La.   Ann.   677. 

Before  a  suit  for  forfeiture  of  charter  of  any 
bank  located  in  New  Orleans  can  be  entertained, 
it  is  indispensable  that  a  petition  praying  for  the 
forfeiture  shall  be  presented  by  the  attorney- 
general,  or  by  the  district  attorney,  or  by  them 
both.    State  v.   Bank,  31  La.  Ann.  836. 

A  corporate  charter  can  be  forfeited  only  at  the 
Instance  of  the  State.  In  re  Louisiana  Savings 
Bank,  35  La.   Ann.   196. 

Power  to  enforce  forfeiture  of  charter  is  posses- 
sed by  the  State  alone.  Bank  v.  Dawson,  13  La. 
606. 

Neither  the  forfeiture,  until  judicially  decreed, 
nor  the  cause,  can  be  inquired  into  collaterally. 
Id. 

A  charter  may  be  forfeited  for  misuse  or  abuse, 
but  such  misuse  or  abuse  must  be  first  iudicially 
ascertained.    State  v.  Gas  Co.,  2  Rob.  529. 

President  and  directors,  without  stockholders' 
consent,  cannot  confess  a  forfeiture.  But  where, 
in  a  suit  by  the  State,  their  answer  does  not 
deny  the  grounds  of  forfeiture  alleged,  they  must 
be  taken  as  true,  and  a  forfeiture  decreed.  State 
V.   Atchafalaya   Co.,   5   Rob.    63. 

A  forfeiture  cannot  be  declared  by  the  legisla- 
ture; it  Is  a  matter  of  judicial  Inquiry  and  must 
be  decreed  by  a  court.  Perry  v.  Clinton  Co.,  11 
Rob.  404.] 

Corporations. 

Sec.  683.  Manner   of    forming    corporations;    pur- 
poses for  which  may  be  formed. 

684.  Duration   and   general   powers. 

685.  Every  charter  shall  contain  what. 
080.  Charter  to  be  recorded  and  published. 

687.  Charter,  how  amended  or  dissolved. 

688.  Charter  forfeited  for  insolvency. 

689.  Streets  not  to  be  used   without  consent 

of   authorities. 

690.  Personal  liability  of  stockholders. 

691.  Duty  of  corporations  whose  works  cross 

public   roads   or   navigable   streams. 

692.  Power    to    borrow    money    by    Issue    of 

bonds  secured  by  mortgage. 
69.3^  Morttrane   to   l)o   bindini;   when   recorded; 

right  may  be  granted  to  convert  bonds 

Into  capital  stock. 
604.  Copies    of    books    and    records    shall    be 

received    in    evidence. 
695.  Governor    and    mayor    to    cast    vote    of 

stock  owned  by  State  or  city  of  New 

Orleans. 
725.  When  a  corporation  may  be  sued  In  case 

of  trespass. 


Sec.  731.  "When  charter  forfeited,  proceedings 
against  corporation;  liquidator  to  be 
appointed. 

733.  Property    of    corporations    shall    be    as- 

sessed where. 

734.  Capital  stock  shall  be  assessed  where. 

735.  Foreign    corporations,    provisions    appli- 

cable   to. 

736.  Statement   by    corporation   to    assessors. 

737.  Entry  of  corporations  on  assessment-roll. 

738.  Taxes   a   lieu. 

740.  Domicile  of  corporation  must  be  In  this 

State. 

741.  Meetings,    elections,    etc.,   to   be   held   at 

place  of  domicile. 

§  683.  (As  amended  April  10,  18S0..»  It 
shall  be  lawful  for  any  number  of  persons, 
not  less  than  six,  on  compliance  with  the 
provisions  following,  to  form  themselves 
into,  and  constitute  a  corporation  for  the  fol- 
lowing purposes,  to  wit:  For  the  construc- 
tion, working  and  maintenance  of  railroads, 
canals,  plankroads,  bridges,  fei-ries  and  other 
works  of  public  improvement,  whether 
within  or  without  the  limits  of  this  State;  to 
effect  fire,  marine,  river  and  life  insurance; 
to  carry  on  manufactories  of  cotton,  woolen, 
linen,  silk  and  hempen  cloths  and  cordage; 
to  construct  and  caiTy  on  works  to  supply 
cities  or  towns  with  gas  or  water;  to  com- 
press cotton;  to  construct  and  carry  on  iron, 
brass  and  copper  foundries;  to  construct 
and  maintain  dry  docks  or  floating  docks  for 
the  building  or  repairing  of  ships  and  other 
vessels;  to  manufacture  iron,  copper,  lead  or 
other  metals,  earthenware  or  stoneware,  en- 
gines, cotton  gins,  machinery,  paper,  gun- 
powder, agricultvu'al  implements;  to  establish 
companies  for  refining  sugar,  and  for  soa 
navigation  by  steam;  to  create  lines  of  tele- 
graph, and  to  establish  chemical  laboratories 
and  manufactures  of  all  kinds;  to  open  and 
work  mines;  to  construct  and  maintain 
docks,  steamships  and  other  vehicles  for 
the  transportation  of  freight  and  passengers; 
for  constructing  and  maintaining  works  of 
drainage,  sewerage  and  land  reclamation; 
and  for  the  development  of  the  agricultural 
resources  of  the  State,  and  for  the  promo- 
tion of  immigration,  and  generally  all  works 
of  public  utility  and  advantage.  No  such 
corporation  shall  engage  in  mercantile  or  in 
commission,  brokerage,  stock  jobbing,  ex- 
change or  banking  business  of  any  kind. 

See  Const.,  art.  275,  and  cross-references.  Use 
of  corporations.  R.  C.  C,  art.  428.  Corporations 
defined.    Const.,  art.  268. 

[Corporations  are  distinct  from  persons  com- 
posing them,  yet  the  latter  have  rights  which 
they  mav  protect  in  courts.  Knabe  v.  Ternot, 
16  La.   Ann.   1.5. 

Ownership  of  stock  does  not  give  stockholders 
any  legal  estate  in  corporate  property.  Morgan 
v.  R.  R.  Co.,  1  Woods  (U.  S.),  15;  Sala  v.  New 
Orleans,  2  Id.   189. 


LOUISIANA. 


11 


Corporate  powers  —  R.  S.,  §  684. 


The  property  of  an  extinct  corporation  belongs 
to  the  Individual  members.  Burke  v.  Wall,  29 
La.    Ann.    39. 

A  corporation  may  be  formed  for  the  business  of 
establishing  a  wharf-boat  and  steam  elevator  at 
a  river  banl^.      filon  v.    Breard,   35   La.    Ann.   875. 

Parol  testimony  is  inadmissible  to  show  any- 
thing against  or  beyond  what  is  contained  in 
an  act  of  incorporation.  Packett  Co.  v.  Brown, 
36   La   Ann.    13S. 

Franchises  and  corporate  rights  of  a  corporation 
and  the  means  vested  in  it  for  the  purpose  of 
its  existence,  cannot  bo  granted  away  and  trans- 
ferred by  any  act  of  its  own  or  by  any  adverse 
proceeding,  unless  with  the  consent  of  the  origi- 
nal grantor,  formally  expressed.  R.  B.  Co.  v. 
Delamore,    34   La.   Ann.    1225. 

.A.nd  in  absence  of  any  provision  to  that  effect, 
either  in  charter  or  the  general  law,  a  franchise 
cannot  be  levied   UDon   for  debts.     Id. 

Corporations  created  under  the  general  stat- 
utes of  the  State  (sections  683  et  seq.)  have  no 
power  to  create  a  corporation  distinct  and  inde- 
pendent from  themselves.  Ins.  Co.  v.  Harbor 
Co.,  37  La.  Ann.  233. 

Private  corporations  must  be  authorized  by  the 
legislature  or  established  according  to  law.  Wil- 
liams V.  Masons,  38  La.  Ann.  620. 

"Whether  they  have  power  to  own  stock  In  an- 
other corporation  must  be  determined  by  charter. 
Kern  v.  Day.  -15  La.  Ann.  71;  s.  c,  12  So.  Rep.  6. 

Incorporated  trading  companies  are  not  part- 
nerships. The  association  of  shareholders  does 
not  constitute  a  partnership  according  to  the 
custom  of  merchants,  nor  within  the  principles 
of  law  established  respecting  joint  traders.  Pur- 
ton  V.  Carrollton  Co..  3  La.  Ann.  19. 

Stockholders  are  like  partners;  when  one  fails 
to  furnish  his  quota  of  stock  and  it  is  furnished 
by  the  others,  he  is  chargeable  for  the  advance 
M'ith  interest.     Bank  v.   New  Orleans,  11  La.  217. 

The  material  distinction  between  a  partnership 
and  a  corporation  is  found  in  the  power  of  the 
latter  to  enact  by-laws,  the  limited  responsibility 
of  the  stockholders,  and  their  rights,  by  trans- 
fer of  shares,  to  introduce  new  partners  into 
the  association.      Purton   v.    Carrolton   Co.,    supra. 

The  acts  of  corporate  officers  are  admissible  in 
evidence  to  prove  the  acceptance  of  an  amended 
charter  by  an  existing  corporation.  A  written 
instrument  or  vote  of  acceptance  on  corporate 
books  is  not  indispensable.  It  may  be  Inferred 
from  other  facts.  Palfrev  v.  Paulding,  7  La. 
Ann.    363. 

Same  person  may  fill  position  of  president  of 
two  distinct  corporations,  and  such  Identity  does 
not,  of  itself,  invalidate  dealings  between  the  two 
corporations.  Leathers  v.  Janney,  41  La.  Ann. 
1120:  s.  c,  6  So.  Rep.  884. 

Proof  of  agency  for  a  corporation  may  be  made 
by  parol,  when  not  objected  to.  Marlatt  v.  Levee, 
etc.,  Co.,  10  La.  586. 

In  general,  corporations  can  contract  only  in 
writing  through  their  official  agent,  though  their 
assent  to  certain  contracts  may  sometimes  be  in- 
ferred from  silence  or  acquiescence.  Courtnay 
V.  Ins.   Co.,  12  La.  233.] 


§  684.  (As  amended  April  10,  1880.)  "  Said 
corporation  stiall  have  power  and  authority, 
first,  to  have  and  enjoy  succession  by  tlieir 
corporate  name  for  the  period  expressed  in 
their  act  of  incorporation,  not  exceeding 
ninety-nine  years; 

See  R.  C.  C.  art.  427.  Corporate  name  must 
be  adopted.  R.  C.  C,  art.  432.  Right  of  succes- 
sion. Id.;  art.  434.  See  corporate  powers  enu- 
merated in  R.  C.  C,  art.  433. 

[The  right  of  succession  is  inherent  to  the  na- 
ture of  a  corporation,  and  they  transmit  their 
successions  and  their  rights  of  property.  Wil- 
liams V.  Masons,  38  La.   Ann.  620.] 


Second,  To  contract,  sue  and  be  sued,  in 
their  corporate  name; 

Consolidation  of  corporations,  effect  of.  Const., 
art.  274.  Duties  of  attorney-general  regarding 
corporation.  R.  S.,  §  131.  Copies  of  records  as 
evidence.  Id.,  §  694.  When  corporation  may  be 
sued  for  trespass.  Id.,  §  723.  Proceedings  when 
charter  forfeited.  Id.,  §  731.  To  sue  and  be 
sued  by  corporate  name.  R.  C.  C,  art.  432.  Cor- 
porate powers,  duties  of  officers.  Id.,  art.  433,  439. 
May  not  bring  an  action  for  assault.  Id.,  art. 
442.  Corporation  cannot  appear  in  court,  when. 
Id.,  art.  446.  To  sue  in  corporate  name.  C.  P., 
art.  112.  Same.  Id.,  art.  119.  Petition,  how 
served.  Id.,  arts.  191-202.  Quo  warranto  pro- 
ceeding.?. Id.,  arts.  867-873.  Actions  before  jus- 
tices of  the  peace.  Id.,  art.  1069.  See  Act  of 
1888,  at  p.  27. 

[A  corporation  not  vet  in  existence  cannot  incur 
liabilitv,  although  the  services  rendered  were  to 
organize  and  put  the  same  in  successful  opera- 
tion. Marchand  v.  L.  &  P.  Assn.,  26  La.  Ann. 
389.  .      , 

A  private  corporation  is  a  person  in  law.  quite 
as  responsible  for  its  contracts  as  natural  per- 
sons are.  Schleider  v.  Dielman,  44  La.  Ann.  462; 
s.  c,  10  So.  Rep.  934.  ,    ^       ^^  , 

Having  onlv  the  powers  conferred  by  their 
charters,  corporations  are  not  bound  by  contracts 
made  by  those  not  authorized  to  represent  them. 
Seibrecht  v.   New  Orleans,   12  La.  Ann.  496. 

They  have  no  higher  rights  than  citizens,  un- 
less specially  granted,  and  are  especially  bound 
by  the  acts  of  their  agents,  as  they  can  be  bound 
iii  no  other  wav.  Municipality  v.  Cotton  Press, 
18  La.   Ann.   246.  .        ,,  ,         ,     . 

So  they  are  bound  by  their  attorney's  admis- 
sions of  record.     Id. 

Their  privileges  and  authority  are  commensu- 
rate with  their  duties.  State  v.  Wilson,  6  U.  S. 
ISO 

A  corporation  may  sue  for  an  infringement  of 
its  trade-mark.     Oil  Co.  v.  Scott,  33  La.  Ann.  946. 

And  mav  sue  on  a  bond  given  in  favor  of  its 
president  'and  directors  to  guarantee  the  faith- 
ful performance  of  the  duties  of  an  officer  or 
agent.     Bank  v.  Mills,  28  La.   Ann.  736. 

t\nd  be  sued  for  injuries  inflicted  through  the 
negligence,  imprudence  and  want  of  skill  of  its 
servants.     Carmenty  v.  Gulf  Co.,  5  La.   Ann.    .03. 

It  may  be  made  responsible  for  the  acts  ot  a 
contractor  who  has  become  its  agent.  Boykin  v. 
Shaffer,  13  La.  Ann.  129.  ,       -  ,    „^^^.   =« 

A  corporation  mav  execiite  a  lawful  power  so 
injuriously  and  maliciously  as  to  justify  a  <?!aim 
for  damages.  But,  when  the  subject-matter  is 
within  its  corporate  powers,  the  presumption  is 
in  favor  of  the  legality  and  good  faith  of  its  ac- 
tion; and  the  complainant  must  make  out  a  clear 
case   of   willful   oppression.     Reynolds   v.    bhreve- 

^  A  'corporation  is  "not  liable  ex  delicto,  unless 
the  act  complained  of  is  unlawful,  or  improperly 
or  wantonly  executed.  The  rule  applies  with 
neculiar  force  to  acts  of  non-feasance,  within 
corporate  discretion,  and  involving  an  expenditure 
of  corporate  funds.     Bennett  v.  New  Orleans,  14 

A  corporation  is  civilly  responsible  for  damages 
caused  by  acts  of  its  agents,  done  by  its  com- 
mands, iii  a  matter  within  the  scope  of  its  cor- 
porate objects.     Rabassa  v.   Nav.   Co.,   5  La.   4M. 

It  is  responsible  for  every  injurious  act,  except 
where  specially  exempted  by  law.  Id.;  Mabire 
V.   Canal  Bank,  11  id.  86. 

A  corporation  held  liable  for  the  sinking  of  a 
boat  bv  its  agents.  Marlatt  v.  Levee,  etc.,  Co.,  10 
La-  586.  ,.   ^.„^ 

There  is  no  distinction  as  to  liability  of  cor- 
porations and  natural  persons,  for  the  acts  and 
neglect  of  their  agents,  when  acting  within  scope 


12 


LOUISIANA. 


Corporate  powers  —  R.  S.,  §  t)84. 


of  their  employment.  Ware  v.  Barataria  Co.,  15 
La.  170. 

Whcrp  an  ascnt,  aotin?  under  directions  of  the 
corporation,  does  any  act  causing  damage,  the 
corporation  will  be  responsible.  Otherwise, 
whore  he  acts  of  his  own  free  will,  without  ref- 
erence to  his  functions  as  an  agent.  Ettlng  v. 
Bank,  7  Rob.  4r»'.>;  AYalling  v.  Shreveport,  5  La. 
.Ann.    660. 

A  bank  held  not  liable  for  an  unauthorized 
declaration  br  one  of  its  officers.  Etting  t. 
Bank,    7   Rob.   4.W. 

Corporators  cannot  sue  singly  for  the  corpora- 
tion. What  is  due  to  the  corporation  is  not  due 
to  the  individuals  composing  it.  Ross  v.  Crockett, 
14  La.  Ann.  811. 

A  nienilier  of  a  corporation,  who  is  a  creditor 
thereof,  has  same  right  as  any  other  creditor  to 
sue  it  and  attach  its  property.  Life  Assn.  v. 
Levy.  33  La.   Ann.   1203. 

A  private  statute  creating  a  private  corporation 
Is  not  such  a  law  as  a  court  will  take  judicial 
cognizance  of;  it  must  be  offered  in  evidence. 
Mandere  v.  Sav.  Inst.,  28  La.  Ann.  415.  Parol 
evidence  when  received  to  prove  the  charter  of 
a  corporation  will  be  considered.  Monaghan  v. 
Hall.  18  La.  Ann.  310. 

An  exception  that  a  petition  of  the  corporation 
does  not  show  that  suit  was  authorized,  would 
be  overruled  If  affidavit  accompanying  petition 
discloses  name  of  vice-president  of  the  company, 
and  affirms  the  truth  of  its  allegations,  the  neces- 
sary inference  being  that  the  suit  was  apparently 
authorized.  Lacaze  v.  Creditors,  46  La.  Ann.  237; 
s.   c.   14   So.   Rep.   601. 

Comi)laint  in  an  action  against  a  corporation 
and  its  officer  for  personal  injuries  held  insuffi- 
cient as  against  the  officers.  Hernv  v.  Bracken- 
ridge  Lumber  Co.,  20  So.  Rep.  221.] 

Third,  To  make  and  to  use  a  corporate  seal; 

[Use  of  seal  not  necessarv  In  appointment  of 
agents.     Fleckner  v.  Bank,  18  Wheat.   (U.   S.)  338. 

The  seal  itself  is  prima  facie  evidence  that  It 
was  affixed  by  proper  authority,  but  the  court 
may  look  beyond  the  seal,  affixed  to  a  deed, 
signed  by  president  and  secretary,  and  If  shown 
to  have  been  affixed  without  authority  of  di- 
rectors, the  deed  will  be  declared  void.  Adams 
T.    Creditors,    14   La.    Aftri. 

Payment  to  a  bank,  like  that  to  an  Individual, 
may  be  proved  by  parol  or  otherwise,  without 
the  corporate  seal.  Mlllaudon  v.  Colla,  15  La. 
213.] 

Fourth,  To  hold,  receive,  purchase  and 
convey,  under  thoir  con^orate  name,  prop- 
erty, both  real  and  personal; 

See  R.  C.  C,  art.  433;  Id.,  art.  436. 

[Corporations  may  hold  real  estate  and  receive 
legacies  and  donations.  Williams  v.  Masons.  38 
La.  Ann.  620. 

If  a  corporation  acquire  property,  even  In  a 
manner  prohibited  by  law,  the  property  Is  not 
liable  for  debts  of  the  vendor.  Edwards  y.  Fair- 
banks, 27  La.  Ann.   4.50. 

A  corporation  authorized  to  sell  Its  property  Is 
In  general  authorized  to  mortgage  It.  In  re  Me- 
chanics'  Soc,   31    La.    Ann.    627. 

A  stockholder  has  an  interest  to  prevent  sale 
of  corporate  property  by  persons  having  no  legal 
power   to  sell.      State  v.    Judge,'  31    La.    Ann.    823. 

In  absence  of  charter  provision,  no  law  prevents 
a  corporation  from  selling  all  or  any  part  of  Its 
property.  Leathers  v.  Janney,  41  La.  Ann.  1120; 
8.  c,  6  So.  Rep.  S84. 

When  one  corporation  sells  property  to  another 
for  a  fixed  price,  to  be  paid  In  stock  of  the  latter 
to  be  delivered  to  the  former  through  its  desig- 
nated oflicer.  delivery  of  the  certificate  of  stock 
to  such  officer  or  to  another  by  his  order,  oper- 
ates a  discliarge  for  the  price.     Id. 

AVhether  a  corporation  has  a  right  to  own  stock 
in  another  corporation  Is  determined  by  its 
charter.  Kern  v.  Day,  45  La.  Ann.  71:  s.  c.  12 
So.  Rep.  6. 


Corporations  have,  by  our  laws,  same  capacity 
as  natural  persons  to  take  by  devise.  Milne  v. 
.Milne,   17  La.   46. 

A  bank  may  take  a  crop  of  cotton  as  security 
for  a  loan  and  sell  it  to  reimburse  the  loan.  De- 
loadi  V.  .Tones,  IS  La.  447. 

A  corporation  may,  in  course  of  its  legitimate 
business,  make  a  promissory  note,  though  without 
express  authority  of  its  charter.  Erode  v.  Ins. 
Co.,  8  Rob.  244;  Bank  v.  Xav.  Co.,  3  La.  Auu. 
294.] 


Fifth,  To  name  and  to  appoint  such  man- 
agers, directors  and  officers  as  their  interest 
and  convenience  may  require; 

Corporation  to  appoint  officers.  R.  C.  C,  art. 
438.  Election  of  officers.  R.  S.,  §  741.  Usurpa- 
tion of  office  in  corporation.  C.  P.,  art.  869. 
Court  cannot  iuquire  Into  election  of  officers, 
when.  C.  P.,  art.  873.  Directors,  see  R.  C.  C, 
arts.  438,  439,  notes. 

[Corporate  seal  not  necessary  In  appointment 
of  agents.  Fleckner  v.  Bank,  18  Wheat.  (U.  S.) 
338. 

President  of  a  railroad  company  who  superin- 
tends the  putting  up  of  a  building  for  the  com- 
pany cannot  claim  compensation  therefor.  Levisee 
V.   R.   R.   Co.,  27  La.   Ann.  641. 

Officers  who  are  not  stockholders  can  only  re- 
ceive their  salary  after  payment  of  corporate 
debts.  Cochran  v.  Dry  Dock  Co.,  30  La.  Ann. 
1366. 

A  bank  is  liable  in  damages  for  refusal,  by  its 
directors,  to  admit  one  entitled  to  subscribe  for 
its  stock  to  do  so.  Bank  v.  McDonough,  5  La. 
07.  A  party  so  aggrieved  may  resort  to  an  ac- 
tion for  damages,  which  will  be  allowed  for  ca- 
pricious or  improper  conduct  of  the  board,  but 
not  an  honest  error.     Walden  v.  Bank,  6  La.  248. 

A  stockholder  who  sells  his  stock,  but  is  not 
released  from  his  subscription  is  bound  for  In- 
stallments.    Ins.   Co.  V.   Gordon,   8   La.   176. 

If,  after  a  sale  of  stock,  an  installment,  pre- 
viously called  In,  becomes  due,  the  vendor,  who 
has  been  compelled  to  pay  it,  must  be  reim- 
bursed by  the  vendee.  Gordon  v.  Parker,  10 
La.  56. 

A  party  will  be  relieved  from  fraud  and  decep- 
tion, in  depriving  him  of  the  right  of  subscrip- 
tion for  shares  in  a  corporation.  Lallande  v.  Ins. 
Co.,  0  La.  326. 

A  stipulation  that  a  vendor  shall  transfer  his 
stock  on  the  books  of  a  bank  means  only  that 
he  shall  cause  his  vendee  to  be  recognized  as  a 
stockholder  on  its  books;  the  contract  is  com- 
plete when  the  act  of  sale  is  made  under  the 
authority,  and  the  application  to  transfer  ap- 
proved by  a  majority  of  the  directors;  and  the 
vendee  is  bound  to  pay  the  bank  an  amount  due 
on  the  stock,  and  assumed  by  him.  Bank  v. 
Desban,  2  Rob.  486. 

A  purchaser  of  stock  cannot  annul  the  sale 
without  putting  his  vendor  In  default,  after  quali- 
fying himself  to  receive  that  transfer  by  comply- 
ing with  regulations  prescribed  for  such  trans- 
fer. .Tones  v.  Sidle,  5  Rob.  65.  Measure  of  lia- 
bility for  refusal  to  allow  a  transfer  of  stock, 
since  depreciated,  is  the  amount  of  the  deprecia- 
tion at  time  of  trial.     Byrne  v.   Bank,  0  Rob.  433. 

When  the  State  is  a  stockholder  it  has  the  same 
rights  as  other  stockholders,  and  no  more.  State 
V.  Bank,  6  La.  750.  Where  charter  provides  for 
forfeiture  of  stock  for  non-payment  of  install- 
ments, such  forfeiture  is  optional  with  the  cor- 
poration.    Gulf  Co.  v.  Viavant,  6  La.  Ann.   305. 

A  subscriber  cannot  take  advantage  of  informal- 
ities In  his  subscription,  unless  in  case  of  fraud 
or  error.     Id. 

Where  subscription  is  to  be  paid  in  Installments, 
obligation  to  pay  same  is  suspended  until  calls 
are  made.  Purton  v.  Carrollton  Co.,  3  La.  Ann. 
19. 

AVhere  stock  is  Issued  in  contravention  of  char- 
ter, a  purchaser  cannot  set  up  such  violation  as 


LOUISIAXA. 


13 


Charter  of  incorporation  —  R.  S.,  §  685. 


a  flefense.     Caual  Bank  v.   Holland,   5   La.   Ann. 
363. 

Where  not  more  than  two  calls  are  to  be  made 
in  any  stiecessive  twelve  months,  the  period  is  to 
be  oaleulated  from  date  of  first  call,  so  that  three 
calls  may  be  made  in  thirteen  successive  months, 
provided  but  four  bo  made  in  two  years.  Dink- 
grnvo  V.   Vioksburg  Co.,   10  La.   Ann.   514. 

Parol  declarations  of  officers  of  a  company  at 
time  of  subscription  cannot  invalidate  it,  unless 
they  establish  fraud  on  part  of  company,  induc- 
ing error  on  part  of  subscriber.  Vicksburg  Co. 
V.   McKean,   12  La.   Ann.   6.38. 

The  charter  and  the  subscription  constitute  a 
contract  between  the  corporation  and  its  stock- 
holders. By  this  contract  their  mutual  rights  and 
obligations  are  fixed,  and  directors  have  no  power 
to  change  it  without  stockholders'  consent. 
Stark  V.   Burke,  0  La.   Ann.  341. 

The  act  of  incorporation  of  a  corporation  limited 
must  show  the  limitation.  Lehman  v.  Knapp,  20 
So.  Rep.  674.] 

Sixth,  To  make  and  establish  such  "by-laws 
for  the  proper  management  and  regulation 
of  the  affairs  of  the  coi-poration  as  may  be 
necessary  and  proper; 

Regulations  of  corporation  binding  on  its  mem- 
bers.    R.  C.  C,  art.  445. 

And  any  corporation  established  for  drain- 
age, .sewerage  and  land  reclamation  may,  by 
contract  witli  the  owner  of  real  property, 
duly  recorded,  have  a  privilege  on  said  prop- 
erty for  the  price  and  value  of  the  work  doiie 
and  facilities  furnished." 

§  GS.">.  Evei-y  charter  of  incorporation  shall 
contain,  first,  the  name  and  title  of  the  cor- 
poration, and  tlie  place  chosen  for  its  domi- 
cile: second,  a  description  of  the  purposes  for 
which  it  is  established,  the  nature  of  the 
business  to  be  carried  on,  and  the  designa- 
tion of  the  officer  on  whom  cititation  may 
be  served;  third,  the  amount  of  the  capital 
stock,  the  number  of  shares,  the  amount  of 
each  share  and  the  time  when  and  the  man- 
ner in  which  payment  on  stock  subscribed 
shall  be  made:  fourth,  the  mode  in  which 
the  elections  of  directoi's  or  managers  sliall 
be  conducted:  fifth,  the  mode  of  liquidation 
at  the  termination   of  the  charter. 

Not  to  engage  in  any  business  other  than  that 
authorized  in  charter.  Const.,  art.  265.  See  R. 
S.,  ?§  686-688.  Charter,  when  forfefted.  R.  S., 
5  731.  Domicile  of  corporation.  Id.,  §  740.  Meet- 
ing and  election  of  directors.  Id.,  §  741.  Name  to 
be  adopted.  R.  C.  C,  art.  432.  Service  of  cita- 
tion.   C.   r.,  art.   191. 

[A  corpnrntion  cannot  subscribe  for  stock  in  an- 
other company,  foreign  to  the  object  of  its  own 
charter.  Steamship  Co.  v.  Dry  Dock  Co.,  28  La. 
Ann.   173. 

If  subscription  books  are  closed  by  resolution 
of  directors,  no  subscription  can  lawfully  be  made 
thereafter.  State  v.  Gas  Light  Co.,  24  La.  Ann. 
318. 

Provision  in  charter  that  no  transfer  of  stock 
Shall  be  valid  until  entered  in  a  book  kept  for 
that  purpose,  is  intended  for  protection  of  the 
corporation,  nnd  of  third  persons  purchasing  with- 
out notice  of  any  previous  transfer,  but  as  be- 
tween owner  of  the  stock  and  his  vendee,  a 
transfer,  not  in  conformity  to  such  provisions,  is 
sufficient  to  pass  equitable  title  and  divest  the 
vendor  of  all  interest  in  the  stock.  Black  v. 
Zacharie,  3  How.  (U.  S.)  483. 


A  transfer  of  stock  regularly  made  on  the  books, 
and  recognized  by  the  directors,  estops  the  com- 
pany from  calling  on  the  transferors  for  any  as- 
sessment.     Ellison  v.  Schneider,  25  La.  Ann.  436. 

No  compensation  can  be  pleaded  by  a  bank, 
based  on  the  indebtedness  of  a  stockholder,  so 
as  to  prevent  the  transfer  of  his  stock  sold  under 
execution  by  the  sheriff.  Although  the  by-laws 
passed  by  directors  after  the  issuance  of  the 
stock  prohibit  a  transfer  when  the  stockholder 
is  indebted  to  the  bank.  Bryon  v.  Kendall,  22 
La.   Ann.  99. 

AVhen  the  intention  and  spirit  of  a  resolution 
to  open  subscriptions  for  stock  is  that  the  stock 
be  paid  for  within  the  delay  during  which  the 
subscription  is  open,  a  stockholder  who  has  noti- 
fied his  intention  to  subscribe  before  the  delay, 
and  made  a  tender  of  the  amount  after  the 
delay  allowed  for  subscription,  cannot  comiiel  the 
company  to  deliver  the  stock.  Hart  v.  R.  R. 
Co.,   30   La.    Ann.   758. 

Stock  of  defendant  in  a  private  corporation 
having  been  declared  forfeited,  he  cannot  be 
called  upon  by  the  creditors  for  any  unpaid  bal- 
ance.    Macauly  v.    Robinson,    18   La.    Ann.   619. 

Even  if  penalty  for  non-payment  of  stock  is  its 
forfeiture,  the  corporation  may  enforce  payment 
by  suit  as  Ions  as  the  stock  is  not  declared  for- 
feited.   Steamship  Co.  v.  Briggs,  27  La.  Ann.  318. 

A  stockholder,  when  sued  on  his  stock  note 
to  pay  the  liabilities  of  an  insolvent  corporation, 
must,  to  be  relieved,  show  that  the  contribution 
called  for  is  not  needed.  Peychaud  v.  Weber, 
25  La.  Ann.  136. 

Plaintiff,  M-ho  was  a  party  to  all  the  proceed- 
ings for  the  distribution  of  certain  shares  of 
stock  between  the  stockholders,  cannot  be  listened 
to  when  urging  technical  irregularities  in  the 
proceedings,  so  as  to  enrich  himself  at  the  ex- 
pense of  others.  Bach  v.  Levee  Co.,  25  La.  Ann. 
228:  Southworth  v.   Same,  30  id. 

Heirs  of  a  stockholder  cannot  compel  the  com- 
pany to  transfer  their  ancestor's  shares  in  their 
nanie,  without  producing  the  original  certificate, 
in  accordance  with  the  by-laws  regulating  the 
transfer  of  shares.  State  v.  R.  R.  Co.,  30  La. 
Ann.  .308. 

Stockholders  h.ave  no  right  to  enter  into  any 
combination  to  divest  the  company  of  its  prop- 
erty and  obtain  it  for  themselves;  they  are  enti- 
tled to  no  share  of  the  capital  stock  until  the 
debts  are  paid.  Cochran  v.  Dry  Dock  Co.,  30 
La.  Ann.  1365;  Jackson  v.  Ludeling,  21  Wall. 
(U.  S.)  616. 

Where  charter  requires  stock  to  be  paid  for  in 
cash,  and  that  no  certificate  shall  issue  until  such 
pavment  is  made,  it  is  a  sufficient  compliance 
with  the  statute  prescribing  that  the  charter 
must  set  forth  "  the  time  when  and  the  manner  in 
which  "  the  stock  shall  be  paid  for.  R.  R.  Co. 
V.   Frank.  .39  La.  Ann.  707;  s.  c.  2  So.  Rep.  310. 

A  bona  fide  sale  of  stock,  coupled  with  a  power 
of  attorney  to  vendee  to  transfer  it  on  books,  is 
made  complete  by  delivery  to  vendee  of  certificate. 
Not  necessary  that  notice  of  sale  should  be 
served  on  the  "corporation,  or  that  an  actual  trans- 
fer should  have  been  made  on  company's  books. 
Smith   v.    Crescent,   etc.,   Co.,   .30   La.   Ann.    1.378. 

In  order  to  make  the  pledge  of  a  certificate  of 
stock  valid  as  to  third  persons,  not  necessary 
to  give  notice  of  the  pledge  to  the  company.  Ins. 
Co.   v.  Marine,   etc.,    Co.,   31   La.   Ann.    149. 

Where  knowledge  of  a  fact  by  a  corporation  Is 
necessarv,  knowledge  of  president  and  other  chief 
officers  is  sufficient.  Id.  A  corporation  cannot  be 
held  to  knowledge  of  ownership  of  stock  by  any 
transfer  of  a  certificate,  merely  because  he, 
through  an  agent,  voted  at  an  election.  Fried- 
lander  V.  Slaughter-House  Co.,  31  La.  Ann.  523. 

Where  certain  stock  of  a  corporation,  standing 
on  its  books  in  the  name  of  a  judgment  debtor, 
is  seized  and  sold  by  the  sheriff  as  the  debtor's 
property,  and  a  judicial  tribunal,  of  competent 
jurisdiction,  of  last  resort,  after  a  fair  contest  in 
good  faith  by  the  corporation,  orders  the  stock 
to  be  transferred  to  the  purchaser  under  such 
seizure  and  sale,  the  corporation  cannot  be 
liable  to  the  holder  of  the  certificate  of  the 
stock,  who  took  no  steps  to  protect  himself.     Id. 

Liability  of  person  refusing  to  surrender  a  list 


14 


LOUISIAXA. 


Charter  of  incorporation;  forfeiture  for  insolvency  —  R.  S.,  §§  686-688. 


of  suliscribprs  to  corporate  stock,  how  determined. 
Brewin?  Co.  v.  Boeblnger,  40  La.  Ann.  277;  s.  c, 
4  So.  Rep.  82.  ,  .     <.       ^ 

A  corporation  is  bound  to  employ  competent  ana 
faithful  transfer  agents,  and  is  responsible  to 
stockholders  for  any  negligence  or  fraud  of  such 
agents,  to  their  injury.  In  case  of  illegal  and 
unauthorized  transfer  of  stock  to  a  third  person, 
the  injured  stockholder  may  contest  the  title  of 
the  transferee,  contradictorily  with  both  the  lat- 
ter and  the  corporation;  but  he  is  not  confined 
to  this  rcmedr.  lie  may  sue  the  corporation 
alone  for  the  value  of  his  stock  illegally  trans- 
ferred. Woodhouse  v.  Ins.  Co.,  35  La.  Ann.  238. 
Under  article  2007  the  mandate  to  sell  must 
be  "  express  and  special."  An  attempt  to  imply 
authority  to  sell  from  other  acts  of  agents  of  a 
different  character,  done  without  authority  and 
vet  approved  by  principal,  is  in  the  very  teeth 
of  the  Code,  nor  do  such  facts  operate  as  an 
estoppel.     Id. 

In  a  certain  sense  shares  of  stock  represent  an 
interest  in  the  corporate  estate,  and  conveyance 
thereof  is  a  conveyance  of  such  interest.  State 
V.  K.   R.  Co..  34  La.  Ann.  947. 

The  transferor  of  stock  without  representation 
of  specification  as  to  the  particular  property  held 
by  the  corporation  warrants  only  his  title  to 
the  stock,  and  not  the  title  of  the  corporation 
to  the  property  held  by  it.     Id. 

The  value  of  stock  cannot  be  recovered  as  the 
price  thereof,  where  it  is  not  shown  that  a  con- 
tract to  sell  and  purchase  was  entered  into  di- 
rectlv,  or  bv  an  authorized  agent.  Crossley  v. 
Bank,   38  La.   Ann.   74. 

No  loss  suffered  by  a  stockholder  will  give  rise 
to  a  claim  for  damages  against  directors,  in  con- 
senuence  of  a  call  authorized  by  charter.  Suc- 
ces"sion  of  Woods,   80  La.    Ann.   1002. 

A  corporation  is  liable  for  damages  caused  by 
wrongful  canceling  of  a  certificate  of  its  stock 
bv  its  president  and  secretary.  Ins.  Co.  v.  Ma- 
rine, etc.,  Co.,  31  La.  Ann.  149. 

Subscriptions  to  stock  in  company  whose  capi- 
tal is  fixed  at  a  certain  sum  and  shares  limited 
to  a  certain  number,  and  whose  charter  provides 
for  payment  of  shares  as  may  be  determined  by 
directors,  cannot  be  compelled  to  pay  until  whole 
capital  has  been  subscribed  and  board  has  called 
for  payment,  unless  it  is  shown  that,  by  their 
acts,  thev  have  waived  their  rights  in  this  re- 
gard. R.  R.  Co.  V.  R.  R.  Co.,  42  La.  Ann.  370; 
s.  c,  7  So.   Rep.  627. 

Stockholders  have  an  uncontrollable  right  to 
dispose  of,  at  their  pleasure,  their  shares.  Tris- 
coni  V.  Winship.  43  La.  Ann.  45;  s.  c,  9  So.  Rep. 
29.  .\nd  this,  though  they  be  members  of  board 
of  directors.     Id. 

In  absence  of  fraud  or  demonstrable  error,  a 
subscriber  for  stock  in  a  corporation  cannot  de- 
fend an  action  on  his  subscription  by  impeach- 
ing its  existence  and  capacitv.  Homestead  Co. 
V.  Linigan,  46  La.  Ann.  1119;  s.  c.  15  So.  Rep.  369. 
Secretary  having  stamped  on  certificates  of  stock 
that  same  were  certified  by  him,  and  issued  to 
the  stockholders,  will  be  estopped  from  proving 
that  any  of  such  shares  were  fraudulently  issued 
without  consideration.  ^Yisner  v.  Delhi  Co.,  46 
Ln.  Ann.  1223;  s.  c,   15  So.  Rep.  690. 

Thotich  stock  of  a  corporation  after  Its  crea- 
tion may  be  held  by  a  less  number  of  sharehold- 
ers than  the  law  would  have  required  for  organi- 
zation of  the  same  corporation,  the  corporation 
continues  to  exist.  In  re  Belton,  47  La.  Ann. 
1614:  s.  c.  18  So.  Rep.  642. 

A  subscription  to  stock  by  a  mimicipal  corpora- 
tion, tliough  unauthorized  by  its  charter,  will  be 
binding  on  it,  if  s\ibsequently  sanctioned  by  the 
legislature.  Municipality  v.  Theater  Co.,  2  Rob. 
209. 

The  dissenting  votes  of  a  few  dissatisfied  stock- 
holders will  not  be  heard  in  the  almost  unani- 
mous assent  of  their  feilow  corporators  to  an 
amendment  of  tho  eharter.  Pollock  v.  Bank,  12 
La.   Ann.   228;  Le   Beau   v.    Bank,   id.    231. 

A  corporation  which  has  acted  under  an 
amended  charter  and  Issued  bonds  in  accordance 
therewith,  and  i)ersons  who  linvo  assumed  sub- 
scriptions to  the  IncrcMscd  capUni  stock,  will 
be  estopped  from  denying  validity  of  amended 
charter.     Haynes  v.  Wall,   13   La.    Ann.  258.] 


§  686.  The  charters  of  corporations,  and 
the  original  subscriptions  made  for  the  pur- 
pose of  organizing  them,  shall  be  recorded  in 
the  office  of  the  recorder  of  mortgages,  or 
other  officer  exercising  his  functions,  at  the 
place  selected  for  the  domicile  of  the  cor- 
poration, and  shall  be  published  in  a  news- 
paper at  its  domicile  once  a  week,  at  least 
for  thirty  days,  but  it  shall  not  be  necessary 
to  publish  the  names  of  the  subscribers;  and 
any  subscril)or  may  present  the  charter  and 
subscriptions  for  record  with  the  recorder  of 
mortgages. 

Copies  of  records  as  evidence.     R.    S.,    §  694. 

[The  failure,  in  forming  a  corporation,  to  ob- 
tain the  authorization  or  certificate  of  the  dis- 
trict attorney  or  judge,  and  to  have  the  act  .^f 
incorporation  duly  recorded,  is  not  a  mere  in- 
formality, but  a  substantial  omission  which 
strikes  the  act  of  incorporation  with  nullity. 
Field  V.  Cooks,  IG  La.  Ann.   154.] 

§  687.  It  shall  be  lawful  for  the  stock- 
holders of  any  corporation,  at  the  general 
meeting  convened  for  that  purpose,  to  make 
any  modifications,  additions  or  changes  in 
their  act  of  incorporation,  or  to  dissolve  it 
with  the  assent  of  three-fourths  of  the  stock 
represented  at  such  meeting;  any  such  modi- 
fication, addition,  change  or  dissolution  shall 
be  recorded  as  required  by  the  preceding 
section. 

See  R.  S.,  §  685. 

§  688.  They  shall  forfeit  their  charter  for 
insolvency,  evidenced  by  a  return  of  no  prop- 
erty found  on  execution;  and  in  such  case  it 
shall  be  the  duty  of  the  district  court,  at 
the  instance  of  any  creditor,  to  decree  such 
forfeiture,  and  to  apjioint  a  commissioner  for 
effecting  the  liquidation,  Avhose  duty  it  shall 
be  to  convert  all  the  assets  of  the  company, 
including  any  unpaid  balance  due  by  stock- 
holders on  their  shares,  into  cash,  and  to 
distribute  the  same  under  the  direction  of 
the  court  amongst  the  parties  entitled 
thereto,  in  the  same  manner,  as  near  as  may 
be,  as  is  done  in  cases  of  insolvency  of  in- 
dividuals. 

See  Const.,  art.  262,  and  cross-references.  Mode 
of  liquidation  to  be  contained  in  charter.  R.  S., 
§  685.  Charter,  when  forfeited,  proceedings,  etc. 
R.  S..  §  731. 

[Proceedings  by  one  party  to  forfeit  the  char- 
ter of  a  corporation  in  the  i)arish  of  New  Orleans, 
does  not  divest  the  other  district  courts  of  juris- 
diction to  entertain  similar  proceedings  brought 
by  other  parties.  State  v.  District  Court,  20  La. 
Ann.  574. 

No  one  l>ut  the  attorney-general  can  urge  the 
forfeiture  of  a  bank's  charter.  Riggin  v.  Bank, 
18  La.  Ann.  677. 

Under  laws  of  Louisiana,  a  corporation  has  no 
right  to  make  a  voluntary  cession  of  its  assets. 
.TefTries  v.  Iron  Works  Co.,  18  La.  Ann.  685;  15 
id.  10. 

A  eorporation  cannot  be  dissolved  by  a  simple 
resolution  adopted  by  its  members;  nor  can  a  ma- 
jority   !)ase    a    deniiiiid    foi-    forfeiture    of    charter 

n  su'-li  a  resoliitlnn.  which,  in  contemplation  of 
law.  was  a  wronirfnl  act,  and  as  s\ich  gives  no 
right  of  action.    Curien  v.  Santini,  16  La.  Ann.  27. 


LOUISIAXA. 


15 


Liquidation  on  dissolution;  use  of  streets  —  R.   S.,  §§  688,  689. 


A  r-orporation  may  be  dissolved,  first,  by  an  act 
of  Ipgislature  on  certain  conditions;  second,  by  a 
forfeiture  of  its  cliarter,  judicially  ascertained  at 
the  suit  of  the  State.     Id. 

A  decree  of  a  State  court,  declaring  a  charter 
forfeited,  constitutes  no  bar  to  a  proceeding  in 
involuntary  bankruptcy  under  the  General  Bank- 
rupt Law.     Thornhill  v.  Bank,  1  Woods.  1. 

Property  of  an  extinct  corporation  t)elongs  lo 
the  individual  members.  Burke  v.  Wall,  29  La. 
Ann.  39. 

The  appointment  of  a  receiver  for  a  corpora- 
tion on  an  ex  parte  application,  without  even 
alleging  its  insolvency,  is  absolutely  null  and  car- 
ries with  it  no  right  to  receive  the  assets  or 
revenues  of  the  companv.  Turgeau  v.  Bradv,  24 
La.  Ann.  348. 

Liquidators  of  a   corporation,   appointed   by   the 
stockholders,    cannot    be    displaced    by    liquidators 
appointed  bv  the  court;  their  election   must   first  i 
be  annulled.     Follett  v.   Field.  30  La.  Ann.  161.        i 
As   a   general    rule,   courts   have    no   jurisdiction  ! 
to   appoint   rpceivers    for   corporations   in    absence 
of   express   statutory   authority.      Baker  v.    R.    R. 
Co.,   34  La.  Ann.   754.  \ 

In  absence  of  any  provision  to  that  effect,  either 
In  the  general  law  or  charter,  a  franchise  cannot 
be  levied  upon  for  debts.  R.  R.  Co.  v.  Delamore, 
34  La.  Ann.  122.5. 

A  creditor  of  a  corporation,  suing  to  forfeit 
its  charter  on  ground  of  its  insolvency,  must,  be- 
fore he  can  demand  the  provisional  appointment 
of  a  receiver  or  judicial  sequestrator,  under  above 
section,  prove  that  the  corporation  is  the  special 
kind  of  a  corporation  subject  to  a  forced  liquida- 
tion under  that  section.  Bothick  v.  Society,  31 
La.   Ann.  63. 

Where  a  petition  is  filed,  praying  for  certain  al- 
leged reasons,  the  forfeiture  of  the  charter  of  a 
banking  corporation,  an  order  of  court,  which  does 
not  decree  the  forfeiture,  but  which  merely  ap- 
points commissioners  to  take  charge  of  the  cor- 
porate assets,  cannot  be  construed  as  directing 
the  liquidation  of  the  affairs  of  the  corporation. 
State  V.   Judge,  31   La.   Ann.    823. 

When  a  jtidgment  dissolving  a  corporation,  for- 
feiting its  charter  and  recognizing  the  liquidators 
appointed  by  the  company,  and  authorizing  them 
to  act,  will  not  be  disturbed  in  the  absence  of 
anv  complaint  bv  either  creditors  or  stockholders. 
State  v.   Coach   Co.,   .35  La.    Ann.    245. 

The  appointment  of  a  receiver  for  a  corporation 
on  an  ex  parte  application,  without  even  alleg- 
ing its  insolvency,  is  absolutely  null  and  carries 
with  it  no  right  to  receive  the  assets  or  revenues 
of  the  companv.  Turgeau  v.  Brady,  2A  La.  Ann. 
348. 

Liquidators  of  a  corporation,  appointed  by  the 
stockholders,  cannot  be  displaced  by  a  liquidator 
appointed  by  the  court;  their  election  must  first 
be  annulled.     Follett  v.   Field,  30  La.   Ann.   161. 

The  appointment  of  a  judicial  sequestrator  to 
wind  up  affairs  of  a  loan  and  pledge  association 
is  illegal.     Mahan   v.   Benton,  30  La.  Ann.   1401. 

The  court  may,  on  its  own  motion,  appoint  a 
liquidator  or  receiver  of  a  corporation,  where  its 
charter  makes  no  provision  for  its  liquidation  and 
the  necessity  for  its  liquidation  shall  arise.  In 
re  Mechanics'  Society,  31  La.  Ann.   627. 

When  a  foreign  corporation  has  been  decreed 
Insolvent,  and  an  assignee  or  trustee  appointed  to 
it  under  the  laws  of  and  in  the  State  where  it 
was  created,  the  assignee  or  trustee  so  appointed 
has  the  right  to  sue  for  the  assets  of  the  insolvent 
corporation,  and  stand  in  judgment  in  the  courts 
of  Louisiana.  Life  Assn.  v.  Levy,  33  La.  Ann. 
1203. 

Courts  of  this  State  are  not  without  jurisdiction 
over  subject-matter  of  appointing  receivers  to  cor- 
porations; but  they  should  exercise  such  juris- 
diction only  in  proper  cases.  Where  charter  vests 
the  liquida"tion  in  the  stockholders,  through  com- 
missioners elected  by  them,  and  where  the  stock- 
holders consent  to  appointment  of  receivers  by 
the  court  at  suit  of  creditors  praying  therefor, 
the  judgment  of  the  corporation  appointing  such 
receivers  will  not  be  disturbed  on  the  appenl  of 
creditors.     In  re  Savings  Bank.  .35  La.  Ann.  106. 

Where  a  court  has  appointed  a  person  receiver, 
who  absents  himself  and  fails  to  file  the  bond  re- 


quired under  order  of  court,  it  is  within  discretion 
of  the  court  to  remove  him  and  appoint  another. 
Id. 

Appointment  of  a  receiver  to  a  corporation  by 
one  district  court,  when  it  appears  that  the  mat- 
ter of  the  liquidation  of  the  same  corporation 
was  pending  In  another  court  for  the  same  parish, 
is  the  act  of  a  court  without  jurisdiction  over 
the  subject-matter,  and  is,  therefore,  absolutely 
null  and  void.  Weymouth  v.  Roselius,  36  La.  Ann. 
527. 

A  court  is  without  authority  to  order  the 
liquidation  of  a  bank,  and  the  transfer  of  its  as- 
sets to  the  commissioners  until  the  propriety  of 
such  an  order  has,  on  proper  inquiry,  been  ju- 
dicially ascertained.  State  v.  Bank,  31  La.  Ann. 
836. 

Corporations  have  no  right,  under  laws  of 
Louisiana,  to  make  a  voluntary  cession  of  their 
assets.  Jeffries  v.  Iron  Works  Co.,  18  La.  Ann. 
685;  15  id.  19.  A  corporation  cannot  be  dissolved 
by  a  simple  resolution  adopted  by  majority  of 
its  members;  nor  can  the  majority  base  a  demand 
for  forfeiture  of  its  charter  on  such  a  resolution 
which,  in  contemplation  of  law,  was  a  wrongful 
act.  and  as  such  gives  no  right  of  action.  Curien 
V.   Santini,  16  La.   Ann.  27. 

Although  corporations  possess  inherent  power  of 
dissolution  at  law,  that  right  does  not  carry  with 
it  authority  of  impairing  the  obligation  of  con- 
tracts. The  liquidation,  while  it  deprives  cred- 
itors of  power  to  compel  specific  performance, 
leaves  an  equitable  remedy  for  the  recovery  of 
damages  unimpaired.  Schleider  v.  Dielman,  44 
La.  Ann.  462;  s.  c,  10  So.  Rep.  9-34. 

Above  section  does  not  authorize  forfeiture  of 
charter  of  the  corporation  and  appointment  of  a 
receiver  by  ex  parte  order  without  notice.  The 
statute  discussed  and  construed.  Ober  v.  Mfg. 
Co..  44  La.  Ann.  570;  s.  c.  10  So.  Rep.  792. 

The  cessation  of  a  corporation  cannot  be  brought 
about  by  an  application  on  its  own  behalf  nor 
by  creditors  acting  adversely  and  under  a  re- 
spite improvidentially  granted.  Lumber  Co.  v. 
Creditors,   19  So.   Rep.   136. 

Shareholders  of  a  corporation  who  carried  on 
a  commercial  partnership  in  addition  were  not 
excused  from  liability  as  partners  because  of 
their  holding  stock.  Lehman  v.  Knapp,  20  So. 
Rep.  674. 

A  creditor  of  a  corporation  held  not  estopped 
from  holding  the  shareholders  personally  liable 
after  ascertaining  that  they  were  liable  as  com- 
mercial partners.    Id. 

Where  the  corporate  business  was  ended, 
though  the  company  was  in  the  hands  of  liquida- 
tors, one  of  the  proprietors  was  held  entitled  to 
sequestration  or  other  conservator  writ.  Eltring- 
ham   V.  Clarke,  21  So.  Rep.   547. 

When  the  articles  prescribe  the  manner  of 
winding  up  the  corporation,  they  should  be  fol- 
lowed. Pringle  v.  Construction  Co.,  21  So.  Rep. 
515.  .         .    ,. 

Action  of  majority  of  members  m  wmding  up 
the  company  held  valid.     Id.] 


§  689.  (As  amended  April  10,  1880.)  No 
railroad,  plankroad,  canal  or  -works  of  drain- 
age, sewerage  and  land  reclamation  shall 
be  constrncted  throngh  tlie  streets  of  any  in- 
corporated city  or  town.  AA'ithout  the  con- 
sent of  the  municipal  council  thereof:  and 
such  council  giving  such  consent  to  any  cor- 
poration formed  for  the  purpose  of  drainage, 
sewerage  and  land  reclamation  may,  in  the 
interest  of  public  health  and  cleanliness, 
pass  all  needful  ordinances  and  police  regu- 
lations to  make  effective  the  plan  of  sewer- 
age and  drainage  it  may  so  adopt,  with  ref- 
erence to  all  houses  and  lands  within  the 
municipal  limits. 


See  R.  S..  S  691. 


16 


LOUISIANA. 


Liability  of  stockholder;  issue  of  bonds  —  R.  S.,  §§  G90-692. 


§  090.  No  stockholder  shall  ever  be  held 
liable  or  resiK)Usible  for  the  contracts  or 
faults  of  such  corporation  in  any  furtlior 
snni  than  the  nnpaid  balance  duo  to  the 
company  on  the  sliarcs  owned  by  hlni;  nor 
shall  any  mere  informality  in  organization 
have  the  effect  of  rendering:  a  charter  mill 
or  of  exposing  a  stockholder  to  any  liability 
beyond  the  amount  of  his  stock. 

Sec  R.  C.  C.  art.  437. 

[A  corporation  is  not  a  partnership;  the  mem- 
bers can  only  be  compelled  to  pay  the  corporate 
creditors  the  amount  due  by  them  to  the  cov- 
poration.     Monaghan  v.    Hall,   18  La.    Ann.   310. 

But  stockholders  in  a  corporation  which  was 
defectively  organized  are  individually  liable  as 
partners  for  a  tort  committed  by  such  de  facto 
corporation.  Vredenburg  v.  Behan,  33  La.  Ann. 
627 

Agreements  between  officers  and  stockholders  are 
not  binding  on  creditors.  Peychaud  v.  Hood,  23 
La.   Ann.  732. 

No  act  or  contract  on  part  of  stockholders  can 
defeat  rights  of  corporate  creditors,  and  they 
are  bound  to  pay  the  full  price  of  the  shares 
subscribed  by  them.  Same  v.  Lane,  24  La.  Ann. 
405.  The  members  of  a  corporation  to  transport 
persons  and  property  are  not  liable  individmlly 
or  in  solido  for  debts  of  the  corporation.  Rein- 
hold  v.  Ludeling,  29  La.  Ann.  5.52. 

Members  of  a  corporation  are  not  liable  to  be 
sued,  as  Individuals,  for  corporate  debts.  Glen 
V.   Breard.  35  La.   Ann.   875. 

The  rights  and  duties  of  stockholders  grow 
out  of  the  contract  of  subscription  for  stock. 
Chase  v.  Bank,  44  La.  Ann.  69;  s.  c,  10  So.  Rep. 
379. 

A  stockholder  of  an  insolvent  corporation  can- 
not, by  a  donation  to  an  insolvent  person,  escape 
liability  for  his  unpaid  stock.  Mandiou  v.  Ins. 
Co.,   11  Rob.   177. 

Where  a  transfer,  though  absolute  on  its  far-e. 
Is  not  so  made  as  to  preclude  a  party,  who  Itns 
retransf erred  it,  from  showing  that  "it  was  in- 
tended only  as  security,  he  will  not  be  liable  to 
company's  creditors  for  a  balance  due  on  the 
stock.     Id. 

A  stockholder  cannot  avail  himself  of  the  mis- 
behavior of  the  corporation  to  avoid  his  own  con- 
tract.    Municipality  v.  Theater  Co.,   2  Rob.   209. 

One  who  signs  an  agreement  to  take  stock, 
thereby  promises  to  pay  the  full  amount  of  every 
share;  and  an  action  lies  to  recover  it.  either  to 
carry  on  business  or  to  pay  company  debts.  Cu- 
culla  v.  Ins.  Co.,  2  Rob.  57. 

He  cannot  avail  himself  of  his  own  neglect  to 
pay  a  required  installment  at  time  of  subscrib- 
ing. This  might  authorize  his  subscription  to  bo 
annulled,  but  cannot  shield  him  from  its  p-iy- 
ment.      Red    River  Co.    v.    Young,    0   Rob.   39. 

A  stockholder,  sued  on  his  note  for  stock,  can- 
not urge  any  informality  in  the  organization  of 
the  corporation,  or  the  unconstitutionalitv  of  its 
charter.  Pascagoula  Co.  v.  West,  l."}  La.  Au'j. 
545. 

Where  stockholders  refuse  to  elect  directors,  or 
elect  those  who  will  not  call  in  stock  to  pav  debts, 
any  creditor  may  compel  such  stockholders  to 
pay  in  so  much  ns  may  be  necessary  to  pay  debts. 
Cusulla  v.  Ins.  Co.,  2  Rob.  57. 

A  corporation  can  never  be  dissolved  by  a  r  >- 
fusal  to  pay  stock,  by  non-user,  or  otherwise,  so 
as  to  defeat  the  rights  of  creditors.  Brown  v. 
Ins.  Co.,  3  La.   Ann.   177. 

Where  forfeiture  of  stock  of  delinquent  stock- 
holders Is  a  means  given  the  company  for  its 
own  protection,  without  its  action,  thev  are  not 
disfranchised,  and  may  be  garnished  bv "judgment 
creditors  of  the  corporation.  Brode  v.  Ins  Co 
10  Rob.  440. 

Stock  transferred  to  another,  to  enable  him  to 
raise  money  thereon,  Is  liable  to  the  execution  of 
his  creditors.    Page  v.  Poree,  3  Rob.  439. 

Creditors  are  entitled  to  the  whole  stock  to 
secure  any  judgment  against  the  corporation,  an  1 


the  latter  cannot,  by  any  act  to  their  prejudice, 
liberate  stockholders  from  the  full  amount  of 
their  subscriptions.    Brode  v.  Ins.  Co.,  10  Rob.  440. 

rnautliorized  forfeiture  Ijy  a  board  of  a  stock- 
holder's share  docs  not  destroy  the  lat tor's  lia- 
bility to  creditors.  Dixon  v.  Ins.  Co.,  11  Rob. 
2.53. 

Where  no  period  Is  fixed  by  charter  for  pay- 
ment of  a  subscription,  a  creditor  who  wishes  to 
enforce  payment  of  a  balance  due  must  resort 
to  a  direct  action.  Brown  v.  Ins.  Co.,  3  La. 
Ann.    177. 

Reduction  of  stock  to  the  amount  paid  in  at 
a  certain  period,  accepted  by  stockholders,  will 
exonerate  them  from  liability  beyond  the  re- 
duced stock,  as  to  subsequent  creditors.  Hep- 
burn V.  Bank,  4  La.  Ann.  88;  Palfrey  v.  Pauld- 
ing, 7  id.  303;  Stark  v.  Burke,  9  id.  341.] 

§  G91.  In  all  cases  whei*e  railroads,  plank- 
roads  or  canals  shall  cross  any  hi.sihway.  the 
corporation  sliall  so  coustrnct  tlie  works  as 
not  to  hinder,  impede  or  obstruct  its  safe 
and  convenient  use;  and  in  all  cases  where 
railroads,  planlcroads  or  canals  shall  be  con- 
structed or  dug  across  any  plantation  or  land 
in  cultivation,  or  that  may  be  cultivated,  the 
corporation  shall  so  construct  the  Avork  as 
not  to  liinder.  impede  or  obstruct  tlie  drain- 
age of  the  land;  and  if  any  railroad  or  plank- 
road  shall,  in  its  course,  cross  any  tide 
waters  or  navigal)le  rivers  or  streams,  the 
company  may  erect  for  the  sole  and  excbi- 
sive  use  of  such  railroad  or  planlvroad.  the 
bridges  required  for  crossing,  but  such 
bridges  shall  be  so  constructed  as  not  to 
obstruct  or  necessarily  impede  the  naviga- 
tion of  said  waters  or  streams. 

Railroad  corporation  may  construct.  Const.,  art. 
271;  see  R.  S.,  §  689. 

§  (592.  (As  amended  July  7,  1894.)  Any 
railroad,  plankroad.  turnpike,  canal,  elevator, 
or  warehouse,  company,  for  drainage.  soAver- 
ago.  land  reclamation  and  levee  l)uilding, 
water  works  or  electric  liglits  and  power 
company,  or  any  bridge  company  or  bridge 
and  raihA'ay  company,  establislied  under  the 
laws  of  this  State,  whether  under  and  by 
special  or  general  act,  may  borrow  from 
time  to  time  such  sums  of  money  as  may 
be  required  for  construction,  repair  oi-  ac- 
quisitions of  property,  or  franchises,  and  for 
tills  purpose  may  issue  lioiids  or  other  obliga- 
tions, secured  by  mortgage,  or  jiledge.  as  the 
case  may  be,  of  the  franchises  and  all  the 
property,  real  and  personal,  and  incomes, 
revenues,  contributions  and  receipts  of  said 
companies,  and  payable  in  such  terms  and 
such  times  and  places  as  the  board  of  direct- 
ors, trustees,  managers  or  commissioners 
may  direct  or  designate,  with  power  to  sell, 
pledge  or  otherwise  dispose  of  said  lionds  on 
such  terms  as  the  companies  respectively 
may  direct  or  deem  expedient. 

See  Const.,  art.  266. 

[Upon  sale  of  the  property  and  franchises  of  a 
corporation,  under  a  decree  founded  upon  a  mort- 
gage, or  under  a  process  upon  a  money  judgment. 
Immunity  from  taxation  provided  for"  in  the  act 
of  lncori)oration  does  not  accompany  the  property 
In  its  transfer  to  the  purchaser.  Alorgan  v. 
Louisiana,  93  U.  S.  217. 


LOUISIANA. 


17 


Mortgages,  etc.;   forfeiture  of  charter;  taxation  — R.  S.,  §§  693-695,  725,  731,  733-735. 


Purchasers  of  all  the  rights  and  franchises  of 
a  corporation  do  not,  for  that  reason,  become  in- 
vested with  the  corporate  powers  of  the  vendee. 
An  obligation  Issued  by  such  purchasers  under 
the  style  of  the  vendee  will  bind  the  purchaser 
Individ'ually.     Chaffe  v.  Ludeling,  27  La.  Ann.  610. 

An  insurance  company,  with  power  to  convert 
bonds  and  stocks  into  cash  when  needed  to  pav 
risks,  has  right  throtigh  its  president  to  borrow 
money  and  pledge  said  stock  as  collateral  secu- 
rity.    Bezou  V.  Pike,  23  La.  Ann.  788.] 


§  693.  A  mortgage  made  l>y  any  company, 
as  aforesaid,  shall  be  binding  in  the  sevi>ral 
parishes  through  which  a  railroad  may  pass 
by  the  record  of  the  mortgage  in  the  parish 
where  the  principal  office  or  domicile  of  the 
company  may  be  located,  and  such  mort- 
gage need  not  be  reinscribed  to  continue  it 
in  force.  The  president  and  directors  of  any 
company  may  confer  on  the  holder  of  any 
bond  or  bonds  issued  for  money  for  the  use 
of  said  company  the  right  to  convert  the 
principal  due  thereon  into  the  stock  of  said 
company  at  any  time,  not  exceeding  ten 
years  from  the  date  of  said  bond  or  bonds, 
under  such  regulations  as  the  president  and 
directors  may  adopt;  Provided,  That  nothing 
In  this  act  shall  be  so  construed  as  to  au- 
thorize an  increase  in  the  capital  stock  of 
any  railroad  company. 

§  694.  Copies  of  all  the  books  and  records 
kept  by  the  several  railroad  companies  in 
this  State,  including  extracts  from  the  stock 
books  and  minutes  of  the  proceedings  of  the 
directoi*,  certified  by  the  secretaries  of  said 
companies,  under  the  seal  of  the  company, 
shall  be  received  in  all  the  courts  of  this 
State  as  evidence  in  place  of  the  originals. 

See  R.  S.,   §  684,   subd.  2,  and  cross-references. 

[Parol  evidence  is  admissible  to  show  the  reso- 
lutions of  a  corporation,  when  the  same  have  not 
been  entered  on  the  minutes.  Donnelly  v. 
Church,   26   La.   Ann.    738. 

Stockholder  has  legal  right  to  Inspect  corpo- 
rate books.  Legendre  v.  Brewing  Assn.,  45  La. 
Ann.  669:  s.  c.  12  So.  Rep.  837.  But  the  error  of 
the  secretary  in  refusing  to  permit  him  to  inspect 
the  books  is  not  of  itself  ground  for  damages 
against  the  corporation.     Id. 

Prayer  of  a  person  for  a  mandamus  to  compel 
an  inspection  of  corporate  books  will  be  refused 
when  no  just  or  useful  object  is  alleged  or  proved, 
and  it  is  not  shown  in  what  way  the  interests  of 
the  corporation  or  the  public  are  to  be  promoted. 
Hatch   V.   Bank,   1  Rob..  470. 

Omissions  in  corporate  minutes  may  sometimes 
be  supplied  by  parol  testimony.  Vicksburg  Co. 
V.  Ouachita,  11  La.  Ann.  649;  Prothro  v.  Minden 
Sem..   2  id.  939. 

Stockholder  in  a  bank  Incorporated  under  the 
Free  Banking  Law  has  a  right,  at  proper  hours, 
to  inspect  the  discount  book,  to  see  whether 
business  Is  being  properly  conducted.  Cockburn 
T.   Bank.   13  La.   Ann.  289.] 

§  695.  The  governor  of  the  State  of  Louisi- 
ana and  the  mayor  of  the  city  of  New 
Orleans  be,  and  they  are  hereby,  authorized 
and  required  to  cast  the  vote  of  the  stock 
owned  by  the  State  of  Louisiana  and  the 
city  of  New  Orleans,  respectively,  in  all 
meetings  of  stockholders  for  the  election  of 
directors   of   said    companies,    in    the    same 


manner    and    to    the    same    extent   as    indi- 
viduals and  private  stockholders  vote  therein. 

Meetings,  elections,  etc.  R.  S.,  §  741;  see  R. 
S.,  §  1660. 

[Officers  of  a  corporation  have  no  right  to  vote 
on  the  shares  held  bv  it.  Monsseaux  v.  Urqu- 
hart,  19  La.  Ann.  485.] 

§  725.  In  all  cases  where  any  corporation 
shall  commit  trespass  or  do  anything  for 
which  an  action  for  damage  lies,  it  shall  be 
liable  to  be  sued  in  the  parish  where  such 
damage  is  done  or  trespass  committed. 

See  R.  S.,  §  684,  subd.  2,  and  cross-references. 

§  731.  Whenever  the  chai"ter  of  any  corpo- 
ration in  this  State  shall  be  decreed  forfeited 
by  any  competent  court,  the  district  attorney 
of  the  district  shall  forthwith  inform  the 
governor  of  the  fact,  who  shall  thereupon 
appoint  a  liquidator  to  take  charge  of  and 
liquidate  the  affairs  of  the  corporation,  as 
in  case  of  insolvencies  of  individuals.  In 
case  of  death,  resignation  or  removal  of  any 
liquidator  so  appointed,  the  governor  shall 
fill  the  vacancy:  and  in  ca.se  of  refusal  of 
any  person  appointed  to  act  as  liquidator,  he 
shall  appoint  the  district  attorney  of  the  dis- 
trict, who  shall  be  dispensed  with  giving 
bond  and  security.  This  section  shall  not 
apply  to  banking  or  other  corporations 
whose  liquidation  is  otherwise  provided  for 
by  law. 

See  Const.,  art.  262,  and  cross-references.  Char- 
ter forfeited  for  formation  of  trust.  Act  of  1802, 
at  p.  28. 

[The  property  of  an  extinct  corporation  belongs 
to  the  individual  members.  Burke  v.  Wall,  29 
La.  Ann.  39.] 

§  733.  The  pi-operty,  real  or  personal,  of 
all  incorporated  comimnies  liable  to  taxation, 
except  capital  stock,  shall  be  assessed  in  tlie 
parish  in  which  it  may  be,  in  the  same' man- 
ner as  that  of  individuals. 

See  Const.,  art.  228,  and  cross-references. 

§  734.  The  capital  stock,  not  invested  in 
real  estate,  of  every  incorporated  compa)iy. 
liable  to  taxation,  shall  be  assessed  in  the 
parish  where  the  principal  office  or  place 
for  tran.sacting  the  financial  concerns  of  the 
company  shall  be,  or  if  the  company  have 
no  such  office,  then  in  the  parish  where  the 
operations  of  the  company  shall  be  carried 
on,  or  its  agents  shall  keep  their  place  of 
business. 

See  Const.,  art.  228,  and  cross-references. 

§  735.  AYhen  the  company  is  not  incorpo- 
rated in  this  State,  but  is  doing  business 
thi'ough  an  agent,  it  shall  be  subject  to  all 
the  provisions  of  preceding  sections,  except 
that  it  shall  not  be  assessed  on  its  capital 
stock,  but  shall  be  asses.sed  on  all  its  prop- 


18 


LOUISIANA. 


Taxation;  meetings  — R.  S.,  §§  736-738,  740,  741,  IGGO. 


erty  owned,  held  or  due  iu  this  State, 
whether  it  consists  in  real  or  personal  estate, 
money,  bills  of  exchange,  bonds,  notes  or 
accounts,  or  other  evidences  of  debt. 

See  Const.,  art.  228.  Foreign  corporation  to 
forfeit  charter,  when.    Act  of  1892,  at  p.  28. 

[A  foreign  corporation  having  an  agent,  and 
placing  monev  in  bank,  subject  to  his  check,  held 
liable  to  taxation  on  such  fund.  Banana  Co.  v. 
Board  of  Assessors,  21  So.  Rep.  627.] 

§  73G.  The  president,  cashier,  secretary,  or 
agent  of  any  money  or  stock  corporation, 
whether  incorporated  by  this  State  or  any  of 
the  United  States,  or  by  a  foreign  govern- 
ment, shall,  on  or  before  the  first  day  of 
March  in  each  year,  make  and  deliver  to  the 
State  collectors  or  assessors,  or  one  of  them, 
of  the  parish  or  district  in  which  such  com- 
pany is  liable  to  be  taxed,  according  to  law, 
a  written  statement,  specifying  under  oath: 

First.  The  real  estate,  if  any,  owned  by 
sucli  company,  wlieii  the  same  Is  situated  in 
this  State; 

Second.  The  capital  stock  actually  paid  in 
and  not  invested  in  real  estate; 

Third.  The  place  of  its  principal  business, 
or  where  its  principal  operations  are  carried 
on  in  which  it  is  liable  to  be  taxed. 

See  Const.,  art.  228. 

[Liability  of  person  refusing  to  surrender  a  list 
of  subscribers  to  corporate  stock,  how  deter- 
mined. Brewing  Co.  v.  Boebinger,  40  La.  Ann. 
277;  s.  c,  4  So.  Kep.  82.] 

§  737.  The  State  collector  or  assessor  shall 
enter  all  incorporated  companies,  from  which 
sucli  statements  shall  have  been  received  by 
them,  and  the  property  of  such  companies, 
in  the  assessment-roll  in  the  following  man- 
ner: In  the  first  column  they  shall  enter  the 
name  of  tlie  company  liable  to  taxation  on 
its  capital  or  otherwise;  in  the  second 
column,  the  quantity  of  real  estate  owned  by 
the  company  and  situated  in  their  parish  or 
district;  in  the  third  column,  the  actual  value 
thereof,  estimated  as  in  other  cases;  in  the 
fourth  column,  its  capital  stock  paid  in  and 
its  value,  (to  be  ascertained  by  the  assessor 
or  State  collector,  by  the  sales  of  its  stock, 
or  in  any  other  manner,  and  not  invested  in 
real  estate,  situated  within  the  State,  and 
then  Itelonging  to  it);  in  the  fifth  column, 
they  shall  put  the  aggregate  value  for  wldch 
the  company  is  liable  to  be  taxed,  which 
value,  thus  ascertained,  shall  be  levied,  ex- 
cept as  is  provided  by  law. 

See  Const.,  art.  228. 

§  738.  All  licenses  and  taxes  assessiMi  by 
law  on  the  property  of  any  person,  firm, 
company  or  corporation,  are  hereby  declared 
a  lien  and  privilege  on  tlie  real  property  of 
such  person,  firm,  company  or  corporation 
for  his  or  tlieir  entire  tax,  any  alienation 
thereof    or    incumbrance    thereon    notwith- 


standing; and  shall  exist  in  favor  of  the 
State  and  parish  for  the  amount  of  taxes 
assessed,  and  shall  be  paid  by  preference  to 
all  mortgages  and  incumbrances. 

See  Const.,  art.  228,  and  cross-references. 

§  740.  Every  corporation  organized,  or 
which  may  hereafter  be  organized  under 
and  by  virtue  of  any  law  of  this  State,  shall 
establish  its  domicile  at  some  place  within 
the  State  of  Louisiana,  and  not  elsewhere. 

See  Const.,  art.  264,  and  cross-references. 

[A  corporation  created  under  laws  of  a  sister 
State  has  right  to  sue  and  stand  in  judgment  In 
courts  of  Louisiana.  Life  Assn.  v.  Levy,  33  La. 
Ann.   1203.] 

§  741.  Every  such  corporation  shall,  from 
and  after  the  passage  of  this  act,  hold  all 
its  meetings  for  the  ti-ansaetion  of  bus^iness 
appertaining  to  Its  corporate  purposes  or 
capacity,  whether  of  its  stockholders  at 
large,  for  election  of  officers,  or  otlier  pur- 
poses, or  of  its  directox's,  managers,  trustees, 
or  other  officers  charged  with  the  direction 
of  its  affairs,  at  the  place  of  domicile  of 
said  corporation,  and  any  such  meeting  held 
elsewhere,  and  any  business  transacted  at 
any  meeting  held  elsewhere,  shall  be  unlaw- 
ful and  of  no  effect. 

See  R.  S.,  §  6S4,  subd.  5.  Vote  of  stock  owned 
by  State  cast  by  whom.  R.  S.,  §  695.  Act  of 
majority,  act  of  whole.     R.  C.   C,  art.  444. 

[When  a  resolution  of  stockholders  ratifying 
sales  of  corporate  property  is  produced,  officers 
who  urge  the  Invalidity  of  the  ratification,  be- 
cause the  meeting  was  illegally  called,  must 
show  such  illegality.  Dunn  v.  Building  Co.,  8 
La.  488.1 

Domicile. 

Sec.  1205.  Corporations   to    establish    their    domi- 
cile  in    Louisiana. 
1206.  Meetings,   elections,   etc.,  to  be  held  at 
place  of  domicile. 

§  1205.  (Identical  with  section  740.) 
§  120G.  (Identical  with  section  741.) 


Goverilor. 

Sec.  1660.  Governor  of  Louisiana  and  mayor  of 
New  Orleans  to  vote  stock  owned  by 
State  or  city. 

§  1G60.  The  governor  of  the  State  of  Louisi- 
ana, and  the  mayor  of  the  city  of  New 
Orleans  be,  and  they  are  hereby  author- 
ized and  required,  to  cast  the  vote  of  the 
stock  owned  by  the  State  of  Louisiana,  and 
the  city  of  Now  Orleans  respectively,  in  all 
meetings  of  stockliolders  for  the  election  of 
directors  of  said  companies,  in  the  same 
manner  and  to  the  same  extent  as  individual 
and  private  stockholders  vote  therein. 

See  R.  S.,  §  695. 


LOUISIANA. 


19 


Trespass;  usurpation  of,  and  intrusion  in  office  —  K.  S.,  §§  2581,  2593-2596,  2601-2605. 


Offenses  and  Quasi  Offenses. 

Sec.  2581.  When    a    corporation    may    be    sued    in 
cases  of  trespass. 

§  2581.  In  all  cases  where  any  corporation 
shall  commit  trespass  or  do  anything  for 
which  an  action  for  damage  lies,  it  shall 
be  liable  to  be  sued  in  the  parish  where  such 
damage  is  done  or  trespass  committed. 


See  R.  S.,  §  725. 


Office. 


TJsnrpation,  Intrusions  into,  and  Unlawful 
Holding  of  Office. 

Sec.  2593.  How  Information  shall  be  brought. 

2594.  Duty  of  district  attorney  and  attorney- 

general. 

2595.  Service  and  answer. 

2596.  Interested  person  shall  be  Joined  with 

the  State. 

2601.  All  claimants  may  be  joined  in  one  ac- 

tion. 

2602.  Defendant  liable  in  damages. 

2603.  Repealing  clause. 

2604.  Appeals. 

2605.  Trials  for  summary. 

§  2593.  An  action  by  petition  may  be 
brought  before  the  proper  district  court  or 
parish  court  by  the  district  attorney  or  dis- 
trict attorney  pro  tempore,  and  for  the 
parish  of  Orleans  by  the  attorney-general  or 
any  other  person  interested,  in  the  name  of 
the  State,  upon  his  own  information  or  upon 
the  information  of  any  private  party 
against  the  party  or  parties  offending,  in  the 
following  cases: 

First.  When  any  person  shall  usurp,  in- 
trude into  or  unlawfully  hold  or  exercise 
any  public  office  or  franchise  within  this 
State;  or 

Third.  When  any  association  or  number  of 
persons  shall  act  within  this  State  as  a  cor- 
poration without  being  duly  incorporated. 

See  Const.,  art.  262,  and  cross-references,  and 
note  to  R.  S.,   §  131. 

[Sections  2593  et  seq.  do  not  provide  for  for- 
feiture of  charters  at  instance  of  private  persons, 
even  when  they  are  parties  interested.  State  t. 
Atty.-Gen.,  30  La.  Ann.  954.] 

§  2594.  In  the  cases  mentioned  in  section 
2593  it  is  hereby  made  the  duty  of  the  dis- 
trict attorney  or  district  attorney  pro  tem- 
pore of  the  parish  in  wliich  the  case  arises, 
and  for  the  parish  of  Orleans  of  the  attorney- 


general,  to  bring  action  against  the  offending 
party  or  parties,  when  so  required  to  do. 

§  2595.  Service  shall  be  made  in  such  cases 
as  are  provided  for  in  the  foregoing  sections, 
the  same  as  in  other  civil  suits,  and  the 
answer  of  the  defendant  shall  be  filed  within 
the  legal  delays  as  in  other  suits;  such  cases 
to  be  tried  by  preference  over  all  other  cases, 
without  being  fixed  for  trial  after  issue 
joined. 

§  2596.  When  an  action  shall  be  brought  by 
virtue  of  the  provisions  of  this  act  by  the 
district  attorney  or  district  attorney  pro 
tempore  or  the  attorney-general,  as  the  case 
may  be,  on  the  relation  or  information  of 
any  person  interested,  the  name  of  such  per- 
son shall  be  joined  with  the  State  as  plain- 
tiff. 

§  2601.  When  several  persons  claim  to  be 
entitled  to  the  same  office  or  franchise,  one 
action  may  be  brought  against  all  such  per- 
sons in  the  same  action  in  order  to  ti*y  their 
rights  to  such  office  or  franchise. 

§  2602.  When  defendant,  whether  a  person 
or  a  corporation,  against  whom  such  action 
shall  have  been  brought,  shall  be  adjudged 
guilty  of  usurping  or  intruding  into,  or  un- 
lawfully holding  or  exercising  any  office, 
franchise  or  privilege,  judgment  shall  be 
rendered  that  such  defendant  be  excluded 
fi'om  such  office,  franchise  or  privilege,  and 
also  that  the  plaintiff  recover  costs  against 
such  defendant,  and  such  damages  as  are 
proven  to  have  been  sustained. 

§  2G03.  All  laws  or  parts  of  laws  in  this 
State  touching  on  the  subject  of  quo  war- 
ranto, conflicting  directly  or  indirectly  with 
any  of  the  provisions  of  tliis  act,  be  and  the 
same  are  hereby  repealed. 

§  2604.  Appeals  to  the  supreme  court  may 
be  taken  from  any  of  the  actions  provided 
for  in  the  foregoing  sections,  the  same  as  In 
other  cases.  But  all  such  cases  shall  take 
preference  when  they  come  before  the  su- 
preme court  over  all  other  cases  in  the  order 
of  trial,  and  shall  be  made  returnable  to  the 
supreme  court,  either  in  New  Orleans  or  at 
one  of  its  sessions  in  the  country,  on  motion 
of  either  of  the  parties. 

§  2605.  All  the  cases  coming  under  the 
provisions  of  this  law  may  be  tried  before  a 
judge  of  the  district  in  chambers,  or  at  a 
special  term  called  by  said  judge  on  legal 
notice  being  given  the  parties  interested; 
and  if  required  by  either  party,  the  judge 
may  order  a  special  jury,  to  be  summoned 
according  to  law,  to  try  such  case. 


20 


LOUISIANA. 


Classification  of  corporations;  corporate  name  and  powers  — Civ.  Code,  Arts.  427-433. 


CIVIL  CODE  OF  LOUISIANA- 18T0. 


Book  I.  Of  Persons. 

TITLE    X.       OF    CORPOUATIOXS. 

CHAPTER  I. 

Of   the   Nature   of    Corporations,    of    their 
Use  and  Kinds. 

Art.  427.   "  Corporation,"    defined. 

428.  The  use  of  corporations. 

429.  Corporations  are  of  two  kinds,   political 

and  private. 

430.  Also,  either  civil  or  religious. 

431.  Civil  and  religious  corporations  defined. 

Art.  427.  A  corporation  is  an  intellectual 
body,  created  by  law,  composed  of  indi- 
viduals united  under  a  common  name,  the 
members  of  which  succeed  each  other,  so 
that  the  body  continues  always  the  same, 
notwithstanding  the  change  of  the  indi- 
viduals which  compose  it,  and  Avhich,  for 
certain  purposes,  is  considered  as  a  natural 
person. 

"  Corporation  "  defined.  Const.,  art.  268,  and 
cross-references;  see  R.  S.,  §  684. 

Art.  428.  The  use  of  corporations  is  to 
contribute  by  the  union  and  assistance  of 
several  pei'sons,  to  the  promotion  of  some 
object  of  general  utility,  although  they  be 
at  the  same  time  established  for  the  advan- 
tage of  those  who  are  members  of  such  cor- 
porations. 


Purposes  for  which  corporation  formed. 
§  683. 


R.   S., 


Art.  429.  Corporations  are  of  tW'O  princi- 
pal kinds;  political  and  private. 

Political  coiijorations  are  those  Avhieh  have 
principally  for  their  object  the  administra- 
tion of  a  portion  of  the  State,  and  to  whom 
a  part  of  the  powers  of  government  is  dele- 
gated to  that  effect. 

All  others  are  private  corporations. 

See  Const.,  art.  268,  and  cross-references. 

Art.  430.  Corporations  are  also  divided  into 
civil  and  religious,  and  this  distinction  ie- 
sults,  as  well  from  the  quality  of  the  persons 
who  generally  compose  those  kinds  of  cor- 
porations, as  from  the  difference  of  the  ob- 
ject of  their  establishment. 

See  Const.,   art.  268,  and  cross-references. 

Art.  431.  Civil  corporations  are  those  which 
relate  to  temporal  police;  such  are  tlie  cor- 
porations of  the  cities,  the  companies  for  the 
advancement  of  commerce  and  agriculture. 


literary  societies,  colleges  or  universities 
founded  for  tlie  instruction  of  youth,  aiid  tl.e 
like.  Religious  corporations  are  those  wliose 
establishment  relates  only  to  religion;"  such 
are  the  congregations  of  the  dift'erent  re- 
ligious persuasions. 

See  Const.,   art.   268,   and   cross-references. 

CHAPTER  II. 

Of  the  Rights  and  Privileges  of  Corpora- 
tions, and  of  their  Incapacity. 

Art.  432.  Corporate  name  must  be  adopted.    Must 
sue  and  be  sued  by  such  name. 

433.  Corporate  powers. 

434.  The  right  of  succession. 

435.  Corporations  distinct  from  persons  com- 

posing them. 

436.  Individual   members    cannot     dispose   of 

corporate  property. 

437.  Creditor    of     corporation     must     collect 

from  it. 
43S.  Corporation     must     appoint     officers     to 

transact   its   business. 
430.  Powers  and  duties  of  such  officers. 

440.  Corporations   are   subject   to   various   in- 

capacity. 

441.  Cannot  fill  any  position  of  personal  trust. 

Nor  be  imprisoned. 

442.  Nor  bring  au  action  for  assault  and  bat- 

tery. 

443.  Nor   commit   treason. 
4-14.  Acts  of  majority  binding. 

445.  Regulations    of   corporations    are    obliga- 

tory upon  all  its  members. 

446.  Corporations    unauthorized   by    law    can- 

not appear  in  court. 

Art.  432.  Corporations  must  not  only  be 
authorized  by  the  legislature,  or  established 
according  to  law,  but  a  name  must  be  given 
to  them;  and  it  is  in  that  name  they  must 
sue  or  be  sued,  and  do  all  their  legal  acts, 
although  a  slight  alteration  in  this  name  be 
not  important. 

See  R.  S.,  §  084,  subd.  192.  Charter  to  contain 
name.     R.  S.,   §  685. 

Art.  433.  Corporations  legally  established 
are  substituted  for  persons,  and  their  union 
which  renders  connnon  to  all  those  who  com- 
pose them,  their  interests,  their  rights  and 
their  privileges,  is  the  reason  why  they  are 
considered  as  one  single  whole.  Hence  it 
follows  that  they  may  possess  an  estate,  and 
have  a  common  treasurj^  for  the  purpose  of 
depositing  their  money;  that  they  are  ca- 
pable of  receiving  legacies  and  donations; 
that  they  may  make  valid  contracts,  obligate 
others  and  obligate  themselves  toward  oth- 
ers; exercise  the  rights  which  belong  to  them; 
manage  their  own  affairs;  appear  in  courts 
of  justice,  and  even  enact  statutes  and  regu- 
lations for  their  own  government,  provided 
such  statutes  and  regulations  be  not  con- 
trary to  the  laws  of  the  political  society  of 
which  they  are  members. 


LOUISIANA. 


21 


Rights  and  privileges;  corporate  debts  —  Civ.  Code,  Arts.  434-438. 


See    R.    S.,    §    684,    notes    and    cross-references,  j 
Incapacity    of    corporation.      R.    C.    C,    arts.    440- 
443.  I 

Art.  434.  The  right  of  succession  also  is 
inherent  to  the  nature  of  corporations;  so 
tliat  as  long  as  they  exist  they  transmit  to 
their  successors  their  rights  and  tlieir  prop-  i 
erty.  The  right  of  electing  in  tlie  manner 
prescribed  by  law,  new  meml^ers  in  the  stead 
of  tlioso  Avho  have  ceased  to  be  members  of 
the  corporation,  is  a  right  impliedly  attached 
to  the  constitution  of  eveiy  regularly  estab- 
lished corporation. 

See  R.  S.,  §  684,  and  cross-references. 

Art.  435.  Corporations  are  intellectual  be- 
ings, different  and  distinct  from  all  the  per- 
sons who  compose  them. 

See  Const.,  art.  268,  and  cross-references.  Reg- 
ulations of  corporation,  binding  on  its  members. 
R.  C.  C,  art.  445.  Incapacities  of  corporation. 
Id.,  arts.  440-443. 

[Corporations  are  distinct  from  persons  com- 
posing them,  yet  the  latter  have  rights  which 
they  may  protect  In  courts.  Knabe  v.  Ternot, 
16  La.   Ann.   15. 

Ownership  of  stock  does  not  give  stockholders 
any  legal  estate  in  corporate  property.  Morgan 
V.  R.  R.  Co.,  1  Woods  (U.  S.),  15;  Sala  v.  New 
Orleans,   2  id.   180. 

The  property  of  an  extinct  corporation  belongs 
to  the  individual  members.  Burke  v.  Wall,  29 
La.  Ann.  39. 

But  not  until  all  corporate  debts  are  paid. 
Cochran  v.  Dry  Dock  Co..  30  La.  Ann.  1365;  Jack- 
son V.    Ludellng,   21   Wall.    (U.    S.)   016. 

Rights  and  duties  of  stockholders  grow  out  of 
the  contract  employed  in  the  subscription  for 
stock.  Chase  v.  Bank,  44  La.  Ann.  69;  s.  c,  10 
So.   Rep.   379. 

Corporators  cannot  sue  singly  for  the  corpora- 
tion. What  is  due  to  the  corporation  is  not  due 
to  the  individuals  composing  it.  Ross  v.  Crockett, 
14  La.  Ann.  811.] 

Art.  436.  The  estate  and  rights  of  a  corpo- 
ration belong  so  completely  to  the  body,  that 
none  of  the  individuals  who  compose  it,  can 
dispose  of  any  part  of  them.  In  this  respect 
the  thing  belonging  to  a  body,  is  very  differ- 
ent from  a  thing  which  is  common  to  several 
Individuals,  as  respects  the  share  which 
every  one  has  in  the  partnership  which  exists 
between  them. 

See  R.  S.,  §  684,  subd.  4;  R.  C.  C,  arts.  437- 
430. 

[A  member  of  a  corporation  who  Is  a  creditor 
thereof  has  same  right  as  any  other  creditor  to 
sue  It  and  attach  its  property.  Life  Assn.  v. 
Levy,  33  La.    Ann.  1203. 

Dividends  declared  on  corporate  stock  are  pay- 
able on  demand,  and  until  demand  and  refusal, 
prescription  does  not  begin  to  run  against  the 
person  entitled.  Armaut  v.  R.  R.  Co.,  41  La. 
Ann.  1020;  s.  c.  7  So.  Rep.  35. 

Where  expiring  corporation  Is  merged  into  a 
new  one,  and  a  provision  inserted  in  new  charter 
forfeiting  dividends  not  claimed  within  three 
years  from  time  when  declared,  is  not  binding 
upon  old  stockholders  except  from  time  when, 
expresslv  or  bv  implication,  they  consent  thereto 
by  assuming  the  quality  of  stockholders  in  the 
new  companv.     Id. 

Stockholders  have  no  right  to  appropriate  any 
part    of   corporate   assets    to    pay    salaries    due    to 


them  as  officers,  or  due  them  on  any  other  ac- 
count, until  all  other  creditors  have  been  paid. 
Cochran  v.  Dry  Dock  Co.,  30  La.    Ann.   1365. 

Stockholders  of  a  corporation,  in  the  name  of 
which  property  has  been  bought  on  credit,  can- 
not form  a  new  corporation  in  which  their  in- 
terests are  the  same  as  in  the  old,  and  based  on 
no  new  consideration;  and  by  transferring  the 
property  to  the  new  corporation  escape  liability 
to  the  vendor  and  creditor.  Hancock  v.  Hol- 
brook,  40  La.  Ann.  53;  s.  c,  3  So.  Rep.  351.] 

Art.  437.  According  to  the  above  rule,  what 
is  due  to  a  corporation  is  not  due  to  any  of 
the  individuals  who  compose  it,  and  vice 
versa.  A  creditor  of  a  corporation  cannot 
therefore  compel  any  of  the  members  thereof 
to  pay  what  may  be  due  to  him  by  the  cor- 
poration; he  can  demand  his  payment  of  the 
corporation  only,  through  their  president, 
syndic  or  attorney  in  fact,  and  he  can  seize 
no  other  effects  bvit  such  as  belong  to  the 
corporation,  provided  the  debt  has  been  con- 
tracted by  the  corporation  through  their 
president,  syndic,  or  attorney  in  fact;  for  If 
all  the  individuals  who  compose  the  corpora- 
tion have  signed  the  deed  personally,  every 
one  of  them  may  be  compelled  to  make  pay- 
ment, either  for  his  individual  portion  or  in 
solidum,  when  it  lias  been  stipulated  ex- 
pressly that  the  debt  was  contracted  in 
solidum. 

See  R.  S.,  §  690. 

[Corporate  property  Is  subject  to  corporate 
debts.  And  a  court  of  equity  will,  in  proper 
cases,  subject  property  sold  by  the  corporation 
and  in  the  hands  of  the  purchaser,  to  the  pay- 
ment of  debts  with  which  it  Is  charged.  Leathers 
V.  Januey,  41  La.  Ann.  1120;  s.  c,  6  So.  Rep.  884.] 

Art.  438.  From  the  circumstance  that  a 
con^oration  is  an  intellectual  being,  it  fol- 
lows that  they  cannot  personally  transact 
all  that  they  have  a  right  legally  to  do.  as 
has  been  above  observed;  wherefore  it  be- 
comes necessary  for  every  corporation  to 
ai^point  some  of  their  members  to  whom  they 
maj^  intrust  the  direction  and  care  of  their 
affairs,  under  the  name  of  mayor,  president, 
syndics,  directors  or  others,  ac-cording  to  the 
statutes  and  qualities  of  such  corporation. 

See  R.  S.,   §  684,  subd.  5. 

[The  managers  and  officers  of  a  corporation, 
where  capital  is  contributed  In  shares,  are  trus- 
tees for  its  stockholders  and  its  creditors;  and 
they  have  no  right  to  participate  in  any  com- 
bination to  divest  it  of  its  property  and  obtain 
such  property  for  themselves  at  a  sacrifice;  nor 
to  seek  their  own  profit  at  expense  of  the  com- 
pany, its  stockholders  or  bondholders;  and  if 
necessary  to  sell  corporate  property,  it  is  their 
dutv  to  get  for  it  the  highest  price  obtainable. 
Jackson  v.  Ludellng,  21  Wall.  (U.  S.)  616. 

Directors  who,  in  pursuance  of  a  resolution  of 
the  stockholders  advertise  a  lease  of  the  prop- 
erty, and  reject  all  the  sealed  proposals  received, 
may  adopt  another  mode  of  contracting,  and  the 
courts  will  not  Interfere.  Ricau  v.  Baquie,  20  La. 
Ann.  67. 

Board  of  directors  has  undoubted  right  to  sell 
property  of  the  corporation  to  pay  its  debts. 
Brewing  Co.  v.  Planner,  44  La.  Ann.  22;  s.  c  10 
So.  Rep.  384. 

But  when  sold  to  one  of  their  own  members  It 
must   appear  that  there  was  a  necessity   for   the 


22 


LOUISIANA. 


Duties  of  officers;  acts  bind  corporation  —  Civ.  Code,  §  439. 


gale,  and  that  the  property  was  bought  In  open 
market,  at  a  fair  price,  and  without  any  unfair- 
ness. Id.  When  the  sale  of  the  property  was 
made  necessary  by  the  mismanagement  of  the 
board,  one  of  the  directors  of  said  board  will  not 
be  permitted  to  purchase  it.     Id. 

An  act  reviving  a  charter  does  not  continue  in 
office  officers  elected  under  the  charter  during  Its 
first  existence;  their  offices  expired  with  that 
charter.     Rost  v.   St.   Francis,   3  N.   S.  54. 

Where  person  elected  a  director  is  ineligible,  the 
person  who  has  obtained  the  next  highest  numb«r 
of  votes  is  not  elected;  a  new  election  must  take 
place.  Jordy  v.  Hebrard,  18  La.  455;  Lesseps  v. 
Creditors,  7  La.  Ann.  624. 

Individuals  of  a  corporation  cannot  bind  it  by 
any  act  of  theirs;  much  less  by  anything  which 
they  say.  Jacob  v.  Ursullne  Nuns,  2  Mart.  271; 
Canal  Bank  v.  Holland,  5  La.  Ann.  563;  Ross  v. 
Crockett,   14  id.  811. 

Directors  of  a  bank  may  pledge  its  faith  in 
execution  of  their  trust.  State  v.  Bank,  5  N.  S. 
344.  But  have  no  authority  to  reduce  its  capital. 
Percey  v.  Millaudon,  3  La.  574.  They  may  sue  to 
erase  a  subscription  to  stock.  Bank  v.  McDon- 
ough,  5  La.  67.  They  are  bound  to  enforce  not 
only  the  express,  but  the  implied  provisions  of 
the  charter.  Id.  When  not  perfectly  satisfied 
of  the  validity  of  titles  to  property  offered  for 
mortgage,  in  the  exercise  of  a  proper  discretion, 
thev  should  withhold  their  approval.  Walden  v. 
Bank,  6  La.  254. 

Directors  have  discretionary  power  to  declare 
dividends,  and  a  very  strong  case  mxist  be  pre- 
sented to  Induce  a  court  to  interfere.  State  v. 
Bank.  6  La.  746. 

Directors  are  not,  properly  speaking,  officers  of 
a  bank,  nor  have  they,  Individually,  any  power 
to  control  its  management.  Bank  v.  Senecal,  13 
La.  527.] 

An.  439.  The  attorneys  in  fact  or  oflBcers 
thus  appointed  by  corpoi-ations  for  the  direc- 
tion and  care  of  their  affairs,  have  their 
respective  duties  pointed  out  by  their  nomina- 
tion, and  exercise  them  according  to  the 
general  regulations  and  particular  statutes 
of  the  corporation  of  which  they  are  the 
heads.  These  attorneys  or  officers,  by  con- 
tracting, bind  the  corporations  to  which  they 
belong  in  such  things  as  do  not  exceed  the 
limits  of  the  administration  which  is  In- 
trusted to  them;  their  act  is  supposed  to  be 
the  act  of  the  corporation.  If  the  powers  of 
such  attorneys  or  officers  have  not  been  ex- 
pressly determined,  they  are  regulated  in  the 
same  manner  as  those  of  other  agents. 

Relative  to  officers  of  bank.  Const.,  art.  269; 
see  R.  S.,  §  684,  subd.  2,  and  cross-references,' 
Corporation  acts  judicially  through  Its  agents.  C 
P.,  art.  112. 

[Officers  of  a  corporation  have  no  right  to  vote 
on  the  shares  held  by  it.  Monsseaux  v.  Urqu- 
hart,  10  La.  Ann.  485. 

To  bind  a  corporation  on  a  note  drawn  by  a 
manager.  It  must  be  shown  that  latter  had  special 
autliority  to  draw  the  note,  or  that  the  giving  of 
it  was  necessary  to  effect  the  object  for  which 
he  was  appointed.     Culver  v.   Leovy,  6  La.   590. 

Where  the  corporation,  for  whos'e  account  the 
note  Is  drawn,  is  not  responsible,  the  Individual 
members  who  signed  and  Indorsed  the  notes  are 
liable  thereon  jointly.  Same  v.  Same,  19  La. 
Ann.  203. 

Officers  of  a  corporation  have  no  right  to  use 
its  property  for  their  personal  benefit.  Packet 
Co.  v.   Brown,  36  La.   Ann.   138. 

A  corporation  which  by  Its  charter  can  only  act 
through  its  board  of  directors  cannot  be  bound 
to  contracts  by  Its  president  without  the  authori- 
zation of  the  board,  unless  It  is  in  acts  of  simple 


administration  which,  of  necessity,  should  be 
done  without  that  authorization.  Bright  v.  Ceme- 
tery Assn.,  33  La.  Ann.  58. 

Agents  of  a  corporation  are  entitled  to  reason- 
able compensation  for  their  services.  Packet  Co. 
V.  Brown,  36  La.  Ann.  138.  The  unauthorized  act 
of  an  agent  of  a  corporation  may  be  ratified  by 
directors,  which  ratification  is  equal  to  a  previous 
authority.     Id. 

The  board  of  directors  of  a  corporation  have 
the  general  right  to  apply  its  property  to  the  pay- 
ment of  Its  debts;  and  a  majoritj*  of  stockholders 
present,  at  a  meeting  regularly  convened,  with 
due  notice  for  the  purpose,  have  the  right  to  ratify 
such  action  and  dissolve  the  corporation.  Han- 
cock V.  Holbrook,  40  La.  Ann.  53;  s.  c,  3  So. 
Kep.  351. 

Where  more  than  ten  years  have  elapsed  since 
a  deceased  president  and  secretary  rendered  the 
last  account  of  his  administration  of  aSairB 
of  the  corporation,  the  plea  of  prescription  must 
prevail.     Ins.   Co.  v.   Pike,  34  La.   Ann.  825. 

Officers  and  directors  are  mandataries,  and  as 
such  liable  to  the  corporation  for  injuries  result- 
ing to  it  from  their  breaches  of  duty.  They  are 
likewise  liable  for  wrongs  which  they  may  com- 
mit against  third  persons.  They  also,  to  a  cer- 
tain extent,  are  representatives  of  creditors,  and 
may  In  some  cases  vindicate  the  rights  of  the 
latter.     Raymond  v.   Palmer,   35   La.    Ann.   276. 

The  president  must  act  with  candor  and  fair 
dealing  for  the  interests  of  the  corporation,  and 
without  any  taint  of  selfish  motive.  Hancock  v. 
Hollirook,  40  La.  Ann.  53:  s.  c.  3  So.  Rep.  351. 

A  hank  held  not  liable  for  an  unauthorized  dec- 
laration by  one  of  its  officers.  Etting  v.  Bank, 
7  Rob.  459. 

Board  of  directors  which,  in  furtherance  of  the 
vote  of  the  required  majority,  directs  a  total 
cessation  of  business  and  liquidation  of  corporate 
affairs,  acts  within  the  sphere  of  its  lawful  au- 
thority, and  is  not  chargeable  with  any  loss  which 
the  mismanagement  may  entail  on  the  minority. 
Trisconi  v.  Winship,  43  La.  Ann.  45;  s.  c,  9  So. 
Rep.  29. 

Acts  of  directors,  done  within  the  lawful  scope 
of  their  powers  and  authority,  are  not  subject  to 
judicial   scrutiny.     Id. 

A  corporation  is  not  bound  by  unauthorized  acts 
of  its  officers.  Const.  Co.  v.  Police  Jury,  44  La. 
Ann.  863;  s.  c,  11  So.  Rep.  230.  As  to  authority 
of  officer  to  bind  corporation  in  management  of 
ordinarv  business,  see  Bank  v.  Plow  Co.,  45  La. 
Ann.    1214;   s.   c,   14  So.   Rep.    l.TO. 

A.  want  of  officers  by  reason  of  either  failure  to 
elect  or  of  death  will  not  of  itself  work  dissolu- 
tion of  the  corporation.  In  re  Belton,  47  La. 
Ann.   1614;  s.   c,   18  So.   Rep.  642. 

Tlie  connection  of  officer  of  corporation  with  It 
Is  one  of  personal  trust  and  terminates  with  his 
death,  and  corporate  property  in  his  hands  passes 
Into  control  of  corporate  agencies  and  not  to  his 
administrators.     Id. 

Powers  of  corporate  officers,  being  defined  by 
charter  and  by-laws,  they  will,  when  acting 
within  their  sphere,  represent  the  corporation,  and 
hind  it  by  their  acts;  but  in  other  matters  they 
can  only  represent,  or  act  for  It,  when  authorized 
by  a  resolution  of  directors.  Reed  v.  Powell,  11 
Rob.  98. 

Where  business  of  a  corporation  is  such  as  to 
require  it  to  be  conducted  through  agents,  notice 
to  one.  In  a  matter  in  which  he  acted  within  the 
Bcope  of  his  employment,  in  the  usual  course  of 
huslness,  will  bind  the  corporation.  Pontchartraln 
Co.  V.  Helrne.  2  La.  Ann.  129. 

Directors  are  bound  to  discharge  their  duties 
with  ordinary  care,  and  are  liable  for  gross  er- 
rors which  a  man  of  common  prudence  would  not 
have  committed:  but  If  they  learn  any  fact  to 
arouse  suspicion  of  fidelity  of  officers  under  their 
control,  greater  care  is  requisite.  Percy  v.  Mil- 
laudon, 8  N.   S.   74;  3  La.  568. 

They  cannot  appropriate  funds  to  the  payment 
of  counsel  fees  for  defending  them,  when  sued 
by  stockholders.  Id.  The  measure  of  their  lia- 
bility for  illegal  measures  is  the  extent  of  Injury 
sustained    by    the   stockholder.      Id. 

They  are  not  responsible  in  solido,  unless  ex- 
pressly   made    so    by    charter.    Id. 


LOUISIAiTA. 


Corporate  rights;  dissolution  —  Civ.  Code,  Arts.  440-447. 


Payment  of  even  a  just  claim  by  president  with- 
out an  order  from  directors,  though  on  verbal 
direction  of  a  majority  of  them.  Is  irregular. 
Building  Co.  v.  Lawson,  11  La.  36.] 

Art.  440.  Corporations  being  intellectual 
persons,  tliey  are  subject  to  various  kinds  of 
incapacities,  some  of  which  are  inherent  to 
their  nature,  others  are  established  by  law. 


See  R.  C.   C,  arts.  441-443. 

Art.  441.  A  coi-poration  cannot  be  admin- 
istrator, guardian  or  testamentary  execntor, 
nor  fnltill  any  other  office  of  personal  trust. 
A  corporation  cannot  be  imprisoned,  for  its 
existence  being  ideal,  nobody  can  arrest  or 
confine  it. 

Art.  442.  In  the  same  manner  a  corpora- 
tion cannot  bring  an  action  for  assault  and 
battery  or  for  other  injuries  of  that  nature;  , 
for  a  coii^oration  can  neither  beat  nor  be  i 
beaten  in  its  corporate  capacity.  ' 

See  R.   S.,   §  6S4,    subd.   2,    and   cross-references. 

1 
Art.  443.  A  corporation  cannot  commit  the  I 
crime  of  treason,  or  any  other  crime  or  of-  ' 
fense,  in  its  corporate  capacity,  although  its 
members  may  be  guilty  of  those  crimes  in 
their  individual  and  respective  capacities. 

See  R.  S.,  §  6S4,   subd.  2,   and  cross-references. 

Art.  444.  In  corporations  the  act  of  the  ma- 
jority is  considered  as  the  act  of  the  whole. 

Regulations  of  corporation  obligatory  upon  mem- 
bers. R.  C.  C,  art.  445.  Meetings  of  corporation. 
R.   S..   §  741. 

[In  absence  of  any  adverse  provision  in 
charter  or  statute,  a  majority  of  stockholders 
may  determine  that  the  business  of  the  concern 
shall  be  stopped  altogether  and  its  affairs  liqui- 
dated. Trisconi  v.  Winship,  43  La.  Ann.  45;  s.  c, 
9  So.  Rep.  29. 

Assent  of  a  majority  of  stockholders  in  rela- 
tion to  a  corporate  matter,  not  given  in  a  stock- 
holders' meeting,  but  by  each  one  separately  and 
at  different  times,  is  without  force.  Peirce  v. 
Building    Co.,    9    La.    Ann.    404. 

Courts  cannot  know  or  regard  the  wishes  of 
majority  of  corporators,  unless  expressed  in  ac- 
cordance with  by-laws  and  charter.  German 
Cong.    V.   Pressler,    14   La.    Ann.    799.] 

Art.  44.5.  The  statutes  and  regulations 
which  corporations  enact  for  their  police  and 
discipline,  are  obligatory  upon  all  their  re- 
spective members  who  are  bound  to  obey 
them,  provided  such  statutes  contain  nothing 
contrary  to  the  laws,  to  public  liberty,  or  to 
the  interest  of  others. 

See  Const.,  art.  263.  Power  to  make  by-laws. 
R.   S.,    §   864,    subd.   6. 

[By-laws  are  obligatory  upon  all  members.  If 
not  coutrarv  to  law,  public  policy  or  the  interest 
of  others.  Congregation  v.  Pressler,  17  La.  Ann. 
127. 

They  have  the  force  of  law  between  the  em- 
ploves;  the  company  may  exercise  its  rights 
and  discharge  its  employes.  Huuter  v.  Ins.  Co., 
26  La.   Ann.   13. 

Corporations  may  enact  by-laws  for  their  govern- 
ment.   Williams  v.    Masons,   38   La.    Ann.    620. 

38 


But  to  be  valid  they  must  be  consistent  with 
the  general  laws,  and  cannot  affect  rights  of 
third  parties  without  their  consent.  Gordon  v. 
where  a  corporation  is  empowered  to  make  by- 
laws in  certain  cases  and  for  certain  purposes, 
its  power  is  limited  to  the  cases  and  objects 
specified.    New  Orleans  v.  Philippi,  9  La.  Ann.  44. 

By-laws  must  be  reasonable  and  consistent  with 
general  laws  of  the  land;  and  whether  they  are 
so  is  a  question  for  the  court.  State  v.  Bank, 
5  N.   S.  344. 

Stockholders  may  be  bound  by  provisions  be- 
yond those  actually  found  in  the  charter,  if  it 
authorize  directors  to  make  by-laws,  not  contrary 
to  law,  for  the  general  administration  of  corpo- 
rate affairs.    Bank  v.  Guice,  2  La.  Ann.  249. 

A  by-law,  where  charter  is  silent  on  the  sub- 
ject, cannot  subject  a  stockholder  to  a  forfeiture 
of  stock  for  non-payment  of  an  installment.  Les- 
seps  y.   Architects'   Co.,  4  La.   Ann.   316.] 

Art.  446.  Corporations  unauthorized  by 
law  or  by  an  act  of  the  legislature,  enjoy  no 
public  character,  and  cannot  appear  in  a 
court  of  justice,  but  in  the  individual  name 
of  all  the  members  who  compose  it,  and  not 
as  a  political  body;  although  these  coi-pora- 
tions  may  acquire  and  possess  estates,  and 
have  common  interests  as  well  as  other  pri- 
vate societies. 

See  R.  S.,   §  684,  subd.  2,   and  cross-references. 


CHAPTER  HI. 
Of  the  Dissolution  of  Corporations. 

Art,  447.  Corporation    may    be    dissolved,    how. 

Art.  447.  A  corporation  legally  established 
may  be  dissolved: 

1.  By  an  act  of  the  legislature,  if  they  deem 
it  necessary  or  convenient  to  the  public  in- 
terest; provided  that  when  the  act  of  incorpo- 
ration imports  a  contract,  on  the  faith  of 
which  individuals  have  advanced  money  or 
ensaged  their  property,  it  cannot  be  repealed 
without  providing  for  the  reimbursement  of 
the  advances  made,  or  malcing  full  indem- 
nity to  such  individuals; 

2.  By  the  forfeiture  of  their  charter,  when 
the  corporation  abuses  its  privileges,  or  re- 
fuses to  accomplish  the  conditions  on  which 
such  privileges  were  granted,  in  which  case 
the  corporation  becomes  extinct  by  the  effect 
of  the  violation  of  the  conditions  of  the  act 
of  incorporation. 

See  Const.,  art.  262,  and  cross-references. 
Charter  forfeited  by  formation  of  a  trust.  Act 
of  1892,  at  p.  28. 

[A  corporation  may  be  dissolved,  first,  by  an 
act  of  the  legislature  on  certain  conditions; 
second,  bv  a  forfeiture  of  its  charter,  judicially 
ascertained  at  the  suit  of  the  State.  Curien  v. 
Santini,  16  La.  Ann.  27;  Burke  v.  "Wall,  29  id.  39. 

A  corporation  legally  established  may  be  dis- 
solved bv  an  act  of  the  legislature,  if  they  deem 
it  neces&'ary  for  the  public  interests.  Williams  v. 
Masons,   38   La.   Ann.  620. 

As  a  general  rule  the  question  as  to  the  for- 
feiture or  dissolution  of  charters  and  acts  of 
Incorporation  is  one  which  concerns  the  public 
order,  and  the  corporation  is  presumed  to  exist 
for  all  purposes  of  justice  until  the  forfeiture  is 
declared  by  the  judgment  of  a  competent  court 
1  In  some  proceeding  to  which  the  State  is  a  party, 
lid.] 


24 


J.OUISIANA. 


Civil  actions;  quo  warranto  —  Code  of  Pr.,  Arts.  112,  119,  191,  198,  202.  8GT.  SCS. 


CODE  OF  PRACTICE  OF  LOUlSIAIsrA-  186' 


Part  I.    Of  Civil  Actions. 

TITLE   I.      OF  ACTIONS    IX   GENE       RAL.. 

CHAPTER  V. 

What  Persons  are  Entitled  to  Bring  Ac- 
tions. 

Art.  112.  Bodies  corporate  must  sue  in  corporate 
name  through  representatives. 

Art.  112.  Bodies  corporate,  and  chartered 
institutions,  act  judicially  through  their 
proper  representatives,  under  the  name  or 
title  given  to  them  in  their  act  of  incorpo- 
ration. 

See  R.   S.,   §  684,  subd.  2,   and  cross-references. 

CHAPTER  VI. 

Against  Whom  Actions  May  be  Brought. 

Art.  119.  Corporations  must  be  sued  by  corporate 
name. 

Art.  119.  Suits  against  corporations,  cor- 
porate bodies  or  chartered  companies,  must 
be  brought  against  them  under  their  legal 
titles. 

See  R.   S.,    §  C84,   subd.   2,   and  cross-references. 

Part  II.     Rules   to   be   Observed  in   Civil 
Actions. 

TITLE  I.  PROCEEDINGS  BEFORE  COURTS 
OF    ORIGINAL    JURISDICTION. 

CHAPTER  II. 

Of  the   Ordinary  Proceedings. 

Art.  191.  Petition    and   citation    how    served    upon 
corporation. 
198.  Same. 

(Statute.)  In   case   of   trespass,  •  corpora- 
tion   to    be    sued    where. 
202.  Service   upon    banks   and   other    Institu- 
tions. 

Art.  101.  *  *  *  If  the  suit  be  brought 
against  the  members  of  a  corporation, 
*  ♦  *  the  petition  and  citation  must  be 
sen'ed,  in  the  manner  hereafter  provided,  in 
the  following  articles. 

See  R.  S.,  §  684,  subd.  2,  and  cross-references. 
Charter  to  desicnate  officer  on  whom  citation  to 
be  served.  R.  S.,  §  685.  Foreign  corporation  to 
have  agent  for  process.     Const.,   art.  264. 

Art.  198.  When  a  suit  is  brought  n gainst 
a  corporation,  *  *  *  the  service  must  be 
made  as  follows:    *    ♦     * 

In  suits  against  banking  establishments,  on 
their  president  In  person,  or  at  the  house 
•where  the  banl<  is  Ivopt.  by  dolivpry  to  the 


teller,  or  in  liis  absence,  to  some  other  officer 
of  the  establishment;    *     *     * 

See  Const.,  art.  2G4,  and  cross-references. 

No.  174.  Stat.  2.5th  April,  1853.— §  2.  In 
all  cases  wiiere  any  coiijoration  shall  commit 
such  trespass,  or  do  anything  for  which  an 
action  lies,  it  shall  be  liable  to  be  sued  in 
the  parish  where  such  damage  is  done  or 
trespass  committed. 

Art.  202.  The  same  formalities,  which  are 
prescribed  in  the  preceding  articles,  must  be( 
observed  by  the  sheriff,  in  serving  citation  at 
the  office  of  chartered  l^anks,  or  other  public 
institutions,  or  at  the  counting-house  of  com- 
mercial establishments,  or  on  board  of  ships 
or  vessels. 

See  R.    S.,    §   684,   subd.   2,    and.  cross-references. 


CHAPTER  X. 

Of  Orders  Which   Courts  May  Render   in 
Certain  Cases. 

Sec.  4.  OF  THE  MANDATE  TO  PREVENT  AN 
USURPATION  OF  OFFICE  (WRIT  OF 
QUO  WARRANTO). 

Art.  867.  Mandate    defined. 

868.  Only    issued    In    relation    to    oflBcers    in 

corporation. 

869.  Person   to   whom    directed   must   answer 

in  writing. 

870.  Penalty  for  not  answering  within  time. 

871.  Judgment    bj-    the    court. 

873.  When  courts  shall  not  issue  such  man- 
dates. 

Art.  8(37.  This  is  an  order  rendered  in  the 
name  of  the  State,  by  a  competent  court,  and 
directed  to  a  person  who  claims  or  usurps 
an  office,  in  a  corporation,  inquiring  by  what 
authority  he  claims  or  holds  such  office. 

See  R.  S.,  §  684,  subd.  2,  and  cross-references. 
Not  to  issue,   when.    C.   P.,  art.  873. 

[Though,  under  our  legislation,  any  stockholder 
has  a  right  to  inquire,  l)y  a  quo  warranto,  into 
election  of  those  who  assume  to  administer  the 
corporation,  yet.  where  wrong  complained  of  was 
the  result  of  his  own  negligence  or  misconduct, 
or  he  has  acquiesced  or  concurred  in  it,  he  will 
not  be  listened  to.  Wiltz  v.  Peters,  4  La.  Ann. 
339. 

Otherwise,  if  some  objection  has  come  to  his 
knowledge  since  the  election.  These  principles 
are  certainly  applicable  to  private  corporations. 
Election  of  directors  will  not  be  set  aside  be- 
cause legal  votes  were  received  without  proper 
evidence.    Conant  v.  Millaudon,  5  La.   Ann.  542. 

Persons  holding  stock  in  tru.<<t  may  vote  for 
directors.  Id.  The  mere  assertion  that  votes  may 
III'  illegal  is  not  siiflicicnt  to  put  olhcers  elected 
on  proof  of  their  legality.  Fraud  upon  a  charter 
is  not   to  be  presumed.    Id.] 

Art.  868.  This  mandate  is  only  issued  for 
tlio  decision  of  disputes  between  parties,  in 


LOUISIAXA. 


25 


Quo  warranto;  trespass  —  Code  of  Pr.,  Arts.  869-873,  1009. 


relation  to  tlie  otiices  iu  corporations  as  wlieD 
a  person  usui-ps  tlie  character  of  mayor  of 
a  city,  and  sucli  lilie    *     *     * 

Art.  8G9.  A  mandate  to  prevent  ttie  usur- 
pation of  an  office  iu  a  city  or  other  corpora- 
tion, may  be  obtained  by  any  person  apply- 
ing for  it.  and  the  party  to  whom  it  is  di- 
rected must  make  his  answer  iu  writing, 
within  the  time  allowed  by  the  court,  and 
state  the  authority  under  which  he  exercises 
his  office. 

See  R.  S.,   §  GS4.  subd.  5. 

Art.  870.  If  the  person  to  whom  the  order 
is  directed  does  not  answer  within  the  time 
allowed,  the  court  shall  declare  him  not 
qualified  to  fill  the  place  of  which  he  per- 
forms the  duties,  shall  forbid  him  to  perform 
them  any  longer,  shall  condemn  him  to  pay 
the  costs,  and  shall  direct  the  corporation  to 
proceed  to  a  new  appointment. 

Art.  871.  But  if  the  person  to  whom  the 
order  is  directed,  answer  within  the  time 
allowed,  the  court  shall  pronounce  upon  the 
answer,  in  a  summai-y  manner,  and  after 
heai'ing  the  parties,  if  he  thinks  that  the 
person  to  whom  the  mandate  was  directed, 
has  usurped  the  office  which  he  holds,  or 
that  he  continues  in  it  unlawfully,  it  shall 
render  judgment  against  him,  in  the  manner 
provided  in  the  preceding  article. 

Art.  S73.  When  the  legislature  has  granted 
to  a  corporation  the  right  to  determine  the 


validity  of  the  elections  of  its  members  or 
officers,  courts  of  justice  shall  not  issue  man- 
dates for  the  pui-pose  of  inquiring  into  that 
fact. 

See  R.  S.,  §  684,  subd.  5. 

TITLE     IV.       OF     PROCEEDINGS     BEFORE 
JUSTICES    OF    THE    PEACE. 

CHAPTER  I. 

Of  Their  Jurisdiction  in  Civil  Matters. 

Art.  1069.  Actions  for  trespass  against  corpora- 
tions,   where    brought. 

Art.  1069.  (As  amended  June  15,  1888.)  In 
civil  cases  within  their  competence  justices 
of  the  peace  can  only  cite  before  them  such 
persons  as  are  domicilated  or  residing  within 
the  limits  of  their  jurisdiction  or  strangers 
who  may  chance  to  be  there;  and  in  all 
cases  where  any  corporation  shall  commit 
trespass  or  do  anything  for  which  an  action 
of  damages  lies,  it  shall  be  liable  to  be  sued 
in  the  ward  where  such  damage  is  done  or 
trespass  committed.  In  this  case  the  term 
strangers  applies  to  such  as  have  no  domicile 
or  fixed  place  of  residence  in  the  State.  Pro- 
vided further,  That  courts  may  issue  their 
•commission  to  any  magistrate  of  the  parish, 
wherein  a  witness  shall  reside,  to  examine 
such  witness  and  receive  his  deposition. 

See  R.    S.,    §  684,   subd.   2,   and  cross-references. 


LEGISLATIVE  ACTS  EELATING  TO  CORPORATIONS    ENACTED 
SUBSEQUENTLY  TO  1870. 


1.  To  consolidate  the  business  of  manufacturing 

corporations. 

2.  To  provide  for  increase  of  capital  stock,  and 

to  carry  into  effect  article  267  of  the  Consti- 
tution. 

3.  To   provide  for  formation   of   certain    corpora- 

tions, and  limiting  their  capital. 

4.  Same. 

.o.  Revenue  Act. 

6.  To  provide  summary  remedy  against  corpora- 

tions to  compel  compliance  with  certain  con- 
tracts with  municipal  corpor.ations. 

7.  To  carry  into  effect  article  264  of  the  Consti- 

tution.' 

5.  To  prevent  trusts  and  combinations. 

0.  To  provide  for  keeping  record  of  charters. 

10.  To    authorize    certain    corporations    to   borrow 

monev  and  issue  bonds. 

11.  To  provide  for  increase  and  decrease  of  capi- 

tal  stock. 

12.  To  n  uulate  appointment  of  receivers  for  cor- 

porations. 

Act  1. 

AN  ACT  to  authorize  the  consolidation  of 
the  business  or  manufacturing  corporations 
or  companies. 

Section  1.  Be  it  enacted  by  the  senate  and 
house  of  representatives  of  the  State  of  Loui- 
siana iu  general  assembly  convened.  That 
any  two  business  and  manufacturing  corpo- 
rations  or    companies   now    existing   under 


general  or  special  law.  whose  objects  and 
business  are  in  general  of  the  same  nature, 
may  amalgamate,  unite  and  consolidate 
said  corporations  or  companies  and  form 
one  consolidated  companj%  holding  and 
enjoying  all  the  rights,  privileges,  pow- 
ers, franchises  and  property  belonging 
to  each,  and  imder  such  corporate  name  as 
they  may  adopt  or  agree  upon.  Such  consoli- 
dation shall  be  made  by  agreement  in  writing 
by  or  under  the  authority  of  the  board  of 
directors,  and  the  assets  of  the  owners  of  at 
least  three-fifths  of  the  capital  stock  of  each 
of  said  corporations  or  companies,  and  a  cer- 
tificate of  the  fact  of  such  consolidation, 
with  the  name  of  the  consolidated  company, 
shall  be  filed  and  recorded  in  the  office  of 
the  secretary  of  State;  Provided,  No  such 
consolidation  shall  in  any  manner  affect  or 
impair  the  right  of  any  creditors  or  either 
of  said  companies.  In  the  agreement  of  con- 
solidation the  number  of  directors  of  the 
consolidated  company  shall  be  specified,  and 
the  capital  stock  may  be  any  amount  agi'eed 
upon  by  the  companies  or  corporations,  and 
set  forth  in  the  articles  of  consolidation. 

§  2.  Be  it  further  enacted,  etc..  That  all 
laws  or  parts  of  laws  conflicting  in  any  man- 


26  LOUISIANA. 

Formation  of  corporations;  taxation  —  Acts,  July  5,  1882;  June  29,  July  12,  188S. 


ner  with  the  provisions  of  this  net  be.  avd 
the  same  are  hereby  repealed,  ao'I  that  this 
act  shall  take  effect  from  and  after  its 
passage. 

(Approved  December  12,  1874.) 

See  Const.,  art.  274. 

Act  2. 

Repeale<l  by  Act  11. 

Act  3. 

AN  ACT  to  provide  for  the  formation  of  cor- 
porations for  certain  pui-poses,  and  limiting 
the  capital  of  the  same.* 

Be  it  enacted  by  the  general  assembly  of 
the  State  of  Louisiana,  That  it  shall  be  law- 
ful for  any  number  of  persons  not  less  than 
three,  upon  complying  with  the  provisions 
and  subject  to  the  restrictions  of  the  laws 
of  this  State  governing  corporations  in  gen- 
eral, to  form  themselves  into  and  constitute 
a  coiiioration,  for  the  purpose  of  cai'iTing 
on  any  mechanical,  mining  or  manufacturing 
business,  except  that  of  distilling  or  manu- 
facturing intoxicating  liquors,  with  a  capi- 
tal not  less  than  five  thousand  nor  more 
than  one  million  doUai-s. 

(Approved,  July  5,  1882.) 

See  Const.,  art.  275,  and  cross-references. 


Act  4. 

AX  ACT  to  provide  for  the  formation  of  cor- 
porations for  certain  pm*poses,  limiting 
the  capital  of  the  same,  and  the  liability  of 
the  stockholders  thereof. 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  the  State  of  Louisiana,  That 
it  shall  be  lawful  for  any  number  of  persons, 
not  less  than  three,  upon  complying  with  the 
provisions  of  the  laws  of  this  State  govern- 
ing corporations  in  general,  to  form  them- 
selves into  and  constitute  a  corporation  for 
the  pui-pose  of  carrying  on  any  lawful  busi- 
ness or  enterprise,  not  otherwise  specially 
provided  for,  and  not  inconsistent  with  the 
Constitution  and  laws  of  this  State;  pro- 
vided that  no  such  corporation  shall  engage 
in  stock-jobbing  business  of  any  kind;  the 
corporations  herein  provided  for  to  have  a 
capital  stock  of  not  less  than  five  thousand 
dollars. 

§  2.  The  word  "  limited  "  shall  be  the  last 
word  of  the  name  of  every  corporation 
formed  under  the  provisions  of  this  act;  and 
every  such  coi-poration  shall  paint  or  affix, 
and  shall  keep  painted  or  affixed,  its  name 
on  the  outside  of  every  office  or  place  in 
which  the  business  of  the  corporation  is 
carried  on,  in  a  conspicuous  position,  in  let- 
ters easily  legible,  and  shall  have  its  full 


*l8  this  act  repealed  by  the  ne.Tt  following  act  ? 


name  mentioned  in  legible  characters  in  all 
notices,  advertisements  and  other  official 
lications  of  such  corporations,  and  in  all 
bills  of  exchange,  promissory  notes,  checks, 
orders  for  money,  bills  of  lading,  invoices, 
receipts,  letters,  and  other  writings  used  in 
the  tran.saction  of  the  business  of  the  cor- 
porations; Provided,  That  the  omission  of 
the  Avord  "  limited,"  in  the  use  of  the  name 
of  the  corporation  shall  render  each  and 
every  person  participant  in  such  omissions, 
or  knowingly  acquiescing  therein,  liable  for 
any  indebtedness,  damage  or  liabilits*  arising 
therefrom. 

§  3.  Be  it  further  enacted,  etc.,  That  no 
stockholder  of  such  corporations  shall  ever 
be  held  liable  or  responsible  for  the  contracts 
or  faults  of  such  corporation  in  any  further 
sum  than  the  unpaid  balance  due  to  the  com- 
pany on  the  shares  owned  by  him;  nor  shall 
any  mere  informality  in  organization  have 
the  effect  of  rendering  a  charter  null  or  of 
exposing  a  stockholder  to  any  liability  be- 
yond the  amount  of  his  stock. 

§  4.  Be  it  further  enacted,  etc.,  That  all 
laws  or  parts  of  laws  in  conflict  or  incon- 
sistent with  the  provisions  of  this  act,  be 
and  the  same  are  herebv  repealed. 

(Approved  June  29,  1888.) 

See  Const.,  art.  275,  and  cross-references. 


Act    5. 

AN  ACT  to  provide  an  annual  revenue  for 
the  State  of  Louisiana  by  the  levying  of 
annual  taxes  upon  all  property  not  ex- 
empted by  the  Constitution  from  taxation, 
and  by  prescribing  the  methods  of  assess- 
ing and  collecting  the  same,  and  of  en- 
forcing payment  thereof. 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  the  State  of  Louisiana,  That  for 
the  calendar  year.  A.  D..  one  thousand  eight 
hundred  and  eighty-eight  <i8S8).  and  for 
each  succeeding  calendar  year,  there  are 
hereby  levied  annual  taxes  amounting  in 
the  aggregate  to  six  mills  on  the  dollar  of 
the  assessed  valuation  of  all  property  situ- 
ated within  the  State  of  Louisiana,  except 
such  as  is  expressly  exempted  from  taxa- 
tion by  the  Constitution;  and  the  term  prop- 
erty as  herein  tised,  means  and  includes  all 
real  estate,  with  the  buildings  and  all  other 
improvements  thereon  or  thereto  attached. 
*  *  *  all  charters  and  franchises,  *  *  • 
all  personal  property.  *  *  *  all  shares  of 
stock  in  all  banking,  insurance,  manufactur- 
ing, and  all  other  incoi-porated  or  non-in- 
coi-porated  companies  chartered  under  the 
laws  of  Louisiana,  or  under  the  laws  of  any 
other  State  than  Louisiana;  and  all  other 
articles  and  things  whatever  possessing  any 
money  value.  This  enumeration  shall  not 
be  construed  so  as  to  exempt  from  taxation 
any  property  or  values  not  enumerated 
herein;  Provided,  that  no  articles  or  things 


LOUISIAls^A. 


27 


Contracts  with  municipalities;  foreign  corporations  —  Acts,  July  12,  1888;  July  10,  1890. 


hereinabove   enumerated   shaJl   be   assessed 
more  than  once  the  same  rear.    *    *    * 

§  90.  Be  it  further  enacted,  etc..  That  the 
following  rules  for  the  taxation  of  persons 
and  property  are  hereby  established,  to-wit: 
*    *    * 

2.  The  phrase  "  personal  property,"  or 
"  movable  property.''  shall  be  held  to  mean 
and  include  all  things  other  than  real  es- 
tate, which  have  any  pecuniary  value,  and 
moneys,  credits,  investments  in  bonds, 
stocks,  shax-es  in  joint-stock  companies  or 
otherwise.    *    *    * 

5.  The  word  "  person  "  or  "  persons."  "  tax- 
payer "  or  "  taxpayers,"  shall  be  held  to  in- 
clude firms,  companies,  associations  and  cor- 
porations.   *    *    * 

(Approved  July  12.   1888.) 

See  Const.,  art.  228,  and  cross-references. 

[The  assessment  of  shares  for  the  purpose  of 
taxation  of  the  shareholder  is  not  subject  to 
deduction  of  bonds  exempt  from  taxation.  Ins. 
Co.  V.  Assessors,  42  La.  Ann.  1131;  s.  c,  8  So.  Rep. 
481. 

A  corporation  in  matters  of  taxation  is  dis- 
tinct from  the  shareholder.  The  statute  expressly 
declares  that  it  is  not  a  tax  on  the  capital  of 
the  corporation,  but  it  is  a  tax  on  the  shares. 
Id. 

Property  exempt  in  taxing  a  corporation  per  se 
is  not  exempt  in  assessing  the  shareholders; 
bonds  exempt  from  taxation  are  not  subject  to 
taxation  when  the  property  of  the  corporation  is 
taxed.  The  eventual  interest  of  the  shareholder 
in  these  bonds  does  not  give  him  any  right  to 
exemption  on  the  assessed  value  of  his  shares. 
Id. 

Above  act  is  not  in  conflict  with  provision  of 
Constitution,  which  requires  taxes  to  be  paid 
equal  and  uniform.  Tax  Collector  v.  Ins.  Co., 
42  La.  Ann.   1172:   s.   c.   8  So.   Rep.   G18. 

Nor  with  the  United  States  Constitution.     Id. 

Shares  of  stock,  evidenced  by  certificate,  are 
incorporeal  rights  in  the  funds  and  assets  of 
the  corporation,  and  must  be  seized,  whether  by 
taking  possession  of  the  shares  themselves,  or 
by  seizing  the  interest  of  the  shareholder  in  the 
assets  of  the  corporation,  i3y  giving  notice  to 
the  proper  oflicer  thereof.     Id. 

The  assessment  of  the  franchise  measured 
chiefly  by  the  earning  capacity  of  the  corporation 
is  a  proper  assessment.  R.  R.  Co.  v.  City,  44 
La.  Ann.  1057;  s.  c,  11  So.  Rep.  681.] 


Act    6. 

AX  ACT  providing  a  summary  remedy 
against  coi"porations  to  compel  a  compli- 
ance with  certain  obligations  and  contracts 
w-ith  mimicipal  corporations,  and  provid- 
ing ways  and  means  to  enforce  said 
remedy. 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  the  State  of  Louisiana,  That 
in  all  cases  where  any  corporation  has  here- 
tofore contracted  with,  or  may  hereafter 
contract  with,  or  shall  be  otherwise  legally 
bound  to  any  parish  or  municipal  corpora- 
tion in  this  State,  with  reference  to  the 
paving,  grading.  I'epairing,  reconstructing 
or  care  of  any  street,  liighway,  bridge,  cul- 
vert, levee,  canal,  ditch  or  crossing,  and 
shall  fail  or  neglect  to  perform  said  contract 


or  obligation,  the  said  parish  or  municipal 
corporation,  or  any  officer  thereof,  or  any 
five  taxpayers  thereof,  shall  have  the  right 
to  proceed  by  a  writ  of  mandamus  to  com- 
pel the  performance  of  said  contract  or  ob- 
ligation, or  any  part  thereof,  which  writ 
of  mandamus  shall  be  made  returnable  in 
five  days,  shall  be  ti-ied  by  preference  over 
aJl  other  cases,  without  a  jury  in  vacation, 
as  well  as  in  term  time,  and  in  case  of  ap- 
peal shall  be  tried  by  preference  in  the 
appellate  court. 

§  2.  Be  it  further  enacted,  etc..  That  in  case 
any  corporation  shall  fail  or  neglect  to  com- 
ply satisfactorily  with  any  judgment  against 
it  in  such  a  proceeding  within  the  time 
therein  fixed  (which  time  shall  be  fixed  by 
the  court  at  such  period  within  which  the 
work  can  be  reasonably  done),  it  shall  be 
the  duty  of  the  court  on  contradictory  mo- 
tion and  proof  taken  in  the  same  case,  to 
issue  a  writ  of  distringas  against  said  com- 
pany, and  to  order  the  sheriff  to  do  the 
work  required  to  be  done,  and  to  apply  the 
revenues  and  property  of  said  company  to 
defray  the  expenses  incurred  in  executing 
the  judgment  of  the  court. 

§  3.  Be  it  further  enacted.  That  all  laws 
and  parts  of  laws  contrary  to  the  provisions 
of  this  act  be  and  the  same  are  hereby 
repealed. 

(Approved   July  12,   1888.) 

See  R.  S.,   §  684,  subd.  2. 


Act    7. 

AN  ACT  to  carry  into  effect  article  236  of 
the  Constitution  of  1879. 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  the  State  of  Lo^uisiana,  That 
it  shall  be  the  duty  of  all  coi-porations,  dom- 
iciled out  of  the  State,  doing  business  in 
the  State,  excepting  mercantile  corporations, 
to  file  in  the  ottice  of  the  secretary  of  State 
a  declaration  of  the  place  or  locality  of  its 
domicile,  together  with  the  name' of  its 
agent  or  officer  in  the  State  representing 
said  coi*poration  upon  whom  service  of  pro- 
cess can  be  made. 

§  2.  Be  it  fuither  enacted,  etc..  Whenever 
any  such  coi-poration  shall  do  any  business 
of  any  nature  whatsoever  in  this  State,  with- 
out having  complied  with  the  requirements 
of  section  one  of  this  act,  it  may  be  sued 
upon  any  cause  of  action  in  the  parish, 
where  the  right  or  cause  of  action  arose, 
and  service  of  process  may  be  made  upon 
the  person  or  persons,  firm  or  cormpany,  act- 
ing or  transacting  such  business  for  such 
corporation,  and  each  person  or  pei-sons, 
company  or  firm  shall  be  deemed  the  agent 
of  said  coiTporation  upon  whom  service  can 
be  made. 

(Approved  July  10,  1890.) 

See  Const.,   art.  264. 


28 


LOriSIA:N^A. 


Trusts  and  combinations  —  Act,  July  7,   1892. 


Act    8. 

AN  ACT  to  prevent  trusts  or  combinations 
intended  to  restrain  trade  or  control  the 
market  value  of  merchandise,  produce  of 
commodities  and  to  provide  for  penalties 
and  punishment  of  persons,  corporations, 
firms  and  associations  of  persons  connected 
with  them,  and  to  promote  free  competi- 
tion in  tlie  State  of  Louisiana. 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  the  State  of  Louisiana,  That 
after  the  passage  of  this  act  it  shall  be 
unlawful  for  any  individual,  lirm.  company, 
corporation  or  association  to  enter  into,  con- 
tinue or  maintain  any  combination,  agree- 
ment or  arrangement  of  any  kind,  expressed 
or  implied,  with  any  other  individual,  firm, 
company,  association  or  corporation  for  any 
of  the  following  purposes:  First.  To  create 
or  carry  out  restrictions  in  trade.  Second. 
To  limit  or  reduce  the  production,  or  in- 
crease or  reduce  the  price  of  mei'chandise, 
produce  or  commodities.  Third.  To  prevent 
competition  in  manufacture,  making,  trans- 
portation, sale  or  purchase  of  merchandise, 
produce  or  commodities.  Foiu'th.  To  fix  at 
any  standard  or  figure,  Avhereby  its  price 
shall  be  in  any  manner  controlled  or  estab- 
lished, any  article  of  merchandise,  produce, 
commodity  or  commerce  intended  for  con- 
sumption in  this  State.  Fifth.  To  make  or 
enter  into  or  execute  or  carry  out  any  con- 
tract, obligation  or  agreement  of  any  kind 
or  description  by  which  they  shall  bind  or 
have  bound  themselves  not  to  sell,  dispose 
of,  or  transport  any  article  or  commodity 
or  article  of  trade,  use,  merchandise,  com- 
merce, or  consumption  below  a  common 
standard  figure,  or  by  which  they  shall 
agree  in  any  manner  to  keep  the  pi*ice  of 
such  article,  at  a  fixed  or  graduated  figure, 
or  by  which  they  shall  in  any  manner  es- 
tablish or  settle  the  price  of  any  article  or 
commodity  or  transiiortation  between  them 
or  themselves  and  others  to  preclude  a  free 
and  unrestricted  competition  among  them- 
selves, or  others,  in  the  sale  or  transporta- 
tion of  any  such  article  or  commodity,  or 
by  which  they  shall  agree  to  pool,  combine. 
or  unite  any  interest  they  may  have  in  con- 
nection with  the  sale  or  transportation  of 
any  such  article  or  commodity  that  its  price 
might  in  any  manner  l»e  affected. 

§  2.  Be  it  further  enacted,  etc..  That  any 
coiT>oration  holding  a  charter  under  the  laws 
of  the  State  of  Louisiana,  which  shall  be 
convicted  of  a  violation  of  tlie  provisions  of 
this  act  shall  thereby  forfeit  its  rights  and 
franchises,  and  its  corporate  existence  shall 
cease  and  determiue,  and  it  shall  be  the 
duty  of  the  attoniey-geiicral  of  his  own  mo- 
tion and  without  leave  or  orders  of  any 
court  or  judge,  to  institute  an  action  iii 
the  name  of  the  State  of  Louisiana  for  the 
forfeiture  of  such  riglits  and  franchises  and 
the  dissolution  of  such  corporate  existence. 


§  3.  Be  it  further  enacted,  etc..  That  every 
foreign  corporation,  or  any  corporation  or- 
ganized under  or  pursuant  to  the  laws  of 
any  State,  who  shall  be  convicted  of  a  vio- 
lation of  the  provisions  of  this  act  is  hereby 
denied  the  right  and  prohibited  from  doing 
any  business  within  this  State,  and  it  shall 
be  the  duty  of  the  attorney-general  to  en- 
force this  provision  by  injunction  or  other 
proceedings  in  the  name  of  the  State  of 
Louisiana. 

§  4.  Be  it  further  enacted,  etc..  That  any 
violation  of  either  or  all  of  the  provisions  of 
this  act  shall  be  and  is  hereby  declared  a  con- 
spiracy against  trade,  and  any  person  who 
may  be  or  may  become  engaged  in  any  such 
conspiracy  or  take  part  therein,  or  aid  or 
advise  in  its  commission,  or  who  shall  as 
principal,  manager,  director  or  agent.  knoAV- 
ingly  carry  out  any  of  the  stipulations,  pur- 
poses, prices,  rates,  or  orders  thereunder  or  in 
pursuance  thereof,  shall  be  punished  by  fine 
not  less  than  one  hundred  dollars  nor  more 
than  one  thousand  dollars,  and  by  imprison- 
ment in  the  penitentiary  not  less  than  six 
months  nor  more  than  one  year  or  by  either 
such  fine  and  imprisonment  in  the  discretion 
of  the  court.  It  shall  be  the  duty  of  the 
district  attorneys  in  their  respective  juris- 
dictions and  the  attorney-general  to  enforce 
this  provision  and  any  district  attornej'  of 
any  parish  securing  a  conviction  under  this 
provision  shall  be  entitled  to  such  fee  or 
salary  as  by  law  he  is  allowed  for  such 
prosecution. 

§  5.  Be  it  further  enacted,  etc..  That  in 
any  indictment  for  any  offense  named  in 
this  act  it  is  sufficient  to  state  the  puiiiosos 
or  effects  of  the  trust  or  combination  and 
that  the  accused  was  a  member  of,  acted 
with  or  in  pursuance  of  it,  without  giving 
its  name  or  description,  or  how,  when  or 
where  it  was  created,  provided,  that  no  con- 
tract or  agreement  or  arrangement  which 
does  not  include,  or  which  cannot  be  held 
to  include  a  stipulation  between  the  parties 
to  share  in  the  profits  of  any  such  contract, 
agreement  or  arrangement,  or  which  con- 
tract, agreement  or  aiTaugement  does  not 
provide  for  or  does  not  contemplate  a  profit 
or  pool  to  be  divided  betAveen  the  parties 
to  such  contract,  agreement  or  arrangement, 
shall  be  held  or  construed  to  be  in  violation 
of  the  provisions  of  this  act. 

§  6.  Be  it  further  enacted,  etc..  That  in 
prosecutions  under  this  act,  it  shall  not  be 
necessary  to  prove  who  constitute  all  the 
members  belonging  to  the  trust  or  combina- 
tion. 

§  7.  Be  it  further  enacted,  etc..  That  any 
contract  or  agreement  in  violation  of  the 
provisions  of  this  act,  shall  be  absolutely 
void. 

§  8.  Be  it  further  enacted,  etc.,  That  the 
provisions  of  this  act  shall  not  apply  to 
agricultural  products  or  live  stock  while  in 
the  hands  of  the  producer  or  raiser;  nor 
be  so  construed  as  to  affect  any  combination 


LOUISIANA. 


29 


Filing  of  charters,  etc.;  bond  issues  — Acts,     July  8,  1S9S. 


or  confederatiou  of  laborers  for  the  purpose 
of  procuring  an  increase  of  their  wages  or 
redress  of  grievances. 

§  9.  Be  it  further  enacted,  etc.,  That  this 
act  shall  take  effect  from  and  after  its  pas- 
sage and  that  all  laws  and  parts  of  laws  con- 
flicting with  same  are  hereby  repealed. 

(Approved  July  7,  1892.) 

See  Const.,  art.  275;  R.  S.,  §  731,  Corporation, 
how  dissolved.    R.  C.  C,  art.  447. 

Act  9. 

AN  ACT  to  provide  for  recording  and  keep- 
ing a  record  in  the  office  of  the  secretary 
of  State  of  all  charters  of  corporations, 
proofs  of  publication  thereof,  amendments 
thereto,  and  proceedings  relative  to  the 
consolidation,  dissolution  and  liquidation 
of  corporations;  to  provide  for  the  use  and 
effect  as  evidence  of  extract  and  certifi- 
cates from  such  record. 

Section   1.  Be   it  enacted  by   the   general 

assembly  of  the  State  of   Louisiana,   That 
all  corporations  except  those  organized  for 
literary,    scientific,   religious,   educational   or 
charitable   purposes,   hereafter   doing   busi- 
ness in  the  State  of  Louisiana  shall  file  Avitli 
the  secretary  of  State  first:    A  duly  certified 
copy  of  their  charters  taken  either  from  the 
record  of  the  notary  before  whom  the  act 
of  incorporation  was    passed,   or    from  the 
record  thereof  in  the  office  of  the  recorder 
in  whose  office  said  charter  shall  have  been 
recorded;  to  which  copy  shall  be  affixed  the 
certificate    of    such    recorder    attesting    rec- 
ordation of  the  acts  in  his  office  and  giving 
book  and  folio  of  such  record  or  a  published 
copy  duly  certified  by  one  of  said  officers. 
Second:    A  copy  of  one  issue  of  the  news- 
paper wherein  the  said  charter  shall  have 
been  published  when  such  publication  is  re- 
quired by  law,  together  with   the  affidavit 
of  the  publisher,   making  oath  to  the  fact 
that  said  charter  was  duly  published  in  his 
paper  as  required  by  law.    Third:  A  certified 
copy  of  any  and  all  amendments   to   such 
charters,  taken  either  from  the  record  thereof 
in  the  office  of  the  recorder  where  the  same 
shall  have  been  recorded  as  required  by  law, 
or  from  the  records  of  the  notary  public  be- 
fore  whom    the  act  of    incorporation   was 
passed,  to  which  copies  shall  be  attached  the 
certificate  of    such   recorder    attesting    the 
fact  that  the  same  has  been  recorded  in  his 
office  and  giving  the  book  and  folio  of  such 
record.     Fiiurth:    A   coi)y  of  the  minutes  of 
any  and  all  meetings  of  stockholders  or  di- 
rectors  containing  all   proceedings   of   such 
stockholders   and   directors   in   reference   to 
such  amendment  of  charter,  duly  attested  by 
the    secretary   of     such   corporation,    whose 
signature  to  such  attestation  shall  be  duly 
acknowledged.      1-itth:    Any  and   all  agree- 
ments for  the  consolidation  of  corporations 
together  with  copies  from  the  minutes  of  any 
meetings  of    stockholders  or    directors  au- 


thorizing or  pertaining  to  the  consolidation, 
dissolution  or  liquidation  of  any  corporation^ 
the  signatures  to  such  agreements  to  be  duly 
acknowledged,  and  the  copies  of  such  min- 
utes to  be  duly  attested  by  the  secretary  of 
such  corporation,  whose  signature  to  such 
attestation  shall  be  duly  acknowledged. 

§  2.  Be  it  further  enacted,  etc.  That  the 
secretary  of  State  shall  keep  books  in  which 
to  transcribe  and  record  all  of  the  documents 
and  writings  by  the  first  section  of  this  act 
required  to  be  filed  in  his  office  (other  than 
the  newspapers  therein  described)  which 
books  shall  be  numbered  consecutively  and 
to  which  books  he  shall  keep  proper  indices, 

§  3.  Be  it  further  enacted,  etc..  That  the 
secretary  of  State,  shall  keep  on  file  in  his 
I  office  the  newspapers  required  to  be  filed 
!  with  him,  as  provided  in  section  one  of  this 
act,  and  he  shall  make  entry  in  the  books 
provided  by  secti<jn  two  of  this  act  atti-sting 
the  fact  that  such  newspapers  have  been 
filed  with  him  and  that  such  charter  has 
been  duly  published. 

§  4.  Be  it  further  enacted,  etc..  That  ex- 
tracts from  the  books  provided  by  section 
two  of  this  act,  duly  attested  by  the  secre- 
tary of  State,  shall  be  admissible  in  evi- 
dence in  all  courts  and  shall  constitute 
prima  facie  proof  of  all  facts  stated  in  such 
extracts. 

§  5.  Be  it  further  enacted,  etc..  That  this 
act  shall  take  effect  from  and  after  its  pas- 
sage. 

(Approved  July  8,  1898.) 

Act  10. 

AN  ACT  to  authorize  certain  corporations 
for  works  of  public  improvement  to  bor- 
row money  and  issue  bonds  or  other  obli- 
gations therefor;  to  prescribe  the  manner 
of  securing  the  same,  and  of  disposing 
thereof,  and  to  repeal  all  laws  conflicting 
herewith. 

Section  1.  Be  it  enacted  by  the  general  as- 
sembly of  the  State  of  Louisiana.  That  any 
railroad,  plank-road,  turnpike,  canal,  ele- 
vator, warehouse,  drainage,  sewerage,  sub- 
way, laud  reclamation,  levee  building,  water- 
works, electric  light,  gas  light,  electric 
power,  water  power,  telegraph,  telephone  or 
mining  corporation,  established  under  the 
laws  of  this  State,  whether  by  special  or 
general  act,  or  under  the  laws  of  any  other 
State,  and  owning  property  in  this  State, 
may  borrow  from  time  to  time  such  sums 
of  money  as  may  be  required  for  its  cor- 
porate puiToses,  aiid  for  this  purpose  may 
issue  bonds  or  other  obligations,  secured  by 
mortgage  or  pledge  or  both  of  the  franchises, 
and  all  property,  real  or  personal,  present 
and  futtire  incomes,  revenues,  contributions 
and  receipts  of  said  companies,  and  payable 
on  such  terms,  and  at  such  times  and  plait's 
as  the  said  corporation,  through  its  board  of 
directors,  or  other  managing  body  may  di- 
rect or  designate;  and  said  corporation  shall 


30 


LOUISIANA. 


Increase  or  decrease  of  capital;  receivers  —  Acts,  July  14,  1S98. 


have  power  to  sell,  pledge,  or  otbenvise  dis- 
pose of  such  bonds  or  other  obligations  on 
such  terms  as  it  may  direct  or  deem  expe- 
dit'Ut.  ^,    ^ 

§  2.  Be  it  further  enacted,  etc.,  That  any 
and  all  laws  and  parts  of  laws  in  conflict 
with  this  act,  be  and  the  same  are  hereby 
repealed. 

(Approved  July  S,  1S98.) 

Act  11. 

AN  ACT  to  provide  the  manner  in  which 
corporations  may  increase  or  decrease  their 
capital  stock,  and  to  carry  into  effect  Ar- 
ticle No.  '2iu  of  the  Conslitutiou  of  1898. 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  the  State  of  Louisiana,  That 
any  corporation  now  existing,  which  was 
created  imder  the  laws  of  this  State,  either 
by  special  act  or  under  the  general  law,  and 
aiiv  corporation  that  may  be  created  under 
the  laws  of  this  State,  may  increase  or 
decrease  its  capital  stock  by  complying  with 
the  provisions  of  this  act,  to  any  amount 
which  may  be  deemed  suflicient  and  proper 
for   the  purposes  of   the   corporation. 

§  2.  Be  it  further  enacted,  etc..  That  when- 
ever any  corporation  shall  desire  to  increase 
or  decrease  its  stock,   the  directors  thereof 
shall  pubhsh  a.  notice  for  thirty  days  pre- 
ceding the  time  fixed  for  such  meeting,  that 
a  meeting  of  the  stockholders  will  be  held 
at  the  otiice  of  the  coiiioratiou  for  the  pur- 
pose of  deciding  upon  such  an  increase  or 
decrease  and  shall  also  deposit  a  written  or 
printed  copy  of  such  notice  in  the  post-office, 
prepaid,    atldressed  to  each  stockholder    at 
his  usual  place  of  residence,  at  least  forty 
days  before  the  date  fixed  for  such  meeting. 
§  ?>.  Be  it  further  enacted,  etc..  That  the 
time  and  place  of   meeting,   fixed   and  ap- 
pointed as  provided  for  in  section  two  (2) 
of  this  act,  stockholders  being  present,  either 
in    person    or    by    proxy,    holding    a    large 
amount  not  less  than  two-thirds   in  value 
of  the  stock,   the  meeting  shall  be  organ- 
ized  by   the   election   of  one   of   the   stock- 
holders  as    chairman    thereof    and    another 
stockholder  as  secretary,  a  vote  shall  then  be 
taken    upon    the   proposed    increase    or   de- 
ci'ease  of  the  stock  of  the  corporation.    If, 
on  canvassing  the  votes,  it  shall  appear  that 
persons    holding    or    I'epresenting    not    less 
than  tAvo-thirds  of  the  stock  of  the  corpora- 
tion, have  voted  in  favor  of  the  proposed 
increase  or  decrease  of  stock,  a  certificate 
of  the  proceedings  shall  be  made,  showing 
a  compliance  with  the  provisions  of  this  act; 
the  amount  of  capital  stock  of  the  corpora- 
tion at  the  time  the  said  vote  was  taken 
and    the    number    of    holders    thereof,    the 
amount  and  the  number  of  shares  to  which 
It  was  proposed  and  agreed  to  be  increased 
or   decreased,   tlie   amount  and   nimiber   of 
shares    whose   holders    have    voted    against 
said  change  and  the  whole  amount  of  the 


debts  and  liabilities  of  said  corporation;  the 
said  certificate  sliall  be  signed  by  the  chair- 
man and  secretary  of  said  meeting  of  stock- 
holders, and  shall  be  verified  by  their  affi- 
davits, and  shall  be  filed  in  the  office  of  the 
secretary  of  State,  and  when  said  certifi- 
cate is  so  filed,  the  capital  stock  of  said  cor- 
poration shall  be  increased  or  decreased  as 
herein  set  forth. 

§  4.  Be  it  further  enacted,  etc.,  That  all 
laws  and  parts  of  laws  in  conflict  herewith 
are  hereby  repealed,  and  that  this  act  shall 
take  effect  from  and  after  its  passage. 

(Approved  July  14,  1898.)- 


See  Const.,  art.  2G7. 

[Stock  cannot  be  increased  except  by  compliance 
witli  requirements  of  above  act.  and  until  those 
requirements  hare  been  fulfilled  the  increased 
stock  is  not  in  existence.  Lincoln  v.  Express  Co., 
45  La.  Ann.  729;  s.  c,   12  So.  Rep.  937. 

A  sale  by  a  corporation  of  such  non-existent 
stock,  and  delivery  of  a  certificate  thereof  to  an 
innocent  third  person  who  pays  cash  for  it,  en- 
titles vendee  to  recovery  of  price.    Id.] 

Act  12. 

AN  ACT  to  authorize  and  regulate  the  prac- 
tice of  appointing  receivers  of  corporations 
under  article  109  and  133  of  the  Consti- 
tution. 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  the  State  of  Louisiana,  That 
the  several  district  courts  of  this  State,  and 
the  Civil  District  Court  of  the  parish  of 
Orleans,  are  empowered  to  appoint  receivers 
to  talie  charge  of  the  property  and  husiness 
of  coiiwrations  domiciled  in  this  State,  and 
of  the  property  of  foreign  corporations 
actually  located  herein,  in  the  cases  and 
under  the  coiulitious   following,    to-wit: 

1.  At  the  instance  of  any  stockholder, 
when  the  corporation  has  been  legally  dis- 
solved and  the  appointment  of  a  receiver 
to  liquidate  the  affairs  of  the  corporation 
has  been  requested  by  a  majority  in  amount 
of  the  stockholders,  provided  the  right  of 
stockholders  to  liquidate  the  affairs  of  the 
corporation  in  accordance  with  the  charter 
shall  not  be  affected  thereby. 

2.  At  the  instance  of  any  stockholder  or 
creditor,  when  the  directors  or  other  ofll- 
cers  of  the  corporation  are  jeopardizing  the 
rights  of  stockholders  or  creditors  by  grossly 
mismanaging  the  business  or  by  committing 
acts  ultra  vires,  or  by  wasting,  misusing,  or 
misapplying  the  propertj-  or  funds  of  a  cor- 
poration. 

3.  At  the  instance  of  any  stockholder  or 
creditor  when  the  property  of  a  corporation 
is  abandoned,  or  when  by  failure  of  the 
stockliolders  to  elect,  or  the  neglect  or  re- 
fusal of  the  officers  to  serve,  there  is  no  one 
authorized  to  take  charge  of  or  conduct  its 
affairs. 

4.  At  the  instance  of  any  creditor  having 
a  final  and  executory  judgnii'ut.  suing  in 
behalf  of  himself  and  for  the  benefit  of  any 


LOUISIAXA. 


31 


Receivei-s,  appointment,  powers  and  duties  —  Act,   July  14,  1898. 


other  creditors  who  may  join  therein,  when 
the  corporation  is  insolvent  or  when  execu- 
tion has  issued  on  such  judgment  and  has 
been  returned  nulla  bona. 

5.  At  the  instance  of  any  mortgage  or 
privileged  creditor  when  the  property  on 
which  the  mortgage  or  privilege  rests  is 
inadequate  to  satisfy  such  mortgage  or  privi- 
lege, and  the  directors  or  officers  are  appro- 
priating the  funds  or  property  of  the  cor- 
poration to  themselves  or  to  the  stockhold- 
ers, or  are  wasting,  misapplying  or  misusing 
the  same  to  the  injury  of  such  mortgage  or 
privilege  creditor. 

6.  At  the  instance  of  any  creditor  when 
the  property  of  the  corporation  has  been 
seized  under  judicial  process  by  fraud  or 
collusion  between  the  corporation,  its  offi- 
cers, or  stockholders  and  any  creditor. 

7.  At  the  instance  of  any  stockholder  or 
creditor  when  the  corporation  has  been  ad- 
judged not  organized  according  to  law,  or 
pursuing  any  business  calling,  or  avocation 
contrary  to  law. 

8.  At  the  instance  of  a  creditor  when  the 
board  of  directors  of  the  corporation  shall 
have  declared  by  resolution  that  the  corpora- 
tion is  unable  to  meet  its  obligations  as  they 
mature,  and  that  a  receiver  is  necessary  to 
preserve  and  administer  its  assets  for  the 
benefit  of  all  concerned. 

9.  At  the  instance  of  a  mortgage  or  privi- 
lege creditor  who  has  instituted  proceed- 
ings to  foreclose  his  mortgage  or  privilege, 
and  the  propei'ty  upon  which  such  mortgage 
or  privilege  rests  is  of  such  a  character 
that  its  administration  pending  a  sale  is 
necessary  or  proper  to  fully  preserve  same 
and  protect  the  rights  of  such  creditor. 

10.  At  the  instance  of  any  creditor  re- 
siding in  this  State,  of  the  property  actually 
situated  in  this  State  of  a  corporation  domi- 
ciled out  of  this  State  for  any  of  the  causes 
hereinabove  mentioned. 

11.  At  the  instance  of  any  stockholder 
when  a  majority  of  the  stockholders  are 
violating  the  charter  rights  of  the  minority 
and  putting  their  interests  in  imminent 
danger. 

S  2.  Be  it  further  enacted,  ek?.,  The  appli- 
cation for  appointment  of  a  receiver  shall 
be  made  by  petition  addressed  to  the  dis- 
trict court  of  the  domicile  of  the  corporation, 
and  if  a  foreign  corporation,  at  its  desig- 
nated domicile  if  it  has  one,  or  if  it  has  not 
designated  a  domicile  Then  where  auy  of  its 
property  is  situated.  Such  petition  shall  be 
verified  by  the  affidavit  of  the  plaintiff  or 
plaintifts.  or  auy  of  tliem.  or  l)y  his  or  their 
attorney-at-law,  or  in  fact,  in  case  such 
plaintiff  or  plaintiffs  are  absent  from  the 
State,  the  court  shall  cause  a  copy  of  the 
petition  together  with  an  order  to  be  served 
on  the  coiTporation  requiring  it  to  show 
cause  on  a  day  fixed  mot  less  than  ten  days 
from  the  date  of  such  order,  unless  cir- 
cumstances shown  require  in  the  judgment 
of  the  court  a  shorter  delay),  and  such  ap- 


plication shall  be  heard  and  determined  by 
the  court  in  a  summary  manner  in  term  time 
or  vacation,  and  without  the  intervention  of 
a  juiT. 

§  3.  Be  it  further  enacted,  etc.,  Pending 
the  hearing  and  determination  of  such  appli- 
cation the  court  may.  in  its  discretion,  and 
on  the  plaintiff  giving  bond  in  a  sum  to  be 
fixed  by  the  court,  restrain  by  injunction  the 
corporation,  its  officers,  stockholders  and 
agents  from  disposing  of  its  property  or 
changing  the  status  of  its  affairs  to  the  in- 
juiy  of  the  plaintiff;  or  staying  proceedings 
by  other  persons  against  its  property. 

§  4.  Be  it  further  enacted,  etc.,  Any  per- 
son or  persons  who  by  affidavit  appear  to 
be  interested,  on  giving  bond  in  a  sum  to 
be  fixed  by  the  court,  may  appeal  in  the  face 
of  the  record  from  any  order  appointing,  or 
refusing  to  appoint  a  receiver,  granting,  or 
refusing  to  grant  an  injunction  as  afore- 
said; such  an  appeal  when  perfected  shall 
have  the  effect  of  suspending  the  functions 
of  such  receiver,  except  to  perform  such 
administrative  acts  as  may  be  necessary  for 
the  preservation  of  the  property;  Provided 
That  such  ajipeal  must  be  taken  and  i>er- 
fected  within  ten  days  from  the  eutry 
of  the  order  appointing  or  refusing  to  ap- 
point a  receiver,  or  granting  or  refusing  to 
grant  an  injunction.  Such  appeal  shall  be 
returnable  in  ten  days  from  the  date  of  such 
order,  and  shall  be  tried  by  preference  in 
the  appellate  court.  Any  interested  party 
may  apply  within  thirty  days  after  the  entry 
of  the  order  of  appointment  of  a  receiver 
to  vacate  same  on  legal  or  just  grounds, 
and  may  appeal  from  an  adverse  judgment, 
but  such  aijpeal  shall  not  suspend  the  func- 
tions of  said  receiver  in  any  way.  The 
value  of  the  property  confided  to  the  receiver 
shall  determine  the  jurisdiction  of  the  ap- 
pellate  court. 

§  5.  Be  it  further  enacted,  etc.,  In  the  or- 
der appointing  such  receiver  the  court  may, 
in  its  discretion,  confer  on  the  receiver  such 
powers  of  administration  as  it  may  deem 
best  for  the  interest  of  all  parties,  and  from 
time  to  time  restrict  or  enlarge  such  powers, 
and  may  authorize  any  receiver  of  a  corpora- 
tion, public  in  its  character,  in  order  to  carry 
on  the  business  of  the  corporation,  to  borrow 
or  obtain  money  on  certificates  of  indebted- 
ness to  be  taxed  as  costs  of  court.  The  sum 
so  obtained  shall  bear  a  first  privilege  on  the 
property  and  income  of  the  corporation. 

§  G.  Be  it  further  enacted,  etc..  The  receiver 
so  appointed  shall  give  such  bond  for  the 
faithful  performance  of  his  duties  as  the 
court  may  fix;  and  shall  hold,  administer, 
manage  and  dispose  of  the  property  and  in- 
come of  such  corporation  in  such  manner 
as  the  court  may  decide  to  be  for  the  in- 
terest of  all  parties.  Such  receiver  shall  re- 
ceive the  same  compensation  as  syndics  of 
insolvents,  whenever  the  power  is  not  con- 
ferred upon  him  to  conduct  the  business  of 
the  corporation  as  a  going  concern;  other- 


32 


LOUISIANA. 


Receivers,  appointment,  powers  and  duties  —  Act,  July   14,   ISitS. 


■wise  his  compensation  shall  be  fixed  at  such 
reasonable  sum  as  the  nature  of  the  case 
justifies.  In  the  event  that  more  than  one 
receiver  be  appointed,  the  compensation  al- 
lowed shall  not  be  increased  but  shall  be 
divided  as  the  court  may  determine. 

§  7.  Be  it  further  enacted,  etc..  The  court 
may  appoint  such  experts  or  examiners  as 
may  be  necessary,  to  "whom  may  be  referred 
for  examination  and  report  such  matters  of 
accounts  and  claims  and  matters  of  similar 
nature  as  the  court  may  determine. 

§  8.  Be  it  further  enacted,  etc..  The  clerk  of 
the  district  court  shall  keep  a  book,  to  be 
known  as  the  receivership  order  book,  among 
the  records  of  office,  and  shall  immediately 
enter  notice  tliorein  of  the  tiling-  of  every 
petition,  motion,  rule  or  application  made  in 
behalf  of  any  person,  (giving  title  and  num- 
ber of  cause,  date  of  filing,  name  of  peti- 
tioner and  the  object  of  the  petition,  etc.), 
and  shall  note  on  said  book  the  time  of 
filing  petition,  etc.,  and  shall  enter  at  large 
therein  all  orders  or  decrees  made  by  the 
court  in  relation  to  any  receivership.  No 
order  shall  be  granted  by  the  court  until 
ten  days  after  entry  of  such  notice  in  the 
order  book,  except  an  order  to  show  cause, 
or  when  circumstances  in  the  opinion  of  the 
court  require  otherwise,  and  same  is  so 
stated  in  the  order  or  decree. 

§  9.  Be  it  further  enacted,  etc.,  Receivers 


shall,  when  vested  with  powers  of  adminis- 
tration, file  quarterly  statements  of  their 
gestion.  unless  oftener  required,  showing  ac- 
cux'atelj'  the  condition  of  the  business  con- 
ducted by  them;  and  when  not  so  vested, 
they  shall  file  annual  accounts.  Notice  of 
the  filing  of  such  statements  or  accounts 
shall  be  entered  in  the  order  book.  No 
statement  shall  be  approved  by  the  court 
until  ten  days  after  entry  of  such  notice, 
and  no  account  shall  be  homologated  imtil 
after  publication  as  provided  in  case  of  ad- 
ministrators of  successions  or  syndics  of 
insolvents. 

§  10.  Be  it  further  enacted,  etc.,  "Where  the 
court  has  appointed  a  receiver  and  it  is  made 
to  appear  that  there  is  no  reasonable  ground 
to  believe  that  the  property  of  the  corpora- 
tion can  be  so  administered  as  to  pay  its 
debts,  and  the  possession  thereof  restored 
to  the  corporation,  the  court  may  on  appli- 
cation of  any  party  at  interest,  after  ten 
days'  notice  of  such  application  on  the  order 
book,  if  there  be  no  opposition,  or  after  hear- 
ing of  same  be  opposed,  order  the  sale  of  the 
property  and  the  distribution  of  its  assets 
in  accordance  wath  the  rights  of  the  parties 
in  interest. 

§  11.  Be  it  enacted,  etc..  All  laws  or  parts 
of  laws  in  conflict  herewith  are  hereby 
repealed. 

(Approved  July  14,  1898.) 


INDEX  TO  LOUISIAITA. 


ACTIONS:  Page. 

against  corporations,  attorney-general  to  institute 10 

corporations  may  maintain  and  defend 11,  20 

for  trespass  against  corporations,  where  brought  17,  IS 

against  usurper  of  franchise  or  office 19 

persons  unlawfully  acting  as  corporation 19 

brought  by  attorney-general  or  district-attorney 19 

service  of  process  and  answer  19 

brought  on  the  relation  of  another  person 19 

parties  claiming  franchise  or  office  19 

defendant  liable  in  damages  19 

appeals  to  supreme  court 19 

trial   19 

by  or  against  corporations  must  be  in  corporate  name 24 

service  of  petition  on  corporation 24 

ACT  OF  INCORPORATION    (See  Charter): 

stockholders  may  modify  14 

ADMINISTRATOR: 

corporation  cannot  act  as 23 

AGENT: 

domestic  and  foreign  corporations  to  have,  within  state  for  service  of  process 8 

on  whom  process  may  be  served,  charter  to  state 14 

foreign  corporation  to  file  declaration  of  appointment 27 

AGREEMENT: 

for  the  consolidation  of  manufacturing  or  business  corporations 25 

AMENDMENT: 

of  charter,  stockholders  may  make l-I 

to  be  filed  in  office  of  secretary  of  state 29 

copy  of  proceedings  of  meetings  for,  to  be  filed 29 

ARBITRATION: 

general  assembly  to  provide  for  settlement  of  labor  disputes  by 6 

ARTICLES  OF  INCORPORATION.    (See  Charter). 
ATTORNEY-GENERAL: 

to  institute  proceedings  against  corporations 10 

to  bring  action  against  usurpers  of  franchise,  etc.    (See  Actions) 19 

BANKING  COMPANIES: 

not  to  receive  deposits  when  insolvent 9 

BONDS: 

to  be  issued  for  labor,  money  or  property 8 

issued  for  construction  purposes  by  certain  corporations 16,  29 

mortgage  to  secure,  to  be  recorded 17,  29 

converted  into  stock  of  corporation 17 

BOOKS: 

containing  names  of  stockholders,  etc.,  to  be  kept  at  office 9 

certified  copies  used  as  evidence 17 

BRIDGE  COMPANIES: 

general  assembly  not  to  incorporate 5 

issue  of  bonds  for  construction 16,  29 

mortgage  to  secure  bonds  to  be  recorded 17 


34  INDEX  TO  LOUISIANA. 

BY-LAWS:  P^S«- 

corporation  may  make  and  establish 13,  20 

are  binding  upon  stockholders 23 

CANALS: 

across  highways  or  plantations,  regulations IG 

issue  of  bonds  for  construction  of 16,  29 

CAPITAL  STOCK: 

increased  or  decreased,  pursuant  to  general  laws 8 

amount,  charter  to  state 14 

where  assessed  for  taxation 17 

of  manufacturing  or  mining  companies 26 

of  corporations  organized  for  any  lawful  purpose 26 

increase  or  decrease,  meetings  for 30 

certificate  of  proceedings  to  be  filed  30 

CHARTER: 

forfeiture  of,  general  assembly  not  to  remit 8 

corporation  not  to  engage  in  business  not  authorized  by 8 

to  state  what 14 

to  be  recorded  and  published 14 

modifications,  stockholders  may  make 14 

forfeiture  for  insolvency 14 

appointment  of  commissioner  for  liquidation 14 

duties  of  commissioner 14 

declared  forfeited,  governor  to  appoint  liquidator 17 

forfeiture,  dissolves  corporation   23 

for  entering  trusts  and  combines  to  regulate  price 28 

copy  of,  to  be  filed  in  office  of  secretary  of  state 29 

amendment  to  be  filed  in  office  of  secretary  of  state 29 

CITATIONS: 

service  of,  on  corporations 24 

COMBINATIONS: 

to  regulate  price  of  articles  of  necessity,  etc 6 

what  are  deemed;  forfeiture  of  charter  for  entering 28 

COMMISSIONER    (See  Liquidator): 

for  liquidation,  appointment  on  forfeiture  of  charter 14 

to  convert  assets  and  distribute 14 

COMPETITION: 

trusts  to  prevent,  are  illegal.    (See  Trusts) 28 

CONSOLIDATION: 

of  business  or  manufacturing  companies 25,  26 

agreement  for,  directors  to  make 25 

CONTRACTS: 

obligations  of,  not  to  be  impaired 6 

corporations  may  make 11,  20 

CORPORATIONS: 

special  acts  granting  privileges  to,  not  to  be  passed 5 

term  includes  what   9 

general  laws  to  provide  for  creation  of 9 

term  defined 20 

use  of 20 

classification,  political  and  private 20 

civil  and  religious 20 

are  substituted  for  persons  20 

CREDIT: 

of  state  or  political  corporation  not  to  be  loaned 6 

CREDITORS: 

rights  of,  as  against  stockholders 21 

liability  to.    (See  Liability.) 

when  receiver  may  be  appointed  at  instance  of 30,  31 


IXDEX  TO  LOUISIAITA.  35 

CRIMES:  ^^=^- 

certain,  corporations  cannot  commit  23 

DEBTS,  CORPORATE: 

liability  of  stockholders  for.    (See  Liability) ^ 16 

DECREASE: 

of  capital  stock,  general  laws  to  provide  for 30 

meetings  of  stockholders  for 3'^ 

certificate  of  proceedings  of  meetings  to  be  filed 30 

DEPOSITS: 

not  to  be  received  by  insolvent  banks,  etc 9 

DIRECTORS: 

of  banking  company,  liability  for  receiving  deposits  when  insolvent 9 

corporations  may  appoint  1- 

election  of,  charter  to  specify  mode  of li 

to  be  held  at  domicile 18 

corporation  must  appoint,  to  transact  business 21 

duties  performed  pursuant  to  regulations 22 

acts  of,  to  bind  corporation 22 

acts  of  majority  bind  the  corporation  23 

agreement  of,  for  consolidation  of  corporations 25 

DISSOLUTION    (See  Receivers): 

stockholders  may  assent  to l-i 

effected  by  act  of  the  legislature   23 

by  forfeiture  of  charter 23 

DOMICILE: 

of  corporation  to  be  within  state 18 

meetings  to  be  held  at  1° 

of  foreign  corporation,  declaration  of,  to  be  filed 27 

DRAINAGE  COMPANY: 

issue  of  bonds  for  construction 16,  29 

mortgage  to  secure  bonds  to  be  recorded IT 

DURATION: 

of  existence  of  corporations H 

ELECTION: 

of  directors,  charter  to  specify  mode  of.    (See  Directors) 1-i 

to  be  held  at  domicile  1" 

ELECTRIC  CORPORATIONS: 

issue  of  bonds  for  construction 16.  29 

mortgage  to  secure  bonds  to  be  recorded 1 ' 

EXECUTOR: 

corporation  cannot  act  as -^ 

EXEMPTION: 

from  taxation  of  certain  property ' 

EXISTENCE,  CORPORATE: 

duration  of 

FERRY  COMPANIES: 

general  assembly  not  to  incorporate ^ 

FOREIGN  CORPORATION: 

property  of,  where  to  be  assessed 1^ 

declaration  of  domicile  and  name  of  agent  to  be  filed 2^ 

service  of  process  when  declaration  has  not  been  filed 2( 

FORFEITURE: 

of  charter,  general  assembly  not  to  remit S 

effects  dissolution  of  corporation   -^ 

for  insolvency,  proceedings   ^* 

declared  by  court,  governor  to  appoint  liquidator 1  * 


36  IXDEX  TO  LOUISIANA. 

FORMATION:  Page. 

of  corporations,  for  what  purposes 10 

of  manufacturing  and  mining  companies 26 

for  any  lawful  purpose' 26 

FRANCHISE: 

action  against  usurper  of.    (See  Action) 19 

deemed  property,  for  purpose  of  taxation 26 

GUARDIAN: 

corporation  cannot  act  as 23 

INCREASE: 

of  capital  stock,  general  laws  to  provide  for S 

meetings  of  stockholders  for 30 

certificate  of  proceedings  of  meetings  to  be  tiled 30 

INDEBTEDNESS    (See  Bonds;  Debts,   Corporate): 

to  state,  general  assembly  not  to  release 6 

INJUNCTION: 

to  restrain  corporation,  pending  application  for  receiver 31 

INSOLVENCY: 

of  corporation,  decree  of  forfeiture  of  charter 14 

appointment  and  duties  of  commissioner 14 

JUSTICES  OF  THE  PEACE: 

actions  for  trespass  in  courts  of 25 

LABOR: 

price  of,  laws  not  to  fix 6 

LIABILITY: 

of  officers  of  banks  for  receiving  deposits  when  insolvent 9 

of  stockholders  for  corporate  debts   IG,    26 

effect  of  use  of  word  "  limited  "  as  to 26 

LICENSE  TAX: 

on  professions,  callings  and  trades,  general  assembly  may  levy 7 

on  corporations,  may  be  levied  by  different  mode  . 8 

LIMITED: 

effect  of  use  of  word  at  end  of  corporate  name 26 

LIQUIDATION    (See  Receivers): 

of  affairs  of  corporations,  on  insolvency 14 

when  charter  is  declared  forfeited 17 

LIQUIDATOR: 

governor  to  appoint,  upon  forfeiture  of  charter 17 

MANDATE    (See  Quo  Warranto): 

to  inquire  into  right  of  officer  of  corporation  to  hold  office 24,  25 

MANUFACTURING  COMPANIES: 

exemption  from  taxation  of  property  belonging  to 7 

consolidation  of,  agreement  for 25 

incorporation  of,  capital  limited oq 

MINING  COMPANIES: 

exemption  from  taxation  of  property  of 7 

incorporation  of,  capital  limited   o(j 

MEETINGS: 

of  stockholders  to  be  held  at  domicile Ig 

majority  act  as  a  whole  23 

for  amendment  of  charter,  proceedings  to  be  filed 29 

for  increase  or  decrease  of  capital  stock  ....  3q 

MORTGAGE:  

to  secure  bonds  issued  for  construction,  to  be  recorded 17 


INDEX  TO  LOUISIAXA.  37 

NAME,  CORPORATE:  Page. 

corporation  to  have   20 

suits  by  or  against  corporations  must  be  brought  in 24 

effect  of  use  of  word  ' '  limited  " 26 

OFFICE    (See  Domicile): 

corporations  to  have,  within  state,  for  transfer  of  stock,  etc 9 

books  to  be  kept  at,  for  inspection 9 

corporate,  right  to  hold,  quo  warranto  to  inquire  into 24,  25 

OFFICERS: 

of  banking  company,  liability  of,  for  receiving  deposits  when  insolvent 9 

corporations  may  name  and  appoint 12 

statements  to  assessors,  what  to  contain 18 

usurping  office,  action  against.     (SeeAction)   19 

quo  warranto  to  inquire  into  right  to  hold 24,  25 

corporation  must  appoint,  to  transact  business  of 21 

duties  prescribed  by  regulations,  etc 22 

acts  of,  to  bind  corporation 22 

FETITION: 

service  of,  on  corporations 24 

PLACE  OF  BUSINESS: 

domestic  and  foreign  corporations  to  have,  within  state 8 

charter  to  state 14 

domestic  corporation  to  have,  in  state 18 

meetings  to  be  held  at 18 

PLANK  ROADS: 

across  highways  or  plantations,  regulation   IG 

issue  of  bonds  for  construction  of 16,  29 

PLANTATION: 

construction  of  railroads,  canals  or  plank  roads  across 16 

POWERS,  CORPORATE: 

defined  generally 11-13 

under  the  civil  code   20 

PRICE: 

of  agricultural  products,  combinations  to  i-egulate  •. 6 

of  produce  and  commodities,  trusts  to  regulate,  illegal 28 

PROPERTY: 

private,  not  to  be  taken  without  compensation  6 

corporations  may  hold  and  convey 12,  20 

PURPOSES: 

for  which  corporations  may  be  formed  10 

charter  to  state  corporate 14 

corporation  organized  for  any  lawful 26 

QUO  WARRANTO,  WRIT  OF: 

to  inquire  into  right  of  person  to  hold  office 24,  25 

failure  to  answer,  judgment  by  default   25 

hearing  of  parties,  judgment  rendered 25 

RAILROADS: 

street,  special  act  not  to  be  passed 5 

exemption  of  property  from  taxation 7 

tax  to  aid  in  construction  of 9 

connecting  lines  with  other  railroads  in  other  states 9 

may  intersect  or  cross  other  railroads 9 

declared  to  be  public  highways 9 

consolidation  with  foreign  corporation,  effect  of 9 


38  IXDEX  TO  LOUISIANA. 

RAILROADS  —  (Continued) :  rage. 

place  of  business  within  state  for  transfer  of  stock,  etc 9 

consent  of  authorities  to  use  of  streets 15 

across  highways  or  plantation,  regulations 16 

issue  of  bonds  for  construction 10.  21) 

mortgage  to  secure  bonds,  to  be  recorded IT,  29 

RECEIVERS:  \ 

district  courts  may  appoint,  when 30,  31 

application  for  appointment  of,  how  made 31 

injunction  pending  proceedings 31 

appeal  from  order  appointing  or  refusing  to  appoint 31 

order  appointing,  may  confer  powers 31 

bond  to  be  given  31 

book  containing  orders  of  appointment 32 

statements  to  be  filed  quarterly 32 

sale  of  corporate  property  and  distribution 32 

RECORDS: 

certified  copies  may  be  used  as  evidence 17 

RIGHTS  OF  INDIVIDUALS: 

corporations  not  to  infringe  upon  . S 

SEAL,  CORPORATE: 

corporation  may  make  and  use  12 

SERVICE: 

of  petitions  and  citations  on  corporations   24 

of  process  on  foreign  corporation 27 

SPECIAL  LAWS: 

not  to  be  passed  for  certain  purposes 5 

notice  of  intention  to  apply  for 5 

STATEMENTS: 

officers  to  make  annual,  to  state  collectors  of  taxes ^° 

STOCK: 

to  be  Issued  for  labor,  money  or  property 8 

transfer,  corporation  to  have  office  within  state  for   9 

shares,  number  and  amount,  charter  to  state 14 

mayor  of  New  Orleans  and  governor  of  state,  when  to  vote  on 17,  18 

capital,  increased  or  decreased,  pursuant  to  general  laws  8 

amount,  charter  to  state 14 

where  taxed   17 

of  manufacturing  or  mining  companies 26 

of  corporations  organized  for  any  lawful  purpose 26 

increase  or  decrease,  meetings  for 30 

certificate  of  proceedings  to  be  filed 30 

STOCKHOLDERS: 

may  modify  act  of  incorporation 14 

liability  of,  for  corporate  debts 16,  26 

governor  of  state  and  mayor  of  New  Orleans  may  vote  as 17,  18 

rights  of,  civil  code  provisions 21 

creditors  can  make  no  demand  of 21 

act  of  majority,  act  of  corporation 23 

when  receiver  may  be  appointed  at  instance  of.    (See  Receivers) 30,  31 

STREETS: 

use  of,  l)y  corporations,  consent  of  authorities 15 

SUBSCRIPTIONS: 

when  to  be  paid,  charter  to  state 14 

original,  to  be  recorded 14 

SUCCESSION: 

corporation  to  have  right  of 11,  21 


IXDEX  TO  LOUISIA^s^A.  39 

SUB  AND  BE  SUED:  Pagp. 

corporations   may    11,  20 

TAXATION: 

special  acts  exempting  from,  not  to  be  passed 5 

power  not  to  be  surrendered  6 

license  tax  on  trades,  callings,  etc 7 

exemption  of  mining  and  manufacturing  companies 7 

of  railroad  property  7 

in  aid  of  construction  of  railroads,  general  laws  to  provide  for 9 

of  property  of  corporation,  where  assessed   17 

of  capital  stock  of  corporation,  where  assessed 17 

of  foreign  corporation   17 

statement  of  officers  to  assessors 18 

assessment  of  corporation,  how  entered  18 

liens  on  property  of  corporation 18 

property,  charters  and  franchises  subject  to 26 

bonds  and  stock  deemed  personal  property 27 

TRADE:     * 

restrictions  of,  trusts  for,  are  illegal.     (See  Trusts.) 28 

TRANSFER: 

of  stock,  corporation  to  have  place  within  state  where  may  be  made 9 

TRESPASS: 

actions  for,  against  corporations,  where  brought 18 

in  courts  of  justices  of  the  peace 25 

TRUSTS: 

forming,  to  regulate  price  of  commodities,  etc 28 

forfeiture  of  charter 28 

violation  a  conspiracy  against  trade 28 

USURPATION: 

of  office  or  franchise,  action  to  prevent.     (See  Action) 19 

quo  warranto  to  prevent 24,  25 

WAGES: 

not  to  be  fixed  by  law 6 

WAREHOUSE  COMPANY: 

issue  of  bonds  for  construction 16,  29 

mortgage  to  secure  bonds  to  be  recorded 17 

WATER  WORKS  COMPANY: 

issue  of  bonds  for  construction 16,  29 

mortgage  to  secure  bonds  to  be  recorded 17 

39 


MAINE. 


TABLE  OF  CONTENTS. 


CONSTITUTIONAL  PROVISIONS.  Page. 

Art.     I.  Declaration  of  rights 5 

IV.  Legislative    ~ 5 

REVISED    STATUTES. 

TITLE   I.      THE    STATE   AND   ITS     SOVEREIGNTY. 

Oh.  1.  Rules  of  construction    6 

6.  Taxation 6 

TITLE    rV.      CORPORATIONS     OF  VARIOL'S   KINDS. 

Ch.  46.  Corporations  In  general    8 

48.  Manufacturing   corporations    18 

TITLE  VI.   COURTS  OF  PROBATE. 

Ch.  70.  The  Insolvent  Law 23 

TITLE    VII.       TITLES     OF    PROPERTY. 

Ch.  76.  Title  by  levy  of  execution   24 

TITLE   IX.     CIVIL   RIGHTS   AND    REMEDIES. 

Ch.  81.  Commencement  of  actions   24 

82.  Trooeedings  in  civil  actions 26 

84.  Levy  of  executions 26 

86.  Trustee  process    27 

91.  Mortgages  of  personal  property   27 

103.  Estates  in  dower  28 

TITLE   XI.      CRIMES   AND   OFFENSES. 

Ch.  120.  Larceny    28 

121.  Forgery    and    counterfeiting ••  -^ 

LEGISLATIVE      ACTS      PASSED      SITBSEQUENTLY     TO     REVISED     STATUTES 

OF  1883. 


MAINE, 


CO:^STITUTIO]S"  OF  MAI:N^E- 181  9. 


PROVISIONS  RELATING  TO  CORPORATIONS. 


ARTICLE   I. 

Declaration  of  Rights. 

Sec.  11.  Laws    Impairing    the     obllgatioa   of     con- 
tracts proliibited. 
21.  Private  property  not  to  be  taken  vrlthout 
just  compensation. 

ARTICLE  IV. 

Legislative. 

Sec.  14.  Coi-porations,    when     practicable,    to     be 
formed  under  general  laws. 

ARTICLE   I. 

Declaration  of  Rights. 
§  11.  The  legislature  shall  pass  no    *    *    * 

law  impairing  the   obligation  of  contracts, 
*    *    * 

Charters  may  be  repealed.     Ch.  46,  §  23. 

[Private  corporations  exist  by  legislative  grants, 
conferring  rights  and  powers  for  special  purposes. 
Yarmouth  v.  North  Yarmouth,  34  Me.  411.  Such 
grants  constitute  legal  contracts,  and  the  legis- 
lature cannot  impair  the  obligation  of  them.    Id. 

The  existence,  powers  and  capacities  of  cor- 
porations created  by  the  legislature  must  depend 
upon  the  contract  by  which  they  were  created. 
Penobscot  Boom  v.   Lamson,  IG  Me.  224. 

Although  charter  of  a  corporation  is  an  invio- 
lable contract  between  it  and  the  State,  corpora- 
tions, like  persons,  are  subject  to  remedial  legis- 
lation, and  amenable  to  general  laws.  Coffin  v. 
Rich,  45  Me.  507. 

There  being  no  privity  of  contract  between  the 
corporators  of  a  corporation  and  the  invidual 
members,  they  are  personally  liable  only  by  ex- 
press provision  of  charter;  the  repeal  of  such  a 
statute  does  not  impair  the  obligation  of  any 
contract.  Coffin  v.  Rich,  45  Me.  5tJ7;  contra, 
Hawthorne  v.  Calef,  2  Wall.  10. 

Charters  are  contracts  with  the  State,  the  obli- 
gation of  which  cannot  be  impaired.  Water  Co. 
V.  Water  Co.,  80  Me.  544;  s.  c,  15  Atl.  Rep.  Y85. 
When  rights  have  become  vested  under  them  au- 
thority of  legislature  to  destroy  those  rights  is 
at  an  end,  unless  power  of  alteration  or  repeal 
is  reserved.    Id. 

But  there  may  be  such  legislation  as  will  in- 
juriously affect  interests  of  corporation,  and  yet 
Impair  ho  obligation   of  contract.     Id. 

When  .State  confers  no  exclusive  privilege  upon 
one  company,  it  impairs  no  contract  by  incorpo- 
rating a  second  one  and  conferring  similar  powers 
and  privileges.     Id. 

Amendment  of  charter  by  legislature  held  not 
to  be  unconstitutional  under  this  section.  Proprs. 
V.  Sullivan,  85  Me.  343;  s.  c,  27  Atl.  Rep.  189. 
Legislation  oftentimes  injuriously  affects  interests 
of  those  with  whom  the  contract  exists,  and  yet 
impairs  no  obligation  of  contract.    Id.] 

§  21.  Private  property  shall  not  be  talien 
for  public  uses  -without  just  compensation; 


nor    unless    the    public    exigencies   require 
it. 

[Corporation  legitimately  exercising  right  of 
eminent  domain  is  not  liable  for  consequential 
damages  arising  without  its  fault  or  negligence. 
Sumner  v.   Dam  Co.,   71   Me.   106.] 

ARTICLE  IV. 

Legislative. 

§  14.  Corporations  sliall  be  formed  under 
general  laws,  and  shall  not  be  created  by- 
special  acts  of  the  legislature,  except  for 
municipal  purposes,  and  in  cases  where  the 
objects  of  the  corporation  cannot  otherwise 
be  attained;  and,  however  formed,  tliey  shall 
forever  be  subject  to  the  general  laws  of  the 
State. 

Acts  of  incorporation  are  public  acts.  Chap. 
1,  §  6.    General  Laws,  ch.  48,  §§  16-20. 

[A  statute  granting  corporate  powers  Is  In- 
operative until  it  is  accepted.  Bank  v.  Richard- 
son,  1  Me.   79. 

Where  an  act  amendator.v  of  charter  contains 
no  provision  requiring  a  formal  acceptance  of 
it,  acceptance  may  be  implied  from  corporate 
acts.  Grants  beneficial  to  the  corporation  may- 
be presumed  to  have  been  accepted.  R.  R.  Co. 
V.   Smith,   47  Me.  34. 

Acceptance  of  a  charter  must  be  proved  by  the 
best  evidence  in  the  power  of  party  relying  upon 
it.  The  records  of  a  corporation  are  the  regular 
evidence  of  its  acts.  Hudson  v.  Carman,  41  Me. 
84;  Coffin  v.  Collins,  17  id.  440;  Whitman  v. 
Church,  24  id.  236. 

If  records  cannot  be  produced,  acceptance  of 
charter  may  be  proved  by  implication  from  the 
acts  of  the  company.  Hudson  v.  Carman,  supra; 
Penobscot  Boom  v.'  Lamson,  16  Me.  224;  Dam 
Co.  V.  Grav,  30  id.  .547:  Sampson  v.  B.  S.  M. 
Co.,  36  id.  78;  M.  &  S.  Fund  v.  Kendrick,  12  id. 
381:  M.  &  S.  Fund  V.  Parks,  10  id.  441;  Trott 
V.   Warren,   11  id.   227. 

Legislature  may  incorporate  a  new  and  dis- 
tinct corporation 'out  of  two  or  more  previously 
existing  corporations.  State  v.  R.  R.  Co.,  66 
Me.   488. 

In  granting  charter  by  State  legislature,  the 
presumption  is  that  all  preliminary  requirements 
of  law  have  been  complied  with.  McClinch  v. 
Sturges,  72  Me.  288. 

Constitutional  amendment,  which  took  effect  in 
1875,  requiring  formation  of  corporations  to  be 
under  general  statutes,  does  not  apply  to  charter 
granted  by  legislature  before  the  amenament,  al- 
though amended  bv  it  afterward.  Farnsworth  v. 
R.   R.   Co.,  83  Me.  440;  22  Atl.  Rep.  373. 

The  four  j-ears  at  expiration  of  which  charter 
becomes  by  statute  forfeited,  unless  company  be 
organized  and  business  commenced  within  that 
time,  do  not  run  against  corporation,  observing 
the  statutory  requirements  beyond  that  time  after 
its  charter  has  been  amended.  The  amendment 
is  a  legislative  waiver  of  any  forfeiture.     Id.] 


MAINE. 

Construction;  taxation  — R.  S.,  ch.  i,  §  6;  ch.  vi,  §§5.  13,  14. 


EEYISED  STATUTES  OF  MAI]SrE-1884. 


TITLE   I.      THE   STATE   AND   ITS 
SOVEREIGNTY. 

CHAPTER  I. 

Statutes  and  Rules  of  Construction. 

Sec.  6.  Rules  of  construction. 

XIII.  The  word  "  person "  may  include 
a  body  corporate. 

XXVI.  (As  amended  March  25,  1895,  and 
March  26,  1S97.)  Acts  of  incorporation  shall 
be  regarded  in  legal  proceedings  as  public 
acts,  and  be  in  force  on  the  date  of  their 
approval.  All  acts  of  incorporation  granted 
since  January  one,  eighteen  hundred  and 
ninety-three,  become  null  and  void  in  two 
years  from  the  day  when  the  same  take 
effect,  unless  such  corporations  shall  have 
organized  and  commenced  actual  business 
under  their  charters.  The  organization  of 
any  corporation  which  may  be  hereafter 
organized  under  any  general  law  of  this 
State  becomes  null  and  void  within  two 
years  from  the  day  whejj  its  certificate  of 
incorporation  has  been  filed  in  the  office  of 
the  Secretary  of  State,  unless  such  cox-po- 
ration  shall  have  commenced  actual  business 
under  its   organization. 


[Section  referred  to.  Stevens  v.  Bank,  70  Me. 
181.  And  applied.  State  v.  McAllister,  24  Me. 
143;  Belmont  v.  Morrill,  69  Id.  317.] 


CHAPTER  VI. 
The  Assessment  and  Collection  of  Taxes. 

Sec.     5.  Personal  estate  includes  shares  of  stock. 

13.  Taxes  on  personal  estate,  how  and  where 

assessed. 

14.  Exceptions  to  the  rule  of  the  preceding 

section. 

15.  Stock  of  toll  bridges,  how  taxed. 

16.  Stock  of  corporations  for  supplying  water 

or  gas,   how  taxed. 

17.  Duty   of   assessors,    collectors,    treasurers 

and  cashiers   relating  to  same. 

18.  Clerk    falling    tb    make    return,    property 

deemed   corporate. 

19.  Taxes,      how     assessed     and      collected; 

franchise  may  bo  sold  in  certain  cases. 
21,  22.  Stock  of  companies  invested  in  banks, 

how  taxed. 
28.  Property   of   manufacturing,    mining    and 

smelting    corporations    taxed,     where; 

shares  in  the  capital  stock  not  to  be 

taxed   to  the  owners. 

30.  Bank    and    other    stocks   owned     out     of 

State,  how  taxed. 

31.  Cashier   or   other   officer   required    to    ex- 

hibit books,  and  deliver  certified  copies 
of  records  of  dividends;  liability  for 
neglect. 


Sec.    33.  Collectors  of  taxes  shall  give  notice. 

138.  Mode    of    distraining    shares    in    corpora- 

tions. 

139.  Duty    of    corporation    officer    to    furnish 

certificates  of  shares. 

§  5.  Personal  estate  for  the  purposes  of 
taxation,  includes  *  *  *  all  shares  in 
moneyed  and  other  coiTporatious  within  or 
without  the  State,  except  as  otherwise  pro- 
vided by  law;    *    *    *. 

[The  capital  stock  of  a  bank  can  be  assessed 
only  once,  and  that  upon  the  stockholders  to  the 
value  of  their  shares.  Bank  v.  Augusta,  36  Me. 
255.  But  property  composing  no  part  of  its  capi- 
tal, so  held  by  a  bank,  that  no  other  person  or 
corporation  could  be  legally  taxed  therefor,  as 
owner,  is  liable  to  be  assessed  to  such  bank.    Id. 

A  corporation  owning  personal  property,  not 
composing  a  part  of  its  capital,  is  liable  to  be 
taxed  for  it  in  the  town  of  its  established  place 
of  business.     Id. 

"  All  shares  in  moneyed  corporations."  Includes 
shares  in  national  banks.  Stetson  v.  Bangor,  56 
Me.  274.] 


§  13.  All  personal  property  within  or  with- 
out the  State,  except  in  cases  enumerated 
in  the  following  section,  shall  be  assessed 
to  the  owner  in  the  town  where  he  is  an 
Inhabitant  on  the  first  day  of  each  April. 

§  14.  The  excepted  cases  referred  to  in 
the  preceding  section  are  the  following: 

III.  Machinery  employed  in  any  branch  of 
manufacture,  goods  manufactured  or  un- 
manufactured, and  real  estate  belonging  to 
any  corporation,  except  when  otherwise  ex- 
pressly provided,  shall  be  assessed  to  such 
corporation  in  the  town  or  place  where  they 
are  situated  or  emploj^ed;  and  in  assessing 
stockholders  for  their  shares  in  any  such 
corporation,  their  proportional  part  of  the 
value  of  such  machinery,  goods  and  real  es- 
tate, shall  be  deducted  from  the  value  of 
such  shares. 

Taxation  of  property  of  real  estate  corpora- 
rations.  See  Act  of  1893,  at  p.  36;  see  ch.  46, 
§§  30-35. 

[Legislature  can  impose  no  other  taxes  upon  a 
corporation  than  those  provided  for  in  its  charter, 
when  the  charters  so  expressly  provided.  State 
v.  R.  R.   Co.,  69  Me.  44. 

Before  amendment  of  Constitution  In  1875,  legis- 
lature had  power  to  create  a  corporation  perpetu- 
ally and  exempting  it  from  taxation.     Id. 

Above  statute  construed.  Railway  v.  City,  37 
Me.  444;  R.   R.  Co.  v.  City,  60  id.  199.] 

§  15.  The  stock  of  toll  bridges  shall  be 
taxed  as  personal  property,  to  the  owners 


MAINE. 


Taxation  —  E.  S.,  ch.  vi,  §§  16-19,  21,  22,  28,  30,  31. 


thereof,  in  the  towns  where  they  reside, 
except  stock  owned  by  persons  residing  out 
of  the  State,  which  shall  be  taxed  in  the 
town  where  the  bridge  is  located,  and  where 
snch  bridge  is  in  two  towns,  one-half  of  such 
stock  so  owned  by  persons  residing  out  of 
the  State  shall  be  assessed  and  taxed  in  each 
town. 

§  16.  Stock  in  any  local  corporation,  char- 
tered for  the  purpose  of  supplying  towns 
with  water  or  gas,  held  bj-  any  person  un- 
known, or  out  of  the  State,  shall  be  taxed 
in  the  town  where  such  corporation  is  lo- 
cated or  transacts  its  ordinary  business,  as 
provided  for  the  taxation  of  bank  stock,  in 
section  thirty. 

§  17.  The  powers  of  assessors,  collectors 
and  treasurers,  and  the  liens  on  the  stock, 
shall  be  the  same  as  provided  in  sections 
thirty,  thirty-one,  thirty-three  and  thirty- 
four,  and  the  duties  therein  imposed  on  cash- 
iers, shall  be  performed  by  the  treasurers 
of  such  corporations. 

§  IS.  When  the  clerk  of  a  corporation  hold- 
ing property  liable  to  be  taxed,  fails  to 
comply  with  section  thirty,  of  chapter  forty- 
six,  whether  the  corporation  was  chartered 
before  or  since  the  separation  of  Maine  from 
Massachusetts,  such  property  for  the  pur- 
poses of  taxation,  shall  be  deemed  corporate 
property,  liable  to  be  taxed  to  the  corpora- 
tion, although  its  stock  has  been  divided 
Into  shares  and  distributed  among  any 
number  of  stockholders. 

§  19.  Such  property,  both  real  and  personal, 
is  taxable  for  State,  county,  city,  town, 
school  district,  and  parochial  taxes,  to  be 
assessed  and  collected  in  the  same  manner 
and  with  the  same  effect  as  upon  similar 
taxable  property  owned  by  individuals.  If 
the  coiTDoration  has  the  right  to  receive  tolls, 
such  right  or  franchise  may  be  taken  and 
sold  on  warrant  of  distress  for  payment  of 
such  taxes,  as  such  property  is  taken  and 
sold  on  execution. 

§  21.  When  an  insurance  or  other  incorpo- 
rated company  is  required  by  law  to  invest 
its  capital  stock  or  anj'  part  thereof  in  the 
stock  of  a  bank,  or  other  corporation  in  the 
State,  for  the  security  of  the  public,  such 
investments  shall  not  be  liable  to  taxation 
except  to  the  stockholders  of  the  company 
so  investing  as  making  a  part  of  the  value 
of  their  shares  in  the  capital  stock  of  said 
company. 

§  22.  When  the  capital  stock  of  any  insur- 
ance company  inconiorated  in  the  State,  is 
taxed  at  its  full  value,  the  securities  and 
pledges  held  by  said  company  to  the  amount 
of  said  stock,  are  exempt  from  taxation;  but 
if  the  pledge  or  security  consists  of  real 
estate  in  a  town  other  than  that  where  the 
stockholder  resides,  it  shall  be  taxed  where 
it  lies,  and  the  stock  shall  be  exempt  to  the 
amount  for  which  it  is  assessed. 

§  28.  The  buildings,  lands,  and  other  prop- 
erty of  manufacturing,  mining  and  smelting 
corporations,   made  personal  by  their  char- 


ters, and  not  exempt  from  taxation,  and  all 
stock  used  in  factories,  shall  be  taxed  to 
the  coi-poration,  or  to  the  persons  having 
possession  of  their  propei'ty  or  stock,  in  the 
town  or  place  where  the  corporations  are 
established,  or  the  stock  is  manufactured; 
and  there  shall  be  a  lien  for  one  year  on 
such  property  and  stock  for  payment  of  such 
tax,  and  it  may  be  sold  for  payment  thereof, 
as  in  other  cases;  and  shares  of  the  capital 
stock  of  such  corporations  shall  not  be  taxed 
to  their  owners. 

Taxation  of  real  estate  of  corporations.  See 
Act  14,  at  p,  36. 

[The  value  of  real  estate  of  a  corporation  must 
be  deducted  from  the  value  of  the  shares  of  the 
stock  of  the  corporation,  in  assessing  a  tax  upon 
the  latter.  Wheeler  v.  Comrs.,  88  Me.  174;  s.  c, 
33  Atl.  Kep.  983.] 

§  30.  (Amended,  L.  1891,  p.  140.)  Stock  of 
any  bank  or  other  corporation,  except  a 
manufacturing  corporation,  held  by  persons 
out  of  the  State,  or  unknown,  which  has  not 
been  certified  according  to  section  thirty  of 
chapter  forty-six  of  the  Revised  Statutes,  in 
any  town  in  the  State,  and  is  not  there  as- 
sessed; and  the  stock  of  any  bank  or  such 
other  corporation  appearing  by  the  books 
thereof  to  be  held  by  persons  residing  out 
of  the  State,  or  whose  residence  is  unknown 
to  the  assessors,  shall  be  assessed  in  the 
town  where  such  bank  or  other  corporation 
is  located,  or  transacts  its  ordinary  busi- 
ness; and  such  town  has  a  lien  on  such  stock 
and  aJl  dividends  thereon,  from  the  date  of 
such  assessment,  until  such  tax  and  all  costs 
and  expenses  arising  in  the  collection  thereof 
are  paid.  No  assignment,  sale,  transfer  or 
attachment  passes  any  property  in  such 
stock  unless  the  vendee  first  pays  such  tax 
and  costs;  cashiers  of  banks  and  clerks  of 
such  other  coi-porations  shall  return  to  the 
assessors  of  the  town  where  such  banli  or 
other  corporation  is  located  or  transacts  its 
business,  all  the  stock  in  such  bank  or  other 
corporation  not  i-eturned  to  the  assessors  of 
other  towns,  according  to  said  section  thirty 
of  chapter  forty-six.  Revised  Statutes;  and 
such  returns  shall  be  made  at  the  time  and 
in  the  manner  prescribed  therein,  and  shall 
be  the  Ibasis  of  taxation  of  such  property. 

§  31.  (Amended,  L.  1891,  p,  141.)  The  cash- 
ier or  other  officer  of  each  bank  or  other 
coiiDoration,  except  a  manufacturing  corpo- 
ration, shall  exhibit  on  demand,  to  the  as- 
sessors of  any  town  all  the  books  of  such 
bank  or  other  corporation  that  contain  any 
record  of  the  stock  of  such  bank  or  other 
corporation  or  any  dividend,  declared  or 
paid  thereon,  and  if  requested,  shall  deliver 
to  them  a  true  and  certified  copy  of  so  much 
of  said  record  as  they  require.  Should  any 
cashier  or  other  olficer  neglect  or  refuse  to 
perform  the  duties  required  by  this  and 
the  preceding  section,  the  assessors  may 
doom  such  bank  or  other  corporation  in  such 
sum  as  thev  deem  reasonable,  and  the  as- 


MAIKE. 


Taxation  —  R.  S.,  ch.  vi,  §§  33,  138,  139. 


sessment  shall  bind  such  bank  or  other  cor- 
poration and  the  tax  thereon  shall  not  be 
abated,  and  for  such  neglect  or  refusal,  such 
cashier  or  other  officer  forfeits  five  hundred 
dollars  to  be  recovered  in  an  action  "of  debt, 
half  to  the  prosecutor  and  half  to  the  State. 

§  33.  (As  amended  March  23,  1897.)  The 
collector  of  a  town,  to  whom  has  been  com- 
mitted a  tax  upon  the  stock  of  any  bank 
or  other  corporation,  except  a  manufactur- 
iuf?  corporation,  sliall,  within  thirty  days 
after  the  bills  of  assessment  are  delivered 
to  him,  cause  a  Avritten  notice  to  be  de- 
livered to  the  cashier  or  president  thereof, 
stating  the  description  of  stock  taxed,  to 
Avhom  assessed,  if  stated  in  the  bills,  and 
the  tax  thereon.  No  dividend  shall  be  paid 
on  such  stock  after  such  notice  until  the 
tax  and  all  cost  thereon  are  paid.  The 
cashier  may  pay  such  tax,  and  payment  shall 
constitute '  a  charge  in  offset  against  any 
dividend  thereon.  Should  such  tax  i-emain 
unpaid  for  ninety  days  after  such  notice, 
the  collector  may  sell  such  stock  in  the 
manner  specified  in  sections  one  liundred  and 
thirty-eight  and  one  hundred  and  thirty-nine. 
For  the  purpose  of  collecting  taxes  on  bank 
stock,  collectors  may  act  in  any  town. 

§  138.  For  non-payment  of  taxes,  the  col- 
lector or  constable  may  distrain  the  shares 
owned  by  the  delinquent  in  the  stock  of 
any  corporation;  and  the  same  proceedings 
shall  be  had  as  when  like  property  is  seized 
and  sold  on  execution. 

§  139.  The  proper  officer  of  such  corpora- 
tion, on  request  of  such  constable  or  collec- 
tor, shall  give  him  a  certificate  of  the  shares 
or  interest  owned  by  the  delinquent  therein, 
and  issue  to  the  purchaser  certificates  of 
such  shares  according  to  tlie  bj--laws  of  the 
corporation. 


TITLE    IV, 


COHPORATIOS    OP    VARIOUS 
KIXDS. 


Ch.  46.  Corporations    In    general. 
48.  Manufacturing  corporations. 

CHAPTER  XL VI. 
Corporations  in  General. 

Sec.     1.  This  chapter   applies   to  all   corporations. 

2.  Cicueral  powers  of  corporations. 

3.  First    meeting,    how    called:    organization 

vallfi,   whether   made   under  this  chap- 
ter or  under  chapter  48. 

4.  Any  meeting  may  be  called  by  a  justice, 

when  no  other  lejjal   mode. 

5.  When    all    shareholders    are    present    and 

sign  record,  meeting  Is  legal. 

6.  By-laws,  what  they  may  determine;  how 

name     may     be     changed,     and     effect 
thereof. 

7.  Whoever  presides   at   meetings  called   by 

a  justice,  not  responsible  for  error. 

8.  On   failure  to   have   annual   meeting,   offl.- 

cers  hold   over;   effect   of   electing   offi- 
cers on   another  day. 

9.  Clerk  to  call  a  meeting  when  objections 

are  made  to  elections  held  on  another 
day. 
10.  Clerk's   oflice   and    records,    where    to   be 
kept;  records  and  books  must  be  open 
to  inspection;  to  be  produced  in  court. 


11.  Clerk    to    file    certificate    of     election     in 

registry  of  deeds;  attested  copy,  evi- 
dence of  clerkship. 

12.  Transfer    of    shares,    how    made;    certifi- 

cates, by  whom  signed;  officers  not  to 
sign  blanks  for  use,  nor  without  knowl- 
edge of  apparent  title. 

13.  Proxies,   powers  of  attorney,   and   rights 

under  them. 

14.  Representation  of  mortgaged  stock. 

15.  When   capital     becomes    impaired,     stock 

may  be  reduced;  par  value  of  shares 
to   be   reduced    accordingly. 

16.  Remedy    for   objecting    stockholder;    pro- 

ceedings. 

17.  Copy  of  proceedings  to  be  filed  with  secre- 

tary of  State;  penalty. 

18.  Such  corporation  may  authorize   issue  of 

new  shares. 

19.  Preventing    use    of    records    and    books, 

penalty  for. 

20.  Property  and  franchise  may  be  taken  for 

debts. 

21.  Corporations   are   bound   by    parol   or   Im- 

plied  contracts. 

22.  Foreign,  may  sue  and  be  sued  here;  acts 

of  their  agents  bind  them. 

23.  Acts  of  incorporation,  liable  to  be  altered 

or  repealed. 

24.  Corporations    continue     for    certain     pur- 

poses for  three  years  after  charter  ex- 
pires. 

2.5.  Court  may  appoint  trustees;  their  powers. 

20.  Trustees  to  pay  debts,  and  divide  balance. 

27.  When  and  by  whom  a  bill  in  equity  may 

be  filed  for  dissolution  of  a  corpora- 
tion;   notice   and   proceedings. 

28.  Court  may  appoint  receivers  and  trustees, 

issue  injunctions,  pass  Interlocutory 
decrees,  and  superintend  collection  and 
distribution  of  assets. 

29.  Personal    liability    of    oflieers    and    share- 

holders  unaffected. 

30.  Casliiers    and     clerks    to     ascertain     resi- 

dence of  stockholders  and  report  same 
to  town  assessors  by  the  8th  of  April 
for  taxation. 

31.  To  make  similar  returns  to   secretary  of 

State  by  the  8th  of  December,  for  use 
of  legislature. 

32.  Such  return  may  be  mailed;  penalty  for 

neglect. 

33.  Secretary  of  State  to  notify  attorney-gen- 

eral,  who  shall  enforce  penalty. 

34.  Suit    to    be    discontinued,    if    returns    are 

made  within  thirty  days. 

35.  Additional  penalty  imposed  on  delinquent 

corporation  ofiicer. 

36.  W^hen    and    how    corporations    ceasing    to 

transact  business,  may  be  excused  from 
filing  annual   i-eturns. 

37.  Stockholders'  liability  for  company  debts; 

to  what  extent,   and  how   liable. 

38.  Stockholders'      liability     in     corporations 

created   since   March   17,   1S;U. 

39.  Creditor   may   demand   of   stockholder   to 

show   i>roi)er1y. 

40.  To   commence   action   within    six    months 

after  judgment  against  corporation. 

41.  Stockholders'  claim  may  be  set  off;  such 

claims  described. 

42.  Treasurer  to  keep  a  record  of  stockhold- 

ers' claim  against  company. 

43.  Clerk    to     furnish     to    officer  names     of 

stockholders. 

44.  Stockholders,  except  in  banks,  not  liable 

beyond   amount   of    stock. 

45.  Capital  stock  subscribed,  stands  for  secur- 

ity of  creditors;  subscriptions  must  be 
paid  bona  fide. 

40.  Fraudulent  dividends  and  withdrawals  of 
stock,  void  against  creditors,  receivers 
or  trustees. 

47.  Proceedings  by  bill  in  equity;  limita- 
tions  of   stockholders'   liability. 


MAII^E. 


Corporations;  powers  —  R.  S.,  Tit.  iv,  ch.  slvi,  §§  1,  2. 


Sec.  48.  What    may    be    proved  "by    any    such    de- 
fendant. 

49.  Stockholder  paying  for   corporation,   may 

recover. 

50.  Officer  having  execution  may  sell  real  real 

estate   in    certain    cases. 

51.  Corporations  not  allowed   to   divide   capi- 

tal,  until   debts  are  paid. 

52.  Judgment  creditor  may  file  bill  in  equity 

in   certain  cases. 

53.  Proceedings,  trial  and  decree  in  the  suit. 

54.  Estate   of   corporations   on    dissolution    is 

vested  in  shareholders. 

Section  1.  This  chapter  applies  to  all  cor- 
porations organized  by  special  acts  of  the 
legislature  or  under  the  general  laws  of  the 
State,  except  so  far  as  it  is  inconsistent  with 
such  special  acts  or  with  public  statutes, 
concerning  particular  classes  of  corpora- 
tions. 

See  ch.  48,  on  manufacturing  corporations. 

[Provisions  of  this  chapter  apply  to  all  railroad 
corporations,  unless  especially  exempted  therefrom 
by  charter.     Came  v.   Brlgham,   3U  Me.   35.] 

§  2.  (As  amended  March  1,  1893.)  Corpo- 
rations may  (1)  sue  and  be  sued,  (2)  plead 
and  be  impleaded,  in  their  corporate  name; 

Corporation  bound  by  Implied  contracts.  §  21. 
Foreign,  may  sue  and  be  sued.  §  22.  Suits  against 
stockholders.  §§  37  et  seq.  Officers  having  exe- 
cution may  take  debts  due  tlie  corporation.  Ch. 
48,  §  10.  Execution  against  real  estate.  Ch.  76, 
§§  43-45.  Venue  and  commencement  of  actions. 
Ch.  81.  Proceedings  in  civil  actions.  Ch.  82, 
§§  16,  133.  Execution  against  personalty.  Ch.  84. 
Trustee  process.     Ch.  86. 

[Private  corporations  existing  by  the  laws  of 
other  States  have  power  to  sue,  in  their  corporate 
name,  in  this  State;  but  their  existence  must  be 
proved,  by  satisfactory  evidence,  like  any  other 
material  facts.     Mfg.  Co.  v.  Armstrong,  17" Me.  34. 

The  existence  of  plaintiff  corporation  and  its 
capacity  to  sue  are  admitted  by  pleading  the  gen- 
eral issue.     Bank  v.   Bagley,  68  Me.  249. 

A  judgment  against  a  corporation  cannot  be  Im- 
peached for  any  defect  in  service  of  the  original 
process  by  any  party  privy  to  it.  To  such  it  is 
valid  until  reversed.    Came  v.  Brigham,  39  Me.  35. 

A  corporation  may  be  sued,  in  its  own  name, 
on  a  contract  made  to  an  agent  for  its  benefit. 
Garland  v.  Reynolds,  20  Me.  45;  Levant,  etc,  v. 
Parks,  10  id.  441;  Acad.  v.  Starrett,  15  id.  44.3. 

The  plea  of  general  issue,  to  an  action  by  a 
corporation,  admits  only  its  power  to  sue  and  be 
sued.  Trustees  v.  Fisher,  30  Me.  523;  Freeman 
V.  M.  W.,  etc.,  Co.,  38  id.  343;  R.  R.  Co.  v.  Veazie, 
39  id.  571;  R.  R.  Co.  v.  Dunn,  39  id.  587;  Bank 
V.  Baglev,  supra;  Steamboat  Co.  v.  Sewall,  78  Me. 
167;   s.   c.   3   Atl.    Rep.    181. 

It  is  not  essential  to  existence  of  corporation, 
or  to  its  right  to  maintain  actions  at  law,  that  its 
clerk  should  have  filed  in  office  of  register  of 
deeds  a  certificate  of  his  appointment.  Dam  Co. 
V.  Gray,  30  Me.  547:  Hudson  v.  Carmen.  41  id.  84. 

To  maintain  action  under  a  special  statute  au- 
thority, its  terms  must  have  been  strictly  com- 
plied with.     R.   R.    Co.   V.   Ritchie,  40  Me.  425. 

In  absence  of  proof  that  suit  brought  in  name 
of  a  corporation  was  not  authorized  by  it,  its 
assent  will  be  presumed,  although  the  corporation 
is  but  a  nominal  partv.  R.  R.  Co.  v.  Smith,  47 
Me.  34. 

Venue  of  actions  by  railroad  corporation  whose 
road  passes  throusrh  two  counties.  R.  R.  Co.  v. 
Stevens,   28  Me.   434. 


Assumpsit  cannot  be  maintained  upon  contract 
of  a  corporation  made  through  an  agent,  who  puts 
to  it  a  seal,  though  it  has  not  their  common  seal. 
Porter  v.   R.   R.   Co.,  37  Me.   349. 

A  corporation,  acting  within  its  powers,  not 
liable  for  injury,  suffered  by  an  individual,  bv 
alteration  of  the  flux  and  reflux  of  tide.  Parker 
v.   Mill  Dam  Co.,  20  Me.  353. 

In  an  action  by  a  corporation,  defendant  can- 
not take  advantage  of  any  abuse  or  misuse  of 
corporate  powers  not  applicable  to  question  in 
controversy;  or  object  that  no  mode  of  service, 
of  attachment,  or  means  of  redress,  or  relief  is 
provided.     Boom  Corp.  v.   Lamson,   16  Me.  224. 

"Where  charter  provides  for  admission  of  mem- 
bers as  witnesses  in  cases  in  which  the  corpora- 
tion is  a  party,  one  member  cannot  obiect  to 
admission  of  others  as  witnesses,  in  an  action  be- 
tween him  and  the  corporation.  Cram  v.  Bangor 
House,   12  Me.  3.54. 

Declarations  of  stockholder  or  director  not  ad- 
missible in  evidence  against  corporation,  made 
when  not  acting  as  agent  thereof.  Pollevs  v.  Ins. 
Co.,  14  Me.  141;  Ruby  v.  Soc,  15  id.  306! 

It  is  incumbent  on  one  ol.iiming  title  under  deed 
from  a  corporation,  excluded  by  an  agent,  to 
prove  that  such  agent  had  been  legally  authorized. 
Miller  v.  Ewer,  27  Me.  509. 

Corporate  liability,  under  charter,  for  damages 
sustained  through  negligence.  Wevmouth  v.  P. 
L.  D.  Co..  71  Me.  20.  It  must  be  shown  that  its 
agents  exercised  reasonable  skill  and  ordinary 
diligence.  Id.  .\nd  whether  agents  have  been 
negligent  is  question  for  jury.     Id. 

Corporation  legitimately  exercising  right  of  emi- 
nent domain  is  not  liable  for  consequential  dam- 
ages arising  without  its  fault  or  negligence.  Sum- 
ner v.  Dam  Co.,  71  Me.   106. 

Corporation  liable  on  contract  for  money  loaned 
to  it.     Castle  v.  Foundry  Co.,  72  Me.   107. 

A  promissory  note  reciting  "  we  "  promise  to 
pay,  and  signed  "A.  B..  Treasurer  Gas  Light 
Company,"  is  the  note  of  an  individual  and  not 
of  the  corporation.  ]McClure  v.  Livermore,  78  Me. 
390;  s.   c.   6  Atl.   Rep.    11. 

Power  under  charter  of  water  company  to  es- 
tablish prices  and  rents  to  be  paid  for  water,  sub- 
ject to  control  of  legislature,  does  not  deprive 
the  court  of  its  jurisdiction  to  adjudicate  between 
parties  upon  their  legal  rights.  "Water  Co.  v. 
Adams,  84  Me.  472;  s.  c,  24  Atl.  Rep.  840. 

A  corporation  that  lets  by  contract,  to  each  of 
several  persons,  the  driving  of  logs  in  same  stream 
is  not  liable  to  them  for  their  torts  upon  each 
othor.     Darling  v.  L.  D.  Co..  85  Me.  22L 

Directors  have  authority,  in  behalf  of  the  cor- 
poration, to  release  person  whom  they  proposed 
to  call  as  a  witness.     Lewis  v.   Bank,   32  Me.  00. 

Inasmuch  as  an  insolvent  corporation  caiuiot  re- 
ceive and  discharge  any  insolvency,  the  fact  tliat 
a  defendant  corporation  in  an  action  at  law  has 
been  declared  an  insolvent  deljtor,  shows  no  cause 
for  restraining  the  prosecution  of  the  action  at 
law  to  immediate  final  judgment.  Miller  v.  Pack- 
ing Co..  88  Me.  605;  s.  c,  34  Atl.  Rep.  527. 

Fact  that  plaintiff  in  an  action  at  law  against 
an  insolvent  corporation  intends  to  levy  the  exe- 
cution upon  property  which  the  corporation  under- 
took to  convey  to  other  parties  before  its  in- 
solvency, does  not  show  any  right  of  the  de- 
fendant corpoi-ation  to  restrain  such  levy.     Id.] 


(3)  Have  a  common  seal  alterable  at  pleas- 
ure; 

See  Act  of  1889,  relating  to  corporate  seals,  nt 
p.  32. 

[At  common  law  "  the  impression  of  a  seal  Is 
not  a  seal;  "  but  otherwise  under  present  stat- 
utes.    "U'oodman  v.    R.  R.   Co..  50   Me.   549. 

.\ssumpsit  cannot  be  maintained  upon  a  contract 
of  a  corporation  made  through  an  agent  who  puts 
to  it  a  seal,  though  it  has  not  their  common  seal. 
Porter  v.  R.  R.  Co.,  37  Me.  349. 

.\gent  of  a  corporation  may  be  appointed  with- 
out  seal,    whatever   may   be   the   purpose   of   the 


10 


MAINE. 


Corporate  powers  —  R.  S.,  Tit.  iv,  ch.  xlvi,  §§  2,  3. 


a>:ency.    Fitch  v.  Mill  Co.,  80  Me.  S4;  s.  c,  12  Atl. 
Kep.  732.] 

(4)  Elect  all  necessary  officers;  prescribe 
their  duties  and  fix  their  compensation; 

See  ch.  48,  §  2,  note.  Failure  to  elect  officers. 
§1  8,  9.  Officers  not  to  siji:n  blanks.  §  12.  Court 
may  appoint  trustees.  S  20.  And  receivers.  §  28. 
Feisonal  liability  of  officers.  §§  29,  35.  Treas- 
urer may  sue  in  his  own  name,  when.  Ch.  82, 
§  16.  Forgery  of  officer's  signature,  penalty. 
Ch.  121,  §  9.  Officer  Issuing  false  certificates  of 
stock,  penalty.     Id.,  §  10. 

(5)  Make  by-laws  consistent  with  the  laws 
of  the  State  and  their  charters; 

By-laws   may   determine   what.      §   6. 

[Powers  of  a  corporation  are  derived  from  the 
law  and  its  charter.  And  no  by-law  of  a  cor- 
poration can  enlarjxe  its  corporate  powers.  An- 
drews V.   Ins.  Co.,  37  Me.   250. 

By-laws  of  a  corporation  are  obligatory  upon 
all  its  members,  if  not  repugnant  to  the  laws  of 
the  land.     Came  v.   Brigham,  39  Me.  35. 

The  by-laws  of  a  corporation,  made  In  pursu- 
ance of  "its  charter,  are  equally  binding  on  all  its 
members  acquainted  with  their  method  of  busi- 
ness, as  any  public  law  of  the  State.  Cummings 
V.  Webster,  43  Me.   192. 

Though  made  in  pursuance  of  an  express  power, 
a  by-law  must  be  lawful  and  reasonable  in  order 
to  be  valid.  If  contrary  to  the  common  or  stat- 
ute law,  it  is  void.  R.  R.  Co.  v.  Kendall,  31 
Me.  470;  Bridge  v.  AYoodman,  id.  573;  Came  v. 
Brigham,   supra;  Driscoll   v.   Soc,   59  Me.   474.] 

(0)  And  hold  and  convey  lands  and  other 
property. 

See  Const.,  art.  I.  §  21.  Sale  of  real  estate  on 
execution.  §  50;  ch.  70,  §§  43-45.  Division  of 
property  upon  dissolution.     §  54. 

[Unless  specially  empowered,  directors  have  no 
authority  to  sell  any  portion  of  the  corporate 
estate  essentially  necessary  for  transacting  its 
business.     RoUius  v.   Clay,  33  Me.   132. 

Kor  to  make  donations  from,  or  misappropriate 
corporate  funds,  in  violation  of  laws  and  rules 
regulating  Its  mode  of  action.  Bank  v.  Johnson, 
24  Mc.   490. 

At  common  law  corporations  have  power  to  sell 
and  convey  their  property  real  and  personal,  and 
to  nuirtgage  it  for  security  on  their  debts.  Fitch 
V.  Mill  Co.,  80  Me.  34;  s.  c,  12  Atl.  Rep.  732.  But 
this  right  may  be  limited  by  statute,  or  by  the 
acts  under  which  they  are  organized.    Id.] 


Directors  must  be  and  remain  stockhold- 
ers, except  that  a  member  of  another  cor- 
poration, which  owns  stock  and  has  a  right 
to  vole  thereon,  may  be  a  director. 

[Corporate  powern  nnrt  tlntics  In  gen- 
eral.-- Rule  that  a  grant  of  privileges  Is  a  grant 
of  necessary  incidents  to  the  enjoyment  of  those 
privileges,  does  not  apply  so  as  to  embrace  as 
incidental  privileges  what  are  expressly  excepted 
or  forbidden  in  the  grant.  I'lummer  v.  Lumber 
Assn.,  07  Me.  363. 

Corporations  originating  according  to  the  rules 
of  the  common  law  must  be  governed  by  It  in 
their  organization  and  exercise  of  powers.  Penob- 
scot  Boom  v.   Lamson,   JO  Me.   224. 

The  existence  of  a  corporation  may  be  inferred 
from  the  exercise  of  its  corporate  powers.    Dam 


Co.    V.    Gray,    30   Me.    547;    Sampson    v.    B.    S.    M. 
Corp..    36   Id.   78. 

Corporations  possess  only  such  powers  as  law 
of  tlielr  creation  confers.  Franklin  Co.  v.  Bank, 
68  Me.  43.  And  parties  dealing  with  them  are 
chargeable  with  notice  of  their  powers,  and  limita- 
tions thereof,  and  cannot  plead  ignorance  to  avoid 
defense  of  ultra  vires.     Id. 

All  votes  and  proceedings  of  persons  professing 
to  act  as  corporators,  when  assembled  beyond 
limits  of  State  granting  charter,  are  void.  >iiller 
V.  Ewer,  27  Me.  509;  Freeman  v.  Mill  Co.,  38  id. 
343. 

A  corporation  duly  organized  and  acting  within 
limits  of  State  granting  charter  may  act  and 
contract,  by  agent,  beyond  limits  of  that  State. 
Miller  v.   Ewer,   supra. 

A  corporation  empowered  to  make  contracts  In 
writing  cannot  delegate  such  power.  Asylum  v. 
Johnson,   43   Me.    180. 

An  authority  given  by  a  vote  of  a  corporation 
to  sell  and  convey  its  real  estate  may  be  reason- 
ably construed  to  include  a  right  to  make  a  bind- 
ing contract  at  a  future  day.  Bank  v.  Hamblet, 
35  Me.  491. 

Corporations  cannot  purchase,  or  hold,  or  de- 
liver any  stocks  of  other  corporations,  unless  ex- 
pressly authorized  to  do  so  by  law.  Franklin  Co. 
V.   Bank,  supra. 

Corporate  powers  cannot  be  enlarged  by  by-laws. 
Andrews  v.  Ins.  Co.,  37  l\Ie.  256. 

"Whether  duty  imposed  upon  a  corporation  Is 
mandatory  or  merely  directory  is  to  be  deter- 
mined by  its  nature  and  object,  by  what  may 
be  understood  to  be  the  intention  of  .the  legisla- 
ture.    Middle  Bridge  v.   Brooks,   13  Me.   391. 

A  corporation  is  not  bound  by  acts  or  declara- 
tions of  individual  members,  except  when  acting 
as  agents.  Ruby  v.  Soc,  15  Me.  306;  Hersey  v. 
Veazie,   24  id.   9. 

Person  not  a  member  of  a  corporation  Is  not 
bound  by  provisions  of  any  vote  it  may  have 
passed,  or  any  contract  it  may  have  made,  to 
which  he  is  not  a  party.  Weymouth  v.  P.  L.  D. 
Co.,  71  Me.  29. 

Powers  and  duties  of  a  dam  company  construed. 
Mill  Co.  V.  Dam  Co.,  77  Me.  337.  Of  a  company 
for  manufacturing  lumber.  Burbank  v.  Mill  Co., 
75  Me.  373.  Of  a  water  company.  Riche  v. 
Water  Co.,  75  Me.  91;  Water  Co.  v.  TlUson,  69 
id.  255.  Of  a  log  driving  company.  Patterson  v. 
Log  Driving  Co..  71  jNIe.  44;  Weymouth  v.  Log 
Driving  Co.;   id.   29. 

An  engineer  in  employ  of  a  railroad  has  no 
Implied  powers  to  bind  company  by  his  contracts. 
Gardner  v.   R.   R.   Co.,  70  Me.  181. 

Contract  made  by  a  corporation  which  is  unlaw- 
ful and  void,  because  beyond  scope  of  its  powers, 
does  not  become  lawful  by  being  carried  into  exe- 
cution. Gas  Liuht  Co.  v.  G.  F.  &  L.  Co.,  85  Me. 
532;    s.    c,    27    Atl.    Rep.    525. 

Where  a  new  corporation  is  formed  out  of  two 
or  more  previously  existing,  and  by  an  act  is  to 
"  have  the  powers,  privileges  and  immunities  pos- 
sessed by  each  of  the  corporations,"  whose  union 
constitutes  such  new  corporation,  it  will  have  only 
the  privileges,  powers  and  immunities,  which  the 
corporation,  with  the  fewest  privileges,  powers 
and  immunities  possessed,  and  which  were  com- 
mon to  all.     State  v.  R.  R.  Co.,  06  Me.  488.] 

§  3.  Their  first  meeting,  unless  otherwise 
provided,  shall  be  called  by  a  notice  signed 
by  some  person  named  in  the  act  of  incor- 
poration, setting  forth  the  time,  place,  and 
l)urpose,  of  the  meeting,  a  copy  of  which 
shall  be  delivered  to  each  meml)or,  or  pub- 
lished in  a  newspaper  in  the  county,  if  any, 
otherwise  in  the  State  paper,  seven  days  be- 
fore the  meeting;  but  tlie  organization  of  all 
existing  corporations  made  in  accordance 
with  this  chajUor,  or  chapter  fortj^-eight, 
are  equally  valid. 

See  ch.   48,    §§3,    17.     Organization   of   corpora- 


MAINE. 


11 


Meetings;  by-laws;  clerk  —  R.  S.,  Tit.  iv,  ch.  xlvi,  §§  4-10. 


tions   specially   chartered.     See   Act   12,    at   p.   36. 
Under  general  law.     See  Act  15,  at  p.  37. 

[First  meeting  cannot  be  called  at  a  place  with- 
out the  State,  and  all  votes  and  proceedings  at 
a  meeting  so  held  are  wholly  void.  Miller  v. 
Ewer,  27  Me.  509;  Freeman  v.  Power  &  Mill  Co., 
38  id.   343. 

Organization  Is  not  defective  because  notice  of 
first  meeting  is  not  served  on  each  corporator, 
when  it  appears  that  the  powers  conferred  by 
charter  have  been  assumed  by  persons  by  whom 
it  was  intended  they  should  be  enjoyed.  Mc- 
Clinch  V.  Sturgis,  72  Me.  288.] 


§  4.  When  a  meeting  cannot  be  otherwise 
called,  three  members  of  the  corporation 
may  make  written  application  to  a  justice 
of  the  peace  where  it  is  established,  if  local, 
or  if  not,  where  it  is  desired  to  hold  the 
meeting,  who  may  issue  his  warrant  to 
either  of  such  members,  directing  him  to 
call  a  meeting  by  giving  the  notice  required 
In  the  preceding  section.  When  the  law  re- 
quires a  notice  to  be  published  in  some  news- 
paper, or  posted  in  some  public  place,  the 
justice  shall  designate  in  his  warrant  the 
newspaper  or  place. 

[See  College  v.   Mallett,   12  Me.   398.] 


§  5.  When  all  the  members  of  a  corpora- 
tion are  present  at  a  meeting,  and  sign  a 
written  consent  on  the  record  thereof,  such 
meeting  is  legal. 

§  6.  Corporations  may  determine  by  their 
by-laws,  the  manner  of  calling  and  conduct- 
ing meetings;  the  number  of  membei-s  that 
constitute  a  quorum;  the  number  of  votes  to 
be  given  by  shareholders;  the  tenure  of  the 
several  officers;  the  mode  of  voting  by  proxy; 
and  of  selling  shares  for  neglect  to  pay  as- 
sessments; and  may  enforce  such  by-laws  by 
penalties  not  exceeding  twenty  dollars.  A 
corporation,  at  a  legal  meeting  of  its  stock- 
holders, may  vote  to  change  its  name  and 
adopt  a  new  one;  and  when  the  proceedings 
of  such  meeting,  certified  by  the  clerls: 
thereof,  are  returned  to  the  office  of  the 
secretary  of  State  to  be  recorded  by  him, 
the  name  shall  be  deemed  changed;  and  the 
corporation,  under  its  new  name,  has  the 
same  rights,  powers,  and  privileges,  and  is 
subject  to  the  same  duties,  obligations  and 
liabilities  as  before,  and  may  sue  and  be 
sued  by  its  new  name:  but  no  action  bi-ought 
against  it  by  its  former  name,  shall  be  de- 
feated on  that  account,  but  on  motion  of 
either  party,  the  new  name  may  be  sub- 
stituted therefor  in  the  action. 

Power  to  make  by-laws.     §  2  (5). 

[It  does  not  require  assent  of  subscriber  to 
capital  stock,  to  authorize  legislature  to  change 
corporate  name;  the  statute  confers  that  right 
without  assent.     R.  R.  Co.  v.  Buck,  68  Me.  81. 

Where  by-laws  of  corporation,  whose  capital  stock 
Is  divided  into  400  shares,  provided  that  no  busi- 
ness should  be  transacted  at  any  meeting  of 
stockholders  unless  majority  of  stock  was  repre- 
sented, held,  that  201  shares  constituted  such  a 
majority,   and  that  no   meeting  at  which  a   less 


number  was  represented  would  be  legal  for  trans- 
action of  business.  Mfg.  Co.  v.  Faunce,  79  Me. 
440;  s.  c,  10  Atl.  Rep.  250. 

In  order  to  be  valid,  a  by-law  must  be  lawful 
and  reasonable.  R.  R.  Co.  v.  Kendall,  31  Me. 
471. 

Above  section  applied.  Corporation  v.  Wood- 
man, 31  Me.  576.] 


§  7.  When  a  meeting  is  called  by  a  justice 
of  the  peace,  he,  or  the  person  to  whom  his 
warrant  was  directed,  may  call  the  meeting 
to  order  and  preside  therein,  until  a  clerk 
is  chosen  and  qualified,  if  there  is  no  officer 
present  whose  duty  it  is  to  preside.  The 
person  presiding  is  not  responsible  for  an 
error  in  judgment  in  receiving  or  rejecting 
the  vote  of  a  person  claiming  to  be  a  mem- 
ber. 

§  8.  When  a  corporation  fails  to  hold  its 
annual  meeting  on  the  day  appointed,  the 
officers  of  the  preceding  year  continue  in  the 
exercise  of  their  duties,  and  their  acts  are 
legal,  until  other  officers  are  chosen  and 
qualified  in  their  stead.  When,  upon  due 
notice  given,  officers  are  regularly  elected  on 
any  other  day  than  that  of  the  annual  meet- 
ing, they  shall  hold  their  offices  and  perfonn 
their  duties  as  if  chosen  on  that  day,  unless 
a  majority  of  the  corporate  members  file 
with  the  clerk,  within  six  months  after  such 
election,  written  objections  thereto,  and 
their  acts  shall  be  considered  legal,  until 
others  are  chosen  and  qualified  in  their 
stead. 


[Where  there  is  nothing  in  State  laws  or  in  by- 
laws of  the  corporation  to  limit  continuance  In 
office  of  its  clerk,  the  one  properly  chosen  remains 
in  office  until  another  is  chosen.  Dam  Co.  v. 
Gray.  30  Me.  547. 

Above  section  applied.  Hotel  Co.  v.  Fisher,  56 
Me.  323.] 


§  9.  When  such  a  notice  is  filed,  the  clerk 
shall  call  a  meeting  of  the  corporation,  at 
such  time  and  place  as  he  appoints,  and 
give  the  notice  required  for  an  annual  meet- 
ing, stating  in  it  the  fact  that  objections 
have  been  filed,  and  the  purpose  of  the  meet- 
ing; and  officers  elected  at  such  meetinir 
shall  hold  their  offices,  and  their  acts  shall 
be  considered  legal,  until  other  officers  are 
chosen  and  qualified  in  their  stead. 

§  10.  (As  amended  INIarch  G.  ISSO.)  All 
corporations,  existing  by  virtue  of  the  laws 
of  this  State,  shall  have  a  clerk  who  is  a 
resident  of  this  State,  and  shall  keep,  at 
some  fixed  place  within  the  State,  a  clerk's 
office  where  shall  be  kept  their  records  and 
a  book  showing  a  true  and  complete  list  of 
all  stockholders,  their  residences  and  the 
amount  of  stock  held  by  each;  and  such 
book,  or  a  duly  proved  copy  thereof,  shall 
be  competent  evidence  in  any  court  of  this 
State  to  prove  who  are  stockholders  in  such 
corporation  and  the  amount  of  stock  held  by 
each  stockholder.  Such  records  and  stock- 
book  shall  be  open  at  all  reasonable  hours 
to  the  inspection  of  persons  interested,  who 
may  take  copies  and  minutes  therefrom  of 


12 


MAINE. 


Clerk;  certifitates  of  stock;  proxies  —  R.  S.,  Tit.  iv,  eh.  xlvi,  §§  11-14. 


such  parts  as  concern  their  interests,  and 
have  them  produced  in  court  on  trial  of  an 
action  in  which  tlioy  are  interested.  The 
above  provisions  as  to  list  of  stockholders 
shall  not  apply  to  any  corporation  doing 
business  in  this  State  and  having  a  treas- 
urer's office  at  some  fixed  place  in  the  State 
where  a  stock-book  is  kept  giving  the  names, 
residences  and  amount  of  stock  of  each 
stockholder. 

See  §  8,  note. 

[A  corporation  record  is  competent  to  show  its 
corporators,  in  absence  of  countervailing  evi- 
dence. R.  R.  Co.  V.  Dununer,  40  Me.  172;  R.  R. 
Co.  V.  AVhite,  41  id.  512;  Coffin  v.  Collins,  17  id. 
440. 

When  a  corporation  has  proceeded  regularly  to 
ascertain  its  corporators  and  the  owners  of  its 
stock,  and  has  entered  tlioni  in  its  records,  all 
parties  become  thereby  prima  facie  entitled  to 
the  rights  thus  secured  to  them.  R.  R.  Co.  v. 
Dumuier,    supra. 

Under  statutes  In  force  In  1841,  books  of  a  cor- 
poration, so  far  as  creditors  were  concerned,  were 
conclusive  evidence  as  to  who  were  stockholders. 
Parol  evidence  was  admissible  to  show  that  person 
had  ceased  to  be  a  stockholder.  Stanley  v.  Stan- 
ley, 2(3  Me.  191.] 

§  11.  (As  amended  March  ::(>,  18U7.)  When- 
ever there  is  a  change  in  the  office  of  clerk 
of  a  corporation,  he  shall,  within  twenty 
days  after  acceptance  of  the  office  file  a 
certificate  of  his  election  in  the  registry  of 
deeds  in  the  district  where  the  corporation 
is  located,  or  Avhere  it  has  a  place  of  busi- 
ness or  a  general  agent;  and  an  attested 
copy  of  such  certificate  shall  be  sufficient 
evidence  that  he  is  clerk,  for  service  of 
process  upon  tlie  coriKiration,  until  another 
certificate  has  been  tiled. 

See    $  8,    note. 


§  12.  (As  amended  March  10,  1893.)  When 
the  capital  of  a  corporation  is  divided  into 
shares,  and  certificates  thereof  are  issued. 
they  may  be  transferred  by  indorsement  and 
delivery,  but  such  transfer  is  not  valid,  ex- 
cept between  the  parties  thereto,  until  the 
same  is  so  entered  on  the  books  of  the  cor- 
poration as  to  exhibit  the  names  and  resi- 
dences of  the  parties,  the  number  of  the 
shares,  and  the  date  of  tlieir  transfer.  Cer- 
tificates of  shares  shall  be  issued  to  those 
entitled  to  them  by  transfer  or  otherwise, 
signed  by  the  president  or  vice-president, 
and  attested  by  the  cashier,  clerk  or  treas- 
urer. Neither  shall  sign  blanks  and  leave 
them  for  use  by  the  other,  nor  sign  them 
without  knowledge  of  the  apparem  title  of 
the  person  to  whom  they  are  issued.  In 
case  of  the  absence  or  disability  of  either 
of  said  officers,  the  signature  of  a  majority 
of  the  directors  in  his  stead  is  sufficient. 

See  ch.  48,  §§  4-7.  Shares  of  stock  sold  on  exe- 
cution. Ch.  84,  §§  12-2.3.  Issuing  false  certifi- 
cates, felony.  Ch.  121,  §  10.  Taxation  of  stock. 
See  ch.  6.     Owner  of  pledged  stock  may  vote  it. 


Ch.  40,   §   14.    See  Act  of   1897,   relating  to  trans- 
fers, at  p.  37. 

[Under  statutes  in  force  in  1841,  books  of  a 
corporation,  so  far  as  creditors  were  concerned, 
were  conclusive  evidence  as  to  wlio  were  stock- 
holders. Parol  evidence  was  admissible  to  show 
that  person  had  c<'ased  to  be  stockholder.  Stan- 
ley V.  Stanley,  2(>  Me.   191. 

When  a  corporation  has  proceeded  regularly  to 
ascertain  its  corporators  and  the  owners  of  its 
stock,  and  has  entered  them  in  its  records,  all 
parties  become  thereby  prima  facie  entitled  to 
the  rights  thus  secured  to  them.  R.  R.  Co.  v. 
Dummer,    40   Mo.    172. 

The  corporation  record  is  competent  to  show  its 
corporators,  in  absence  of  countervailing  evidence. 
Id.;  R.  R.  Co.  V.  White,  41  Me.  512;  Coffin  v.  Col- 
lins, 17  id.  440. 

A  person  becomes  legally  entitled  to  shares  in 
a  corporation  by  having  them  transferred  to  him 
on  the  books.  The  certificate  of  ownership  is 
but  additional  evidence  of  the  title.  Rank  v. 
P.urr,  24  Me.  2.')G;  Bank  v.  Wilson,   id.   273. 

A  transfer  of  stock,  made  to  fulfill  a  contract. 
Is  not  ineffectual  on  account  of  its  being  made 
two  days  earlier  than  the  stipulated  day.  Dodge 
V.  Barnes,  31  Me.  290. 

Where  by-laws  require  transfer  of  stock  to  be 
made  by  treasurer,  and  not  by  owner,  treasurer 
thereby  becomes  agent  of  owner  for  that  purpose. 
Id. 

Where  by-laws  provide  that  shares  should  be 
transferable  by  indorsement  in  writing  by  the 
holder,  "  in  presence  of  the  cashier  or  two  wit- 
nesses," held,  that  to  make  a  valid  transfer, 
cashier  or  witnesses  must  attest  signature  of 
holder.     Dane  v.   Young,   01  Me.   100. 

Transfer  made  in  violation  of  by-laws  is  void, 
and  cannot  be  made  valid  by  ratification.     Id. 

Mandamus  will  not  be  granted  to  compel  trans- 
fer of  stock  upon  books  of  a  corporation,  or  to 
compel  certificates  of  stock  to  be  issued,  when. 
Townes  v.   Nichols,  73  Me.   515. 

Transfer  of  stock  not  against  public  policy, 
when.  Greene  v.  Nash,  85  Me.  148;  s.  c,  26  Atl. 
Rep.    1114. 

Above  section  applied.  FIske  v.  Carr,  20  Me. 
301. 

No  transfer  of  stock  will  secure  it  from  attach- 
ment until  It  Is  entered  on  the  books.  Bank  v. 
Cutler.   49   Me.   315. 

Assignee  of  certificates  of  stock,  who  leaves 
them,  with  assignments  unrecorded,  in  posses- 
sion of  assignor,  not  guilty  of  negligence,  when. 
Eaton  V.  Tel.   Co.,   68  Me.   63.] 


§  13.  Shareholders  may  be  represented  by 
proxies  granted  not  more  than  thirty  days 
before  the  meeting  which  shall  be  named 
therein;  they  are  not  valid  after  a  final  ad- 
journment thereof.  They  may  be  repre- 
sented by  a  general  power  of  attorney,  pro- 
duced at  the  meeting,  until  it  is  revoked. 
Shares  hyiiothecnied  to  the  corporation  shall 
not  be  represented.  No  person  can  give,  by 
right  of  representation,  a  greater  number 
of  votes  than  is  allowed  to  any  one  by  the 
charter  or  by-laws. 

See  §  2  (4),  and  note. 

§  14.  After  the  owner  of  stock  in  a  cor- 
poration has  transferred,  mortgaged  or  in 
any  way  pledged  the  -same  to  another  for 
security  merely,  and  it  so  appears  in  such 
transfer,  mortgage  or  pledge,  and  on  the 
books  of  the  corporation,  such  owner  con- 
tinues to  have  tlie  right  to  vote  upon  such 


mai:N'E. 


13 


Reduction  of  capital;  foreign  corporations  —  R.  S.,  Tit.  iv,  ch.  xlvi,  §§  15-22. 


stock  at  all  meetings  of  the  stockliolders  un- 
til his  right  of  redemptiou  ceases. 

§  15.  Whenever  the  assets  of  a  corpora- 
tion have  been  so  diminished  by  losses  or 
depreciation  of  property,  that  its  capital  is 
impaired,  such  coii>oration,  at  any  meeting 
of  the  stockholders  legally  called  therefor, 
with  the  consent  of  not  less  than  two-thirds 
in  amount  of  all  its  outstanding  stock,  ex- 
pressed at  such  meeting  or  at  any  adjourn- 
ment thereof,  may  reduce  such  stock  to  the 
extent  of  such  impairment,  and  thereupon 
the  par  value  of  all  shares  issued  or  to  be 
issued  shall  be  reduced  proportionally. 

See  ch.  48,   §§  8,  20. 

§  16.  Within  thirty  days  after  such  re- 
duction, any  stoclvhokler  who  has  not  agreed 
thereto,  may  file  a  bill  in  equity  in  any 
county  in  which  said  corporation  has  an 
established  place  of  business,  or  in  which 
it  held  its  last  stockholders'  meeting,  for  a 
revision  of  its  proceedings  in  making  said 
reduction,  upon  which  bill  such  proceedings 
may  be  annulled  or  modified,  so  that  such 
reduction  shall  not  exceed  the  actual  im- 
pairment of  capital.  The  action  of  the  court, 
or,  if  no  bill  is  filed  as  aforesaid,  the  action 
of  the  coi"poration,  as  provided  in  the  pre- 
ceding section,  shall  be  conclusive  upon  all 
parties,  whether  stockholders  or  creditors, 
and  such  reduction  shall  not  create  any  per- 
sonal liability  of  any  stockholder  or  officer 
thereof. 

See  ch.  48,   §  20. 

§  17.  The  clerk  of  said  coiiDoration  shall 
file  with  the  secretary  of  State  a  certified 
copy  of  such  proceedings,  within  thirty  days 
after  they  are  taken,  or  forfeit  one  thousand 
dollars,  to  be  recovered  by  action  of  debt 
in  favor  of  any  existing  or  future  c-reditor 
of  such  corporation  first  suing  therefor  in 
any  court  or  county  in  which  a  transitory 
action  between  the  same  parties  can  be 
brought. 

§  18.  Simultaneously  with  or  after  such 
reduction  of  its  stock,  such  corporation  may 
from  time  to  time  authorize  the  issue  of 
new  shares,  of  the  reduced  par  value,  until 
the  gross  capital  equals  the  gross  capital 
authorized  by  its  charter  or  articles  of  as- 
sociation before  such  reduction  was  made, 
although  the  new  shares  should  increase  the 
whole  issue  beyond  the  number  authorized 
by  such  charter  or  articles. 

See  ch.   48,    §   20. 

§  19.  Any  officer  or  member  of  a  coi-pora- 
tion,  who  prevents  access  to  and  use  of  the 
records  and  books  as  provided  in  section  ten, 
is  liable  for  all  damages  occasioned  thereby, 
in  an  action  on  the  case. 

§  20.  The  property  of  any  corporation,  and 
the  franchise  of  one  having  a  right  to  re- 
ceive a  toll  establishe<l  by  the  State,   with 


its  privileges  and  immunities,  are  liable  to 
attachment  on  mesne  process  and  levy  on 
execution  for  debts  of  the  corporation,  in 
the  manner  prescribed  by  law. 

§  21.  Corporations  are  bound  by  parol  con- 
tracts made  by  an  agent  authorized  by  vote 
or  by  its  by-laws.  Contracts  may  be  im- 
plied from  corporate  acts,  or  from  the  acts 
of  a  general  agent. 

See  powers  of  corporations.  §  2.  Agent  guilty 
of  larceny.     Ch.   120,   §  9. 

[Authority  of  agent  need  not  be  proved  by  rec- 
ord or  writing,  but  may  be  presumed  from  acts 
and  general  course  of  business.  Warren  v.  Ins 
Co.,  16  Me.  439. 

Individual  members  of  a  corporation  have  no  au- 
thority to  call  agents  or  oUicers  thereof  to  ac- 
count, or  to  make  settlements  with  them.  Iler- 
sey  V.  Veazie,  24  Me.  9;  Ruby  v.   Soc,  15  id.  300. 

Where  corporation  makes  a  contract  through 
an  agent,  who  puts  to  It  a  seal,  it  becomes  the 
deed  of  the  corporation  though  it  has  not  the 
common   seal.      Porter  v.    R.    R.    Co.,   37  Me.   34!). 

Powers  of  a  general  agent  construed.  Whit- 
ney V.  S.  P.  M.  Co.,  39  Me.  316. 

Authority  of  agent  may  be  shown  by  other  evi- 
dence than  the  by-laws.  Brown  v.  Donnell,  49 
Me.  421.  May  be  shown  by  acts  and  general  course 
of  business.     Badger  v.  Bank,  26  Me.  428. 

Corporation  may  ratify  acts  of  agent  so  far  as 
they  were  within  its  powers,  but  no  further. 
Boom  Corp.   v.   Whiting,   29   Me.   123. 

Alteration  of  policy  of  insurance  by  agent, 
binding  upon  the  company,  when.  Warren  v.  Ins. 
Co.,   supra. 

Agent  of  a  corporation  may  be  appointed  with- 
out seal,  whatever  may  be  the  purpose  of  agency. 
Fitch  v.  Mill  Co.,  80  Me.  34;  s.  c,  12  Atl.  Rep.  732. 

In  matters  where  acts  of  agent  of  corporation 
in  transfer  of  personal  property  require  no  formal 
instrument  under  seal,  as  in  sale  or  mortgage  of 
personal  property,  not  necessary  that  authority 
should  be  given  by  a  formal  vote.  Fitch  v.  Mill 
Co.,  80  Me.   34;   s.   c,   12  Atl.   Rep.   732. 

Such  authority  may  be  inferred  from  conduct 
of  officers,  or  from  their  knowledge  and  neglect 
to  make  objection,  as  in  the  case  of  individuals. 
Id. 

Railroad  engineer  has  no  implied  power  to  bind 
company  by  his  contracts.  Gardner  v.  R.  R.  Co., 
70  Me.   181. 

A  promise  may  be  Implied  on  part  of  a  cor- 
poration from  acts  of  its  agent,  whose  powers 
are  of  a  general  character.  Abbott  v.  Hermon, 
7  Me.  118. 

Where  bank  claims  benefit  of  an  unauthorized 
contract  of  cashier,  it  thereby  ratifies  the  con- 
tract.    Bank  v.  Curtis,  24  Me.  30.  • 

Corporations  are  subject  to  same  laws  in  rela- 
tion to  acts  of  their  agents  as  individuals  are. 
Bank  v.  Johnson,  24  Me.  490.] 

§  22.  Corporations  existing  by  the  laws  of 
another  State  or  of  a  foreign  jurisdiction, 
may  s.ue  or  be  sued  by  their  corporate  name 
in  this  State;  and  if  they  have  property  in 
this  State  it  maj-  be  attached  and  appraised 
and  set  off  on  execution,  as  the  property 
of  non-resident  individuals.  The  acts  of 
their  agents  have  the  same  effect  as  the 
acts  of  agents  of  foreign  private  persons, 
unless  prohibited  by  law. 

Power  of  corporation  to  sue  and  be  sued.     §   2 

(2),    and   note.      Statement  required   from    foreign 

corporation.  See  Act  of  1889,  as  amended  in 
1891,   at  p.  3.^ 

[A  corporation  duly  organized  and  acting  within 


14  MAINE. 

Corporate  existence;  termination;  dissolution  —  R.  S.,  Tit.  iv,  ch.  xlvi,  §§  23-27. 


limits  of  State  grantlnp  charter  may  act  and 
contract,  by  agent,  beyond  limits  of  that  State. 
Miller  T.  E^er,  27  Me.   507. 

But  all  votes  and  proceedings  of  persons  pro- 
fessing to  act  as  corporators,  when  assembled 
beyond  limits  of  State  granting  charter,  are  void. 
Id.;  Freeman  v.  Mill  Co.,  38  Me.  343. 

Comltv  does  not  require  courts  of  this  State 
to  permit  foreign  receivers  to  exercise  privileges 
detrimental  to  our  own  citizens,  while  pursuing 
appropriate  legal  remedies  here.  Chase  v.  Ins. 
Co..   55  Me.  290.  ^  .     ^ 

Action  mav  be  maintained  in  this  State  against 
a  foreign  corporation.  Williams  v.  Ins.  Co.,  29 
Me.  465.  And  In  such  action  jurisdiction  is  con- 
ferred by  attachment  of  defendant's  property. 
Id. 

Dissolution  of  a  corporation  in  another  State 
will  not  prevent  an  action  commenced  against 
it  here  from  proceeding  to  judgment  unless  it 
be  shown  that  the  corporation  is  utterly  extinct. 
Hunt  V.  Ins.   Co.,   55  Me.  290. 

A  corporation  can  have  legal  residence  only  in 
the  State  creating  it,  although  by  comity  it  may 
do  business,  through  its  agents,  in  other  States. 
Chafee  v.  Bank,  71  Me.  514. 

A  State  may  permit  foreign  corporation  to 
transact  business  within  its  limits  upon  such 
terms  and  conditions  as  it  may  prescribe,  not 
Inconsistent  with  Constitution  and  laws  of  the 
United  States.  Cousins  v.  Lovejoy,  81  Me.  467; 
s.   c,   17  Atl.   Rep.   495. 

Private  foreign  corporation  has  power  to  sue 
in  its  corporate  name  in  this  State,  but  its  ex- 
istence must  be  satisfactorily  proved,  like  any 
other  material  facts.  Mfg.  Co.  v.  Armstrong,  17 
Me.   34.] 


§  23.  Acts  of  incorporation,  passed  since 
Marcli  seventeen,  eighteen  hundred  and 
thirty-one,  may  be  amended,  altered,  or  re- 
pealed by  the  legislature,  as  if  express  pro- 
vision therefor  were  made  in  them,  unless 
they  contain  an  express  limitation:  but  this 
section  shall  not  deprive  the  courts  of  any 
power  which  they  have  at  common  law  over 
a  corporation  or  its  officere. 

See  Const.,  art.  I,  §  11. 

[Statute  by  which  State  reserves  to  Itself  right 
to  amend,  alter  and  repeal  all  acts  of  incorpora- 
tion Is  in  full  force,  and  applies  to  all  subse- 
quent corporations,  whether  organized  under 
general  or  special  laws.  State  v.  R.  R.  Co.,  66 
Me.  488. 

Creditor  of  a  corporation  can  interpose  no  valid 
objection  to  repeal  a  charter  by  legislature  on 
ground  that  it  would  prevent  prosecution  of  a 
suit  which  had  been  commenced  against  it.  Read 
V.    Bank.    23    Me.    318. 

Dissolution  of  a  corporation  by  act  of  legislature 
deprives  it  of  corporate  existence.  Hunt  v.  Ins. 
Co.,   55    Me.    290. 

Dissolution  can  take  place  how.  Boom  Corp.  v. 
Lamson,   16  Me.  224. 

Repeal  by  charter  operates  to  dissolve  attach- 
ments against  the  corporation.  Bowker  v.  Hill, 
60  Me.  174. 

Power  and  duty  to  determine  manner  in  which 
a  corporation  shall  perform  its  public  duties  de- 
volves upon  State  tribunals.  Comrs.  v.  R.  R.  Co., 
63  Me.  209. 

Exemption  from  taxation  In  charter  of  corpora- 
tion held  to  be  perpetual  and  irrepealable.  State 
V.  R.  R.  Co.,  69  Me.  44.] 

§  24.  Corporations,  whose  charters  expire 
or  are  otherwise  terminated,  have  a  coriw- 
rate  existence  for  three  years  thereafter; 
to  prosecute  and  defend  suits;  to  settle  and 


close  their  concerns;  to  dispose  of  their  prop- 
ertj-;  and  to  divide  their  capitals. 

[If  charter  of  a  corporation  has  expired.  It  may 
be  revived  in  all  its  original  force  by  subsequent 
statute;  and  this  is  merely  a  revival  of  the  former 
corporation,  and  not  the  creation  of  a  new  one. 
Bank  v.    Richardson,   1   Me.    79. 

The  judgment  of  another  State,  decreeing  a 
dissolution,  and  appointing  receivers  to  wind  un 
a  corporation  created  by  its  laws,  will  not  pre- 
vent an  action  commenced  against  such  corpora- 
tion here,  prior  to  such  dissolution,  from  pro- 
ceeding to  judgment,  unless  it  be  shown  that  the 
corporation  is  utterly  extinct.  Hunt  v.  Ins.  Co., 
55   Me.    290.] 


§  25.  When  the  charter  of  a  corporation 
expires  or  is  terminated,  a  creditor  or  stock- 
holder may  apply  to  the  supreme  judicial 
court,  which  may  appoint  one  or  more  trus- 
tees to  take  charge  of  its  estate  and  effects, 
with  power  to  collect  its  debts,  and  prose- 
cute and  defend  suits  at  law;  and  to  sell 
and  convey  its  real  estate;  and  if  sold  at  auc- 
tion, the  same  notice  shall  be  given  as  in 
the  sale  of  lands  of  conmrations  on  execu- 
tion. The  court  has  jurisdiction  in  equity 
of  all  proceedings  therein,  and  may  make 
such  orders  and  decrees,  and  issue  such  in- 
junctions as  are  necessary. 

Corporations  are  within  the  Insolvent  Law. 
Ch.  70,  §  61. 

[Trustees  are  to  collect  the  debts  and  dispose 
of  the  assets  of  the  corporation  and  then  make 
a  ratable  division  of  the  same.  Bowker  v.  Hill, 
60  Me.  174.] 

§  26.  The  debts  of  the  corporation  shall 
be  paid  in  full  by  such  trustees,  when  the 
funds  are  sufficient;  when  not,  ratably  to 
those  creditors,  who  prove  their  debts,  as 
the  law  provides,  or  as  the  court  directs. 
Any  balance  remaining  shall  be  distributed 
among  the  stockholders  or  their  legal  repre- 
sentatives in  proportion  to  their  interests. 

See   note   to   preceding   section. 

§  27.  Except  where  otherwise  provided 
by  statute,  whenever  at  any  meeting  of  its 
stockholders,  legally  called  therefor,  such 
stockholders  vote  to  dissolve  such  corpora- 
tion, a  bill  in  equity  against  the  same  for 
dissolution  thereof,  may  be  filed  by  any 
officer,  stockholder  or  creditor  in  the  su- 
preme judicial  court,  in  the  county  in  which 
it  has  an  established  place  of  business,  or  in 
which  it  held  its  last  stockholders'  meeting, 
upon  which  bill,  such  notice  shall  be  given 
as  may  be  ordered  by  any  justice  of  said 
court,  in  term  time  or  vacation,  upon  proof 
of  which  notice,  such  proceedings  may  be 
had  according  to  the  iisual  course  of  suits  in 
equity,  that  said  corporation  shall  be  dis- 
solved and  terminated.  Upon  proof  that 
there  are  no  existing  liabilities  against  said 
corporation,  and  no  existing  assets  thereof, 
requiring  distribution  among  the  stock- 
I  holders,  said  court   may   dissolve  said  cor- 


MAIXE. 

Dividends;  statements,  etc.;  liability  of  stockholders  —  R.  S.,  Tit.  iv,  ch.  xlvi,  §§  28-37. 


15 


poration  "without  the   appointment  of   trus- 
tees or  receivers. 

§  28.  Said  court  has  jurisdiction  in  said 
cause  to  appoint  receivers,  issue  injunctions, 
and  pass  interlocutory  decrees  and  orders, 
according  to  the  usual  course  of  proceedings 
in  equity;  and  shall,  moreover,  upon  dissolv- 
ing said  coi-poration,  or  upon  terminating  its 
charter,  appoint  one  or  more  trustees,  who 
shall  have  all  the  powers  confeiTed  upon 
similar  trustees  by  sections  twenty-four, 
twenty-five,  twenty-six  and  forty-seven,  or 
by  any  other  law  of  the  State,  with  sucli 
special  powers  as  may  be  given  them  by  said 
court.  But.  notwithstanding  the  appoint- 
ment of  such  trustees,  said  court  may  su- 
perintend the  collection  and  distribution  of 
the  assets  of  said  corporation,  and  may  re- 
tain said  bill  for  that  pui*pose. 

[The  legal  authority  of  receivers  is  coextensive 
with  the  jurisdiction  of  the  court  appointing 
them.    Hunt   v.    Ins.    Co.,    55   Me.    290.] 

§  29.  Nothing  in  the  two  preceding  sec- 
tions relieves  any  oflScer,  shareholder  or 
other  person  from  any  liability,  except  as 
provided  therein. 

§  30.  Cashiers  of  banks,  and  clerks  or 
treasurers  of  other  corporations  shall  ascer- 
tain the  residences  of  all  stockholders  in 
either;  and  no  dividend  shall  be  paid  to  any 
stockholder,  Avhose  residence,  for  the  tiiii" 
being,  is  not  entered  on  the  books  thereof; 
and  the  cashiers  of  banks,  and  clerks 
or  treasurers  of  all  corporations  holding 
property  liable  to  be  taxed,  shall,  by  the 
eighth  day  of  April  annually,  return  under 
oath,  to  the  assessors  of  each  town,  in  which 
any  of  its  stockholders  reside,  the  names  of 
such  stockholders,  the  amount  of  stock 
owned  by  them  on  the  first  day  of  such 
April,  and  the  amount  of  stock  paid  into 
such  corporations,  and  such  return  shall 
contain  in  the  body  thereof,  or  by  note  an- 
nexed thereto  an  abstract  of  section  thirty- 
two  of  chapter  six;  and  such  returns  shall 
be  the  basis  of  taxation  on  such  property. 

"When   dividends   may   be   made.    Ch.    48,    §    8. 

[See  Starrett  v.   Ins.   Co.,  65  Me.  374.] 

§  31.  (As  amended  March  4.  1885.)  Such 
cashiers  and  clerks  or  treasurers  shall,  be- 
tween the  first  day  of  November  and  the 
eighth  day  of  December,  annually,  make  re- 
turn to  the  secretary  of  State,  of  the  names 
of  all  stockholders,  their  residences,  the 
amount  of  stock  owned  by  each,  and  the 
whole  amount  of  stock  paid  in,  on  said  first 
day  of  November.  The  secretary  shall  lay 
the  same  before  the  legislature,  within  the 
first  thirty  days  of  the  session. 

[See  Starrett  v.   Ins.   Co.,  65  Me.  374.] 

§  32.  A  deposit  of  the  return  required  in 
the  two  preceding  sections  in  a  post-office. 

40 


postage  paid,  properly  directed,  is  a  com- 
pliance therewith.  For  the  neglect  or  re- 
fusal of  its  officer  to  make  such  return,  the 
corporation  forfeits  five  hundred  dollars,  to 
be  recovered  in  an  action  of  debt,  half  to 
the  prosecutor  and  half  to  the  State. 

§  o.").  A^'henever  any  coiiioration  or  its  offi- 
cers neglect  to  make  to  the  secretaiw  of  State 
any  return  required  by  law,  the  secretary 
of  State  shall  forthwith  notify  the  attorney- 
general,  who  shall  proceed  at  once,  by  ac- 
tion of  debt  in  the  name  of  the  Stat  •.  to 
enforce  the  penalties  therefor.  In  addition 
to  said  penalties,  the  following  costs  shall 
be  recovered  in  behalf  of  the  State  against 
said  corporation,  to-wit:  for  the  attorney- 
general,  for  the  writ,  an  attorney  fee,  and 
travel  and  attendance  at  court  not  exceed- 
ing two  terms;  and  for  the  State,  such  other 
costs  as  are  legally  taxable  in  actions  at 
law.  Such  action  may  be  brought  in  any 
county. 

[Action  against  corporation  to  recover  penalty 
for  not  mailing  return  of  money  of  stockholders, 
etc.,  allegation  that  the  "  defendant  corporation 
is,  and  for  a  long  time  has  been  a  corporation 
duly  organized,  and  existing  under  the  laws  of 
this  State,"  does  not  sufficiently  aver  the  material 
fact  that  anv  stock  was  ever  issued.  State  v. 
R.   R.   Co.,   76  Me.   411.] 

§  34.  If  within  thirty  days  from  the  com- 
mencement of  the  action  under  section 
thirty-two,  such  corporation  makes  to  the 
secretary  of  State  the  returns  required  l)y 
law,  he  shall  forthwith  notify  the  attorney- 
general,  who  shall  discontinue  such  suit 
upon  payment  of  the  costs  already  accrued. 

§  35.  If  any  officer  of  a  corporation, 
charged  by  law  with  the  duty  of  making 
and  causing  to  be  published  any  statement 
in  regard  to  such  corporation,  neglects  so  to 
do,  such  officer,  in  addition  to  penalties  al- 
ready provided,  forfeits  five  hundred  dollars, 
to  the  prosecutor,  to  be  recovered  by  action 
of  debt,  or  action  on  the  case. 

§  36.  The  attorney-general,  upon  applica- 
tion by  any  ccjrporatioii.  and  sMtistnctory 
proof  ithat  it  has  ceased  to  transact  busi- 
ness, shall  file  a  certificate  of  the  fact  with 
the  secretary  of  State,  and  on  payment  of 
a  reasonable  compensation  for  his  services, 
shall  give  a  duplicate  certificate  to  the  cor- 
poration; and  thereupon  such  corporation 
shall  be  excused  from  filing  annual  returns 
with  the  secretary  of  Sratf.  as  iiuw  reMuii'^'d 
by  law,  so  long  as  its  franchises  remain 
unused. 

§  37.  The  stockholders  of  all  corporations 
created  by  the  legislature  after  February 
sixteen,  eighteen  hundred  and  thirty-six, 
except  banking  corporations,  unless  it  is 
otherwise  specified  in  their  charter,  or  by 
general  law,  are  liable  for  the  debts  of  the 
corporation  contracted  during  their  owner- 
ship of  such  stock,  prior  to  June  one,  eigh- 
teen hundred  and  fifty-seven,  in  case  of 
deficiency  of  attachable  corporate  property, 
to  the  amount  of  their  stock  and  no  more; 


16 


MAIXE. 


Liabilities  of  stockholders  —  R.  S.,  Tit.  iv,  ch.  xlvi,  §§  38-41. 


and  such  liability  continues,  notwithstand- 
ing any  subsequent  transfer  of  such  stock, 
for  one  year  after  such  transfer  is  recorded 
on  the  corporation  books;  but  no  stock- 
holder whose  stock  has  been  fully  paid  in, 
and  no  part  of  the  principal  has  been  with- 
drawn, is  liable  for  debts  contracted  after 
said  first  day  of  June;  but  in  the  latter  case, 
when  an  officer  certifies  on  an  execution 
against  a  corporation,  that  he  cannot  find 
corporate  property  to  satisfy  it,  each  stock- 
holder's stoclc  and  interest  in  stock  may  be 
seized  and  sold  thereon  as  on  execution 
against  him;  and  he  may  recover  of  the 
corporation  the  value  of  the  stoclv  or  in- 
terest so  taken  as  provided  in  section  forty- 
nine. 

Proceedings  against  stockholders  by  bill  in 
equity.  §  47.  See  §  38.  Enforcement  of  liability. 
Ch.  86,  §  36.  Executors  and  administrators  not 
liable.    Act  of  1897,  at  p.  37. 

[Individual  liabilitv  of  stockholders.  See  Long- 
lev  V.  Little,  26  Me.  162;  Grose  v.  Hilt.  36  id. 
22;  AVheeler  v.  Bank,  23  id.  308;  Hathorn  v. 
Calef,  53  id.  471;  Came  v.  Brigham,  39  id.  35; 
Whitney  v.  Hammond,  44  id.  305;  Milliken  v. 
Whitehouse,  49  id.  527;  Lovegrove  v.  Hunt,  58 
id.  9;  Poor  v.  Willonghby,  64  id.  379;  Cummings 
v.  Maxwell,  45  id.   19U. 

Storkhoklers  are  liable  to  creditor  for  an  un- 
satisfied judgment,  although  he  is  assignee  of  the 
debt  against  it.    Came  v.   Brigham,  supra. 

Stockholder  liable  only  for  amouut  of  his 
stock  without  interest  thereon.  Cole  v.  Butler, 
43  Me.  401.  But  judgment  against  him  may  in- 
clude costs  of  suit.    Grose  v.   Hilt,    supra. 

Power  of  stockholder  to  change  existing  laws 
as  to  liability  of  stockholders  for  debts  of  the 
corporation.    Hatliorn    v.    Calef,    supra. 

The  right  of  creditor  against  individual  stock- 
holders does  not  vest  imtil  he  recovers  his  judg- 
ment against  them.  CofHn  v.  Rich,  45  Me.  507; 
Carroll  v.   Hinkley,  46  Me.  81. 

When  corporate  debt  is  settled  by  a  negotiable 
note,  which,  when  due,  is  taken  up  by  another 
note,  the  date  of  second  note  is  the  time  when 
indebtedness  of  corporation  accrued  so  far  as  re- 
lates to  liability  of  its  stockholders.  Milliken  v. 
Whitehouse,  supra. 

Creditor  must  obtain  judgment  against  the  cor- 
poration before  he  can  have  his  remedy  against 
stockholders.  Drinkwater  v.  Ry.,  18  Me.  35; 
Longley  v.   Little,  supra. 

A  judgment  against  a  corporation  is  binding 
upon  stockholders  until  reversed  and  is  conclusive 
upon  them  in  a  subsequent  action  against  them 
by   plaintiff.    Milliken   v.    AVhitehouse,   supra. 

But  such  judgment  is  not  conclusive  evidence 
of  organization  and  existence  of  the  corporation. 
If  denied  these  must  be  proved.  Hudson  v. 
Carman,  41  Me.  84. 

Ro(luisites  of  oflicer's  return  on  execution 
against  a  corporation  to  allow  proceedings  against 
Individual  stockholders.  Stanley  v.  Stanley,  20 
Me.  191;  Came  v.  Brigham,  supra;  Whitnev  v. 
Hammond,  supra;  Hathorn  v.  Calef,  supra;  Love- 
grove  V.  Brown,  60  Me.  592;  Grose  v.  Hilt,   supra. 

Cause  of  action  against  Individual  corporators 
does  not  accrue  until  failure  to  satisfy  judgment 
from  corporators'  property,  by  due  course  of  pro- 
ceedings for  that  purpose.  Longley  v.  Little, 
Bupra. 

Such  action  may  be  commenced  as  soon  as 
oflBcer  shall  ascertain  and  certify  upon  the  execu- 
tion that  he  cannot  find  corporate  property,  and 
before  return  day  of  execution.  Whitney  v."  Ham- 
mond, supra. 

What  notice  is  required  to  be  given  to  stock- 
holders by  creditor  of  corporation  before  com- 
mencing action  against  hira  individually.  Ingalls 
V.   Cole,  47  Me.   530. 


Fund  arising  from  Individual  liability  of  stock- 
holder belongs  to  whom?  Id.;  Cole  v.  Butler,  43 
Me.  401. 

AVhether  stockholder  may  settle,  in  good  faith, 
with  creditors  withoiit  levy  or  suit  brought, 
quaere.    Ingalls   v.    Cole,    supra. 

Defendant  cannot  protect  himself  l)y  proof  that 
he  has  paid  to  corporation  the  whole  amount  of 
his  liability  toward  payment  of  corporate  debts. 
Fowler  v.  Robinson,  31  Me.  189;  Grose  v.  Hilt, 
supra* 

Sale  and  transfer  of  stock  does  not  exonerate 
stockholder  from  individual  liability  upon  cor- 
porate debts  contracted  prior  to  such  transfer. 
Fowler   v.    Ludwig,    34   Me.   455. 

Where  indebtedness  of  corporation  exceeds  its 
assets,  and  stockholders  subscribe  to  agreement 
promising  to  liquidate  the  deficit,  an  action  of 
assumpsit  can  be  maintained  against  subscriljer 
who  fails  to  pay  his  portion.  Haskell  v.  Oak,  75 
Me.  519. 

Individual  liability  of  stockholder  for  debt  of 
a  corporation  depends  entirely  upon  express  pro- 
visions of  statute  law.  There  being  no  contract, 
express  or  implied,  between  him  and  the  plain- 
tiff, the  statute  is  to  be  strictly  construed.  Libby 
V.  Tobey,  82  Me.  397;  s.  c,   19  Atl.   Rep.  904. 

Capital  stock  is  a  trust  fund  for  payment  of 
corporate  debts.  Appletoa  v.  TurnbuU!  84  Me. 
72. 

Unpaid  stock  is  as  much  a  part  of  the  assets 
of  a  corporation  as  the  money  that  has  been 
paid  in  tipon  it.    Id. 

Stockholder  held  not  liable  to  creditors  because 
of  non-assessable  sliare>s  taken  by  another  in  good 
faith  and  assigned  to  him.  Morgan  v.  Howlands, 
36  Atl.   Rep.  990.] 

§  38.  The  stockholders  of  corporations, 
excepting  tliose  created  for  literary,  Ijenevo- 
lent,  and  baulking  puiiioses,  incorporated 
since  March  seventeen,  eighteen  hundred 
and  thirty-one,  are,  as  it  regards  debts  of 
the  corporation,  suliject  to  the  liabilities  im- 
posed on  stockholders  by  section  thirty- 
seven,  except  for  stock  owned  before  April 
twenty-four,  eighteen  hundred  and  thirty- 
nine,  and  for  stoclv  held  as  executor,  ad- 
ministrator, guardian  or  trustee. 

§  39.  At  any  time  within  six  months  after 
the  return  of  an  execution  against  a  cor- 
poration, recovered  on  a  debt  for  which  any 
stockholder  is  liable  under  section  thirty- 
seven,  unsatisfied  in  whole  or  in  part  for 
want  of  attachable  property  of  the  corpora- 
tion, the  plaintiff  in  such  execution  may 
make  demand  of  any  stockholder  thereof  to 
disclose,  and  show  attachable  property 
thereof  sufficient  to  satisfy  the  execution. 

See  note  to   §  37. 

§  40.  After  demand  as  aforesaid,  the  exe- 
cution creditor  may  have  an  action  on  the 
case  against  such  stockholder,  to  recover  of 
him  individually  the  amount  of  his  exe- 
cution and  costs,  or  the  deficiency  thereof, 
not  exceeding  the  amount  for  which  said 
stockholder  is  liable  by  section  thirty-seven. 
Such  action  must  be  commenced  within  six 
months  after  the  rendition  of  judgment 
against  the  corporation. 

See  note  to  S  37. 

§  41.  In  such  action,  said  stockholder  may 
prove,  in  reduction  of  his  liability,  the 
amount    of    corporate    del)t    which    ho    has 


MAIIs^E. 


17 


Rights  of  creditors;  creditors'  actions  —  R.  S.,  Tit.  iv,  ch.  xlvi,  §§  42-i7. 


previously  paid,  and  which  has  not  been  re- 
paid to  him  by  the  corporation;  also  any 
debt  due  him  from  the  corporation,  for 
which  he,  at  the  time,  might  maintain  an 
action  at  law  against  it;  and  may  show  any 
other  legal  cause  why  judgment  should  not 
be  rendered  against  him. 

[A  member  of  a  corporation,  as  such,  cannot 
make  himself  its  creditor  bv  the  pavnient  of  its 
debts.     Blanchard  v.   Assn.,   59   Me.   202. 

By  virtue  of  above  section,  debts  vriiich  a  stock- 
holder has  against  an  insolvent  corporation  may 
be  set  off  against  a  debt  which  he  owes  for  un- 
paid stock,  in  a  suit  against  him  b.v  an  assignee 
of  the  insolvent  corporation  as  well"  as  when  suit 
is  brought  by  a  judgment  creditor.  Appleton  v. 
TurnbuU,  84  Me.   T2;  s.   c,  24  Atl.   Rep.  592.] 


§  42.  The  treasurer  of  every  such  corpo- 
ration shall  keep  a  full  record  of  all  claims 
in  favor  of  its  stockholders  agaiust  the  cor- 
poration, and  exhibit  the  same  with  a  par- 
ticular statement  of  its  financial  condition, 
to  any  creditor  thereof,  when  requested  by 
him,  and  on  failure  to  exhibit  such  state- 
ment the  stockholders  shall  not  be  entitled, 
in  actions  against  them,  to  show  previous 
payments  on  account  of  the  corporation  in 
reduction  of  their  liability,  but  if  they  suffer 
damages  by  reason  of  being  thus  deprived 
of  their  defence,  they  have  a  remedy  upon 
the  bond  of  the  treasurer. 

§  43.  The  clerk  of  every  such  corporation, 
on  demand  of  an  officer  holding  an  execu- 
tion against  it,  shall  furnish  him  with  the 
names,  and,  so  far  as  known  to  him,  the 
residences  of  every  person  liable  thereon 
under  this  chapter,  and  the  amount  of  his 
liability. 

§  44.  (As  amended  March  6,  1885.)  No 
stockholder  in  any  corporation,  except  in 
banks,  has,  after  Feliruary  twenty-four, 
eighteen  liundred  and  seventy-one,  been  lia- 
ble for  the  debts  of  ot  claims  against  such 
corporation  beyond  any  amounts  witlidrawn 
or  not  paid  in,  as  provided  in  the  two  fol- 
lowing sections;  but  neither  this  section  nor 
the  four  following,  affect  past  or  future  lia- 
bilities of  any  officer  of  any  corporation; 
nor  any  liability  of  any  person  or  corpo- 
ration or  remedy  therefor,  existing  on  said 
twenty-fourth  day  of  February. 

§  45.  The  capital  stock  subscribed  for  any 
corporation  is  declared  to  be  and  stands  for 
the  security  of  all  creditors  thereof;  and  no 
payment  upon  any  subscription  to  or  agree- 
ment for  the  capital  stock  of  jiny  cori^oration, 
shall  be  deemed  a  payment  within  the  pur- 
view of  this  chapter,  unless  bona  fide  made 
in  cash,  or  in  some  other  matter  or  thing 
at  a  bona  fide  and  fair  valuation  thereof. 

[To  relieve  stockholders  from  liability  for  stock 
subscribed,  or  agreed  to  be  taken,  payment  there- 
for must  be  made  bona  fide  in  cash,  or  in  some 
other  matter  or  thing  at  a  bona  fide  and  fair 
valuation  thereof.  Libbv  v.  Tobey,  82  Me.  397; 
s.    c.    19   Atl.    Rep.    904. 

Payment  of  stock  in  anything  except  money 
will    not   be   regarded   as   payment,   except   to   ex- 


tent of  true  value  of  property  received  in  lieu 
of  money.    Id. 

When  on  payment  of  GO  per  cent,  of  its  par 
value,  as  many  shares  of  new  stock  as  they  al- 
ready have  of  old,  are  duly  allotted  to  stock- 
holders, the  unpaid  40  per  cent,  is  a  part  of 
assets  of  corporation,  and  "  stands  for  the  se- 
curity of  all  creditors  thereof  "  within  meaning 
of  above  section.  McAvity  v.  P.  &  i^.  Co.,  82 
Me.    504;   s.    c,   20  Atl.    Rep.    82. 

When  business  of  a  corporation  is  to  be  closed 
up  by  insolvency  proceedings,  creditor  thereof 
holding  such  new  stock  thus  unpaiu  must  pay 
in  the  balance  and  then  take  his  percentage  with 
other  creditors.    Id.] 

§  4G.  Xo  dividend  declared  by  any  corpo- 
ration from  its  capital  stock  or  in  violation 
of  law,  no  withdrawal  of  any  portion  of 
such  stock,  directly  or  indirectly,  no  can- 
cellation or  surrender  of  any  stock,  and  no 
transfer  thereof  in  any  form  to  the  corpora- 
tion which  issued  it,  is  valid  as  against  any 
person  who  has  a  lawful  and  bona  fide 
judgment  against  said  cori)oration,  based 
upon  any  claim  in  tort  or  contract  or  for 
any  penalty,  or  as  against  any  receivers, 
trustees  or  other  persons  appointed  to  close 
up  the  affairs  of  an  insolvent  corporation. 

See  ch.  48,   §  8. 

[A  subscriber  to  capital  stock  of  an  unorganized 
business  corporation  has  a  right  to  withdraw,  pro- 
vided he  exercises  the  right  before  corporation 
is  organized  and  his  subscription  accepted.  Such 
a  subscription  is  not  a  completed  contract.  Mill 
Co.  V.  Felt,  87  Me.  234;  s.  c,  32  Atl.  Rep.  888. 

§  47.  Any  person  having  such  judgment, 
or  any  such  trustees,  receivers  or  other  per- 
sons appointed  to  close  up  the  affairs  of  an 
insolvent  corporation,  may,  within  two  years 
after  their  right  of  action  herein  given  ac- 
crues, commence  an  action  on  the  case  or 
bill  in  equity,  without  demand  or  other  pre- 
vious formalities,  against  any  i^erson  (if  a 
bill  in  equity,  jointly  or  severally,  otherwise 
severally)  who  have  subscribed  for  or  agreed 
to  take  stock  in  said  coi'poration  and  have 
not  paid  for  the  same;  or  who  have  received 
dividends  declared  from  the  capital  stock, 
or  in  violation  of  law;  or  who  have  with- 
drawn any  portion  of  the  capital  stock,  or 
cancelled  and  surrendered  any  of  their  stock, 
and  received  any  valuable  consideration 
therefor  from  the  coii)oration.  except  its 
own  stock  or  obligation  therefor;  or  who 
have  transferred  any  of  their  stock  to  the 
corporation  as  collateral  security  or  other- 
wise, and  received  any  valuable  considera- 
tion therefor  as  aforesaid;  and  in  such  ac- 
tion they  may  recover  the  amount  of  the 
capital  stock  so  remaining  unpaid  or  with- 
drawn, not  exceeding  the  amounts  of  said 
judgments  or  the  deficiency  of  the  assets  of 
such  insolvent  corporation.  But  no  stock- 
holder is  liable  for  the  debts  of  the  corpo- 
ration not  contracted  during  his  ownership 
of  such  unpaid  stock,  nor  for  any  mortgage 
debt  of  said  con^oration;  and  no  action  for 
the  recovery  of  the  amounts  hereinbefore 
mentioned    shall    be    maintained    against    a 


18 


MAINE. 

Creditors'  actions  —  R.  S.,  Tit.  iv,  ch,  xlvi,  §§  48-51. 


stockholder  unless  proceedings  to  obtain 
Judgment  against  the  corporation  are  com- 
menced during  the  ownership  of  such  stock, 
or  within  one  year  after  its  transfer  by  such 
stockholder  is  recorded  on  the  corporation 
books. 


[In  an  action  by  a  Judgment  creditor  of  a  cor- 
poration apalnst  a  stockholder  who  has  not  fully 
paid  for  his  stock,  plaintiff  must  bring  the  case 
within  the  provisions  of  the  two  preceding  sec- 
tions. Griudle  v.  Stone,  78  Me.  176;  s.  c,  3  Atl. 
Rep.    183. 

When  judgment  creditor  of  a  corporation  seeks 
to  recover  amount  of  such  judgment,  or  any  part 
thereof,  from  a  stockholder  who  has  not  fully 
paid  for  his  stock  he  must  bring  his  case  within 
provisions  of  the  two  foregoing  sections.  Libby 
V.  Tobey.  S2  ^le.  307;  s.  c,  19  Atl.  Rep.  904.  And 
must   show    what?    Id. 

Above  remedy  exists  only  against  those  "  who 
have  subscribed  for  or  agreed  to  take  stock  in 
Bald  corporation  and  have  not  paid  for  the  same." 
Id. 

The  statute  contemplates  a  transaction  or  con- 
tract with  the  corporation  In  accepting,  subscrib- 
ing for,  or  agreeing  to  take  stock;  not  one  between 
individuals  in  the  purchase  of  stock  in  open 
market.    Id. 

A  purchaser  of  stock  assessable  on  its  face,  or 
by  charter  or  by-laws  of  corporation  and  payable 
by  installments,  Is  liable  for  amount  remaining 
unpaid  as  if  an  original  subscriber,  chargeable 
with  notice  of  any  such  unpaid  balance,  whether 
purchased  of  the  corporation  or  in  open  market. 
Id. 

Upon  a  creditor's  bill  against  a  stockholder  to 
enforce  payment  of  unpaid  stock,  ownership  of 
stock  may  be  proved  by  payment  therefor  al- 
though no  written  subscription  is  produced.  Bar- 
ron V.  Burrill,  86  Me.  66;  s.  c,  29  Atl.  Rep.  938. 
Certificates  of  stock  are  merely  the  usual  evidence 
of  proving  ownership.    Id. 

Above  section  construed.    Id. 

In  an  action  by  judgment  creditor  of  a  corpora- 
tion against  stockholder,  under  above  section, 
it  should  be  alleged  that  the  debt  was  not  a 
mortgage  debt  of  the  corporation.  Omission  of 
such  allegation  leaves  the  declaration  insufficient 
on  (lenuirrei-.  Ilight  v.  Quinn,  86  Me.  494;  s.  c, 
29  Atl.   Rop.    1111. 

An  agrocnicnt  of  one  corporation  to  pay  a 
mortgage  debt  of  another  does  not  make  It  a 
mortgage  debt  of  its  own.  Its  own  debt  is  not 
secured  by  mortgage.  Barron  v.  Paine,  83  Me. 
312;  s.   c,  22  Atl.   Rep.  218. 

A  judgment  regularly  obtained  against  a  cor- 
poration  is  conclusive  evidence  of  its  indebted- 
ness In  a  suit  by  creditors  against  stockholders, 
unless  it  be  shown  that  such  judgment  was 
procured  by   collusion  or  fraud.    Id. 

A  stockholder  in  a  business  corporation  is  pre- 
sumed to  continue  to  be  a  stockholder  until  con- 
trary is  shown.    Id. 

Correctness  of  decision  in  Burbank  y.  Gould, 
15  Me.  118,  questioned.    Id.] 


§  48.  A  defendant  in  such  suit  may  prove 
that  he  has  already  in  good  faith  paid  by 
himself  or  through  another  person  who  has 
assumed  his  stock  or  subscription,  to  any 
person  holding  a  bona  fide  judgment,  or  to 
any  such  trustee  or  receiver,  or  other  per- 
son authorized  to  receive  it,  or  to  the  corpo- 
ration itself,  the  whole  or  any  part  of  any 
amounts  for  which  ho  would  be  liable  under 
this  chapter;  or  that  he  has  already  in  good 
faith  and  without  collusion  been  sued  for, 
and  is  still  in  peril  of  being  compelled  to 
pay,  such  amounts  in  whole  or  part,  to  some 
other  person,  in  which  latter  case  the  suit 


may  be  continued  to  await,  on  payment  of 
defendant's  costs  from  tex'm  to  term;  or  he 
may  prove  that  the  amounts  illegally  re- 
ceived by  him  from  said  corporation  were 
received  more  than  two  years  before  the 
claim  arose  on  which  such  judgment  was 
obtained,  or  if  the  suit  is  by  trustees,  re- 
ceivers or  other  such  person,  more  than  two 
years  before  the  commencement  of  the  legal 
proceeding  by  virtue  of  which  such  corpora- 
tion passed  into  the  hands  of  trustees  or  re- 
ceivers; or  he  may  prove  the  invalidity  of 
such  judgment  in  any  particular  which  could 
avail  the  corporation  on  a  writ  of  error, 
or  that  said  judgment  was  not  bona  fide; 
or  he  may  prove  that  he  has  bona  fide  claims 
in  contract  or  tort,  several,  or  joint  with 
other  persons,  against  said  corporation,  ab- 
solute or  contingent,  or  which  could  be 
availed  of  by  set-off  in  court  or  on  execution, 
for  the  whole  or  any  part  of  the  amounts  for 
which  he  would  be  liable  under  this  chapter; 
or  in  case  his  stock  was  transferred  to  such 
corporation  as  collateral  security  or  as  pay- 
ment, he  may  either  prove  that  the  same 
was  so  transferred  in  good  faith  as  security 
or  payment  for,  or  of,  an  anterior  liability 
incurred  without  any  concurrent  agreement 
for  the  transfer  of  such  stock,  and  for  which 
the  corporation  was  unable  to  obtain  other 
sufficient  security  or  payment,  or  in  such 
case  he  may  prove  that  whatever  sum  was 
received  thereon,  has  been  in  whole  or  part 
repaid  to  such  corporation;  and  proof  of  any 
of  such  matters  is  a  full  or  partial  defense 
for  such  defendant. 

§  49.  When  members  of  a  corporation  are 
liable  for  its  debts,  or  for  any  acts  of  its 
officers  or  members,  or  to  contribute  for 
money  paid  on  account  of  such  debts  or  acts, 
the  amount  due  may  be  I'ecovered  of  such 
corporation  by  an  action  at  law,  or  a  bill 
in  equity;  and  the  court  may  make  all  nec- 
cessary  orders  and  decrees. 

[A  member  of  a  corporation,  as  such,  cannot 
make  himself  its  creditor  by  the  payment  of  its 
debts.    Blanchard  v.  Assn.,  59  Me.  202. 

See   Sampson   v.   Itflll   Corp.,   36  Me.   78.] 


§  50.  When  an  officer,  having  an  execution 
against  a  corporation  not  created  for  pur- 
poses of  education  or  religion,  certifies 
thereon  that  he  is  unable  to  find  personal 
property  of  the  corporation,  the  creditor  may 
cause  so  much  of  its  real  estate  to  be  seized 
and  sold  at  public  auction,  in  the  town 
where  it  lies,  in  the  manner  provided  for 
the  sale  of  real  estate  of  banks,  and  subject 
to  the  same  right  of  redemption,  as  is  nec- 
cessary  to  satisfy  such  execution  and  inci- 
dental charges. 

Widow  may  demand  dower.    Ch.  103,   §  17. 


§  51.  Corporations,  not  created  for  literary, 
benevolent,  or  banking  purposes,   shall  not 


MAINE. 


19 


Creditors'  actions  —  R.  S.,  Tit.  iv,  ch.  xlvi,  §§  52-54;  M'f  g   corps.—  Id.,  ch.  xlviii,  §§  1,  2. 


so  divide  any  of  their  corporate  property 
as  to  reduce  their  stock  below  its  par  value, 
until  all  debts  are  paid,  and  then  only  for 
the  purpose  of  closing  their  concerns. 

Illegal   dividends  prohibited.    Ch.   48,   S  8. 
[See  Drlscoll  v.   Co-operative   Soc,   59  Me.   474.] 

§  52.  When  such  a  corporation  has  unlaw- 
fully made  a  division  of  any  of  its  property, 
or  has  property  which  cannot  be  attached, 
or  is  not  by  law  attachable,  any  judgment 
creditor  may  file  a  bill  in  equity  in  the  su- 
preme judicial  court,  setting  forth  the  facts, 
and  the  names  of  such  persons  as  are  alleged 
to  have  possession  of  any  such  property,  or 
choses  in  action,  either  before  or  after  di- 
vision; names  of  defendants  may  be  struck 
out  or  added  by  leave  of  court;  costs 
awarded  at  discretion,  and  service  made  on 
the  defendants  named,  as  in  other  equity 
suits.  They  shall  in  answer  thereto,  dis- 
close on  oath  all  facts  within  their  knowl- 
edge relating  to  such  property  in  their  hands, 
or  received  by  a  division  among  stockhold- 
ers. When  either  of  them  has  the  custody 
of  the  records  of  the  corporation,  he  shall 
produce  them  and  make  extracts  therefrom 
and  annex  them  to  his  answer,  as  the  court 
directs. 

§  53.  The  court  shall  determine,  with  or 
without  a  jury,  whether  the  allegations  in 
the  bill  are  sustained,  and  it  may  decree, 
that  any  such  property  shall  be  paid  to  such 
creditor  in  satisfaction  of  his  judgment,  and 
cause  such  decree  to  be  enforced  as  in  other 
chancery  cases.  Any  question  arising  may, 
at  the  election  of  either  party,  be  submitted 
to  the  decision  of  a  jury  under  the  direction 
of  the  court. 

§  54.  When  a  corporation  is  dissolved,  its 
real  and  personal  estate  is  vested  in  the 
persons  who  were  at  the  time  shareholders, 
as  tenants  in  common  according  to  their 
interests. 

[A  corporation  may  be  dissolved  In  what  ways. 
Penobscot  Boom  v.  Lamson,  16  Me.  224;  Hodsdon 
V.    Copeland,    id   314. 

A  corporation  is  not  dissolved  by  ceasing  to 
exercise  its  powers.  Nor  because  its  stockholders 
and  directors  may  consider  it  to  be  defunct.  Rol- 
lins T.  Clay,  33  Me.  132;  Proprs.  v.  Webb,  66  id. 
398. 

Dissolution  of  a  corporation  in  another  State 
will  not  prevent  an  action  commenced  against  it 
here  from  proceeding  to  judgment  unless  it  bo 
shown  that  the  corporation  is  utterly  extinct. 
Hunt   v.    Ins.    Co.,    55   Me.    290. 

Dissolution  of  a  corporation  by  act  of  legislature 
deprives  it  of  its  corporate  existence.  Merrill  v. 
Bank,  31  Me.  5T. 

Disposition  of  assets  of  dissolved  corporation. 
Buck  V.    Ins.    Co.,    68   Me.    5;:!2. 

When  a  corporation,  which,  like  mutual  insur- 
ance companies,  has  no  stockholders  is  dissolved, 
its  personal  property  which  remains  after  dis- 
charging its  debts  vests  in  the  State.  Titcomb  v. 
Ins.  Co.,  79  Me.  315;  s.   c,  9  Atl.   Rep.  732.] 


CHAPTER  XLVIII. 

Manufacturing  Corporations.  Organiza- 
tion under  General  Law. 

Manufacturing  Corporations. 

Sec.  1.  Powers,  liabilities  and  officers  of  manu- 
facturing  corporations. 

2.  Officers,   when  chosen;  number  of  direct- 

ors; president;  treasurer  to  give  bond; 
clerk   to   be   sworn. 

3.  First    meeting,    how    to    be    called;    by- 

laws. 

4.  Capital  to   be   fixed,   divided   into  shares, 

and  names  of  owners  and  their  shares 
to  be  entered  of  record  at  first  meet- 
ing;   capital    may   be    increased. 

5.  Certificates   of   stock    to   be   issued,    and 

are  transferable. 

6.  Assessment    may    be    made,    and    shares 

sold,   for  neglect  to  pay. 

7.  Notice   of  sale,   how   given;   title  of   pur- 

chaser. 

8.  Dividends  may   be  made,   but  not  to   re- 

duce   capital    or   debts   due;    penalty. 

9.  Names     of     directors     and     clerk,      and 

schedule  of  property,  to  be  furnished  to 
any  officer  having  writ  against  the  com- 
pany. 

10.  Officer,    having   an    execution,    may    elect 

to  take  debts  due  the  corporation;  pro- 
ceedings. 

11.  Person  refusing  to  obey  the  two  preced- 

ing sections,  subject  to  penalty. 

12.  Books  to  be  produced,  upon  a  trial  for  a 

penalty. 

13.  Children   under  fifteen   years   of  age  not 

to  be  employed  without  proof  of  school- 
ing; certificate  of  teacher,  evidence. 

14.  Penalty     for     violation;      superintending 

school  committee  to  inquire,  and  county 
attorney  to  prosecute. 

15.  Persons    under    sixteen    not    to    be    em- 

ployed over  ten  hours  a  day;  penalty. 

Certain   Corporations   Organized  under   General 
Lazu. 

Sec.  16.  How  three  or  more  persons  may  organ- 
ize themselves  into  a  corporation  for 
certain  enumerated  purposes;  other 
corporations   excepted. 

17.  First    meeting,    how    called;    amount    of 

stock  and  number  of  officers. 

18.  Before  doing  business,  officers  to  prepare 

a  certificate  of  facts,  to  be  examined 
and  approved  by  attorney-general,  and 
then  recorded  in  registry  of  deeds  and 
secretary    of    State's    office;    their    pay. 

19.  Thereupon   to    be    a    corporation,    subject 

to   this    chapter    and    chapter   46. 

20.  Such  corporations   may  by   majority  vote 

increase  stock  and  number  of  directors; 
limit;  notice  to  secretary  of  State. 

Manufacturing  Corporations. 

Section  1.  Manufacturing  corporations  shall 
exercise  the  powers  and  be  subject  to  the 
duties  and  liabilities  contained  in  this  chap- 
ter and  in  chapter  forty-six,  and  in  their 
charters.  They  shall  have  a  president, 
directors,  clerk,  treasurer,  and  any  other 
desirable  officers. 

Powers.    See    ch.    46,    §    2,    and    note. 


§  2.  Such  officers  shall  be  chosen  annually, 
and  shall  continue  in  office  until  others  are 
chosen  and  qualified  in  their  stead.  There 
shall  not  be  less  than  three  directors,  one 


20 


MAINE. 


Manufacturing  corporations  —  R.  S.,  Tit.  iv,  ch.  xlviii,  §§  3-5. 


of  whom  shall  be  by  them  elected  president. 
No  director  can  hold  such  ottice  after  he 
ceases  to  be  a  stocliholder.  The  treasurer 
shall  pive  bond  for  the  faithful  discharge 
of  his  duties,  in  such  sum,  and  with  such 
sureties,  as  are  required.  The  clerk  shall 
be  sworn,  and  shall  record  all  votes  of  the 
corporation  in  a  book  kept  for  that  purpose. 

Failure  to  elect  officers,  effect.  Ch.  4G,  §  8. 
Personal  liability  of  officers.  Cb.  46,  §§  29,  35; 
Ch.  48,  §  8.  Officers  Issuing  false  certificates  of 
stock,  penalty.  Ch.  121,  §  10.  See  Cb.  40  (4), 
note. 

[Notice  of  annual  meeting  for  election  of  offi- 
cers to  contain  what.  Sampson  v.  Mill  Corp.,  36 
Me.   78. 

Where  there  Is  nothing  in  by-laws  of  corpora- 
tion or  laws  of  the  State  to  limit  tlie  term  of 
the  officer,  he  remains  In  office  until  his  succes- 
sor Is  chosen.    Dam  Co.  v.  Gray,  30  Me.  547. 

Treasurer  of  corporation,  who  purchases  stock 
In  its  behalf,  does  not  render  himself  personally 
liable  to  pay  therefor;  aliter.  If  he  acts  for  him- 
self, though  purporting  to  act  as  its  agent. 
Haynes  v.   Huunewell,  42  Me.   276. 

Treasurer  cannot  be  charged  as  trustee  of  the 
corporation,  for  funds  held  liy  him  in  his  official 
capacity.     Bowker  v.    Hill,    GO    Me.    172. 

As  a  general  rule,  a  corporation  is  not  re- 
sponsible for  unauthorized  or  unlawful  acts  of 
its  officers.    Mitchell  v.    Rockland,  41  Me.  3(W. 

Acceptance  of  a  draft  by  treasurer,  without  evi- 
dence of  authority,  does  not  render  the  corpora- 
tion liable  thereon.  Atkinson  v.  Mfg.  Co.,  24 
Me.  171. 

General  power  given  by  directors  to  president 
to  have  full  control  of  the  business  authorizes  bim 
to  purchase  materials,  borrow  money,  and  give 
note  of  a  corporation  for  borrowed  money.  Castle 
V.   Foundry   Co.,   72  Me.   177. 

Acts  of  de  facto  officers  binding  upon  third 
parties.    Simpson  v.   Garland,   70  Me.    203. 

Notice  to  officers,  when  not  tdnding  on  corpora- 
tion.   Bank  v.  €hase,  72  Me.  220. 

Treasurer  of  a  corjioratlon  is  not  its  trustee  with 
respect  to  its  funds,  tie  is  a  mere  depositor  of 
the   money.    Taylor  v.    Taylor.    74   Me.    582. 

The  law  raises  no  Implied  promise  to  pay  jjresl- 
dent  of  private  corporation  for  official  services; 
and  a  by-law  providing  ibnt  directors  shall  fix 
compenwition  will  not  «'ri1itle  bim  to  recover  for 
such  services  until  dir<-'tors  fake  the  necessary 
action;  nor  then.  If  th«-y  do  not  act  before  cor- 
poration is  adjudged  insolvent.  M'-Avity  v.  P.  & 
P.   Co..  82  M<-.  .V>4:  B.  r..  20  Atl.   IK-p.   82. 

Evidence  that  a  particular  person  was  once 
chosen  tr'-asurer,  and  has  continued  to  act  as 
such,  held  sufficient  evidence  that  he  Is  still 
treasurer  as  to  third  parties.  Mason  v.  Belfast 
Hotel    Co.,   36  Atl.    Rep.   624. 

Creditors  t'  •  ■  •  ■  'i  «be  company's  agf-nt  liable 
for   wasting.'  the    ground    that    It    con- 

stitutes  a    I  '-n    of   trust    funds.    In    re 

Brockway  ^:;..       -  ,   :.->  Atl.  Rep.   1012. 

A  treasurer  wtio  used  corporat'-  funds  to  pay 
for   stock    of   the    con'oration    pur'-bjised    by    him 


and  other 
consent  of  ; 
liable  for  t; 
Where  dli- 
by  tbeir  cjj 
onlT  T»r  f  i< 


for  tbems"lve«,    with   the 
holders  and  directors,  was 

power  to  bind  corporation 
'  power  may  be  exerdsf-d 
'-tt  T.  Warren,  11  Me.  227; 
' .  12  Id,  354. 
dir^-ction  '-oncrirred  In  by 
•11)  >,«•  tilridiTisr  on   corT>ora- 

'       Td.    Direct- 

; -oration,    to 
/  call  as  a 

• rg  bave  no 

-f*<-    fgihtif 

"     "ns    T. 

fT'JW. 

ion  of 


l.'iw  ntid  Its  regulations.  Bank  v.  Johnson,  24 
Me.   4110. 

I  Mrcctors  cannot  delegate  their  powers  in  case 
of  sale  of  shares  for  default  In  piivnieut  of  as- 
sessments.    K.    H.    Co.    V.    Ultclile,   40   Me.    42.'. 

Pireclors  and  managers  of  a  c-orporation  are 
truKtees,  lioliliiig  fiduciary  relation  to  stock- 
holders, and  cannot  be  jierniltled  to  acquire  in- 
terests adverse  to  such  relation.  Ky.  Co.  v.  I'oor, 
50  Me.  277.  Thus,  directors  carinotderlve  pecuni- 
ary  benefit   from   contracts   of   a    corporation.    Id. 

For  official  mlscomiuct  and  fraudulent  discharge 
of  duties  of  directors,  they  are  responsible  to  the 
corporation.  Smith  v.  Poor,  40  .Me.  415.  Remedy 
of  Individual  wiio  has  sufTered  damage  through 
sucli  misconduct  is  against  company  and  not 
against   the   offenders.    Id. 

Directors  hold  corporate  property  under  Implied 
or  constructive  trusts  for  benefit  of  creditors. 
Baxter  v.  Moses,  77  .Me.  405;  s.  c,  1  Atl.  Rep.  350. 

It  Is  the  duty  of  director  to  know  the  comiition 
of  corjioration,  and  he  cannot  avail  himself  of 
any  dereliction  of  such  duty  to  secure  a  personal 
advantage  over  other  creditors  of  the  corporation. 
Clay  V  Towle,  7«  Me.  80;  s.  c,  2  Atl.  Ren.  852. 

Purchase  by  director  of  a  railroad  of  land  upon 
which  lie  antifipntes  the  truck  or  buildintrs  may 
be  located,  cannot  necessarily  be  construed  to 
have  been  made  In  trust  for  companv.  R.  R. 
Co.  V.  Stubbs.  77  Me.  .504:  s.  c.  2  Atl.  Rep.  ». 

Directors  cannot  sell  all  tlie  property  and  busi- 
ness of  the  corporation  under  the  guise  of  a  sale 
of  their  stock,  and  receive  the  entire  proceeds  to 
tbelr  private  use.  Cusick  v.  Bartlett,  39  All.  Rep. 
497.] 


§  3.  The  first  meeting  may  be  called  by  a 
majority  of  the  persons  named  in  the  act, 
In  the  manner  prescribed  in  section  three, 
of  chapter  forty-six,  giving  fourteen  days' 
notice  thereof.  By-laws  may  be  made  and 
enforced  as  provided  in  section  six  of  that 
chapter. 

See  ch.  40,   S  3. 

[Organization  of  corporation  not  defective  be- 
cause notice  of  first  meeting  Is  not  certified  upon 
each  corporator  In  accordance  with  law,  when 
it  appears  that  the  corporate  powers  have  been 
assumc'd  by  the  persons  by  whom  It  was  Intended 
they  should  be  enjoyed.  McClinch  v.  Sturgis,  72 
Me.  288.] 

§  4.  The  capital  shall  i»e  fixed  within  the 
limits  of  the  charter  and  divided  into  shares; 
and  the  names  of  owners,  and  tlje  nunjlHT  of 
shares  owned  by  each,  shall  be  entered  of 
record  at  its  first  nj«-eting.  The  cajtital  may 
be  subsequently  increased  to  the  amount 
allowed  by  its  cljai-ter,  by  adding  to  the 
number  of  shares. 

See  cb.  46,  f  12,  and  notes.  Stockholders'  lia- 
bility.   See  ch.  46,  ti  37-54. 

[Where    charter    requires  •    lime    and 

place    for    opening    books    '  Mon    to    be 

given    under    direction    of    j  njed    In    Its 

flrxt  section,  majority  of  the  p'  li'jijs  thus  named 
may  lawfully  give  such  notice.  B.  K.  Co.  v. 
White,  41  Me.  612.] 

i   5.  Certiflcate«,   stating   the   number   of 
shares  owned  by  them,  signed  by  the  • 
urer.  with  the  sefil  of  the  corj'oration  ;' 
shall  be  furnished  to  the  stockholders.    J  tj^y 
are    transferable,    as    provided    in    sectJon 
twelve  of  chapter  forty-six. 

He«  cb.  46,  I  12,  and  notes. 


\>- 


21 


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22 


MAINE. 


Manufacturing  corporations;  assessments  —  R.  S.,  Tit.  iv,  ch.  xlviii,  §§  7-14. 


Unconditional  subscription  to  talic  and  pay  for 
certain  number  of  shares  at  par  value  is  binding, 
even  tliouph  amount  of  capital  stock  was  not 
fixed,  and  minimum  number  of  shares  named  in 
charter  were  not  subscribed  for.  11.  K.  Co.  v. 
Kinsman,   77  Me.   370. 

When  subscriber  to  stock  cannot  be  held  to  his 
subscription.  Steamboat  Co.  v.  Sewall,  80  Mo. 
400;  s.  c,  14  Atl.  Rep.  039;  Same  v.  Same,  78  Me. 
167;  s.   c,  3  Atl.   Rep.   181. 

When  he  may  be  held  thereon.  R.  R.  Co.  v. 
Kinsman,   supra;  W^ebber  v.   Dunn,   71   Me.   331. 

A  subscriber  to  capital  stock  of  an  unorganized 
corporation  has  a  right  to  withdraw,  provided 
he  exercises  the  right  before  the  corporation  is 
organized  and  his  subscription  accepted.  Bryant 
V.  Felt,  87  .Me.  234;  s.  c,  32  Atl.  Rep.  8SS. 

Sale  of  the  entire  property  and  business  of  a 
cori)oration  held  a  defense  to  an  action  on  an  un- 
paid subscription.  Cusick  v.  Bartlett,  39  Atl.  Rep. 
497.] 


§  7.  The  treasurer,  before  the  sale,  shall 
give  notice  of  the  time  and  place  thereof, 
and  of  the  amount  due  on  each  share,  in  a 
newspaper  printed  in  the  town,  if  any,  if 
not,  in  the  county  where  the  manufactory 
is  established,  otherwise  in  the  State  paper, 
three  weeks  successively;  and  the  treas- 
urer's certificate  of  the  sale  of  such  shares, 
recorded  as  other  transfers,  passes  the  title 
to  the  purchaser. 

§  8.  Dividends  of  profit  may  be  made  by 
the  directors,  but  the  capital  or  the  debts 
due  shall  not  thereby  be  reduced,  until  all 
debts  due  from  the  corporation  are  paid. 
Any  officer  or  member,  who  votes  or  aids  to 
make  a  dividend  in  violation  hereof  shall 
be  fined  not  exceeding  two  thousand  dol- 
lars, and  imprisoned  less  than  one  year;  and 
all  sums  received  for  such  dividends  may  be 
recovered  by  any  creditor  of  the  corporation 
in  an  action  on  the  case. 

See  ch.  46,  §§  15,  46,  51,  52,  53.  See  Act  of 
1885,  at  p.  29. 

[Funds  of  a  corporation,  whenever  earned,  are 
to  be  divided  among  those  who  are  stockholders 
when  a  dividend  is  declared.  Goodwin  v.  Hardy, 
57  Me.  143;  Hagar  v.  Bank,  63  id.  509.  A  cor- 
poration has  the  right  to  hold  a  cash  dividend, 
as  pledge  for  indebtment  of  shareholder  to  it. 
Id.  A  dividend  declared  on  shares  under  attach- 
ment are  subject  to   the   lien.    Id. 

When  a  dividend  is  declared  out  of  profits  and 
earnings,  payable  in  money,  it  belongs  to  person 
holding  the  stock  at  time  of  such  declaration, 
■whether  holder  be  a  life  tenant  or  remainderman, 
regardless  of  the  source  of  such  proflits  and  earn- 
ings, the  time  when  earned  or  the  size  of  the 
dividends.    Richardson  v.   Richardson,  75  Me.   570. 

One  who  is  entitled  to  the  "  net  annual  Income  " 
of  stock  can  rightfully  claim  what'/  Gilkey  v. 
Paine,  80  Me.  319;  s.  c,  14  Atl.   Rep.  205. 

I'referred  stockholders  take  their  shares  upon 
conditions  regarding  dividends  named  in  a  by- 
law as  a  contract  between  themselves  and  the 
corporation.  R.  R.  Co.  v.  Belfast,  77  Me.  445;  s.  c, 
1  Atl.   Rep.   362. 

Preferred  stockholder  is  not  a  creditor,  nor  Is  a 
dividend  guaranteed  to  him.  Deficiency  of  divi- 
dend for  one  year  is  not  to  be  made  up  from 
net  earnings  of  another  year.    Id. 

The  term  "  net  earnings  "  means  such  as  are 
applicable  to  dividends,  and  these  would  be  gross 
receipts  and  loss  interest  on  company's  indebted- 
ness and  in  floating  llal)ilities,  and  less  also  an 
annual   contribution   to  a   sinking   funu.    Id. 

As  a  rule  officers  of  a  corporation  are  solo  judges 
of  propriety  of  declaring  dividends,  unless  they  act 


Illegally,  wantonly  or  oppressively.  When  right 
to  dividend  is  acquired  a  court  of  equity  will  com- 
pel company  to  declare  it.    Id. 

Directors  are  not  justified  in  refusing  to  declare 
dividends  to  preferred  stockholders  merely  be- 
cause corpoi'ation  cannot  pay  all  its  funded  mort- 
gage indebtedness  at  maturity  if  dividends  be 
paid;  other  conditions  are  to  be  considered. 
Hazeltine  v.  R.  R.  Co.,  79  Me.  411.] 

§  9.  Every  agent  or  person  having  charge 
of  coiTJorate  property,  shall,  on  reiiucst.  fur- 
nish to  any  officer  having  a  writ  or  execution 
against  the  corporation  for  service,  the 
names  of  the  directors  and  clerk,  and  a 
schedule  of  all  property,  including  debts 
known  by  him  to  belong  to  the  corporation. 

§  10.  An  officer,  having  an  execution 
against  such  a  corporation  and  unable  to 
find  property  liable  to  seizure,  or  the  cred- 
itor, may  elect  to  satisfy  it,  in  whole  or  in 
part,  by  a  debt  due  to  the  corporation  not 
exceeding  the  amount  due  to  the  creditor, 
and  the  person  having  custody  of  the  evi- 
dence of  such  debt  shall  deliver  it  to  such 
officer  with  a  written  transfer  thereof  to 
him  for  the  use  of  the  creditor,  which  shall 
constitute  an  assignment  thereof,  and  the 
creditor,  in  the  name  of  the  corporation, 
may  sue  for  and  collect  it,  subject  to  any 
equitable  set-off  by  the  debtor. 

§  11.  Any  officer  or  other  person,  who  un- 
necessarily neglects  or  refuses  to  comply 
with  the  two  preceding  sections,  forreits 
not  exceeding  four  times  the  amount  due  on 
such  execution,  and  may  be  imprisoned  less 
than  one  year. 

§  12.  When  a  suit  or  prosecution  is  pend- 
ing for  a  violation  of  any  provision  hereof, 
the  clerk  or  person  having  custody  of  the 
books  of  the  corporation,  shall,  upon  rea- 
sonable written  notice,  produce  theiu  on 
trial;  and  for  neglect  or  refusal  so  to  do, 
he  is  liable  to  the  same  fine  or  imprison- 
ment as  the  jiarty  on  trial  v\-ould  be. 

§  13.  No  child  shall  be  employed  or  suf- 
fered to  work  in  a  cotten  or  woolen  manu- 
factory without  having  attended  a  public 
school,  or  a  private  school  taught  by  a 
person  qualified  to  be  a  public  teacher;  if 
under  twelve  years  of  age,  for  four  months, 
if  over  twelve  and  under  fifteen,  for  three 
months,  of  the  year  preceding  such  employ- 
ment. A  certificate  under  oath  of  such 
teacher,  filed  with  the  clerk  or  agent  before 
employment,  is  the  proof  of  such  schooling. 

An  Act  (1887)  providing  for  fortnightly  payment 
of  wages.     See  p.  30. 

§  14.  Any  owner,  agent  or  superintendent 
of  such  manufactory,  for  each  violation  of 
the  preceding  section,  forfeits  one  hundred 
dollars,  to  be  recovered  by  indictment,  half 
to  the  prosecutor  and  half  to  the  town 
where  the  offense  was  committed,  to  be 
added  to  its  school  money.  Superintending 
school  committees  shall  inquire  into  such 
violations,  and  report  tliem  to  tlie  county 
attorney,  who  shall  prosecute  therefor. 


MAIl^E. 

General  corporations  —  R.  S.,  Tit.  iv,  ch.  xlviii,  §§  15-18. 


23 


§  15.  No  person  under  the  age  of  sixteen 
years  shall  be  employed  by  any  corporation 
for  more  than  ten  hours  of  a  day.  Who- 
ever violates  this  provision  forfeits  one  hun- 
dred dollars,  half  to  the  town  where  the 
offense  is  committed,  and  half  to  the  per- 
son employed;  to  be  recovered  by  indict- 
ment. 

Certain     Corporations      Organized     under 
General  Laws. 

§  16.  Three  or  more  persons  may  associate 
themselves  together  by  written  articles  of 
agreement,  for  the  purpose  of  forming  a 
corporation  to  carry  on  any  lawful  business, 
Including  corporations  for  manufacturing, 
mechanical,  mining  or  quarrying  business 
and  also  corporations  whose  purpose  is  the 
carriage  of  passengers  or  freight,  or  both, 
upon  tlie  high  seas,  or  from  port  or  ports  in 
this  State  to  a  foreign  port  or  ports,  or  to 
a  port  or  ports  in  other  States,  or  the  car- 
riage of  freight  or  passengers,  or  both, 
upon  any  waters  where  such  corporations 
may  navigate;  and  excepting  corporations 
for  banking,  insurance,  the  construction  and 
operation  of  railroads  or  aiding  in  the  con- 
struction thereof,  and  the  business  of  sav- 
ings banks,  trust  companies  or  corporations 
intended  to  derive  profit  from  the  loan  or 
use  of  money,  and  safe  deposit  companies, 
including  the  renting  of  safes  in  burglar- 
proof  and  fire-proof  vaults;  also  excepting 
telegraph  and  telephone  companies. 

Corporations  must  be  formed  under  general 
laws.  Const.,  art.  IV,  §  14.  Acts  of  incorporation 
are  public  acts.  Ch.  1,  §  6.  An  act  relating  to 
record  of  clianges  in  organization.  See  p.  29. 
To  payment  of  wages.  See  p.  30.  To  corpora- 
tions especially  chartered.  See  p.  36.  To  change 
of  location  of  corporation  organized  under  above 
section.     See  p.  36.    To  organization.     See  p.  37. 

[The  doings  of  persons  attempting  to  organize 
become  void  and  of  no  effect  unless  the  certificate 
of  attornev-general  has  been  obtained.  Assn.  v. 
Clarlie,  61  Me.  351. 

The  members  of  a  corporation  are  legally  pre- 
sumed to  be  citizens  of  the  State  by  the  laws 
of  which  it  was  created  and  in  which  alone  it 
has  a  legal  existence.  Hobbs  v.  Ins.  Co.,  56  Me. 
417. 

A  lumber  company  organized  under  above  sec- 
tion, as  a  manufacturing  corporation,  is  not  a 
railroad  company  because  it  constructs  a  railroad 
on  its  own  land  to  facilitate  its  lumbering  opera- 
tions. Palangio  v.  Lumber  Co.,  86  Me.  315;  s.  c, 
2U   Atl.    Pep.    1087. 

Quasi  public  corporations  cannot  sell  or  lease 
their  corporate  powers  and  privileges,  and  thereby 
disable  themselves  from  performing  public  duties, 
without  legislative  authority.  Gas  Light  Co.  v.  G. 
F.  &  L.  Co.,  85  Me.  532;  s.  c,  27  Atl.  Rep.  103. 
A  serious  objection  to  traffic  in  corporate  fran- 
chises is  the  ease  with  which  such  a  power  could 
be  used  to  create  monopolies.    Id. 

Chapter  102,  Laws  18U5,  provides  for  organiza- 
tion of  gas  and  electric  companies  under  this  act.] 

§  17.  (As  amended  March  25,  1891.)    Their 
first  meeting  shall  be  called  by  one  or  more  \ 
of  the   signers   of   said   articles,   by   giving  { 


notice  thereof,  stating  the  time,  place  and 
purposes  of  the  meeting  to  each  signer,  in 
writing,  or  by  publishing  it  in  some  news- 
paper printed  in  the  county,  at  least  four- 
teen days  prior  to  the  time  appointed  there- 
for. At  such  meeting  they  may  organize 
into  a  corporation,  adopt  a  corporate  name, 
define  the  purposes  of  the  coi-poration.  fix 
the  amount  of  the  capital  stock,  which  shall 
not  be  less  than  one  thousand,  nor  more  than 
ten  million  dollars,  divided  into  shares,  and 
elect  a  president,  not  less  than  three  direct- 
ors, a  clerk,  treasurer,  and  any  other  neces- 
sary officers,  and  may  adopt  k  code  of  by- 
laws. 

See  ch.   46,    §   3;   ch.   48,    §   3. 


§  IS.  (As  amended  by  K  180.">.  oh.  89, 
and  L.  1897,  ch.  225.)  Before  commenc- 
ing business,  the  president,  treasurer,  and 
a  majority  of  the  directors  shall  prepare 
a  certificate  setting  forth  the  name  and 
purposes  of  the  corporation,  the  amount  of 
capital  stock,  the  amount  already  paid 
in,  the  par  value  of  the  shares,  the  names 
and  residences  of  the  owners,  the  name 
of  the  county  where  it  is  located,  and 
the  number  and  names  of  the  directors, 
and  the  name  and  residence  of  the 
clerk,  and  shall  sign  and  make  oath 
to  it;  and  after  it  has  been  examined  by  the 
attorney-general,  and  been  by  him  certified 
to  be  properly  drawn  and  signed  and  to  be 
conformable  to  the  Constitution  and  laws,  it 
shall  be  recorded  in  the  registry  of  deeds 
in  the  county  where  said  corporation  is 
located,  in  a  book  kept  for  that  purpose, 
and  within  sixty  days  after  the  day  of  the 
meeting  at  which  such  corporation  is  or- 
ganized, a  copy  thereof  certified  by  such 
register  shall  be  filed  in  the  secretary  of 
State's  office,  who  shall  enter  the  date  of 
filing  thereon,  and  on  the  original  certificate 
to  be  kept  by  the  corporation,  and  shall 
record  said  copy  in  a  book  kept  for  that 
purpose.  Such  corporation  shall  pay  the 
attorney-general  and  secretary  of  State  five 
dollars  each  for  their  services,  in  advance; 
and  before  said  certificate  is  filed  in  the 
office  of  the  secretaiy  of  State,  when  the 
amount  of  the  capital  stock  does  not  exceed 
ten  thousand  dollars,  it  shall  also  pay  to  the 
treasurer  of  State  for  the  use  of  the  State 
the  sum  of  ten  dollars;  when  the  amount  of 
the  capital  stock  exceeds  ten  thousand  dol- 
lars and  does  not  exceed  five  hundred  thou- 
sand dollars,  it  shall  pay  to  the  treasurer 
of  State  for  the  use  of  the  State,  the  sum 
of  fifty  dollars;  when  the  amount  of  the 
capital  stock  exceeds  five  hundred  thousand 
dollars,  it  shall  pay  to  the  treasurer  of  State 
for  the  use  of  the  State  ten  dollars  for  each 
one  hundred  thousand  dollars  of  the  capital 
stock;  and  the  treasurer's  receipt  for  said 
sum  shall  be  filed  with  the  secretary  of 
State  as  a  condition  precedent,   before   he 


24 


MAINE. 


Increase  of  capital  —  R.  S.,  Tit.  iv,  ch.  xlviii,  §§  19,  20;  insolvent  —  Id.,  Tit.  vi,  ch.  Ixx.  §  (U. 


Bhall  be  authorized  to  receive  said  certificate 
for  filing. 

See  note  to  next  section. 

[.\nv  corporation  heretofore  organizer!  under 
Bald  chapter  48.  which  caused  the  certificate  to 
be  recorded  in  the  registry  of  deeds  of  tlie  county 
In  which  such  corporation  is  dcs^cribod  in  said 
certificate  to  be  located,  shall  be  deemed  to  have 
complied  with  the  requirements  of  section  18 
of  saiil  chapter  48  relating  to  recording  said  cer- 
tificate.   Acts  of  1893,   ch.   212.] 

[The  doctrine  of  waiver  on  the  part  of  the 
State  of  breach  of  a  condition  precedent  to 
exercise  of  corporate  functions  is  not  applicable 
when,  by  terms  of  charter,  the  franchise  abso- 
lutely determines  upon  failure  to  perform  such 
conditions.  State  v.  Bridge  Corp.,  85  Me.  18;  s.  c, 
26  Atl.   Rep.  947. 

In  a  proceeding  against  a  corporation  there  may 
be  judgment  of  ouster  of  the  particular  franchise, 
and    not    the    whole    charter.    Id.] 


§  19.  From  the  time  of  filing  such  certifi- 
cate in  the  secretary  of  State's  office,  the 
signers  of  said  articles  and  their  successors 
and  assigns  shall  be  a  corporation,  the  same 
as  if  incorporated  by  a  special  act,  with  all 
the  rights  and  powers,  and  suT:)ject  to  all  the 
duties,  obligations  and  liabilities  provided  by 
this  chapter  and  chapter  forty-six. 

[Unless  the  certificate  of  the  attorney-general 
be  obtained  as  required  by  statute,  persons  as- 
sociating themselves  together  under  provisions  of 
this  chapter  do  not  become  a  corporation.  Fac- 
tory Assn.  V.   Clarke,   61  Me.   351. 

Manufacturing  corporations,  created  under  pro- 
visions of  this  chapter,  stand  on  an  equality  with 
those  "  Incorporated  by  special  act  "  as  to  rights 
and  powers  conferred  and  as  to  duties,  obligations 
and  liabilities  imposed  by  chapter  46.  I'oor  v. 
Wllloughby,  64  Me.  379. 

Above  section  cited.  Car  Co.  v.  Cook,  70  Me. 
146.] 


§  20.  (As  amended  March  15,  189.3.)  If  the 
stockholders  of  any  corporation  created  by 
special  charter  and  not  charged  with  the 
performance  of  auy  ]iulilic  duty,  or  nrtiaui^'d 
under  the  general  laws  of  the  State,  find 
that  the  amount  of  its  capital  stock  is  in- 
sufficient for  the  purposes  for  which  said 
corporation  is  organized,  or  that  the  number 
of  directors  is  inconvenient  for  the  trans- 
action of  its  business,  the  stockholders  may 
by  a  vote  representing  a  maiority  of  the 
stock  issued,  increase  the  amount  of  its 
capital  stoclv  to  any  amount  not  exceeding 
ten  million  dollars,  and  may  change  the 
number  of  their  directors  in  like  manner, 
and  the  corporation  shall  file  a  certificate 
thereof  with  the  secretary  of  State  within 
ten  days  thereafter,  and  thereupon  said  vote 
shall  take  elTect.  When  the  capital  stock 
is  increased  from  en  thousand  dollars  or 
less  to  not  exceeding  five  luindred  tliousand 
dollars,  the  coiiioration  shall  pay  to  the 
treasurer  of  State  for  the  use  of  the  State 
the  sum  of  forty  dollars.  AYhen  the  capital 
stock  is  increased  to  any  amount  exceeding 
five  hundred  thousand  dollars,  it  sliall  pay 
to  the  treasurer  of  State  for  the  use  ot  the 


State,  the  sum  of  ten  dollars  for  each  one 
hundred  thousand  dollars  of  such  increase, 
and  the  treasurer's  receipt  for  same  shall 
be  filed  with  the  secretary  of  State,  before 
he  shall  be  authorized  to  receive  any  cer- 
tificate  of   an    increase    of    capital    stock. 

See  note  to  preceding  section. 

TITLE  VI.   COURTS  OF  PROBATE. 

CHAPTER  LXX. 

The  Insolvent  Law. 

Sec.  61.  This  chapter  applies  to  corporations; 
exceptions;  proceedings;  but  no  dis- 
charge shall  be  granted  nor  stockhold- 
ers'  liability  affected. 

§  01.  This  chapter  (the  Insolvent  Law)  ap- 
plies to  all  corporations  created  by  the  law 
of  the  State,  carrying  on  manufacturing, 
trading,  mining,  building,  insurance  or  other 
private  business,  Init  does  not  apply  to  cor- 
porations engaged  in  business  involving 
puljlic  duties  aud  obligations,  among  which 
are  railroads,  banks,  corporations  engaged 
in  supplying  cities  and  towns  with  gas  or 
water,  and  other  corporations  of  like  char- 
acter; and  upon  petition  of  any  officer  au- 
thorized by  legal  vote  of  such  corporation, 
passed  at  a  legal  meeting  called  for  that 
purpose,  or  upon  petition  of  any  creditor  or 
creditors  of  such  corporation,  made  and 
presented  as  in  this  chapter  is  provided  in 
the  case  of  au  individual  debtor,  aud  tipon 
such  notice  as  the  judge  orders,  a  hearing 
shall  be  had  upon  such  petition,  and  if  it 
appears  that  such  corporation  is  insolvent, 
aud  that  such  facts  exist  as  would  author- 
ize the  judge  to  issue  a  warrant  against 
the  estate  of  an  individual  clel)tor,  such 
corporations  shall  be  adjudged  insolvent, 
aud  a  warrant  shall  issue  agaiust  its  prop- 
erty and  effects,  as  hereinbefore  provided; 
and  all  the  provisions  of  this  chapter  re- 
lating to  proceedings  subsequent  to  the 
issuing  of  a  warrant  against  the  estate  of 
an  mdividual  debtor,  apply  to  saitl  corpora- 
tion aud  the  disposal  of  its  effects  and 
estate,  but  no  discharge  shall  be  granted  to 
such  corporation,  and  nothing  in  this  cliapter 
affects  the  liability  of  any  stockholder  in 
such  corporation  as  Is  now  provided  by 
law. 

Court  may  appoint  receiver.  Ch.  46,  §  28.  Per- 
sonal liability  of  stockholders  of  insolvent  cor- 
poration.   Ch.    46,    §§    37   et   seq. 

[Corporations  engaged  in  business  Involving 
pulilic  duties  and  obligations,  including  gas  and 
water  companies,  are  expressly  exempted  by 
statute  from  operation  of  the  Insolvent  Law.  Edi- 
son Co.  Y.  ]•:.  &  P.  Co.,  82  Me.  464;  s.  c,  10  Atl. 
Rep.  859.  Au  electric  light  and  power  company, 
organized  under  general  laws  of  the  State,  is  such 
.T  corporation.  Id.  Whether  use  is  a  public  one 
by  reason  of  exercise  of  right  of  eminent  domain, 
how   determined.    Id.] 


MAIXE. 


25 


Execution  — R.  S.,  Tit-  7,  ch.  76,  §§  43^5;  actions,  etc.— Id.,  tit.  9,  ch.  81,  §§  2,  13,  1.5.  1<J. 


TITLE    VII.     TITLES    TO    PROPERTY. 

CHAPTER  LXXVI. 

Title  to  Real  Estate  by  Levy  of  Execution. 

Sec.  43.  Lands  of  banks  and  manufacturing  cor- 
porations, and  their  titles  as  mort- 
gagees, may  be  sold  at  auction;  pro- 
ceedinss. 

44.  No  transfer  of  such  property  made  after 

notice   of   seizure,    is   valid. 

45.  Corporations     may     redeem,     and     their 

equity  may  be  attached  and  sold. 

§  43.  The  lands  of  banks  or  manufacturiui; 
corporations,  and  their  titles  as  mortgagees 
of  lands,  may  be  seized  on  execution  and 
sold  at  auction.  The  officer  shall  give  no- 
tice of  the  time  and  place  of  sale  fourteen 
days  previous  thereto,  by  posting  it  in  tsvo 
or  more  public  places  in  Ihe  town  where 
the  lands  lie,  and  by  publication  in  a  news- 
paper printed  in  the  county,  if  any,  other- 
wise in  the  State  paper;  and  he  may  by 
deed  convey  the  same,  and  a  debt  secured 
by  such  mortgage  and  remaining  vinpaid 
will  pass  with  the  mortgagee's  title  to  the 
purchaser,  who  may  recover  the  premises 
or  debt  in  his  own  name.  In  such  action, 
a  copy  of  the  mortgage,  attested  by  the 
register  of  deeds,  is  prima  facie  evidence 
of  such  deed,  and  of  the  contracts  secured 
by  it,  as  remaining  due  at  the  time  of  trial. 
The  cashier  of  the  banli  or  clerli:  of  the  cor- 
poration, on  reasonable  request  of  the  offi- 
cer, shall  furnish  him  with  a  certified  copy 
of  such  contract,  and  of  all  payments  made 
thereon. 

See   ch.   46,    §   2   (6). 

§  44.  No  transfer  of  such  mortgage,  or 
the  debt  secured  thereby,  made  by  such 
corporation  after  notice  of .  the  seizure 
thereof  on  execution  has  been  filed  in  the 
registry  where  the  land  lies,  or  given  to  the 
party  to  be  affected  thereby,  has  any  valid- 
ity against  the  purchaser  at  such  sale. 

§  45.  The  corporation  may  redeem  such 
land,  or  mortgage  and  debt,  as  is  provided 
for  the  redemption  of  lands  levied  on  by 
appraisement;  and  such  right  may  be  at- 
tached and  sold  on  execution  as  the  right  to 
redeem  from  the  sale  of  an  equity  of  re- 
demption may  be,  and  the  corporation  hns 
the  like  right  to  redeem  from  such  second 
sale. 

TITLE     IX.     CIVIL     RIGHTS     AXD     REME- 
DIES. 

CHAPTER  LXXXI.. 

ConnnerLcement  of  Civil  Actions. 

Sec.      2.  Actions,    how   commenced. 
13.  Venue   of  actions. 

15.  Certain   actions    in    behalf   of   the    State 
may  be  brought  in  any  county. 

19.  Service   on   corporation,    how   made. 

20.  Service    on    domestic    corporation,    when 

no    officer   can    be    found. 
22.  Service    on    foreign    insurance    and    ex- 
press companies,   how   made. 


corporation    may    be 


Sec.     27.  How    shares    in 
attached. 

28.  Franchises    and    other    property    of    the 
corporation,   how   attached. 
^  74.  Certificates    of    proceedings    to    be    filed 

with   olHcer   of   corporation. 
104.  Foreign   corporation    entitled    to   process 
relating  to  limitation  of  actions. 

§  2.  All  civil  actions,  except  scire  facias 

I  and  other  special  writs,  shall  be  commenced 

j  by   original    writs;    *    *    *    and   in   actions 

against  corporations    *    *    *    the  writ  and 

summons  may  be  coml)ined  in  one    *    *    *, 

Corporation    may    sue    and    be    sued.      Ch.    46, 
§  2  (1),   and  notes. 


§  13.  Local  and  transitory  actions  shall  be 
commenced  and  tried  as'  follows:  *  *  * 
when  a  corporation  is  one  party  and  a 
county  the  other,  in  any  adjoining  county; 
*  *  *  when  one  party  is  a  town,  parish, 
or  school  district,  and  the  other  some  cor- 
poration or  natural  person,  in  the  county 
in  which  either  of  the  parties  is  situated  or 
lives;  =:=  *  *  all  other  corporations 
may  sue  and  be  sued  in  the  county  in  which 
they  have  an  established  place  of  business, 
or  in  which  the  plaintiff  or  defendant,  if 
a  natural  person,  lives. 

See  note  to  ch.  46,  §  2  (1). 

[Special  provision  in  an  act  incorporating  an 
insurance  company  held  not  to  affect  require- 
ments of  this  section.  Martin  v.  Ins.  Co..  53 
Me.   419. 

Wrong  venue  of  local  actions,  how  taken  ad- 
vantage of.    Haskell  v.   Woolwich,   58  Me.   535.] 

§  15.  An  action  in  behalf  of  the  State  to 
enforce  the  collection  of  State  taxes  upon 
any  corporation,  or  to  recover  of  any  per- 
son or  corporation  moneys  due  the  State, 
public  funds  or  property  belonging  to  the 
State,  or  the  value  thereof,  may  be  brought 
in  any  county;  Provided.  That  on  motion 
of  the  defendant,  any  justice  of  the  su- 
preme judicial  court,  holding  the  term  at 
which  such  action  is  returnable,  may.  for 
sufficient  reasons  shown,  remove  the  same 
to  the  docket  of  said  court  in  any  other 
county  for  trial,  and  may  upon  such  re- 
moval, award  costs  to  the  defendant  for 
one  term,  to  be  paid  by  the  treasurer  of 
State  on  presentation  of  the  certificate  of 
the  amount  thereof,  from  the  clerk  of  the 
coiu't  of  the  county  from  which  said  action 
is  transferred. 

§  19.  In  suits  against  a  county,  the  sum- 
mons shall  be  served  by  leaving  an  attes- 
ted copy  thereof  with,  etc..  *  *  *  and 
against  any  other  corporation,  however 
created,  with  its  president,  clerk,  cashier, 
treasurer,  general  agent,  or  director:  if  there 
is  no  such  officer  or  agent  found  within 
the  county  where  such  corporation  is  es- 
tablished, or  where  its  records  or  papers  are 
by  law  required  to  be  kept,  with  any  mem- 
ber thereof:  and  in  all  suits  and  proceedings 
at  law  or  in  equity  against  any  foreign  or 


26 


MAK^E. 


Actions;  service  of  summons  — R.  S.,  Tit.  ix,  eh.  Ixxxi,  §§  20,  22,  27,  28,  74,  104. 


alien  company  or  corporation  established  by 
the  laws  of  any  other  State  or  country,  and 
having  a  place  of  business  within  this  State 
or  doing  business  herein,  service  of  the 
writ,  bill,  petition,  or  other  process  is  sutti- 
cient.  if  made  by  leaving  an  attested  copy 
thereof  with  the  president,  clerk,  cashier, 
treasurer,  agent,  director,  or  attorney  of 
such  company  or  corporation,  or  by  leaving 
such  copy  at  the  office  or  place  of  business 
of  such  company  or  corporation  within  this 
State:  and  in  each  case,  it  shall  be  so  served 
thirty  days  before  the  return  day  thereof. 

Service  on  foreign  corporations.  §§  22,  104,  post; 
Act  of  1S97,  at  p.  37. 

[Service  upon  a  manufacturing  corporation  by 
leaving  copy  witli  its  clerli  thirty  days  prior  to 
day  of  sitting  of  the  court,  is  good.  Hincliley  v. 
Granite  Co.,  16  Me.  370. 

Service  at  last  and  usual  abode  of  treasurer  or 
other  proper  olficer  of  railroad  company,  held 
good.    Harris  v.   R.   R.   Co.,  47   Me.  298. 

Above  section  cited.  Walker  v.  Tewksbury,  67 
Me.  496. 

Plea  in  abatement  for  want  of  suflBcient  service 
on  a  corporation,  held  not  euflcient.  Perry  v. 
Ry.  Co..  71  Me.  359.] 


§  20.  When  no  officer,  general  agent,  or 
member  of  a  domestic  coi-poration,  can  be 
foimd  in  the  county  in  which  the  same  is 
located,  or  in  the  county  in  which  its  last 
certificate  of  election  of  clerk  was  filed,  the 
officer  having  in  his  hands  any  process  for 
service  on  such  corporation,  may  file  a  copy 
thereof,  in  the  registry  of  deeds  of  the 
county  in  which  such  coi-poration  was  lo- 
cated, or  in  which  its  last  certificate  of 
election  of  clerk  was  filed,  and  make  re- 
turn of  his  doings,  which  service  is  sufficient 
to  hold  said  corporation  to  answer  to  such 
process. 

§  22.  In  actions  by  inhabitants  of  this 
State  against  insurance  companies  estab- 
lished by  any  other  State  or  country,  on 
policies  of  insurance,  signed  or  counter- 
signed by  agents  in  this  State,  on  property 
or  lives,  or  against  accidents  in  this  State; 
and  in  such  actions  against  express  com- 
panies so  established,  service  is  sufficient  if 
made  on  the  person  who  signed  or  counter- 
signed sucli  policies,  or  on  any  agent  or 
attorney  of  either  such  company,  or  if  left 
at  his  last  and  usual  place  of  abode  thirty 
days  before  the  return  day  af  the  suit;  but 
the  court  may,  in  any  case,  order  further 
notice. 

See  §  104;  Act  of  1897,  at  p.  37. 

§  27.  When  the  share  or  interest  of  any 
person  in  an  incorporated  company  is  at- 
tached on  mesne  process,  an  attested  copy  of 
the  writ  with  a  notice  thereon  of  the  attach- 
ment, signed  by  the  officer,  shall  be  left 
with  the  clerk,  cashier  or  treasurer  of  the 
company;  and  such  attachment  is  a  lien 
on  such  share  or  interest,  and  on  all  accruing 


dividends;  and  if  the  officer  having  the  writ 
exhibits  it  to  the  officer  of  the  company  hav- 
ing custody  of  the  account  of  shares  or  in- 
terest of  the  stockholders,  and  request  a 
certificate  of  the  number  held  by  the  de- 
fendant, and  such  company  officer  unreason- 
ably refuses  to  give  it,  or  willfully  gives 
him  a  false  certificate  thereof,  he  shall 
pay  double  the  damage  occasioned  by  such 
I'efusal  or  neglect;  to  be  recovered  against 
him  in  an  action  on  the  case  by  the  creditor. 

[Attachment  under  this  section  held  good. 
Hagar  v.   Bank,  63  Me.  514.] 

§  28.  The  franchise  and  all  right  to  demand 
and  take  toll,  and  all  other  property  of  a 
corporation,  may  be  attaclied  on  mesne  pro- 
cess, and  the  attaching  ofiicer  shall  leave  an 
attested  copy  of  the  writ  with  a  notice  of 
the  attachment  thereon,  signed  by  him,  with 
the  clerk,  treasurer,  or  some  officer  or  mem- 
ber of  the  corporation,  as  provided  in  sec- 
tion nineteen. 

[Section  applied.    Benson  v.  Smith,  42  Me.  425.] 

§  74  ♦  *  *  When  the  property  attached 
is  stock  in  a  banking  or  other  corporation, 
or  is  such  that  the  attachment  must  be 
recorded  in  the  town  clerk's  office,  such  copy 
and  certificate  shall  be  filed  with  the  offi- 
cer of  such  corporation  or  with  the  town 
clerk  with  whom  the  attachment  is  filed; 
and  thereby  the  attachment  is  vacated. 

§  lO-i.  (Enacted  February  5,  1889.)  Any 
foreign  coi^poration  doing  business  contin- 
uously in  this  State,  and  having  constantly 
an  officer  or  agent  resident  herein,  on  whom 
service  of  any  process  may  be  made,  shall 
be  entitled  to  the  benefit  of  all  provisions 
of  law  relating  to  limitation  of  actions  the 
same  as  domestic  corporations. 

See  ch.  46,  §  22;  ch.  81,  §  22;  Act  of  1897,  at  p. 
37. 

CHAPTER  LXXXII. 

Proceedings  in  Civil  Actions. 

Sec.     16.  Treasurers   of  corporations   may   sue   in 
their  own  names,  when. 
133.  Costs  for  travel  in  actions  by  corpora- 
tions. 

§  16.  Treasurers  of  *  *  *  coiT>orations, 
may  maintain  suits  in  their  own  names  as 
treasurers  on  contracts  given  to  them  or 
their  predecessors,  and  prosecute  suits  pend- 
ing in  the  name  of  their  predecessors. 

§  133.  In  actions  of  a  corporation,  its 
travel  is  computed  from  the  place  where  it 
is  situated,  if  local,  otherwise  from  the  place 
where  its  business  is  usually  transacted,  not 
exceeding  forty  miles,  unless  its  agent  act- 
ually travels  a  greater  distance  to  attend 
court 


MAINE. 


27 


Levy  on  shares  of  stock  —  R.  S.,  Tit.  ix,  ch.  Ixxxiv,  §§  12-21. 


CHAPTER  LXXXIV. 

Levy  of  Execution  on  Personal  Property. 

Sec.  12.  Shares    in    Incorporated    companies,    how 
to  be   sold. 

13.  Notice   of   seizure    of,    how    to    be    given, 

if  not  attached;  and  how  if  attached. 

14.  Officers     of     corporations     shall     certify 

number    of    debtor's    shares;    penalty. 

15.  Shares    sold    shall    be    transferred;    new 

certificate   to   buyer;    dividends. 
Ifi.  Notice  of  sale,  how  to  be  given. 

17.  Franchise  of  corporation,  how  to  be  sold; 

notice  of  sale  of,  how  to  be  given. 

18.  Mode    of    sale;     possession,     what,     and 

how  to   be   given   to   the  purchaser. 

19.  Rights  and  duties  of  the  purchaser. 

20.  Rights  of  redemption  by  the  corporation. 

21.  Franchises  of  railroads  wholly  within  the 

State,    notice    of    sale    of,    how    to    be 
given  in   each   county   interested;   con- 
veyance by   sheriff's   deed. 
23.  Notice    of    second    attachment    shall    be 
given  to  the  first  attaching  officer. 

§  12.  Any  share  or  interest  of  a  stockbolder 
or  proprietor  in  an  incorporated  company, 
may  be  taken  on  execution  and  sold  in  the 
following  manner,  and  not  otherwise,  any- 
thing in  the  charter  of  such  company  to  the 
contrary  notwithstanding. 

§  13.  If  the  property  was  not  attached  on 
mesne  process  in  the  same  suit,  the  officer 
shall  leave  a  copy  of  the  execution  with  the 
treasurer,  cashier,  clerk,  or  other  recording 
officer  of  the  company,  and  the  property 
shall  be  considered  as  seized  on  execution 
when  the  copy  is  so  left.  If  it  was  so  at- 
tached and  remains  attached,  the  officer 
shall  proceed  in  seizing  and  selling  it  on 
execution  as  in  section  sixteen. 

§  14.  The  officer  of  the  company  having 
the  care  of  the  records  or  account  of  shares, 
or  interest  of  the  stockholders,  shall,  on  ex- 
hibition to  him  of  the  execution,  give  the 
officer  holding  it  a  certificate  of  the  number 
of  shares  held  by  the  judgment  debtor,  or 
of  the  amount  of  his  interest,  under  the 
penalty  provided  in  section  twenty-seven  of 
chapter  eighty-one. 

§  15.  Within  fourteen  days  after  the  sale, 
the  officer  shall  leave  an  attested  copy  of 
the  execution  and  of  the  return  thereon, 
with  the  officer  of  the  company  whose  duty 
it  is  to  record  transfers  of  shares;  and  the 
purchaser  is  thereupon  entitled  to  a  certifi- 
cate or  certificates  of  the  shares  bought  by 
him,  on  paying  the  fees  therefor,  and  for 
recording  the  transfers;  and  if  such  shares 
or  interest  were  attached  in  the  suit  in 
which  the  execution  issued,  he  shall  have 
all  dividends  which  accrued  after  the  at- 
tachment. 

[Section  applied.    Hagar  v.   Bank,   63  Me.  514.] 

§  16.  In  selling  such  shares  or  interest,  the 
officer  holding  the  execution  shall  give  no- 
tice in  writing  of  the  time  and  place  of  the 
sale  to  the  debtor,  by  leaving  it  at  his  last 
and  usual  place  of  abode,  if  within  the 
county  where  the  officer  dwells;  and  public 
notice  thereof  by  posting  it  in  one  or  more 


public  places  in  the  town  where  the  sale  is 
to  be  made,  and  in  two  adjoining  towns, 
if  there  are  so  many,  thirty  days  at  least 
before  the  day  of  sale;  and  shall  publish 
an  advertisement  of  the  same  import,  nam- 
ing the  judgment  debtor,  for  three  weeks 
successively  before  the  day  of  sale,  in  some 
public  newspaper  printed  in  the  county,  if 
any,  if  not,  in  the  State  paper;  and  if  the 
debtor  never  lived  in  the  county,  posting 
the  notification  and  publishing  the  adver- 
tisement as  aforesaid  are  sufficient. 

[Section  cited.    Baker  v.  Bean,  74  Me.  20.] 

§  17.  When  judgment  is  recovered  against 
a  bridge,  canal,  or  other  incorporated  com- 
pany with  power  to  receive  toll,  its  fran- 
chise may  be  sold  on  execution  at  public 
auction,  giving  notice  of  the  time  and  place 
of  sale  by  posting  a  notification  in  any  toAvn, 
in  which  the  treasurer,  clerk,  or  any  offi- 
cer thereof,  if  there  are  any  officers,  and  if 
not,  where  any  stockholder  resides,  for 
thirty  days  at  least  before  the  day  of  sale, 
and  by  causing  an  advertisement,  naming 
the  creditor  therein,  to  be  inserted  for  three 
weelvS  successively  in  a  newsj)aper  printed 
in  a  county  where  either  of  said  officers,  or, 
if  the  company  is  without  officers,  where 
any  stockholder  resides,  the  last  publica- 
tion being  at  least  four  days  before  the  day 
of  sale;  and  if  there  is  no  newspaper  printed 
in  any  such  coimty,  then  in  the  State  paper. 

§  18.  In  the  sale  of  such  franchise,  who- 
ever will  pay  and  satisfy  such  execution,  all 
fees,  and  incidental  expenses,  in  considera- 
tion of  being  entitled  to  receive  to  his  own 
use  all  such  toll  as  the  corporation  is  en- 
titled to  receive,  for  the  shortest  period  cf 
time,  is  the  highest  bidder,  and  the  pur- 
chaser for  such  period;  and  immediately 
after  such  sale,  the  officer  shall  deliver  to 
him  possession  of  the  toll  houses  and  gates, 
in  whatever  county  situated,  and  state  his 
doings  therein  in   his  return. 

§  19.  The  purchaser  of  such  franchise,  and 
those  claiming  under  him,  may  receive  to 
their  own  use  the  tolls  accruing  within  the 
time  limited  in  the  purchase,  and  shall  have 
all  the  powers  of  the  corporation  necessary 
for  the  convenient  use  of  the  property,  be 
subject  to  the  same  duties  and  penalties 
during  the  term  of  said  purchase,  and  may 
recover  of  said  corporation  any  moneys  paid 
or  expenses  incurred  in  consequence  of  such 
liability,  and  without  their  fault  or  negli- 
gence. 

§  20.  The  corporation,  at  any  time  within 
three  months  after  the  day  of  sale,  may 
redeem  said  franchise  by  paying  to  the  pur- 
chaser the  sum  which  he  paid  in  satisfac- 
tion of  the  execution,  with  twelve  per  cent, 
interest,  in  addition  to  the  toll  received. 

§  21.  The  provisions  of  the  four  preceding 
sections  apply  to  the  franchises  of  railroad 
corporations  whose  railroads  lie  wholly 
within  the  State,  except  that  notice  shall 
be  given  of  the  time  and  place  of  such  sale. 


28 


MAINE. 


Trustee  process;  cliat'l  mort.—  R.  S.,  Tit.  ix,  ch.  Ixxxvi,  §§  S,  9,  36;  cb.  xci,  §  1;  ch.  ciii,  §  17. 


by  posting  a  notification  thereof  at  the  court- 
house in  each  county  through  which  such 
railroad  runs,  either  wholly  or  in  part,  for 
thirty  days  at  least  before  the  daj^  of  sale, 
and  by  causing  an  advertisement  to  be  in- 
serted for  three  weeks  successively  in  at 
least  one  newspaper  published  in  each  county 
through  which  the  road  runs,  either  wholly 
or  in  part,  the  last  publication  to  be  at  least 
four  days  before  the  day  of  sale,  and  if 
there  is  no  newspaper  printed  in  any  one 
or  more  of  such  counties,  then  in  the  State 
paper  instead;  and  when  the  company  has 
an  established  office  in  the  State,  notice  of 
the  sale  shall  also  be  given  by  leaving  an 
attested  copy  thereof  at  the  olfjce  of  said 
company  for  not  less  than  thirty  days  pre- 
vious to  such  sale;  and  notice  given  in  the 
manner  herein  provided  is  sutticient.  The 
officer  shall  deliver  to  the  purchaser  a  con- 
veyance by  deed  of  the  franchise  so  sold. 
§  23.  If  a  share  in  a  corporation,  or  other 
property  that  may  be  attached  without  tak- 
ing and  keeping  possession  thereof,  is  at- 
tached or  taken  on  execution,  and  is  subse- 
quently attached  or  taken  on  execution  by 
another  officer,  he  shall  give  notice  thereof 
to  the  officer  who  sells  under  the  first  at- 
tachment or  seizure;  and  if,  without  such 
notice,  he  pays  the  balance  of  the  proceeds 
of  sale  to  the  debtoi  he  is  not  liable  there- 
for to  the  person  claiming  under  such  sub- 
sequent attachment  or  seizure. 

CHAPTER   LXXXVI. 
Trustee  Process. 

Sec.     8.   Corporations  may  be   summoned  as   trus- 
tees;   they    may    answer    by    attorney 
or  agent,  and  disclose. 
9.  Taxes    due    from    principal    defendant    to 
corporations    are    exempted. 
36.  Liability  of  stockholders  of  a  corporation. 

§  8.  All  domestic  corporations,  and  all  for- 
eign or  alien  companies  or  corporations  es- 
tablished by  the  laws  of  any  other  State  or 
country,  and  having  a  place  of  business,  or 
doing  business  within  this  State,  may  be 
summoned  as  trustees,  and  trustee  writs  may 
be  served  on  them,  as  other  writs  are  served 
on  such  companies  or  corporations;  and  they 
may  answer  by  attorney  or  agent,  and  make 
disclosures,  Avhich  shall  be  signed  and 
sworn  to  by  such  attorney  or  agent,  or  such 
other  person  upon  Avhom  legal  service  of 
the  writ  may  be  made;  and  the  same  pro- 
ceedings shall  thereupon  be  had  through- 
out, except  necessary  changes  in  form,  as 
in  other  cases  of  foreign  attachment. 

[See   Walker  v.   Tewksbury,  67  Me.   496. 

A  corporation  summoned  as  trustee  may  dis- 
close by  attorney.    Head  v.  Morrill,  34  Me. '580. 

A  railroad  company,  in  making  disclosures  bv 
agent  under  a  trustee  process,  is  not  concluded 
by  entries  upon  its  books.  Bigelow  v.  R.  R.  Co. 
37  Me.  .•',20. 

Where    corporation    Is    summoned     as    trustee, 
what   is   sufficient   service.     Harris   v.    R.    R.    Co 
47  Me.  208.  ' 

Money  in  hands  of  station  agent,  received  for 
tickets  and  freight,  cannot  be  attached  by  trus- 
tee process  by  creditor  of  company.  Pettincill 
V.  R.  R.  Co.,  51  Me.  370. 


Cashier  of  bank  in  which  funds  of  a  corporation 
are  deposited  cannot  be  holden  as  trustee  or 
such  corporation.  Sprague  v.  Nav.  Co.,  52  Me. 
592. 

See  Foxton  v.  Kucking,  55  Me.  350:  Clark  v. 
Clark,  62  id.  250.] 

§  9.  Any  corporation  summoned  as  trus- 
tee  of  a  defendant,  may  set  off  and  deduct 
from  any  amount  found  due  the  defendant 
from  the  trustee  and  attached  by  trustee 
process,  the  amount  due  from  the  defend- 
ant to  the  trustee  for  taxes. 

§  36.  *  *  *  The  amount,  which  a  stock- 
holder of  a  corporation  is  liable  to  pav  to 
a  judgment  creditor  thereof,  may  be  attached 
by  a  creditor  of  such  judgment  creditor,  by 
trustee  process  served  on  such  stockholder 
at  any  time  after  the  commencement  of  the 
judgment  creditor's  action  against  him,  and 
before  the  rendition  of  judgment  therein. 

See  ch.  46,  §§  37,  38,  as  to  liability  of  stock- 
holders. 

CHAPTER   XCI. 

Mortgage  of  Personal  Property. 

Sec.  1.  Mortgage    by    corporation    to    be    recorded 
where. 

Section  1.  (As  amended  February  21,  1895.) 
No  mortgage  of  personal  property  is  valid 
against  any  other  person  than  the  parties 
thereto,  unless  possession  of  such  property 
is  delivered  to,  and  retained  by  the  mort- 
gagee, or  the  mortgage  is  recorded  by  the 
clerk  of  the  city,  town  or  plantation  or- 
ganized for  any  purpose,  in  which  the  mort- 
gagor resides,  when  the  mortgage  is  given. 
AVhen  all  the  mortgagors  reside  without  the 
State,  the  mortgage  shall  be  recorded  in 
said  city,  town  or  plantation,  where  the 
property  is  when  the  mortgage  is  made;  but 
if  a  part  of  the  mortgagors  reside  in  the 
State,  then  in  the  cities,  towns  or  plantation 
in  which  such  mortgagors  reside,  when  the 
mortgage  is  given.  A  mortgage  made  by  a 
corporation,  shall  be  recorded  in  the  town 
where  it  has  its  established  place  of  business. 
If  any  mortgagor  resides  in  an  unorganized 
place,  the  mortgage  shall  be  recorded  in  the 
oldest  adjoining  town  or  plantation,  organ- 
ized as  aforesaid,    in  the  county. 

Mortgage  of  domestic  to  foreign  corporation. 
See  Act  of  1897,  at  p.  :i7. 

CHAPTER  CIII. 

Estates  in  Dower. 

Sec.  17.  Demand  upon     a     corporation,     and     the 
time   for  bringing   the  action. 

§  17.  When  a  corporation  is  the  tenant  of 
the  freehold,  she  (the  widow)  must  de- 
mand her  dower  in  writing  of  any  officer 
thereof,  on  whom  a  writ  in  a  civil  action 
against  it  may  be  served;  and  the  time  be- 
tween the  demand  and  the  suit  shall  be  sixty 
days,  instead  of  thirty;  but  a  second  demand 
may  be  made  as  aforesaid. 

See  ch.  46,    §  50. 


MAIXE. 


29 


Embezzlement;  false  certificates,  etc.—  R.  S.,  Tit.  xi,  ch.  cxx,  §  9;  ch.  cxxi,  §§  9,  10. 


[When  a  foreign  corporation  Is  seized  of  real 
estate  situated  in  tliis  State,  and  has  a  tenant 
thereon,  the  demand  of  dower  may  be  made, 
under  provisions  of  above  section,  upon  the  ten- 
ant In  possession.    Stevens  v.   Bank,   70  Me.   180.] 

TI'liiK   XI.      CRIMKS   AM)   OFFENSES, 
CHAPTER  CXX. 

Larceny 
Sec.  9.  Embezzlement   by   agent    Is   larceny. 

§  9.  *  *  *  Any  insurance  agent,  or  agent 
of  any  corporation  doing  business  in  the 
State,  who  appropriates  to  his  own  use  any 
money,  or  substitute  for  money,  received 
by  him  as  such  agent,  or  refuses  or  neglects 
to  pay  over  and  deliver  the  same  to  the 
party  entitled  to  receive  it,  for  thirty  days 
after  written  demand  upon  him  therefor,  is 
guilty  of  larceny,  and  shall  be  punished  ac- 
cordinglv. 

CHAPTER  CXXI. 

Forgery  and  Counterfeiting,  and  Fraudu- 
lent Stocks. 

Sec.     9.  Forgery,    by    false    certificates    and    ficti- 
tious signatures. 
10.  Making    or    issuing    false    certificates    of 
stock,  or  pledging  genuine,  without  au- 
thority. 

§  9.  If  any  any  person,  legally  authorized 
to  take  the  proof  or  acknowledgment  of  any 


instrument  that  by  law  may  be  recorded, 
willtully  and  falsely  certifies  that  such  proof 
or  acknowledgment  Avas  duly  made;  or  if 
any  person  fraudulently  affixes  a  fictitious  or 
pretended  signature,  purporting  to  be  that 
of  an  officer  or  agent  of  a  corporation,  to 
any  written  instrument  puiijorting  to  be  a 
draft,  note,  or  other  evidence  of  debt  is- 
sued by  such  corporation,  Avith  intent  to 
pass  the  same  as  tiiie,  although  such  person 
never  was  an  officer  or  agent  of  such  cor- 
poration, or  never  existed,  he  is  guilty  of 
forgery  and  shall  be  punished  as  provided 
in  section  one. 

§  10.  If  an  officer  or  agent  of  a  corpora- 
tion willfully  signs  with  intent  to  issue,  or 
issues  any  certificate  purporting  to  be  a  cer- 
tificate or  other  evidence  of  the  ownership 
of  the  transfer  of  any  stock  in  such  corpo- 
ration, not  authorized  by  its  charter,  by- 
laws, or  votes,  or  without  such  authority 
issues,  sells,  or  pledges  such  certificate  or 
other  evidence  of  ownership  or  ti-ansfer  of 
stock  after  it  is  lawfully  signed,  he  shall 
be  punished  by  imprisonment  in  the  State 
prison  for  not  more  than  ten  years  and  by 
fine  not  exceeding  one  thousand  dollars. 

[Where  a  crime  is  committed,  under  color  of 
corporate  authority,  the  individuals  concerned, 
and  not  the  corporation,  should  be  indicted.  State 
V.  Works  Co.,  20  Me.  41.] 


LEGISLATIVE  ACTS  RELATING  TO  CORPORATIONS    ENACTED 
SUBSEaUENTLY  TO  1884. 


1.  Relating  to  record  of  changes  in  organization 

of   cori>orations. 

2.  To  repeal  penalties  and  forfeitures  on  account 

of  failure  to  comply   with  certain   laws. 

3.  To  provide  for  fortnightly  payment  of  wages. 

4.  To    regulate   hours   of   labor   and    employment 

of   women    and    children. 

5.  Relating  to  use  of  corporate  seal. 

6.  To  prevent  formation  of  trusts  and  combina- 

tions. 

7.  Requiring  foreign  corporation  to  send  detailed 

statement   to   bank   examiner. 

8.  To  provide  for  corporation  reporting  to  State 

librarian. 

9.  Relating  to  the  employment   of  labor. 

10.  To  define  the  rights  of  minority  stockholders. 

11.  To   give   right   of   action    for    injuries    causing 

death. 

12.  In    relation    to    organization    of    corporations 

specially  chartered. 

13.  Relating  to  changes  in  location  of  corporations. 

14.  Relating    to    taxation    of    real    estate    corpora- 

tions. 

15.  Relating  to  organization  of  corporations  under 

the  general  law. 

16.  Relating  to  service  of  process  on  foreign  cor- 

porations   acting    as    trustees    under    mort- 
gages. 

17.  Relating  to  transfers  of  stock. 

Act  1. 

AN  ACT  relating  to  corporations  and  record 
of  changes  in  organization  thereof. 

Be  it  enacted  by  the  senate  and  house  of 
representatives  in  legislature  assembled,  as 
follows: 

Section  1.  Whenever  a  corporation  shall 
make    a     change    in     it's  charter    or    cer- 


tificate of  organization,  in  any  manner, 
for  the  more  convenient  transaction  of  its 
business,  it  shall  forward  a  notice  of  such 
change  to  the  secretary  of  State,  who  shall 
record  the  same  in  a  book  kept  for  that 
purpose,  and  for  making  such  record  the 
corporation  shall  pay  the  secretaiy  of  State 
for  his  services,  five  dollars,  in  advance;  said 
fee  not  to  be  within  the  provisions  of  sec- 
tion thirty-eight  of  chapter  two  of  the  Re- 
vised Statutes. 

§  2.  This  act  shall  take  effect  when  ap- 
proved. 

(Approved  March  6,  18S5.) 

Act  2. 

AN  ACT  to  repeal  penalties  and  forfeitures 
on  account  of  the  failure  to  comply  with 
section  eight  of  chapter  forty-eight  of  the 
Revised  Statutes  of  eighteen  hundred  and 
seventy-one. 

Be  it  enacted  by  the  senate  and  house  of 
representatives  in  legislature  assembled,  as 
follows: 

Section  1.  No  action  or  indictment  shall 
be  maintained  for  any  penalty,  or  for- 
feiture, or  fine  imposed  in  consequence 
of  a  failure  to  comply  with  the  requirements 
of  section  eight,  chapter  forty-eight  of  the 
Revised  Statutes  of  eighteen  hundi'ed  and 
seventj--one;    and    this    act    shall    apply    to 


30 


MAINE. 


Wages;  employes  in  factories  —  Acts,  March  17,  1887. 


pending   suits   and   indictments   commenced 
since  the  repeal  of  said  statute,  except  as  to 
costs. 
(Approved  March  6,  1885.) 

Act  3. 

AN  ACT  to  provide  for  the  fortnightly  pay- 
ment of  wages. 

Be  it  enacted  by  the  senate  and  house  of 
representatives  in  legislature  assembled,  as 
follows: 

Section  1.  Every  manufacturing,  mining, 
quarrying,  stone-cutting,  mercantile,  horse 
railroad,  telegraph,  telephone  and  mu- 
nicipal corporation,  and  every  incorporated 
express  and  water  company,  and  any 
person  or  firm  engaged  in  any  of  the  above 
specified  kinds  of  business,  having  in  their 
employ  more  than  ten  persons,  shall  pay 
fortnightly  each  and  every  employe  engaged 
in  its  business,  the  wages  earned  by  such  em- 
ploye to  within  eight  days  of  the  date  of 
said  payment;  Provided,  however,  That  if  at 
any  time  of  payment,  any  employe  shall  be 
absent  from  his  regular  place  of  labor,  he 
shall  be  entitled  to  said  payment  at  any 
time  thereafter  on  demand.    ' 

§  2.  (As  amended  February  28.  1895.  and 
March  17,  1897.)  Any  corijoration  violat- 
ing any  of  the  provisions  of  this  act,  shall 
be  punished  by  a  fine  not  less  than  ten  nor 
more  than  twenty-five  dollars  on  each  com- 
plaint under  which  it  is  convicted.  Provided, 
Complaint  for  such  violation  is  made  within 
thirty  days  from  the  date  thereof. 

§  3.  When  a  coi-poration  against  which  a 
complaint  is  made  under  this  act.  fails  to 
appear  after  being  duly  seiwed  with  process, 
its  default  shall  be  recorded,  the  allegations 
in  the  complaint  taken  to  be  true,  and  judg- 
ment rendered  accordingly. 

§  4.  When  judgment  is  rendered  upon  any 
such  complaint  against  a  corporation,  the 
court  may  issue  a  warrant  of  distress  to 
compel  the  payment  of  the  penalty  pre- 
scribed by  law,  together  with  costs  and  in- 
terest. 

§  5  The  provisions  of  this  act  shall  not 
apply  to  municipal  officers  whose  services 
are  paid  for  by  the  day,  or  to  teachers*  em- 
ployed   by    municipal    corporations. 

§  6.  This  act  shall  take  effect  May  one, 
eighteen   hundred   and   eighty-seven. 

(Approved   March  17,   1887.) 

Employment  of  minors  In  factories.  Ch.  48, 
{§  13,   14,   15. 

Act  4. 

AN  ACT  to  regulate  the  hours  of  labor  and 
the  employment  of  women  and  children 
In  manufacturing  and  mechanical  estab- 
lishments.    (As  amended  March  17,  1893.) 

Be  it  enacted  by  the  senate  and  house  of 
representatives  in  legislature  assembled,  as 
follows: 

Section  1.  No  female  minor  under  eigh- 
teen  years   of   age,    no    male    minor   under 


sixteen  years  of  age,  and  no  woman  shall  be 
employed  in  laboring  in  any  manufacturing 
or  mechanical  establishment  in  this  State, 
more  than  ten  hours  in  any  one  day,  ex- 
cept when  it  is  necessary  to  make  repairs 
to  prevent  the  interruption  of  the  ordinary 
running  of  the  machinery,  or  when  a  differ- 
ent apportionment  of  the  hours  of  labor  is 
made  for  the  sole  purpose  of  making  a 
shorter  day's  work  for  one  day  of  the  week; 
and  in  no  case  shall  the  hours  of  labor  ex- 
ceed sixty  in  a  week;  and  no  male  per- 
son sixteen  years  and  over  shall  be  so 
employed  as  above,  more  than  ten  hours 
a  day  during  minority,  unless  he  volun- 
tarily contracts  to  do  so  with  the  con- 
sent of  his  parents,  or  one  of  them,  if  any, 
or  guardian,  and  in  such  case  he  shall  re- 
ceive extra  compensation  for  his  services; 
Provided,  however.  Any  female  of  eighteen 
years  of  age  or  over,  may  lawfully  contract 
for  such  labor  for  any  number  of  hours  in 
excess  of  ten  hours  per  day,  not  exceeding 
six  hours  in  any  one  week  or  sixty  hours 
in  any  one  year,  receiving  additional  com- 
pensation therefor;  but  during  her  minority, 
the  consent  of  her  parents,  or  one  of  them, 
or  guardian,  shall  be  first  obtained. 

§  2.  Every  employer  shall  post  in  a  con- 
spicuous place  in  every  room  where  such 
persons  are  employed,  a  notice  printed  in 
plain,  large  type,  stating  the  number  of 
hours'  work  required  of  them  on  each  day 
of  the  week,  the  exact  time  for  commencing 
work  in  the  morning,  stopping  at  noon  for 
dinner,  commencing  after  dinnei",  and  stop- 
ping at  night;  the  form  of  such  ijrinted  notice 
shall  be  furnished  by  the  inspector  of  factor- 
ies, workshops,  mines  and  quarries  here- 
after named,  and  shall  be  approved 
by  the  attorney-general.  And  the  em- 
ployment of  any  such  person  for  a  longer 
time  in  any  day  than  that  so  stated,  shall  be 
deemed  a  violation  of  section  one,  unless 
it  appears  that  such  employment  is  to  make 
up  for  time  lost  on  some  previous  day  of  the 
same  week,  in  consequence  of  the  stopping 
of  machinery  upon  which  such  person  was 
employed    or   dependent   for    employment. 

§  3.  Whoever,  either  for  himself,  or  as 
superintendent,  overseer  or  agent  of  another, 
employs  or  has  in  his  employment  any  per- 
son in  violation  of  the  provisions  of  section 
one,  and  every  parent  or  guardian  who  per- 
mits anj^  minor  to  be  so  employed,  shall  be 
punished  by  a  fine  of  not  less  than  twenty- 
five  dollars  nor  more  than  fifty  dollars  for 
each  offense.  A  certificate  of  the  age  of  a 
minor  made  by  him  and  by  his  parent  or 
guardian  at  the  time  of  his  employment, 
shall  be  conclusive  evidence  of  his  age  in 
behalf  of  the  hirer,  upon  any  prosecution  for 
a  violation  of  the  provisions  of  sectio?i  one. 
Whoever  falsely  makes  and  utters  such  a 
certificate  with  an  intention  to  evade  the 
provisions  of  this  act.  shall  be  subject  to  a 
fine  of  one  hundi-ed  dollars. 

§  4.  It  shall  be  lawful  for  any  person,  firm 
or  corporation  engaged  in  any  manufactur- 


MATN^E. 


31 


Children  in  factories,  etc. —  Act,  March  17,  1887. 


ing  or  mechanical  business,  to  contract  with 
adult  or  minor  employes  to  give  one  week's 
notice  of  intention  on  such  employe's  part, 
to  quit  such  employment  under  a  penalty  of 
forfeiture  of  one  ^veek's  wages.  In  such 
case,  the  employer  shall  be  required  to  give 
a  like  notice  of  intention  to  discharge  the 
employe;  and  on  failure,  shall  pay  to  such 
employe  a  sum  equal  to  one  week's  wages. 
No  such  forfeiture  shall  be  enforced  when 
the  leaving  or  discharge  of  the  employe  is 
for  a  reasonable  cause.  Provided,  however. 
The  enforcement  of  the  penalty  aforesaid, 
shall  not  prevent  either  party  from  recover- 
ing damages  for  a  breach  of  the  contract  of 
hire. 

§  5.  No  child  under  twelve  years  of  ago, 
shall  be  employed  in  any  manufacturing  or 
mechanical  establishment  in  this  State. 
Whoever,  either  for  himself,  or  as  superin- 
tendent, overseer  or  agent  of  another,  em- 
ploys or  has  in  his  employment  any  child  in 
violation  of  the  provisions  of  this  section, 
and  eveiy  parent  or  guardian  who  permits 
any  child  to  be  so  employed,  shall  be  pun- 
ished by  a  fine  of  not  less  than  twenty-five 
nor  more  than  fifty  dollars  for  each  offense. 

§  6.  No  child  under  fifteen  years  of  age 
shall  be  employed  in  any  manufacturing  or 
mechanical  establishment  in  this  State,  ex- 
cept during  vacations  of  the  public  schools 
in  the  city  or  town  in  which  he  I'esides,  un- 
less during  the  year  next  preceding  the  time 
of  such  employment,  he  has  for  at  least  six- 
teen weeks,  attended  some  public  or  private 
school,  eight  weeks  of  which  shall  be  con- 
tinuous; nor  shall  such  employment  continue 
unless  such  child  in  each  and  every  year,  at- 
tends some  public  or  private  school  for  at 
least  sixteen  weeks,  and  no  child  shall  be 
so  employed  who  does  not  present  a  certifi- 
cate made  under  or  by  the  direction  of  the 
school  committee,  superintendent  of  the  pub- 
lic schools,  or  the  teacher  of  a  private  school, 
that  such  child  has  so  attended  school.  And 
it  shall  be  the  duty  of  such  committee,  super- 
intendent or  teacher,  to  furnish  such  a  cer- 
tificate in  accordance  with  the  fact  upon  re- 
que.st  and  without  charge.  Provided,  That 
this  section  shall  not  take  effect  until  Janu- 
ary one,  eighteen  hundred  and  eighty-eight. 

§  7.  Any  parent  or  guardian  who  procures 
a  child  to  be  employed  contrary  to  section 
six,    and   any    corporation,    owner,    superin- 
tendent or  agent  of  the  owner,  of  such  es- 
tablishment violating  the  provisions  of  said 
section,  shall  forfeit  the  sum  of  one  hundred 
dollars,  one-half  to  the  use  of  the  county,  I 
and  one-half  to  the  u.se  of  the  city  or  town  ' 
where  the  offense  is  committed.    Money  so  [ 
recovered  to  the  use  of  the  city   or  town.  I 
shall  be  added  to  its  school  money.    It  shall 
be  the  duties  of  the  school  committees  and 
superintendent  of  public  schools,  to  inquire 
into  violations  of  >^aid  section  and  report  the 
same  to  the  county  attorney,  who  shall  prose- 
cute therefor. 

§  8.  Every  owner,  superintendent  or  over- 

41 


seer  of  any  such  manufacturing  or  mechani- 
cal establishment  shall  require  and  keep  on 
file,  a  certificate  of  the  age  and  place  of 
birth  of  every  child  under  sixteen  years  of 
age  employed  therein,  so  long  as  such  child 
is  so  employed,  which  certificate  shall  also 
state  in  the  case  of  a  child  under  fifteen 
years  of  age,  the  amount  of  his  school  at- 
tendance during  the  year  next  preceding  such 
employment.  Said  certificate  shall  be  signed 
by  a  member  of  the  school  committee  of  the 
place  where  such  attendance  has  been  had, 
or  by  some  one  authorized  by  such  commit- 
tee, and  the  form  of  said  certificate  shall  be 
furnished  by  the  State  superintendent  of 
Schools,  and  shall  be  approved  by  the  attor- 
ney-general. The  inspectors  of  factories, 
workshops,  mines  and  quarries  hereinafter 
named  or  either  of  his  assistants,  may  de- 
mand the  names  of  the  children  under  six- 
teen years  employed  in  such  establishment, 
in  the  several  cities  and  towns  of  the  State, 
and  may  require  that  the  certificates  of  age 
and  school  attendance  prescribed  in  this  sec- 
tion, shall  be  produced  for  his  inspection, 
and  a  failure  to  produce  the  same,  shall  be 
prima  facie  evidence  that  the  employment 
of  such  child  is  illegal. 

§  9.  The  governor,  by  and  with  the  ad- 
vice and  consent  of  the  council,   shall   ap- 
point an  inspector  of  factories,  workshops, 
mines  and  quarries,  at  a  salary  of  one  thou- 
sand dollars  a  year,   who  shall   hold  office 
for  two  years,  or  until  his  successor  is  ai>- 
pointed,  unless  sooner  removed.    It  shall  be 
the  duty  of  the  inspector  of  factories,  work- 
shops,  mines   and  quarries  to   inquire   into 
any  violations  of  this  act,  and  also  to  assist 
in  the  collection  of  statistics  and  other  in- 
formation which  may  be  required,  for  the 
use  of  the  bureau  of  industrial  and  labor 
statistics.    And  said   inspector  of  factories, 
workshops,  mines  and  quarries  shall,  in  ad- 
dition  to   his   salary   provided   by    law,    be 
allowed  his  reasonable  expenses.    Whenever 
the  governor  of  this  State  shall  be  satisfied 
that  the  Inspector  of  factories,   workshops, 
mines  and  quarries  cannot  perform  all  the 
duties   of   his   said   oflice   required   by   this 
section,  in  person,  he  shall,  with  the  advice 
and  consent  of  the  council,  appoint  a  suflB- 
cient  number  of  assistant  deputies  to  assist 
him  in  so  doing.    Said  assistants  shall  hold 
their  ofiice  for  the  term  of  two  years,  and 
act   under   the  direction   of   said   inspector 
of  factories,  workshops,  mines  and  quarries, 
and  shall  receive  the  sum  of  two  dollars  per 
day  and  reasonable  expenses  while  actually 
engaged   in   duty.    Said  assistants   may,   at 
any  time,  be  removed  for  cause  by  the  gov- 
ernor.   All  bills  for  the  expenses  of  the  in- 
spector of  factories,  workshops,  mines  and 
quarries  and  for  the  services  and  expenses 
of  such  assistant  deputies,  shall  be  audited 
by  the  council.     For  the  piu-pose  of  inquiring 
into  any  violation  of  the  provisions  of  this 
act,    and    enforcing    the    penalties    thereof, 
such  inspector  of  factories,  workshops,  mines 


32 


MAINE. 


Corporate  seals;  trusts  aud  combines  —  Acts,  February  5  and  March  7,  1889. 


and  quarries  and  assistants  may,  at  all  rea- 
sonable times,  enter  any  manufacturing  or 
mecliauical  establishment  and  make  investi- 
gation concerning  such  violation.  Such  In- 
vestigation shall  be  conducted  with  as  little 
interruption  as  possible  to  the  prosecution 
of  the  business  of  such  establishment.  Who- 
ever interferes  with  said  inspector  of  fac- 
tories, workshops,  mines  and  quarries  or  his 
assistants,  in  performance  of  their  duties 
as  prescribed  in  this  act,  shall  be  fined  fifty 
dollars. 

§  10.  Nothing  in  this  act  shall  apply  to  any 
manufacturing  establishment  or  business, 
the  materials  and  products  of  which  are  per- 
ishable and  require  immediate  labor  thereon, 
to  prevent  decav  thereof  or  damage  thereto. 

§  11.  This  act  shall  take  effect  July  1,  1887. 

(Approved  March  17,  1SS7.) 

Act  5. 

AN  ACT  relating  to  use  of  corporate  seals. 

Be  it  enacted  by  the  senate  and  house  of 
representatives  in  legislature  assembled,  as 
follows: 

Whenever  a  corporate  seal  is  used  or  re- 
quired on  any  instrument,  an  impression 
made  on  the  paper  of  such  instrument  by 
the  seal  of  the  corporation,  without  any  ad- 
hesive substance  shall  be  deemed  a  valid 
seal. 

(Approved  February  5,  1SS9.) 

See  ch.  46,  §  2(3). 

[At  common  law,  "  the  impression  of  a  seal  is 
not  a  seal;  "  otherwise  now.  Woodman  v.  R.  R. 
Co.,  60  Me.  549.] 

Act  6. 

AN  ACT  to  prevent  such  formation  of  trusts, 
combination  of  business  firms,  incorpo- 
rated or  unincoii)orated  companies,  or  as- 
sociations of  persons  or  stockholders,  as 
may  be  contrary  to  public  policy 

Be  it  enacted  by  the  senate  and  house  of 
representatives  in  legislature  assembled,  as 
follows: 

Section  1.  It  shall  bo  unlawful  for  any 
firm  or  incorporated  company,  or  any  nuni- 
ber  of  firms  or  incon^orated  companies,  or 
any  unincorporntod  comiinny.  or  any  asso- 
ciation of  pei-sons  or  stoclcholders,  organized 
for  the  purpose  of  manufacturing,  producing, 
refining,  or  mining  any  article  or  product 
which  enters  into  general  use  and  consump- 
tion by  the  people,  to  form  or  organize  any 
trust,  or  to  enter  into  any  combination  of 
firms,  incorporated  or  unincoiT)orated  com- 
panies, or  association  of  stockholders,  or  to 
delegate  to  any  one  or  more  board  or  boards 
of  ti'ustees  or  directors  the  powers  to  con- 
duct and  direct  the  business  of  the  whole 
number  of  firms,  coi-porations.  companies  or 


associations  which  may  have,  or  whicli  may 
proiwse  to  form  a  trust,  combination  or 
association  inconsistent  with  the  provisions 
of  this  section  and  contrary  to  public  policy. 

§  2.  No  certificate  of  stock,  or  other  evi- 
dence of  interest,  in  any  trust,  combination, 
or  association,  as  named  in  section  one  of 
this  act,  shall  have  legal  recognition  in  any 
court  in  this  State,  and  any  deed  to  i"eal 
estate  given  by  any  person,  firm,  or  corpora- 
tion, for  the  purpose  of  becoming  interested 
in  such  trust,  combination  or  association, 
or  any  mortgage  given  by  the  latter  to  the 
seller,  as  well  as  all  certificates  growing 
out  of  such  transaction,  shall  be  void. 

§  3.  Any  incorporated  company  now  oper- 
ating under  the  laws  of  this  State,  and 
which  at  the  date  of  the  passage  of  this  act, 
may  be  interested  in  any  trust,  combination 
or  association,  named  in  section  one  of  this 
act,  or  any  firm,  incoiTporated  or  unincorpo- 
rated company,  or  association  of  persons  or 
stockholders,  who  shall  enter  into  or  become 
interested  in  such  trust,  combination  or  asso- 
ciation, after  the  passage  of  this  act,  shall 
be  deemed  guilty  of  a  misdemeanor,  and  be 
subject  to  a  fine  of  not  less  than  five  nor 
more  than  ten  thousand  dollars;  Provided, 
That  nothing  in  this  section  shall  be  so  con- 
strued as  to  apply  to  such  incoi'porated  com- 
panies as  shall,  within  ninety  days  from  the 
date  of  the  passage  of  this  act,  withdraw 
from  and  sever  all  connections  with  such 
trust,  cond)ination  or  association. 

§  4.  It  shall  be  the  duty  of  the  secretary 
of  State,  as  soon  as  may  be  after  the  pas- 
sage of  this  act.  to  forward  to  the  president, 
secretary  or  treasurer,  of  each  incorporated 
company  organized  for  the  puri^ose  of  manu- 
facturing, producing,  refining  or  mining  any 
article  or  product  which  enters  into  general 
use  and  consvunption  by  the  people,  and  do- 
ing business  within  this  State,  a  copy  of  this 
act.  and  also  aletter  of  iuquiiy  as  to  whether 
said  conioration  has  merged  all  or  any  part 
of  its  business  or  interests  in  or  with  any 
trust,  combination  or  association  of  persons 
or  stockholders  as  named  in  section  oue  of 
this  act,  and  to  require  an  answer,  under 
oath,  of  the  president,  secretary,  treasurer, 
or  directors  of  said  company,  a  form  of  affi- 
davit, together  with  questions  to  be  an- 
swered, shall  be  prescribed  by  the  secretaiy 
of  State,  and  forwarded  with  said  letter, 
and  on  neglect  or  refusal  to  make  answers 
under  oath  to  such  questions  for  the  term  of 
ninety  days  from  the  date  of  this  act,  the 
secretary  of  State  shall  notify  the  attorney- 
general,  whose  duty  it  shall  be  forthwith  to 
file  an  information  in  the  nature  of  a  writ 
of  quo  wan-anto,  with  the  supreme  judicial 
coiu-t,  against  said  cori^oration  and  the  court 
may,  upon  hearing  and  proof  of  such  neglect 
or  refusal,  decree  the  dissolution  of  said 
corporation,  and  its  coiiiorate  rights  and 
powers  shall  be  terminated. 

(Approved  March  7,  1889.) 


MAIXE. 

Statement  of  foreign  corporation  —  Act,  March  9,  1889. 


33 


Act  7. 

AN  ACT  requiring  foreign  corporations  to 
send  to  the  hank  examiner  a  detailed  state- 
ment of  their  condition. 

Be  it  enacted  by  the  senate  and  house  of 
representatives  in  legislature  assembled,  as 
follows: 

Section  1.  (As  amended,  L.  1891.  chap.  131.) 
No  foreign  corporation,  or  any  agent  or  rep- 
reseutatire  thereof,  shall  offer  to  sell,  sell 
or  negotiate  in  this  State,  any  bonds,  mort- 
gages, notes  or  other  choses  in  actions,  is- 
sued, endorsed  or  guaranteed  by  it.  unless 
it  first  obtains  a  license  therefor  from  the 
bank  examiner.  Before  receiving  such 
license  it  shall  furnish  the  examiner  a  de- 
tailed statement  of  its  condition,  "vxhich 
statement  shall  clearly  describe  the  variotis 
classes  of  its  assets  and  liabilities  and  shall 
be  svrorn  to  by  either  its  president,  treas- 
urer or  secretary,  and  certified  to  be  cor- 
rect by  at  least  two  of  its  directors.  Said 
statement  shall  in  all  particulars  be  as  full 
as  the  examiner  may  require.  Upon  receiv- 
ing such  statement  the  liank  examiner  may 
grant  a  license  authorizing  such  corporation 
to  conduct  its  business  in  this  State  subject 
to  its  laws  until  the  first  day  of  the  next 
December,  and  such  license  may  be  renewed 
annually  thereafter  so  long  as  the  bank  ex- 
aminer regards  the  corporation  responsible 
and  safe,  but  in  all  cases  to  terminate  on 
the  first  day  of  the  succeeding  December. 
The  examiner  may  revoke  such  license  at 
any  time  should  he  deem  the  condition 
of  such  corporation  or  its  management  un- 
safe, whereupon  the  right  of  such  corpora- 
tion to  do  business  in  this  State  shall 
terminate.  For  stieh  license  and  each  re- 
newal, the  corporation  shall  pay  the  exam- 
iner for  his  use  twentv  dollars. 

§  2.  (As  amended.  L.  1891.  chap.  131.)  It 
shall  be  the  duty  of  such  corporation  or  its 
agents  to  publish  at  their  own  expense  in 
some  newspaper  pul)lished  in  any  town  or 
city  designated  by  the  bank  examiner,  a 
copy  of  the  statement  furnished  him.  Every 
such  corporation  shall  at  the  time  of  mak- 
ing application  for  license  as  hereinbefore 
provided,  appoint  in  writing  the  bank  ex- 
aminer or  his  successor  in  olfice  to  be  Its 
true  and  lawful  attorney  upon  whom  all 
lawful  processes  in  any  action  or  proceediuu 
against  it  may  be  served,  and  in  such  writ- 
ing shall  agree  that  any  lawful  process 
against  it  which  is  served  on  said  attorney 
shall  be  of  the  same  legal  force  and  valid- 
ity as  If  served  upon  the  corporation,  and  j 
that  the  authority  shall  continue  in  force  ' 
so  long  as  any  liability  remains  outstanding 
against  the  corporation  in  this  State.  Ser- 
vice made  in  such  manner  on  said  coi-pora- 
tion  in  any  such  suit  or  proceeding  shall  be 
valid  and  binding  thereon,  and  the  judg- 
ment rendered  therein  shall  bind  the  cor- 
poration as  valid  in  every  respect  whether 


the  defendants  appear  or  not.  If  license  is 
granted  by  the  bank  examiner  he  shall  place 
said  writing  on  file  in  his  office  to  take  effect 
therefrom,  but  if  license  is  not  granted  by 
him  it  sliall  be  returned  to  the  corporation. 
Copies  of  said  writing,  certified  by  the  bank 
examiner,  shall  be  deemed  sufficient  eA'i- 
dence  thereof.  When  legal  process  against 
any  such  corporation  is  served  upon  said 
bank  examiner,  he  shall  wilhin  ten  days 
thereafter  mail  a  copy  thereof,  postage  pre- 
paid, directed  to  the  address  of  said'coiiio- 
ration,  or  to  any  person  designated  bv  said 
corporation  in  writing.  The  plaintiff  in  each 
process  so  served  shall  pay  to  the  bank  ex- 
aminer at  the  time  of  such  service,  a  fee 
of  two  dollars  which  shall  be  recovered  by 
him  as  a  part  of  his  taxable  costs  if  he 
prevails  in  the  suit. 

§  3.  (As  amended,  L.  1891,  chap.  131.)  Such 
corporation  and  its  agents  for  the  purposes 
hereinbefore  mentioned,  are  under  the  su- 
pervision of  the  bank  examiner  and  shall  at 
all  times  at  his  request  furnish  him  such 
statements  and  information  as  he  may  de- 
sire, together  with  full  facilities  to  ascertain 
the  true  condition  and  standing  of  the  same, 
and  no  person  shall  act  as  agent  or  repre- 
sentative of  such  corporation  before  the 
license  herein  provided  is  granted  or  after 
the  same  has  been  revoked.  Any  person 
violating  any  of  the  provisions  of  this  act 
shall  be  deemed  guilty  of  a  misdemeanor, 
and  on  conviction  thereof  be  liable  to  a 
fine  not  exceeding  five  hundred  dollars  or 
imprisonment  not  exceeding  sixty  days,  or 
both.  All  provisions  in  sections  one,  two 
and  three  of  the  aforesaid  chapter  two  hun- 
dred and  eighty-six,  inconsistent  with  this 
act  are  hereby  repealed. 

§  4.  No  president,  treasurer,  clerk  or  em- 
ploye of  any  savings  bank  in  this  State,  shall 
act  as  agent  or  representative  in  this  State, 
of  any  foreign  corporation  engaged  in  the 
business  of  selling  or  negotiating  any  bonds, 
mortgages,  notes  or  other  choses  in  action. 

(Approved  March  9,  1889.) 


See  eh.  46,  §  22. 


Act  8. 


AN  ACT  to  provide  for  the  preservation  of 
local  histories,  financial,  and  otlior  ronorts 
of  towns,  cities,  counties  and  corporations. 

Be  it  enacted  by  the  senate  and  house  of 
representatives  in  legislature  assembled,  as 
follows: 
******  * 

§  3.  The  directors  of  all  coniorations 
doing  business  in  this  State  shall  transmit 
to  the  librarian  of  the  State  library,  copies 
of  all  printed  reports,  relating  to  the  affairs 
of  said  corporations. 

(Approved  March  9,  1889.) 


34 


MAINE. 


Employment;  minority  stockholders  —  Acts,  March,  13,  1889,  and  Mai-ch  21,  1891. 


Act  9. 

AN   ACT  relating  to   the   employment   of 
labor. 

Be  it  enacted  by  the  senate  and  house 
of  representatives  in  legislature  assembled, 
as  follo"u-s: 

(As  amended  March  31,  1S91.)  "  Any 
employer,  employe,  or  other  person,  who  by 
threats  of  injury,  intimidation  or  force,  alone 
or  in  combination  with  others,  prevents  any 
person  from  entering  into,  continuing  in  or 
leaving  the  employment  of  any  person,  firm 
or  corporation,  shall  be  punished  by  im- 
prisonment not  more  than  two  years,  or  by 
fine  not  exceeding  five  hundred  dollars." 

(Approved  March  13,  1889.) 


Act  10. 

AN  ACT  to  define  the  rights  of  minority 
stockholders. 

Be  it  enacted  by  the  senate  and  house 
of  representatives  in  legislature  assembled, 
as  follows: 

Section  1.  No  corporation  shall  sell,  lease 
or  in  any  manner  pai-t  with  its  franchises 
except  with  the  consent  of  its  stockholders 
at  an  annual  or  special  meeting,  the  call 
for  which  sliall  give  notice  of  the  subject- 
matter  of  the  proposed  sale,  lease  or  con- 
solidation. All  such  sales,  leases  and  con- 
solidations shall  be  subject  to  the  provisions 
of  this  act,  and  to  the  prior  liens  of  stock- 
holders as  herein  defined. 

§  2.  If  any  stockholder  in  any  corporation, 
which  shall  vote  to  sell,  lease  or  consolidate 
its  franchise,  shall  vote  in  the  negative  and 
shall  file  his  written  dissent  therefrom  with 
the  president,  clerk  or  treasurer  of  such 
corporation  within  one  month  from  the  day 
of  such  vote,  the  corporation  in  which  he 
is  a  stockholder  may  within  one  month 
after  such  dissent  is  so  filed,  enter  a  petition 
with  the  supi-eme  judicial  court,  sitting  in 
equity,  in  the  county  where  it  held  its  last 
annual  meeting,  in  term  time  or  in  vacation, 
setting  forth  in  substance  the  material  facts 
of  the  transaction,  the  action  of  the  cor- 
porations thereon,  the  names  and  residence 
of  all  dissenting  stockholders  whose  dis- 
sents were  so  filed,  making  such  dissenting 
stockholders  parties  thereto,  and  praying 
that  the  value  of  the  shares  of  such  dissent- 
ing stockholders  may  be  determined,  and 
for  other  appropriate  relief. 

§  3.  If  any  such  corporation  shall  fail  to 
enter  such  petition  as  aforesaid,  any  stock- 
holder dissenting  as  aforesaid  may  within 
one  month  thereafter  enter  such  petition 
and  prosecute  the  same,  making  such  cor- 
poration party  defendant.  In  either  case  the 
court  shall  fix  the  time  of  hearing  and  shall 
order  notice  thereof  to  all  parties  interested, 
by  publication  in  some  newspaper  or  news- 


papers at  least  two  weeks  successively,  and 
such  personal  service  as  is  required  upon 
bills  in  equity. 

§  4.  The  court,  or  any  justice  thereof  in 
term  time  or  in  vacation,  shall  hear  the 
parties  and  determine  as  soon  as  practicable 
the  value  of  the  stock  of  such  dissenting 
stockholder;  and  shall  make  and  enforce  all 
such  oi-ders  and  decrees  as  may  l)e  neces- 
sary to  secure  to  such  stockholders  all  their 
rights.  Such  corporation  shall,  notwith- 
standing any  appeal  as  hereinafter  author- 
ized, forthwith  deposit  the  amount  so 
awarded,  in  some  bank  or  trust  company 
designated  by  the  .court,  to  be  by  it  held 
until  final  judgment,  and  paid  to  the  parties 
as  thereafterward  ordered  by  the  court 
directing  such  deposit.  Upon  such  deposit 
and  upon  compliance  with  final  judgment  as 
hereinafter  ordered,  the  shares  of  such 
stockholders  shall  become  the  property  of 
such  corporation,  and  the  court  mas'  make 
and  enforce  sucli  orders  as  may  be  neces- 
sary to  secui'e  its  title  thereto. 

§  5.  Within  thirty  days  after  filing  the 
decree  determining  such  values,  as  afore- 
said, either  party  may  enter  an  appeal  there- 
from, to  be  heard  at  the  next  term  of  the 
supreme  judicial  court  in  the  county  where 
such  petition  is  pending.  The  issue  may 
thereupon,  at  the  request  of  any  party 
thereto,  be  submitted  to  a  jury.  If  upon 
such  ti'ial  the  amount  of  such  awai'd  is  in- 
creased, the  stockholders  shall  have  judg- 
ment and  execution  against  the  petitioning 
corporation  or  corporations  defending,  for 
such  increase  with  interest  and  costs;  and 
if  not  increased,  such  corporation  may  with- 
draw from  said  deposit,  the  amount  of  the 
deci'ease  with  interest  and  costs.  I  Miring 
the  pendency  of  such  appeal,  the  appellant 
shall  have  a  lien  upon  all  the  property  of 
the  corporation  interested  in  such  sale  or 
lease,  or  consolidation  for  thirty  days  after 
judgment  on  appeal.  Such  lien  shall  have 
precedence  over  any  mortgages  or  leases 
made  after  any  vote  of  sale,  lease  or  con- 
solidation. All  such  liens  may  be  released 
upon  filing  with  the  court,  a  bond  in  such 
amount  and  with  such  sureties  as  the  court 
may  approve.  Two  or  more  stockholders 
may  join  in  the  same  appeal. 

§  6.  Any  stockholder  failing  to  file  his 
dissent  as  required  in  section  two  shall  be 
deemed  to  have  assented  to  such  vote.  If 
it  appears  that  any  stockholder  is  legally  in- 
capacitated from  giving  such  assent  or 
waiver,  the  court  shall  appoint  suitable 
guardians  or  representatives  for  such  per- 
sons, and  the  case  shall  then  be  heard  and 
determined  as  if  such  stockholders  had  filed 
their  dissent  as  retinired  by  section  two.  I'ro- 
vided,  however,  That,  if  the  proceedings 
authorized  by  this  act  are  not  had.  then  as 
against  any  stockholder  who  is  a  minor,  or 
otherwise  legally  incapacitated,  and  who 
has  no  guardian,  the  period  of  one  month  in 
which  to  file  the  written  dissents  aforesaid 


:\IAIXE. 


35 


Minority  stockholders;  actions  for  injuries  -  Acts,  March  21  and  31,  1891. 


shall  not  begin  to  run  until  the  removal  of 
the  incapacity,  by  the  appointment  of  a 
guardian  or  otherwise  and  actual  notice  of 
the  vote  of  sale,  lease  or  consolidation. 

§  7.  Every  stockholder  appearing  in  an- 
swer to,  or  filing  any  petition,  by  himself, 
guardian  or  other  legal  representative,  shall 
simultaneously  therewith  or  within  such 
time  as  the  court  may  allow,  deposit  in 
court  his  certificate  of  shares  duly  indorsed 
to  the  corporation  of  which  he  is  a  share- 
holder, or  some  other  sufficient  transfer 
thereof,  which  shall  there  remain  subject  to 
the  order  of  the  court.  All  attachments  and 
transfers  of  such  shares  shall  be  subject  to 
the  final  decrees  in  such  proceeding;  and 
any  such  attaching  creditor  or  transferee 
shall  be  allowed  to  become  a  party  to  the 
proceedings  to  protect  his  interests;  and  if 
such  person,  so  claiming  under  such  trans- 
fer or  attachment  omits  or  fails  to  intervene 
in  such  proceedings,  his  omission  as  a  party 
shall  not  bar  or  impair  the  proceedings. 

§  8.  If  none  of  the  corporations  interested 
in  such  petition  shall  pay  or  deposit  the 
amount  as  herein  ascertained  and  decreed, 
with  interest  thereon,  within  such  time  as 
the  court  shall  order,  any  stockholder,  en- 
titled to  such  amount,  may  at  his  option 
take  judgment  .and  execution  therefor,  with 
Interest  and  costs,  against  such  corporation 
or  withdraw  his  stock  aforesaid;  and  after 
such  withdrawal  or  if  said  execution  is  re- 
turned unsatisfied  within  thirty  days  after 
judgment,  the  owner  of  such  shares  shall 
retain  all  the  rights  of  a  dissenting  stoclv- 
holder  as  though  no  proceedings  had  taken 
place.  All  stockholders  entitled  to  a  remedy 
hereunder,  shall  have  a  lien  upon  the  prop- 
erty of  the  corporations  in  which  they  are 
stockholders  which  shall  take  precedence 
of  all  mortgages  or  leases,  of  any  kind  made 
after  any  vote  of  sale,  lease  or  consolidation. 
Such  liens  may  be  released  as  provided  in 
section  five. 

§  9.  The  supreme  judicial  court,  or  any 
justice  thereof,  may  in  term  time  or  vaca- 
tion hear  and  determine  said  petitions,  and 
make  all  orders  for  giving  notice  to  non- 
resident parties,  and  taking  action  with 
reference  to  them,  for  the  enforcement  of 
the  rights  of  any  party  to  the  proceeding, 
for  the  consolidation  of  two  or  more  peti- 
tions, for  the  payment  of  interest  on  the 
adjudged  value  of  the  shares,  for  the  pay- 
ment of  dividends,  pending  the  proceedings, 
for  interest  upon  the  deposit  aforesaid,  tor 
the  distribution  of  costs  between  the  parties 
and  for  enforcing  its  orders  and  decrees,  as 
axe  consistent  with  the  principles  of  equity 
practice,  and  as  the  convenient  and  speedy 
settlement  of  the  controversy  may  require. 
§  10.  If  any  petition  shall  fail  for  any 
matter  of  form,  any  party  interested  therein 
may  file  a  new  petition  within  two  months 
thereafter.     No  petition  shall  be  abated  by 


the  death  of  any  party,  but  may  thereupon 

be   summarily   revived   by   suggestion   and 

amendment. 

I      §  11.  This  act  shall  not  apply  to  nor  affect 

I  any  pending  action  at  law  or  in  equity  or 

I  cause  of  action,  legal  or  equitable,  heretofore 

accrued,    nor   any   special   acts   relating   to 

I  the  rights  of  minority  stockholders  in  any 

particular   cori)oratious   enacted    heretofore, 

or   by   the  present  legislature,   nor  to   any 

j  mortgage  legally  made. 

I  §  12.  In  the  event  eitlier  of  the  corpora- 
tions interested  has  consolidated  its  stock 
with  corporations  created  by  any  other  State 
or  States,  or  the  stock  therein  is  held  by 
virtue  of  concurrent  legislation  of  one  or 
more  States,  and  proceedings  have  been 
commenced  for  valuing  the  stock  and  pay- 
ing the  value  thereof  in  any  State  having 
jurisdiction,  such  proceedings  shall,  while 
pending,  be  a  bar  to  any  under  this  statute; 
but  if  such  proceedings  in  any  other  State 
shall  fail  for  any  reason  not  touching  the 
merits,  a  petition  may  be  filed  as  herein 
provided,  within  two  months  thereafter. 
(Approved  March  21,  1891.) 

Act  11. 

AN  ACT  to  give  a  right  of  action  for  In- 
juries causing  death. 

Be  it  enacted  by  the  senate  and  house  of 
representatives  in  legislature  assembled,  as 
follows: 

Section  1.  Whenever  the  death  of  a  per- 
son shall  be  caused  by  wrongful  act, 
neglect  or  default,  and  the  act,  neglect  or 
default,  is  such  as  would,  if  death  had  not 
ensued,  have  entitled  the  party  injured  to 
maintain  an  action  and  recover  damages  In 
respect  thereof,  then,  and  in  every  such 
case,  the  person  who,  or  the  corporation 
which,  would  have  been  liable,  if  death  had 
not  ensued,  shall  be  liable  to  an  action  for 
damages,  notwithstanding  the  death  of  the 
person  injured,  and  although  the  death  shall 
have  been  caused  under  such  circumstances 
as  shall  amount  to  a  felony. 

§  2.  Every  such  action  shall  be  brought 
by  and  in  the  names  of  the  personal  repre- 
sentatives of  such  deceased  person,  and  the 
amount  recovered  in  every  such  action  shall 
be  for  the  exclusive  benefit  of  his  v\-idow, 
if  no  children,  and  of  the  children,  if  no 
widow,  and  if  both,  then  of  her  and  them 
equally,  and,  if  neither,  of  his  heirs.  The 
jury  may  give  such  damages  as  they  shall 
deem  a  fair  and  just  compensation,  not  ex- 
ceeding five  thousand  dollars,  with  reference 
to  the  pecuniary  injuries  resulting  from 
such  death  to  the  persons  for  whose  benefit 
such  action  is  brought.  Provided.  That  such 
action  shall  be  commenced  within  two  j-ears 
after  the  death  of  such  person. 
(Approved  March  31,  1891.) 


36 


MAINE. 


Special  charters;  location  —  Acts,  April  3,  1897,  and  March  2,  1893. 


Act  12. 

AN  ACT  in  relation  to  the  organization  of 
coriJorations  cliartered  by  special  statute. 

Be  it  enacted  by  the  senate  and  house  of 
representatives  in  legislature  assembled,  as 
follows: 

Section  1.  Before  commencing  business, 
the  president,  treasurer,  and  a  majority 
of  the  directors  of  any  corporation 
chartered  by  special  act  of  the  legislature, 
shall  prepare  a  certificate  setting  forth  the 
date  of  approval  of  its  charter,  the  name 
and  pui-poses  of  the  corporation,  the  amoimt 
of  capital  stock,  the  amount  already  paid  in. 
the  par  value  of  the  shares,  the  names  and 
residences  of  the  ownoi's,  the  name  of  the 
coimtj'  where  it  is  located,  and  the  number 
and  names  of  the  directors,  and  shall  sign 
and  make  oath  to  it.  Such  certificate  shall 
be  recorded  in  the  registry  of  deeds  in  the 
county  where  its  principal  office  is  to  be 
located,  in  a  book  kept  for  that  purpose, 
and  a  copy  thereof,  certified  by  such  regis- 
ter, shall  be  filed  in  the  secretary  of  state's 
office,  who  shall  enter  the  date  of  filing 
thereon  and  on  the  original  certificate  to  be 
kept  by  the  corporation,  and  shaJl  record 
eaid  copy  in  a  book  kept  for  that  ])urpose. 
From  the  time  of  filing  such  certificate  in 
the  secretary  of  State's  office,  the  stockhold- 
ers of  said  conioration,  their  successors  and 
assigns,  shall  be  a  corporation. 

§  2.  (As  amended  L.  1893,  chap.  185.)  The 
certificate  mentioned  in  the  preceding  sec- 
tion shall  not  be  received  and  filed  by 
the  secretary  of  State,  except  upon  the 
payment  to  him  of  the  sum  of  fiifteen 
dollars.  If  the  capital  stock  does  not  ex- 
ceed five  thousand  dollars;  twenty-five  dol- 
lars if  the  capital  stock  exceeds  five  thou- 
sand dollars  and  does  not  exceed  ten 
thousand  dollars;  seventy-five  dollars  if  the 
capital  stock  exceeds  ten  thousand  dollars 
and  does  not  exceed  fifty  tliousand  dollars; 
one  hundred  and  twenty-five  dollars  if  the 
capital  stock  exceeds  fifty  thousand  dollars 
and  does  not  exceed  one  hundred  thousand 
dollars;  sixty  dollars  upon  every  one  htm- 
dred  thousand  dollars  or  fraction  thereof 
in  excess  of  one  hundred  thousand  dollai-s, 
if  the  capital  stock  exceeds  one  hundred 
thousand  dollars,  which  sum  is  to  be  paid 
by  the  secretaiy  of  State  to  the  State  treas- 
urer for  the  use  of  tlie  State,  Provided,  That 
the  provisions  of  this  section  shall  not  apply 
to  corporations  chartered  for  charital)le  and 
benevolent  pun^oses. 

S  .3.  (As  amended  L.  1893.  chap.  185.)  No 
certificate  of  organization  of  any  corpora- 
tion for  banking,  insurance,  construction 
and  operation  of  railroads,  or  aiding  in 
the  construction  thereof,  the  business  of 
savings  banks,  trust  companies,  or  cor- 
porations intended  to  derive  a  profit  from 
the  loan  or  use  of  money,  safe  dejtosit  coni- 
panii'S.  renting  of  safes  and  burglar  and 
fire-proof    vaults,    telegraph    and    telephone 


companies,  electric  or  gas-light  companies, 
street  raihvay  companies.  Avater  companies, 
or  anj-  corporation  authorized  to  exercise 
the  right  of  eminent  domain,  shall  be  re- 
ceived and  filed  by  the  secretiiiy  of  State 
except  upon  payjnent  to  him  of  twenty-five 
dollars,  if  the  capital  stock  does  not  exceed 
five  thousand  dollars;  fifty  dollars  if  the 
capital  stock  exceeds  five  thousand  dollars 
and  does  not  exceed  ten  thousand  dollars; 
one  hundred  dollars  if  the  capital  stock  ex- 
ceeds ten  thousand  dollars  and  does  not 
exceed  fifty  thousand  dollars;  two  hundred 
dollars  if  the  capital  stock  exceeds  fifty 
thousand  dollars  and  does  not  exceed  one 
hundred  thousand  dollars;  seventy-five  dol- 
lars upon  every  one  hundred  tliousand  dol- 
lars or  fraction  thereof  in  excess  of  one 
hundred  thousand  dollars,  if  the  capital 
stock  exceeds  one  hundred  thousand  dollars, 
which  sum  is  to  be  paid  by  the  secretary 
of  State  to  the  State  treasurer  for  the  use 
of  tlie  State. 

§  4.  This  act,  so  far  as  relates  to  the  pay- 
ment of  fees,  shall  not  apply  to  such  cor- 
porations as  shall  be  organized  prior  to 
July  first,  one  thousand  eight  hundred  and 
ninety-one. 

(Approved  April  3,  1891.) 

Act  13. 

AN  ACT  additional  to  chapter  48  of  the 
Revised  Statutes,  relating  to  changes  in 
location  of  coii^oratious. 

Be  it  enacted  by  the  senate  and  house  of 
representatives  in  legislature  assembled,  as 
follows: 

Section  1.  Any  coi-poration  organized  under 
sections  sixteen  and  seventeen  of  chapter 
forty-eight  of  the  Revised  Statutes  at  a  legal 
meeting  of  its  stockholders,  may  by  a  vote 
representing  a  majority  of  the  stock  issued, 
change  its  location  from  one  county  to  an- 
other in  this  State,  and  the  corporation  shall 
file,  by  its  clerk  or  other  officer,  in  the  regis- 
try of  deeds  in  each  of  said  counties,  within 
twenty  days  after  such  change  of  location, 
the  certificate  required  by  section  eleven  of 
chapter  fortj'-six  of  the  Revised  Stittutes,  as 
amended  by  section  two  of  chapter  two  hun- 
dred sixty-three  of  the  public  laws  of  eigh- 
leeu  hundred  and  eightj'-nine. 

(Approved  March  2,  1S93.) 

Act  14. 

AN  ACT  relating  to  the  taxation  of  real  es- 
tate coniorations. 

Be  it  enacted  by  the  senate  and  house  of 
representatives  in  legislature  assembled,  as 
follows: 

Section  1.  The  buildings,  lands,  and  all 
other  property,  real  and  personal,  including 
all  reserve  funds,  accumulations  and  un- 
divided profits  of  con^orations  organized  for 
the  purpose  of  buying,   selling  and  leasing 


MAINE. 


37 


Oryaiiizatiou;  service,  etc.;  trausfers  of  stock  — Acts,  Mar.  6,  '95;  Feb.  24  and  Mar.  20,  1897. 


real  estate,  shall  be  taxed  to  the  corpora- 
tiou  or  the  persons  having  possession  of  such 
property,  in  the  place  where  such  laud  and 
other  property  are  situated,  and  there  shall 
be  a  lieu  for  two  years  ou  such  property  for 
the  payment  of  the  such  tax,  and  the  same 
may  be  sold  for  payment  thereof  as  in  other 
cases;  and  shares  of  the  capital  stoclc  of  such 
corporations  shall  not  be  taxed  to  the  owners 
thereof. 

§  2.  This  act  shall  talie  effect  when  ap- 
proved. 

(Approved  :»Iarch  29,  1893.) 

See  ch.  6,  §  28,  and  note. 


Act  15. 

AN  ACT  additional  to  chapter  48  of  the 
Revised  Statutes,  relating  to  organization 
of  corporations,  under  the  general  law. 

Be  it  enacted  by  the  senate  and  house  of 
representatives  in  legislature  assembled,  as 
follows: 

Section  1.  If  the  stockholders  of  any 
corporation  already  organized  or  that  may 
be  hereafter  organized  under  sections  six- 
teen and  seventeen  of  chapter  forty-eight 
of  the  Revised  Statutes  shall  desire  to  de- 
crease the  amount  of  its  capital  stock,  the 
stockholders,  at  a  meeting  duly  called  for 
the  purpose,  or  at  any  annual  meeting,  when 
notice  shall  have  been  given  of  such  pro- 
posed action  in  the  call  tliorefor,  may  by 
a  vote  representing  a  majority  of  all  the 
stock  issued,  decrease  the  amount  of  its 
capital  stock  to  any  amount  desired,  and  the 
corporation  shall  give  notice  of  such  change 
to  the  secretary  of  State  Avithin  ten  days 
thereafter.  And  each  stockholder  shall, 
within  three  months  after  such  meeting,  sur- 
render such  a  proportion  of  his  stock  as  the 
amount  of  decrease  shall  bear  to  the  amount 
of  the  capital  stock  before  the  decrease,  so 
that  each  stockholder  shall  have  the  same 
proportion  of  the  whole  capital  stock  of  the 
company  as  before  the  decrease. 

§  2.  This  act  shall  not  affect  or  prejudice 
in  any  way  the  rights  of  creditors  of  such, 
corporation  existing  at  the  time  when  the 
reduction  of  its  capital  stock  authorized 
under  the  preceding  section  shall  be  con- 
summated. 

§  3.  The  clerk  of  any  corporation  organized 
under  the  laws  of  this  State  may  resign  his 
office  as  clerk  by  filing  his  resignation  with 
the  register  of  deeds  in  the  county  where 
such  coi"poration  was  orgajiized.  said  resig- 
nation to  take  effect  from  and  after  the  time 
of  the  receipt  of  the  same  by  such  register 
of  deeds. 

(Approved  March  6,   1895.) 


Act  16. 

AN  ACT  relating  to  service  of  ])rocess  on 
foreign  coiiioratious  acting  as  trustees 
under  mortgages. 

Be  it  enacted  by  the  senate  and  house  of 
representatives  in  legislature  assembled,  as 
follows: 

In  case  of  the  mortgage  of  the  fran- 
chises, lands  or  other  hereditaments  by  any 
domestic  corporation  to  a  foreign  corpora- 
tion as  trustee,  service  of  process  may  be 
made  on  any  authorized  agent  of  such  for- 
eign corporation  in  the  State,  or  if  no  such 
agent  can  be  found,  such  service  may  be 
made  upon  tlio  bank  examiner,  who  shall 
immediately  notify  the  corporation  by  mail. 
Service  made  in  either  of  said  methods  sliall 
be  valid  and  binding  upon  the  corporation 
in  every  respect. 

(Approved  February  24,   1897.) 

See  ch.  81,  §§  22,  104. 

Act  17. 

AN  ACT  relating  to  transfers  of  stock. 

Be  it  enacted  by  the  senate  and  house  of 
representatives  in  legislature  assembled,  as 
follows: 

Section  1.  The  delivery  of  a  certificate 
of  stock  of  a  corporation  to  a  bona 
tide  purchaser  or  pledgee  for  value,  together 
with  a  written  transfer  of  the  same  or  a 
Avritten  power  of  attorney  to  sell,  assign 
and  transfer  the  same,  signed  by  the  owner 
of  the  certificate,  shall  be  a  sufficient  de- 
livery to  transfer  the  title  against  all  parties. 

§  2.  A  pledgee  for  value,  holding  a  cer- 
tificate of  stock  of  a  corporation  for  se- 
curity merely,  shall  not,  while  he  so  holds 
such  stock,  be  subject  to  any  of  tlie  liabili- 
ties of  a  stockholder,  unless  he  appears  on 
the  books  of  the  coii)oration  as  the  absolute 
owner  of  such  stock. 

§  3.  No  transfer  shall  affect  the  right  of 
the  corporation  to  pay  any  dividend  due 
upon  the  stock,  or  to  treat  the  Jiolder  of 
record  as  the  holder  in  fact,  until  such  trrns- 
fer  is  recorded  upon  the  books  of  tlie  cor- 
poration or  a  new  certificate  is  issued  to 
the  person  to  whom  it  has  been  so  trans- 
ferred. 

§  4.  Persons  holding  stock  as  executors, 
administrators,  guardians,  or  trustees,  shall 
not  be  personally  subject  to  any  liabilities 
as  stockholders;  but  the  estates  and  funds 
in  their  hands  shall  be  liable  in  like  manner 
and  to  the  same  extent  as  the  testator,  in- 
testate, ward,  or  person  interested  in  such 
trust  fund  would  be  if  they  were  respect- 
irelj'  living  and  competent  to  act  and  hold 
the  stock  in  their  own  names. 

(Approved  March  20,  1897.) 


IKDEX  TO  MAIXE. 


ACTIONS:  Page. 

corporationg  may  maintain 9 

foreign  corporations  may  maintain 13 

against  stockholders  for  corporate  debts 16 

defense  of  stockholders  18 

by  judgment  creditors  against  certain  persons 17 

by  and  against  corporations,  how  commenced 25 

where  commenced  25 

to  enforce  payment  of  taxes,  where  brought 25 

service  of  summons  25 

against  foreign  corporation   25,  26 

when  officer  or  agent  cannot  be  found 26 

on  insurance  and  express  companies 26 

foreign  corporations  entitled  to  limitation  of 26 

by  treasurer  of  corporation  26 

travel  by  corporation,  how  computed   26 

for  personal  injuries,  causing  death 35 

ACTS  OF  INCORPORATION: 

are  public  acts  6 

null  and  void,  when 6 

amendment  or  repeal  of ^^ 

ADMINISTRATORS: 

not    liable    as    stockholders    37 

AGENTS: 

corporation  liable  for  acts  of 1^ 

embezzlement  by    29 

fraudulent    signature    29 

ARTICLES  OF  AGREEMENT: 

corporations  may  be  organized  by  23 

first  meeting  of  signers   23 

organization  of  corporation  23 

certificate  to  be  filed 23 


fees 


23 


ASSESSMENT.    (See  Taxation.) 
ASSETS: 

impaired,   reduction  of  capital  stock    13 

ATTACHMENT: 

on  mesne  process,  property  and  franchise  liable  to 1«^'    ^ 

on  shares  of  stockholders   


26 


BANK  EXAMINER: 

duties  as  to  foreign  corporations  33 

BANKS: 

taxation  of    "^ 

stock  books  open  to  assessors 7 

seizure  of  lands  of,  under  execution 25 

redemption   of   lands   sold    25 

BOOKS: 

clerk  to  keep  at  office H 

open    to    inspection    H 

penalty  for  failure  to  permit  inspection  13 

of  manufacturing  corporation,  inspection    -^ 


40  INDEX  TO  M.VIXE. 

BY-LAWS:  I'age. 

corporations  may  make   10 

may  prescribe  what   11 

manufacturing   corporations    20 

CAPITAL  STOCK: 

reduction   of    13 

revision  of  proceedings 13 

clerk  to  file  proceedings    13 

security   of    creditors    17 

subscriptions,  bow  paid   17 

enforcement  by  corporate  creditors   17 

withdrawals  Toid 17 

actions  to  set  aside 17 

of   manufacturing   corporations    20 

assessments  upon    21 

neglect  to  pay  assessments  21 

treasurer  to  give  notice  of  sale 22 

of  corporations  organized  under  articles  23 

amount  to  be  stated  in  certificate   23 

increase  of,  of  corporation  under  special  charter 24 

fees  to  be  paid 2i 

decrease  of    37 

CERTIFICATE  OF  INCORPORATION.     (See  Charter;  Certificate  of  Organization.) 
CERTIFICATE  OF  ORGANIZATION: 

to  be  filed   , 23 

contents 23 

fees  for  filing   23 

corporation  exists  from  time  of  filing 24 

changes  in,  to  be  filed  29 

of  corporations  chartered  by  special  act 36 

fees   for   filing    3G 

CERTIFICATE  OF  SHARES: 

how  issued    12 

of  manufacturing  corporations   20 

CHARTER    (See  Certificate  of  Organization): 

void  for  non-user  6 

corporate  existence  after  expiration    14 

expiration  of,  trustees  to  be  appointed 14 

distribution  of  assets 14 

CHILDREN: 

employment  in  factories 22,  30 

penalty  for   violation    i!2,  23 

not  to  be  employed  more  than  ten  hours 23 

hours   regulated    30 

under  12,  not  to  be  employed   31 

CLERK  OF  CORPORATION    (See  Ofiicers): 

corporations   to   have    11 

office,  where  kept 11 

book  and  records  11 

open  to  inspection    11 

penalty  for  not  allowing  inspection 13 

certificate  of  election  to  be  filed   12 

proceedings  for  reduction  of  stock  to  be  filed 13 

entry  of  names  and  residences  of  stockholders 15 

reports  to  assessors  15 

to  secretary  of  state 15 


IXDEX  TO  MAIXE.  41 

CLERK  OF  CORPORATION  — (Continued):  Page. 

manufacturing,  votes  to  be  recorded   20 

books  to  be  exhibited  22 

resignation    of    36 

COMBINATIONS: 

for  regulating  prices  proliibited   32 

CONTRACTS: 

laws  impairing  obligation  of 5 

parol,  corporations  bound  by 13 

CORPORATIONS: 

created  under  general  laws    5 

organization  void,  unless  business  commenced    6 

powers   of    9 

first   meeting,   how   called    10 

ceasing  to  transact  business,   certificate   ,  15 

organization  by  articles  of  agreement 23 

CREDITORS: 

trustees  appointed  after  expiration  of  charter  14 

debts  to  be  paid   14 

records  of  stockholders'  indebtedness 17 

capital  stock  for  security  of IT 

petition  when  corporation  is  insolvent 24 

DEATH:  '  j 

actions  for  personal  injuries  causing   35 

DEBTS,  CORPORATE: 

liability  of  stockholders  for   15 

enforcement   of    16 

reduction  of,  how  proved   Ifj,  17 

DIRECTORS: 

must  bo  stockholders    10 

of  manufacturing  corporations   19 

number  of    19,  -0 

must   be   stockholders    20 

dividends 22 

name  of,  to  be  given  upon  demand 22 

reports  to  be  made  to  state  librarian 33 

DISSOLUTION: 

stockholders  vote  for !•* 

receivers  may  be  appointed   1^  ' 

trustee:? 1** 

property  vests  in  stockholders   1^ 

DIA'IDENDS: 

not  to  be  declared  from  capital  stock 17 

actions  to  recover 1 ' 

of   manufacturing   corporations    =  . — ' 

not   affected  by  transfer   37 

DOWER: 

2.S 
demand  of,  upon  corporation   

EMBEZZLEMENT: 

by  agent  of  corporation,  larceny   29 

EMPLOYES: 

wages  paid  fortnightly    ^^ 

hours  of  women  and  children   30 

notice  to  quit   '^^ 

combinations  to  prevent  employment   


42  iKDEX  TO  mai:n:e. 

EVIDENCE:  Page. 

book  of  stockholdera   12 

certificate  of  election  of  clerk  12 

EXECUTION: 

action  against  stockholders  after  return 16 

records  to  be  exhibited 17 

names  and  residences  of  stockholders 17 

against  manufacturing  corporation,  satisfaction  22 

lands,  etc.,  of  manufacturing  and  banking  corporation 25 

on  shares  of  stock,  how  made 26 

officer  to  give  number  of  shares  held  by  debtor 26 

sale  of  shares   26 

transfer  of  shares  to  purchaser 26 

EXECUTORS: 

not  liable  as  stockholders  37 

EXISTENCE,  CORPORATE: 

must  be  proved   9 

after  termination  of  charter   14 

EXPRESS  COMPANY: 

service  of  summons  on    26 

FACTORIES: 

employment   of    children   in    22 

penalty  for  violation   22,  23 

employed  more  than  ten  hours   23 

inspectors  of,  appointment,   etc   31 

FEES: 

payment  for  organization  of  corporation    23 

for  increase  of  capital  stock 24 

for  filing  certificate  of  corporations  chartered  by  special  act  36 

FOREIGN  CORPORATIONS: 

may  sue  and  be  sued   13 

service  of  summons  upon 25,  26 

limitation  of  actions  against 26 

reports  of,  to  bank  examiner  33 

license  to   33 

statement  to  be  published   3.3 

under  supervision  of  bank  examiner 33 

acting  as  trustees,  service  of  process 37 

FRANCHISE: 

liable  to  attachment    13,  26 

sale  of  27 

of  railroad  corporation,  sale   27 

disposal  of,  by  stockholders 34 

dissent  of  stockholders  to  be  filed 34 

proceedings  to  determine  value  of  shares   34 

GUARDIAN: 

not  liable  as  stockholders   37 

HOURS  OF  LABOR: 

of  children  and  women,  regulated 30 

HYPOTHECATION    (See  Pledge): 

of  stock  to  corporation    12 

INCORPORATION: 

acts  of,  are  public  acts   6 

when  null  and  void 6 


IKDEX  TO  MAINE.  43 

INSOLVENCY:  Page. 

of  corporations,  provisions  respecting 24 

INSPECTORS  OF  FACTORIES: 

appointment  of 31 

INSURANCE  COMPANY: 

service  of  summons  on    26 

JUSTICE  OF  THE  PEACE: 

warrant  for  meeting  of  corporation 11 

may  preside  at  meeting    11 

LABORERS.    (See  Employes.) 
LANDS    (See  Real  Property): 

corporations  may  bold  and  convey   10 

LARCENY: 

embezzlement  constitutes   29 

LAWS: 

impairing  obligation  of  contracts 5 

general,  for  creation  of  corporations 5 

LIABILITY: 

of   stockbolders   for  corporate   debts    15 

enforcement  of 16 

reduction  of,  bow  proved 16,  17 

names  and  residences  to  be  furnisbed 17 

an  owner,  only  subject  to 17 

judgment  must  be  secured 17,  18 

LOCATION: 

of  principal  office,  cbange  of 36 

MANUFACTURING  CORPORATIONS: 

taxation  of 7 

subject  to  general  laws   19 

officers  of 20 

directors,  number   '. 20 

chosen  annually    10,  20 

treasurer  to  give  bond   20 

first  meeting   20 

by-laws 20 

capital  stock   20 

certificates  of  shares    20 

assessments   upon   capital   stock    21 

sale  of  stock  for  failure  to  pay 21 

treasurer  to  give  notice  of  sale 22 

dividends - 22 

names  of  directors  and  schedules  to  be  given  22 

execution  satisfied  by    debt  to  corporation 22 

books  open  to  inspection   22 

MEETINGS: 

first,  how  called  10 

justice  may  issue  warrant 11 

legal  by  consent  of  members 11 

by-laws  may  prescribe  manner  of  calling 11 

annual,  effect  of  failure  to  hold 11 

notice  of  objections  to  be  filed    11 

clerk  may  call  upon   11 

vote  by  proxy  at   12 

by  power  of  attorney    12 

hypothecated  stock  entitled  to   12 


44  INDEX  TO  MAINE. 

ilEETIXGS  — {Continued):  Page. 

for  reduction  of  capital  stock  13 

revision  of  proceedings   13 

clerli  to  file  proceedings  13 

manufacturing    corporations,    first    20 

of  signers  of  articles  of  agreement 23 

of   insolvent  corporation    24 

for  disposal  of  franchise 34 

for  change  of  location 36 

for  decrease  of  capital  stock   37 

MORTGAGE: 

of  personal  property  by  corporation 28 

NAME  OF  CORPORATION: 

stockholders   may   change    11 

OFFICERS: 

of  corporations,  may  elect 10 

tenure  of,  by-laws  to  prescribe 11 

to  hold  until  successors  are  elected   11 

elected  at  other  time  than  annual  meeting 11 

returns  of  names,  etc.,  of  stockholders    15 

penalty  for  failure;  recovery    15 

of  manufacturing  corporations   19 

liability    for   unlawful    dividends    22 

fraudulent  signatures   29 

issue  of  stock,  or  transfer  29 

ORGANIZATION: 

of  corporations  by  articles  of  agreement 23 

certificate  to  be  filed 23 

payment  of  fees   23 

changes  in  certificate  to  be  filed 29 

of  corporations  chartered  by  special  act 36 

certificate,   contents,   etc    36 

PERSON: 

word  includes  corporation   6 

PERSONAL  ESTATE: 

includes  shares  of  stock 6 

assessment    of    6 

mortgages   of    28 

PERSONAL  INJURIES: 

causing  death,  actions  for 35 

PLEDGE: 

of  stock  for  security,  may  be  voted 12 

pledgee  not  liable    37 

POWER  OF  ATTORNEY: 

stockholders  may  be  represented  by   12 

PROPERTY: 

not  to  be  taken  without  compensation   5 

of  corporation,  subject  to  attachment   13 

not  to  be  divided  until  debts  are  paid  18,  19 

actions  where  division  has  been  made 19 

schedule,  when  to  be  given  22 

PROXY: 

by-laws  to  provide  for  voting  by 11 

stockholders  may  be  represented  by    12 

QUORUM: 

by-laws    may    prescribe    11 


IKDEX  TO  MAINE.  45 

EAILROAD   CORPORATION:  Page. 

sale  of  franchise  27.  28 

REAL  PROPERTY: 

corporations  may  hold  and  convey   10 

sale  of,  when  personal  property  not  sufficient 18 

execution  against  25 

sale  under  25 

RECORDS  OF  CORPORATION: 

clerk  to  keep  at  office 11 

open  to  inspection 11 

penalty  for  not  allowing  inspection  13 

REDEMPTION: 

of  lands  sold  under  execution    25 

RETURNS: 

of  names  and  residences  of  stockholders   15 

penalty    for    failure    35 

recovery  of  penaltj'    1^ 

SEAL.  COMMON: 

corporation  may   have    9 

impression   of    32 

SECRETARY  OF  STATE: 

returns  to,  of  stockholders   15 

to  be  laid  before  legislature  15 

certificate  upon  ceasing  business   15 

SHAREHOLDERS.    (See  Stockholders.) 

SHARES.    (See  Stock.) 

STOCK: 

shares  of,  personal  estate   6 

taxation  of,  deduction 6 

of  toll  bridges   6 

of  water  or  gas  corporations   " 

lien  on,  for  taxes  7 

of  other  than  manufacturing  corporations,  taxation   7 

distrain  of,  for  taxes   8 

sale  of,  for  failure  to  pay  assessments  11 

shares,   certificates  of,  how  issued    12 

transfer   of    12 

hypothecated  to  corporation  not  to  be  voted 12 

pledged  for  security   12 

amount  held  by  stockholders  to  be  returned  15 

transfers  or  cancellation,  when  void   l"*" 

actions  to   set   aside    1" 

of  manufacturing  corporation,  sale  of,  for  failure  to  pay  assessments 21 

attachment   of    shares   of    26 

execution   on   shares  of    2  < 

fraudulent  issue  or  transfer  of 29 

of  stockholders  dissenting  to  disposal  of  franchise 34 

proceedings  to  determine  value   34 

purchase  of  shares  by  corporation  34 

transfer  to  be  recorded   37 

not  to  affect  dividends   37 

executors,   administrators,   etc.,   not   liable    37 

capital,  reduction  of   13 

revision  of  proceedings    13 

clerk  to  file  proceedings    13 

security  of  creditors  ^l 

subscriptions,    how   paid    


17 


46  IKDEX  TO  MAINE. 

STOCK— (Continued):  Page. 

capital,  enforcement  by  corporate  creditors 17 

withdrawals  void 17 

actions  to  set  aside IT 

of  manufacturing  corporations   20 

assessments  upon  21 

neglect  to  pay  assessments 21 

treasurer  to  give  notice  of  sale 22 

of  corporations  organized  under  articles 23 

amount  to  be  stated  in  certificate 23 

increase  of,  by  corporation  under  special  charter 24 

fees  to  be  paid  24 

decrease  of   ^ ' 

STOCKHOLDERS: 

in  toll-bridge  corporations,  where  taxed  6,  7 

directors  must  "be 10 

number  of  votes  by 11 

change  of  name  of  corporation 11 

book  containing  names  of   • H 

evidence 1 1 

open  to  inspection    11 

may  vote  by  proxy 12 

reduction  of  capital  stock  33 

revision  of  proceedings  for 33 

clerk  to  file  proceedings 13 

expiration  of  charter,  appointment  of  trustees 14 

distribution  of  balance 14 

dissolution  by  vote  of 14 

receivers  may  be  appointed 15 

entry  of  names  and  residences  15 

return  of  names,  etc.,  to  assessors   15 

to  secretary  of  state   15 

penalty  for  failure  to  make 15 

proceedings  for  recovery  of  penalty   15 

liability  of,  for  corporate  debts 15,  16 

enforcement   of    16 

trustee    process   28 

actions  against,  for  corporate  debts   16 

reduction  of  liability,  how  proved   16,  17 

records   of  indebtedness    17 

to  be  exhibited  to  creditors    17 

not  liable  except  as  owner   17 

judgment  must  be  secured  17 

defense 18 

of  manufacturing  corporations,  payment  of  installments   21 

sale  of  stock    21 

increase  of  capital  stock   24 

franchise,  disposal  of   34 

dissent  to  be  filed 34 

value  of  shares  of  dissenting,  to  be  determined 34 

proceedings  thereon    34 

change   of  location    36 

decrease  of  capital  stock  37 

executors,  administrators,  etc.,  not  liable  as 37 

SUBSCRIPTIONS.    (See  Capital  Stock.) 
SUE  AND  BE  SUED: 

corporations  may   9 

foreign  corporations  may  13 


iXBEx  TO  :maixe.  47 

SUMMONS:  Page. 

service  of,  against  corporation  25 

against  foreign  corporation    25  26 

where  officer  or  agent  cannot  be  found 26 

on  insurance  and  express  companies 26 

on  foreign  corporations  acting  as  trustees   37 

TAXATION: 

shares  of  stock  personal  estate 6 

personal   property,   assessment 6 

machinery  and  goods  of  corporations   G 

deduction,  in  assessment  of  stockholders 6 

stock  of  water  or  gas  companies  7 

of  property  of  corporation    7 

of  insurance  corporation   7 

of  manufacturing  and  mining  corporations 7 

stock  of  other  than  manufacturing  corporations 7 

booka  open  to  assessors 7 

collector  to  give  notice  to  corporations 8 

actions  to  enforce,  where  brought 25 

of  real  estate  corporations 36 

TOLL: 

corporations  taking,  sale  of  franchise 27 

purchaser  may  receive  27 

redemption  of  franchise    27 

TOLL-BRIDGES: 

taxation  of  stock  of 6,  7 

franchise  may  be  sold  under  execution 27 

TRANSFER: 

of  stock,  how  made 12 

to  be  entered  in  books 12 

effect  upon  stockholders'  liability   16 

void  as  against  creditors 1" 

actions  to  set  aside  17 

TREASURER.     (See  Officers.) 

records  of  stockholders'  indebtedness   17 

of  manufacturing  corporation,  to  give  bond 20 

notice  of  sale  of  stock  ^^ 

actions  maintained  by       26 

TRUSTEE  PROCESS: 

agamst   corporations    ■^^ 

stockholders    ^ 

TRUSTEES: 

after  expiration  of  charter 1* 

upon  dissolution  of  corporation    15 

actions  to  set  aside  transfers  of  stock 17.  18 

corporations  as,  may  be  summoned   ^° 

not  liable  as  stockholders   ^ ' 

TRUSTS: 

by  corporations  prohil)ited    *" 

ULTRA  TIRES:  ^^ 

decisions  respecting   

WAGES:  3^ 

paid   fortnightly    

WOMEN:  OQ 

under  18.  hours  of  labor  regulated   

42 


MARYLAND. 


TABLE  OF  CONTENTS. 


CONSTITUTIONAL  PROVISIONS. 

Declaration  of  Rights.  Page. 

Art.  III.  Legislative  department 5 

GENERAL  LAWS. 
Art.  I.  Rules  of  interpretation -j 


IX.  Attachments. 


7 


XXIII.  Corporations 7 

Miscellaneous  provisions 8 

Formation  ,... jq 

General  regulations 12 

Foreign  corporations  22 

Manufacturing  companies 23 

Abuse,    misuse    and    non-use    of   powers 23 

Dissolution ^ ^ 24 

Execution  against  stock   27 

Police 28 

Preferred  stock 29 

Process 29 

Taxation  31 

General  applicability 31 

XXVII.  Crimes  and  punishments 31 

XXXV.  Evidence 31 

LXXV.  Pleadings,  practice  and  process 32 

LXXXI.  Revenue   and   taxes 32 

LEGISLATIVE  ACTS  PASSED  SUBSEQUENTLY  TO  1888. 


M  ARYLAN  D. 


COXSTITUTIO]^  OF  JVIARYLAInTD  -  1867. 


PROVISIONS  RELATING  TO  CORPORATIONS. 


Declaration  of  Rights. 
Sec.  41.  No  monopolies. 

§  41.  That  monopolies  are  odious,  contrary 
to  the  spirit  of  a  free  government  and  the 
principles  of  commerce,  and  ought  not  to 
be  suffered. 

See  acts  for  taxation  of  certain  corporations, 
at  pp.  41-43. 

[Act  Incorporating  a  ferry  company,  held  not 
to  be  repugnant  to  this  section.  Ferry  Co.  v. 
Hankey,   31   Md.   346.] 

ARTICLE  III. 
Legislative  Department. 

Sec.  34.  Credit  of  State  not  to  be  loaned   In   aid 
of  corporations. 

39.  Banliing  corporations. 

40.  Private    property    not    to    be    taken    for 

public  use   without   compensation. 

48.  Corporations  may  be  formed  under  gen- 
eral   laws 

54.  No  county  to  give  or  loan  its  credit. 

68.  Taxation "  upon  revenues  of  foreign  cor- 
porations. 

§  34.  *  *  *  The  credit  of  the  State  shall 
not  in  any  manner  be  given,  or  loaned  to,  or 
In  aid  of  any  individual,  association  or  cor- 
poration;   *    *    * 

See   8  54,  post. 

§  39.  The  general  assembly  shall  grant  no 
charter  for  banliing  purposes,  nor  renew  any 
banking  corporation  now  in  existence,  ex- 
cept upon  the  condition  that  the  stocl^holders 
shall  be  liable  to  the  amount  of  their  re- 
spective share  or  shares  of  stock  in  such 
banking  institution,  for  all  Its  debts  and 
liabilities  upon  note,  bill,  or  otherwise;  the 
books,  papers,  and  accounts  of  all  banks 
shall  be  open  to  inspection,  under  such  regu- 
lations as  may  be  prescribed  by  law. 

Savings  banks  may  be  formed.  Art.  XXIII,  §  29. 
Liability  of  stockholders  In  general.  Art.  XXIII, 
§  64,  and  note. 

[See  Hammond  v.  Straus,  53  Md.  1.] 

§  40.  The  general  assembly  shall  enact 
no  law  authorizing  private  property  to  be 
taken  for  public  use,  without  just  compensa- 


tion, as  agreed  upon  between  the  parties, 
or  awarded  by  a  jury,  being  first  paid,  or 
tendered  to  the  party  entitled  to  such 
compensation. 

[Where  an  inquisition  is  taken,  returned,  and 
ratified,  according  to  law,  all  questions  relating 
to  damages  are  concluded  by  such  inquest.  R.  R. 
Co.   V.   Compton,   2  Gill,   20. 

The  power  of  appropriating  private  property  for 
public  use  is  inherent  to  the  sovereignty  of  the 
State.    Alexander  v.  Mayor,  5  Gill,  383. 

Grant  of  powers  of  eminent  domain  must  be 
construed  strictly;  cannot  be  exercised  for  any 
but  a  public  purpose;  and,  in  general,  does  not 
admit  of  any  repetition.  Binney's  case,  2  Bl. 
100. 

Corporate  right  to  select  and  acquire  land  for 
authorized  purposes  of  the  corporation  is  prop- 
erty. It  is  an  incorporeal  hereditament.  That 
portion  of  the  eminent  domain  granted  and  sub- 
sisting in  one  corporation  cannot  be  bestowed 
upon  another.  Canal  Co.  v.  R.  R.  Co.,  4  G.  & 
J.  5. 

Power  to  take  private  property  for  public  uses 
may  be  exercised  for  benefit  of  public  bv  cor- 
porations.   Canal    Co.    v.    Archer,    9    G.    &   J.    479. 

By  virtue  of  the  power  of  eminent  domain, 
private  property  may  be  taken  for  public  uses; 
but  cannot  be  taken  from  one  and  given  to  an- 
other in   any   way.    Hepburn's   case,   3   Bl.    95. 

Damages  may  be  assessed  either  before  or  after 
property  has  been  taken;  but  no  unreasonable 
delay  or  fraud  in  taking  inquisition  will  be  suf- 
fered. Compton  v.  R.  R.  Co.,  3  Bl.  386.  Suits  for 
damages  for  injury  to  real  property  are  classed 
among  "  personal  actions."  Kenneriv  v.  Wilson, 
1   Md.   102. 

The  principle  expressed  in  this  section  would 
exist  though  it  were  not  written  In  the  Constitu- 
tion. Harness  v.  Canal  Co.,  1  Md.  Ch.  Dec.  248; 
Hoye  V.  Swan.  5  Md.   237. 

Distinction  between  right  of  eminent  domain 
and    taxing   power.    Moale   v.    Mayor,    5    Md.    314. 

This  section  of  Constitution  construed.  Steuart 
V.  Mayor,   7  Md.   500. 

Court  of  equity  has  jurisdiction  to  prevent,  by 
injunction,  a  railroad  company  from  making  its 
railroad  over  land  of  a  private  citizen  where 
companv  has  not  paid  or  tendered  compensation. 
R.   R.   Co.  V.  Owings,  15  Md.  199. 

Under  above  section  legislature  cannot  confer 
on  any  corporation  power  to  take  private  prop- 
erty for  anv  other  than  public  use.  Kane  v. 
Mayor.    15   Md.   240. 

Condemnation  by  turnpike  companies.  Douglass 
V.  Road  Co..  22  Md.  219.] 

§  48.  Corporations  may  be  formed  under 
general  laws;  but  shall  not  be  created  by 
special  act,  except  for  municipal  purposes, 
and  except  in  cases,  Avliere  no  general  laws 
exist,  providing  for  the  creation  of  corpo- 
rations of  the  same  general  character,  as 
the  corporatioi^  proposed  to  be  created;  and 


MARYLAND. 


State  or  county  credit  —  Const.,  Art.  iii,  §§  54,  58. 


any  act  of  Incorporation,  passed  in  viola- 
tion of  this  section  shall  be  void.  And  as 
soon  as  practicable,  after  the  adoption  of 
this  Constitution,  it  shall  be  the  duty  of  the 
governor,  to  appoint  three  persons  learned 
in  the  la-^,  whose  duty  it  shall  be,  to  pre- 
pare drafts  of  general  laws,  providing  for 
the  creation  of  corporations,  in  such  cases 
as  may  be  proper,  and  for  all  other  cases, 
where' a  general  law  can  be  made;  and  for 
revising  and  amending,  so  far  as  may  be 
necessary,  or  expedient,  the  general  laws 
which  may  be  in  existence  on  the  first  day 
of  June,  eighteen  hundred  and  sixty-seven. 
providing  for  the  creation  of  corporations. 
and  for  other  purposes;  and  such  drafts  of 
laws  shall  by  said  commissioners,  be  sub- 
mitted to  the  general  assembly,  at  its  first 
meeting,  for  its  action  thereon;  and  each  of 
said  commissioners  shall  receive  a  compen- 
sation of  five  hundred  dollars  for  his  ser- 
vices, as  such  commissioner. 

All  charters  granted,  or  adopted,  in  pur- 
suance of  this  section,  and  all  charters  hei-e- 
tofore  granted  and  created,  subject  to  repeal 
or  modification,  may  be  altered,  from  time 
to  time,  or  be  repealed;  Provided,  Nothing 
herein  contained  shall  be  construed  to  ex- 
tend to  banlis,  or  the  incorporation  thereof. 

Formation  of  G.  L.,  art.  XXIII,  §§  14  et  seq.; 
§§  42  et  seq.  Taxation  of  corporations.  Id.,  §  302; 
G.  L..,  art.  LXXXI.  Existing  corporations.  Art. 
XXIII,  §  81.  Corporation  subject  to  cliange  in 
law.    Id.,  §  85. 

[This  provision  was  merely  Intended  to  prohibit 
future  special  legislation,  and  to  repeat  previous 


acts.  Central  Coal  Co.  v.  Coal  &  Iron  Co.,  37 
Md.   537. 

Every  charter  hereafter  gi-anted  is  subject  to 
above  provision.  Jackson  v.  Walsh,  75  Md.  304; 
s.   c,   23   Atl.    Rep.    7T8. 

Legislature  has  power  to  amend,  by  special  act, 
a  charter  obtained  under  the  general  law.  Hodges 
V.  R.  R.  Co.,  58  Md.  G03. 

Act  of  1882,  incorporating  Baltimore  Trust  and 
Guarantee  Co.,  is  constitutional.  Reed  v.  T.  & 
G.  Co.,  72  Md.  531;  s.  c,  20  Atl.  Rep.  194.] 

§  54.  No  county  of  this  State  shall  contract 
any  debt,  or  obligation,  in  the  construction 
of  any  railroad,  canal,  or  other  work  of  in- 
ternal improvement,  nor  give,  or  loan  its 
credit  to,  or  in  aid  of  any  association,  or 
corporation,  unless  authorized  by  an  act  of 
general  assembly,  which  shall  be  published 
for  two  months  before  the  next  election 
for  members  of  the  house  of  delegates  in 
the  newspapers  published  in  such  county, 
and  shall  also  be  approved  by  a  majority 
of  all  the  members  elected  to  each  house  of 
the  general  assembly  at  its  next  session  after 
said  election. 

See   S   34.   ante. 

§  58.  The  legislature,  at  its  first  session 
after  the  ratification  of  this  Constitution, 
shall  provide  by  law  for  State  and  municipal 
taxation  upon  the  revenues  acci'uing  from 
business  done  in  the  State  by  all  foreign 
corporations. 

Process  on  foreign  corporations.  Art.  XXIII, 
§  295.  Taxation  of  stock  owned  by  non-residents. 
Art.  LXXXI,  §  131.  Taxation  of  certain  foreiga 
corporations.     Act  of  1890,  at  p.  41. 


MAEYLAND. 


I 


luterpi-etation  -  G.  L..  Art,  i,  §§  3,  12;  Attachments,  Id.,  Art.  ix,  §§  2,  IS. 


PUBLIC  GENERAL  LAWS  OF  MAR YL A]^D  -  1888. 


ARTICLE  I. 
Kules  of  Interpretation- 
Sec.     3.  Adoption   of   Code   not  to   Impair   charter 
rights. 
12.  "  Person  "   to  include   corporation. 

§  3.  No  rights,  property  or  privileges  held 
under  a  charter  or  grant  from  this  State 
shall  be  in  any  manner  impaired  or  affected 
by  the  adoption  of  this  Code. 

[See  Mayor  v.   Groshon,   30  Md.  443.] 


§  12.  The  word  person  shall  include  cor- 
poration, unless  such  a  construction  would 
be  unreasonable. 

[In  view  of  the  law  a  corporation  is  a  person. 
Germania   v.    State,    7   Md.    1.] 


ARTICLE  IX. 
Attachments. 

Sec.     2.  Corporation   may   be   defendant. 

18.  Attachment  against  stocli  of  corporations. 

§  2.  Every  person  who  doth  not  reside  in 
this  State,  and  every  person  who  absconds, 
may  be  made  a  defendant  in  an  attachment; 
and  any  corporation  not  chartered  by  this 
State,  or  any  corporation  chartered  by  this 
State,  but  not  having  the  president  or  a 
majority  of  the  directors  or  managers 
thereof  residing  in  this  State,  may  be  made 
a  defendant,  as  other  non-residents. 

§  18.  An  attachment  may  be  laid  on  any 
interest  which  the  defendant  has  or  may  be 
entitled  to  in  the  stock  of  any  corporation, 
or  in  the  debt  of  any  corporation,  transfer- 
able upon  the  books  of  such  coi-poration;  and 
it  shall  be  the  duty  of  the  sheriff  or  other 
officer,  in  laying  said  attachment,  to  comply 
with  the  requirements  contained  in  article 
XXIII,  title  •'  Corporations,"  of  this  Code, 
in  relation  thereto. 

Execution   against  stocli.    §|    277-287. 

[Service  of  notice  of  an  attachment  upon  two 
of  the  ofHcers  and  directors,  sutHcient  notice  to 
corporation.    Boyd   v.    Canal   Co.,    17   Md.    195. 

Corporations  may  proceed  by  attachment,  the 
same  as  individuals,  to  collect  debts.  Gordon  v. 
Mayor,    5    Gill,    241. 

Notice  to  directors  is  notice  to  corporation, 
when.  Ins.  Co.  v.  Shriver,  3  Md.  Ch.  Dec.  381; 
Gen.  Ins.  Co.  v.  U.  S.  Ins.  Co.,  10  Md.  517;  Boyd 
V.    Canal   Co.,    supra.] 


ARTICLE  XXni. 
Corporations. 

Miscellaneous  Provisions. 

Sec.     1.  How   to   acknowledge  deeds. 

2.  Banking    privileges    not    to    be    exercised 

unless  expressly  granted. 

3.  Majority  to  govern. 

4.  Certified   copy   of   by-laws  to  be   received 

as  prima  facie  evidence. 

5.  Accounts  and  annual  statement  of  presi- 

dent and  directors. 

fi.  General    meeting   of   stockholders. 

7.  Officers  may  be  removed  and  others  ap- 
pointed. 

S.  Notice  of  intention  to  canvass  vote;  ac- 
tion  upon. 

9.  Oath  of  stockholders  offering  to  vote. 

10.  Some   oflScer   to   vote   stock   held    by    cor- 

poration. 

11.  Proxies. 

12.  Directors    of    bank    must    be    bona    fide 

stockholder. 

13.  Pledgor  of  stock  may   vote,   when. 


Formation  of  Corporations. 


Sec.  14. 

15. 

16. 

17. 
19. 

19a 
20. 
21. 
22. 
23.' 

24. 
25. 
26. 

27. 
28. 

29. 
30. 
31. 

32. 
33. 
34. 
35. 
36. 
38. 

39. 
39a. 


May  be  formed  by  five  or  more  citizens, 
for  following  purposes. 

Class  2.  Co-operative  stores,  hotels,  fruit 
packing,  etc. 

Class  3.  Traffic  In  land,  lumber,  fruits, 
etc. 

Class  4.   Insurance;  live  stock. 

Class  6.  Manufacturing,  ship  building  or 
mechanical. 

.  Class  6a.  Printing  and  publliLIng. 

Class  7.   Mining. 

Class    8.    Smelting. 

Class  9.  Quarrying. 

Class  10.  Operating  for  petroleum  and 
other  oils. 

Class  11.  Telegraph  and  telephone. 

Class  12.  Ocean  navigation. 

Class  13.  River    navigation. 

Class  14.  Warehousing. 

Class  15.  Bridges  and  dry  dock,  etc.. 
building. 

Class  17.  Trust  and  guarantee  companies. 

Class  17.  Gas   and    electric    light. 

Class  18.  Turnpike,  plankroad  and  pas- 
senger  railways. 

Class  19.  Stage  and  stage  coaches. 

Class  20.  Water. 

Class  21.  Immigration. 

Class  22.  Trafficking   in    patent    rights. 

Class  23.  Accident  insurance. 

May  be  formed  for  two  or  more  such  pur- 
poses. 

Consolidation  of  two  or  more  corporations. 
Same. 


General  Regulations. 

Sec.  42.  Certificate  of  Incorporation,  requirements 
of. 

43.  To   be   submitted   to   judge   for  approval. 

44.  Indorsement   of  judge;   certificate   to    be 

recorded. 

45.  Signers   of   certificate   then   incorporated. 

46.  Certified  copy  of  certificate  to  be  evidence. 


8 


MAEYLAXD. 


Corporations  —  Art.  xxiii,  §  1. 


Sec.   47.  Alteration    or    amendnicnt,     how     to     bo 
made. 

48.  Fees  of  clerk   for   recording. 

49.  General  provisions  as  to  powers. 

50.  Power    to    have    succession    by    corporate 

name. 

51.  To  sue  and  be  sued. 

52.  To  have  a  common    seal. 

53.  To  acquire  and   own   property. 

54.  To   appoint   officers   and   agents. 

55.  To   make   by-laws. 

56.  Powers    not    conferred    shall    not    be    ex- 

ercised. 

57.  To  be  managed  by  trustees  and  directors, 

or  managers. 

58.  Elections  to  be  by  ballot. 

59.  Vacanies  among  directors,   how  filled. 

60.  Failure    to    elect    officers   not    to    dissolve 

corporation. 

61.  Subscriptions  to  stock,   how  made. 

62.  Books    to    show    what    property    was    re- 

ceived for  stock. 

63.  Stock  shall  be  deemed   personal  estate. 

64.  Individual  liability  of  stockholders. 

65.  Certificate  of  paid-up   stock. 

06.   Certain   stockholders   not   to   be   individu- 
ally liable. 

67.  Directors  of  insolvent  corporations  not  to 

declare  dividend:   penalty. 

68.  Dissenting    directors    not    liable,    when. 

69.  No   loan   to   bo   made   to   stockholders. 

70.  Calls  for  subscription. 

71.  Statement  of  condition,  how  obtained  by 

stockholder. 

72.  List  of  stockholders  to  be  kept  by  secre- 

tary. 

73.  Semi-annual  statement  of  assets  and  lia- 

bilities. 

74.  Increase   and   reduction   of   capital    stock. 

75.  Stock  not  to  be  reduced  until   debts  are 

paid. 

76.  Notice  of  meeting  of  stockholders  to   in- 

crease or  diminish  capital   stock. 

77.  Two-tliirds   vote  required. 

78.  Certificate  of  such  increase  or  reduction. 

79.  Par  value  of  stock  may  be  changed,  how. 

80.  Notice   of   such    meeting   to   stockholders. 

81.  Existing  corporations  may  become  incor- 

porated under  this  article. 

82.  Notice  of  meeting. 

83.  Certificate   of   such   incorporation. 

84.  Such  certificate  how  executed;  effect  of. 

85.  Corporations  subject  to  future  legislation. 

Foreign  Corporations. 

Sec.  109a.  Foreign  corporation  must  file  certificate; 
fees. 

100b.  Secretary  of  State  shall  issue  certificate. 

109c.  Failure  of  corporation  to  comply;  pen- 
alty. 

109d.  Same. 

109e.  Secretary  of  State  shall  furnish  copies 
of  certificates. 


Manufacturing  Companies. 

Sec.  143.  Manufacturing  corporation  may  change 
or  extend  its  business;  certificate  to 
be   filed. 


The  Remedies  for  Abuse,  Misuse  and  Non  Use  of 
Corporate  Potvers. 

Sec.  255.  Proceedings      by      attorney-general      or 
State's  attorney. 

256.  Corporation    must    file   answer. 

257.  Said   answer  may   be   traversed. 
2.58.   Trial  of  issues;  judgment. 

269.  Ex    parte    hearing   in    case    of  default. 

260.  Court   shall   dismiss   pt-tition,    when. 

261.  Petition   to   be   filed,    where. 

262.  Appeal. 

263.  Injunction    to    restrain    exercise    of    cor- 

porate powers. 


Dissolution. 

Sec.  264.  Insolvent    corporation    adjudged     to    be 
dissolved ;  necessary  proceedings. 
264a.   Distribution   of  assets. 

265.  Majority  of  stockholders  may  order'  dis- 

solution. 

266.  Plea  for  dissolution  must  allege  what. 

267.  Court  to  pass  order  to  show  cause. 

268.  Decree. 
2tffl.   Receivers. 

270.  Transfer  of  property  and  judgment  con- 

fessed   after    filing;    plea    for    dissolu- 
tion   shall    be   void. 

271.  Dissolution   not  to   affect   individual    lia- 

bility. 

272.  When  directors  shall  wind  up  affairs  of 

corporations. 

273.  Decree  of  dissolution   not  to   abate   any 

suit. 

274.  Suits  by  receiver. 

275.  Death    or    removal    of    receiver    not    to 

abate    suit. 

276.  Pending  suit  of  dissolved  company   may 

be  continued. 

Execution  against  Stock. 

Sec.  277.  Stock   liable   to    execution. 

278.  Levy  of   execution. 

279.  Sheriff     may    require     certificates     from 

officers   of   corporations. 

280.  Sheriff   shall   make   schedule. 

281.  Shall  advertise  and  sell  stock. 

282.  Penalty    against    corporation    for    trans- 

ferring stock  after  levy. 

283.  Release   of    stock    by   sheriff   If    writ   be 

countermanded. 

284.  Sale  and  transfer  by  sheriff. 

285.  Corporation,  or  any  of  its  officers,  refuse 

to   make   transfer;   penalty. 

286.  Remedies  of  purchaser. 

287.  Fee  for  making  transfer. 


Police. 


to 


Sec.  288.  Certain      corporations      may      apply 
governor  to  appoint  policemen. 

289.  Governor    may    appoint. 

290.  Oath,     authority     and     power     of     such 

policemen. 

291.  Policeman  to  wear  a  shield. 

292.  Compensation   of  such  policemen. 

293.  Termination  of  authority. 

Preferred  Stock. 

Sec.  294.  Who  may  issue  preferred   stock;  how  to 
be  Issued. 


Process. 

Sec.  295.  Foreign  corporations  liable  to  suit. 

296.  Process  to  be   served  upon   whom. 

297.  Suits   to  be   brought,    where. 

298.  Service  on  non-resident  officers,  when  al- 

lowable. 

299.  Judgment  by   default. 

300.  Creditor's   bill    against   company   debtor. 

301.  Name  by  which  corporation  may  be  sued. 

Taxation. 
Sec.  302.  Property  not  to  be  exempt  from. 

General  Applicability. 

Sec.  303.  This   article   applicable   to   all    Maryland 
corporations. 

Section  1.  Any  corporation  may  acknowl- 
edgo  any  doed  which  such  cori)oration  has 
tlie  power  to  make,  by  attorney  appointed 


MARYLAND. 


Miscellaneous  provisions  —  G.  L.,  Art.  xxiii,  §§  2-8. 


by  such  corporation,  under  the  seal  thereof, 
and  such  appointment  may  be  embodied  in 
the  deed. 

Power  to  acquire  and  hold  property.  §  53.  To 
have  a  seal.  §  52.  Penalty  against  corporation 
for  transferring  property  after  levy.    §  282. 

[Acknowledgement  of  mortgage  by  ofHoer  of 
corporation.    Bldg.   Assn.  v.   Brace,  51  Md.  508.] 

§  2.  No  corporation  created,  or  to  be  cre- 
ated, and  not  expressly  incorporated  for 
banking  purposes  shall,  by  any  implication 
or  construction,  be  authorized  to  exercise 
banking:  privileges,  or  to  issue  any  note, 
token  or  device,  scrip  or  other  evidence  of 
debt,  to  be  used  as  currency. 

See  Const.,  art.  Ill,  §  39.  Savings  bank  may  be 
incorporated.     §  29,  post. 

[Purpose  of  section  Is  to  prohibit  all  corpora- 
tions, except  banks,  from  using  paper  for  cir- 
culation as  currency,  and  not  from  giving  promis- 
sory notes,  as  evidences  of  debts.  Davis  v.  Build- 
ing Union,  32  Md.  294;  but  see  Duncan  v.  Md. 
Sav.  Inst.,  10  G.  &  J.  299;  Bank  v.  Katz,  57  Md. 
128.1 

§  3.  When  tbe  corporate  powers  of  any 
corporation  incoi-porated  under  the  lav\"S  of 
this  State,  are  clirected  by  its  charter  or 
certificate  of  incorporation  to  be  exercised 
by  any  particular  body,  or  number  of  per- 
sons, a  majority  of  such  body  or  persons,  if 
it  be  not  otherwise  provided  in  the  charter 
or  certificate  of  incoi-poration,  shall  be  a 
suflJicient  number  to  form  a  board  for  the 
transaction  of  business,  and  every  decision 
of  a  majority  of  the  persons  duly  assembled 
as  a  board,  shall  be  valid  as  a  corporate  act. 

Powers.  §§    49-56.    Affairs  to    be    managed    by 

directors.  §    57.    Election   to  be   by   ballot.     §    58. 

Directors  declaring  Illegal  dividend;  penalty. 
§§   67,   68. 

[What  may  constitute  quorum  of  directors. 
Bank  v.  Ruff,  7  G.  &  J.  448. 

In  the  absence  of  ijroof  to  the  contrary,  where 
it  appears  from  the  minutes  of  a  corporation  that 
a  meeting  of  trustees  was  held,  business  trans- 
acted, the  presumption  will  be  that  a  quorum  was 
present.    Baile  v.  College,  47  Md.  124.] 

§  4.  A  copy  of  any  l)y-law  of  any  corpora- 
tion incorporated  under  the  laws  of  this 
State,  under  its  seal  aifd  puiporting  to  be 
signed  by  the  president,  secretary  or  treas- 
urer of  the  coiporation,  shall  be  receivetl  as 
prima  facie  evidence  of  such  by-law  in  the 
courts  of  tills  State. 

Powers  to  make  by-laws.  §  55.  Certified  copy 
of  certificate  evidence.    §  46. 

[Book  of  by-laws  admissible  as  evidence.  Frank 
V.   Morrison,   58  Md.   423.] 

§  5.  The  president  and  directors  of  every 
corporation  sliall  keep  full,  fair  and  correct 
accounts  of  their  transactions,  which  shall 
be  open  at  all  times  to  the  inspection  of  the 
stockholders   or    members;    and    they    shall 


annually  prepare  a  full  and  true  statement 
of  the  affairs  of  the  corporation,  which  shall 
be  certified  to  by  the  president  and  secretary 
and  submitted  at  the  annual  meeting  of  the 
stockholders  or  members. 

Books  must  show  what  property  was  taken  for 
stock.  §  62.  Statement  of  condition  to  stock- 
holders. §  71.  Semi-annual  statement  of  assets 
and    liabilities.    S    73. 

[Failure  of  president  to  comply  with  this  sec- 
tion will  not  release  corporation  or  Its  stockholders 
from  liability  for  corporate  debts.  Weber  v. 
Fickey,   52  Md.   510.] 

§  6.  General  meetings  of  the  stockholders 
of  any  corporation,  incorporated  under  the 
laws  of  this  State,  may  be  called  at  any  time, 
upon  the  requirement  of  stockholders  enti- 
tled to  vote  a  majority  of  the  stock  of  said 
corporation,  of  which  meeting  not  less  than 
ten  days'  notice  shall  be  given  in  a  news- 
paper published  in  the  county  in  which  the 
principal  place  of  business  of  said  corpora- 
tion is  situated,  and  also  in  a  newspaper 
published  in  the  city  of  Baltimore;  and  when 
said  principal  place  of  business  is  situated 
in  said  city,  then  in  two  newspapers  pub- 
lished therein;  and  if  the  president  and  di- 
rectors refuse  to  call  such  meeting,  the  said 
stockholders  so  owning  a  majority  of  said 
stock  may  do  so  on  giving  notice  as  above 
set  forth. 

Majority  to  govern.  §  3.  Meetings  of  stock- 
holders to  Increase  or  diminish  stock.  §  76. 
Notice  of  stockholders'  meeting.  §§  80,  82.  Meet- 
ing to  order  dissolution.     §  265. 

§  7.  At  any  general  meeting  of  the  stock- 
holders, called  as  provided  for  in  the  pre- 
ceding section,  any  president,  director  or 
directors  of  said  corporation  may,  by  a  vote 
of  a  majority  in  interest  of  the  whole  num- 
ber of  stoclciiolders,  be  removed  from  ofiice, 
and  another  or  others  be  appointed  in  the 
place  of  the  person  or  persons  so  removed,  to 
serve  for  the  remainder  of  his  or  their  term. 

Majority  to  govern.  §  3.  Power  to  appoint  and 
pay  officers.  §  54.  Election  of  officers.  §§  58, 
59,   60. 

§  8.  (As  amended  April  7,  1892.)  When- 
ever five  or  more  stockholders  of  any  private 
corporation  created  under  the  laws  of  this 
State,  at  least  thirty  days  before  an  election 
for  managers,  directors  or  other  officers  of 
such  corporation  elected  by  the  stockholders 
thereof,  shall  give  notice  in  writing  of  their 
intention  to  canvass  the  votes,  which  may 
be  given  at  the  next  election  thereof,  and 
shall  deliver  said  notice,  at  the  usual  place 
of  business  of  such  corporation,  to  the  presi- 
dent, cashier,  secretary',  treasurer,  director 
or  other  principal  manager  of  such  company, 
it  shall  be  the  duty  of  the  oflScers  receiving 
such  notice,  immediately  to  communicate  the 


10 


MARYLAND. 


Miscellaneous  provisions;  formation —  G.  L.,  Art.  xxiii,  §§  9-14. 


same  by  mail  to  all  the  stockholders  of  said 
corporation  living  in  the  State  and  living  in 
other  States,  so  far  as  their  places  of  resi- 
dence appear  on  the  books  of  such  corpo- 
ration. 

§  9.  Upon  proof  made  to  the  judges  of  any 
such  election  of  such  notice  having  been 
delivered  as  aforesaid,  by  any  five  stock- 
holders, such  judges  shall,  before  receiving 
the  votes,  I'equire  every  stockholder  offering 
to  vote  in  person  the  stock  of  the  corjoora- 
tion,  to  make  an  oath  or  affirmation  that  the 
stock  which  such  person  proposes  and  otters 
to  vote  in  the  election  then  to  be  held,  is  his 
sole  and  bona  fide  property,  or  belongs  solely 
and  bona  tide  to  him  and  his  partner  or 
partners  in  trade,  or  is  held  by  him  as  trus- 
tee, or  in  some  fiduciary  relation,  to  be 
specified  in  such  oath,  and  that  his  right 
and  title  to  the  same  has  been  fairly  and 
bona  fide,  and  not  colorably  and  fraudu- 
lently created  or  acquired,  and  not  with  any 
intent  to  increase  the  number  of  votes  which 
would  otherwise  be  allowed  to  said  stock, 
nor  in  any  manner,  directly  or  indirectly, 
to  violate,  avoid  or  evade  the  standard  of 
voting,  as  fixed  either  by  the  charter  of  said 
compan:^'  or  its  by-laws,  and  that  the  said 
stock,  to  the  best  of  his  knowledge,  belief 
and  information,  or  any  interest  he  has 
therein,  is  not  retained  in  his  name  or  in 
that  of  his  partner,  on  the  books  of  said 
corporation,  with  any  such  intent,  design  or 
purpose,  and  that  he  does  design  in  all  re- 
spects and  in  good  faith  to  comply  with  the 
charter  of  the  said  coii^oi-ation  and  its  regu- 
lations upon  the  subject  of  voting  stock 
therein. 

§  10.  Whenever  such  stock  is  owned  by 
and  stands  in  the  name  of  any  corporation 
or  body  politic,  some  officer  thereof  shall 
take  the  oath  prescribed  in  the  preceding 
section,  and  further  declare,  on  oath,  that 
he  has  full  opportunity,  from  his  official 
station  in  the  corporation,  to  know  the  opin- 
ions and  sentiments  of  a  majority  of  the 
directors  thereof,  in  relation  to  such  stock, 
and  that  he  represents  them  fairly  in  the 
premises. 

[Corporation  may  Invest  in  stock  of  another 
corporation.    Booth  v.  Robinson,  55  Md.  419. 

And  may  vote  such  stock  at  all  meetings  of 
stockholders.  Davis  v.  P.  &  L.  Co.,  77  Md.  35; 
s.    c,   25   Atl.   Rep.   982. 

But  this  right  may  not  be  used  to  destroy  an- 
other corporation.  Id.;  see,  also,  Mfg.  Co.  v. 
The  Okisko  Co.,  5  Md.  152;  s.  c,  1  Md.  Ch.  Dec. 
392.] 

§  11.  (As  amended  April  7,  1892.)  If  no- 
tice shall  be  given  for  a  canvass  of  votes, 
as  prescribed  in  section  eight,  then  at  the 
election  with  reference  to  which  such  notice 
shall  be  given,  no  person  or  body  coi-porate 
shall  vote  by  proxy  on  stock  held  in  any 
private  corporation  unless  the  person,  or  in 
case  of  a  body  corporate  tlie  president, 
cashier,  or  some  lawfully-constituted  officer 
thereof,  shall  make  oath  before  some  person 


authorized  by  the  laws  of  Mai-yland,  or  by 
the  laws  of  the  State  where  the  same  shall 
be  administered,  to  administer  an  oath  to 
the  same  eft'ect  as  required  by  section  nine 
of  this  article,  a  certificate  of  which  oath 
shall  be  produced,  before  the  person  or  per- 
sons holding  said  election  before  any  vote 
by  proxy  shall  be  received. 

Elections  to  be  by  ballot.    §  58. 

§  12.  No  person  shall  act  as  the  director 
of  any  bank  requiring  that  the  directors 
thereof  shall  hold  any  number  of  shares 
therein,  unless  the  said  director,  before  he 
acts  as  such,  shall  make  oath  before  some 
justice  of  the  peace,  that  he  is  the  sole  and 
bona  fide  o'WTier  of  the  stock  standing  in 
his  name  on  the  books  of  said  bank,  and 
that  the  same  has  not  been  transferred  to 
qualify  him  to  serve  as  director  therein. 

§  13.  In  all  cases  where  the  stock  in  any 
corporation  in  this  State  shall  have  been 
hypothecated  or  pledged  by  the  owner 
thereof  as  security  for  the  payment  of  any 
debt  or  loan,  such  person,  upon  exhibiting 
to  the  person  holding  any  election  in  such 
corporation,  a  certificate  in  writing  from 
the  pawnee  of  said  stock,  tliat  the  same  is 
held  in  pledge  or  by  hypothecation,  shall, 
until  forfeiture,  be  deemed  and  taken  to 
be  the  holder  of  such  stock,  and  as  such, 
entitled  to  vote  the  same;  and  every  person 
holding  stock  in  such  corporation  as  execu- 
tor, administrator,  guardian  or  trustee,  shall 
represent  the  shares  of  stock  in  his  hands, 
and  may  vote  accordingly  as  a  stockholder 
at  any  election  in  such  corporation. 

Porm.ation  of  Corporations. 

§  14.  Corporations  may  be  formed  in  this 
State,  under  the  provisions  hereinafter  set 
forth,  by  any  five  or  more  persons,  citizens 
of  the  United  States,  and  a  majority  of 
them  citizens  of  this  State,  or  if  unnatural- 
ized, residents  of  this  State,  making  oath 
that  they  bona  fide  intend  to  become  citi- 
zens of  the  United  States  without  unreason- 
able delay,  who  may  desire  to  form  a  body 
corporate  or  politic,  for  any  of  the  following 
purposes : 

[Corporation  may  be  private,  and  yet  charter 
contain  provision  of  a  purely  public  character. 
University  v.   Williams,   9  G.   &  J.  365. 

Legislature  intended  this  act  to  be  a  substitute 
for  all  existing  general  laws  on  the  subject  (see 
Const.,  art.  Ill,  §  48),  but  does  not  repeal  charters 
of  corporations  previously  existing.  Montel  v. 
Coal  Co.,  39  Md.  1G4;  Webb  v.  Ridgely,  38  id.  364. 

Corporation  must  dwell  in  place  of  Its  creation, 
but  may  do  business  In  other  States.  Ins.  Co.  v. 
Lancley.  G2  Md.  196. 

Where  a  corporation  Is  formed  under  the  general 
law,  compliance  with  provisions  of  the  statute 
sufficient  proof  that  person  who  signed  the  articles 
have  accepted  the  same.  Glymont  Co.  v.  Toler, 
80  Md.  278;  s.   c,  30  Atl.   Rep.  278. 

Neither  directors  nor  majority  of  stockholders 
have  power  to  make  fundamental  changes  In 
charter,  inconsistent  with  objects  for  which  It 
was  granted.    Id. 


MARYLA^^D. 


11 


Formation  for  what  purposes  —  G.  L.,  Art.  xxiii,  §§  15-27. 


Where  a  statute  provides  that  the  charter  of  a 
certain  company  shall  be  continued  in.  full  force 
for  a  period  of  thirty  years,  such  statute  operates 
merelj'  to  revive  and  extend  the  charter  of  the 
company,  and  does  not  create  a  new  and  distinct 
corporation.  Mining  Co.  v.  R.  R.  Co.,  81  Md.  28; 
s.   c,   31   Atl.   Rep.    698.] 

§  15.  Class.  2.  For  the  creation  and  main- 
tenance of  mechanics'  institutes,  co-opera- 
tive stores  or  societies,  libraries,  public 
reading  or  lecture-rooms,  medical  societies, 
public  hotels,  public  baths,  dairy  associa- 
tions and  agricultural  or  horticultural  so- 
cieties, fairs  or  exhibitions,  and  companies 
for  the  packing  of  fruits,  vegetables  and 
other  things;  Provided,  Such  corporations 
are  located  in  this  State,  and  the  property 
they  possess  or  acquire  is  located  therein. 

§  IG.  Class  3.  For  buying,  selling,  mort- 
gaging, leasing,  improving,  disposing  of,  or 
otherwise  dealing  in  lands  in  this  State,  or 
partly  in  this  State,  and  partly  beyond  this 
State,  and  for  the  procuring  and  preparing 
for  market,  transportation  and  selling  of 
lumber,  timber,  wood,  trees,  plants,  seeds, 
fruits,    roots   or   other  products   of   land. 

General  power  of  corporations  to  acquire  prop- 
erty. §  53.  Corporation  may  aeliuowledge  deeds. 
§  1. 

§  17.  Class  4.  For  the  formation  of  fire, 
life,  marine,  accident,  cattle,  live  stock  and 
other  insurance  companies,  and  all  compa- 
nies for  receiving,  weighing  sheltering, 
feeding  and  exposing  for  sale,  cattle,  sheep 
and  hogs;  Provided,  That  such  companies 
shall  have  their  principal  otfice  in  this  State; 
And  provided  the  yai'ds  and  scales  of  every 
company  for  receiving,  weighing,  sheltering, 
feeding  and  exposing  for  sale,  cattle,  sheep 
and  hogs,  shall  be  located  either  within  the 
city  of  Baltimore  or  within  a  distance  of 
not  more  than  six  miles  from  the  limits 
thereof;  And  provided  further.  That  all  such 
cattle,  sheep  and  hogs  shall  be  w^eighed  by 
or  under  the  supervision  of  the  State  weigh- 
master,  as  now  provided  for  by  law;  such 
weighing  to  be  done  at  the  yards  and  scales 
of  such  company. 

§  19.  Class  G.  For  carrying  on  in  this 
State  any  kind  of  manufacturing,  ship- 
building, mechanical,  industrial  or  chemir-nl 
business,  and  for  the  sale,  transportation, 
or  other  disposition  of  the  products  thereof. 
For  manufacturing,  furnishing  and  selling 
hot  water  or  steam  for  motive  power,  heat- 
ing, cooking  or  other  useful  applications  in 
the  streets  and  public  and  private  buildings 
of  any  city,  village  or  town  in  this  State; 
and  such  corporation  shall  have  the  power 
to  lay  pipes  or  conductors  for  conducting 
hot  water  or  steam  through  tlie  streets, 
avenues,  lanes,  alleys,  squares  and  highways 
In  such  city,  village  or  town,  with  the  con- 
sent of  the  municipal  authorities  of  said 
city,  town  or  village,  and  under  such  rea- 
sonable regulations  and  conditions  as  they 
may  prescribe. 


§  19a.  Class  6a.  (Enacted  March  19,  1890.) 
For  the  pui-pose  of  carrying  on  the  business 
of  printing,  publishing  or  selling  books, 
pamphlets  or  newspap<'rs,  or  of  carrying  on 
the  general  business  of  a  jol)  printing  ortice. 

§  20.  Class  7.  For  conducting  any  kind  of 
mining  business  in  this  State,  and  for  selling 
or  otherwise  disposing  of  the  products  of 
said  business  where  the  principal  office  of 
said  corporation  is  located  in  this   State. 

§  20a.  Class  7a.  (Added  April  0.  1894.) 
For  conducting  or  carrying  on  in  this  State 
and  elsewhere,  any  lawful  wholesale  or  re- 
tail trading,  commercial  or  mercantile  Inisi- 
ness,  where  the  principal  ottice  and  place 
of  business  of  the  coi-poration  are  located 
in  this  State. 

§  21.  Class  8.  For  washing,  dressing, 
smelting  and  otherAvise  preparing  for  and 
bringing  to  market  and  selling  the  ores  of 
all  kinds  of  metals;  Provided,  Said  corpora- 
tions carry  on  their  general  operations  in 
this  State,  and  have  their  principal  office 
therein. 

§  22.  Class  9.  For  opening  and  working 
quarries  of  marble,  slate  or  other  economic 
minerals  or  mineral  substances  in  this  State, 
and  for  the  manufacturing  thereof  in  this 
State,  and  for  the  transportation  or  exporta- 
tion and  sale  thereof. 

§  23.  Class  10.  For  boring  for,  opening, 
using  or  refining  petroleum,  salt,  or  other 
mineral  springs  in  this  State,  and  for  boring 
for,  opening,  using  or  refining  in  this  State, 
other  oils,  where  the  principal  office  of  said 
corporation  is  located  in  this  State. 

Taxation  of  such  companies.  See  Acts  of  1890, 
at  pp.  41-43. 

§  24.  Class  11.  For  constructing,  owning 
or  operating  telegraph  or  telephone  lines  in 
this  State,  where  the  principal  office  of  said 
corporation  is  located  in  this  State,  and  for 
the  transaction  of  any  business  in  which 
electricity  over  or  through  wires  may  be  ap- 
plied to  any  useful  pui-pose. 

Taxation  of  such  companies.  See  Act  of  1890, 
at  pp.  41-43. 

§  25.  Class  12.  For  navigating  the  ocean 
by  steam,  sail  or  other  ships  or  vessels,  and 
transportation  of  goods  and  passengers 
therein,  where  the  principal  port  of  entry 
or  departure  thereof  is  in  the  United  States, 
and  the  principal  business  office  of  said  cor- 
poration is  located  in  this  State. 

§  26.  Class  13.  For  navigating  the  Avaters 
of  this  and  adjoining  States  by  steam,  sail 
or  other  boats  or  vessel'.,  and  for  the  trans- 
portation of  goods  and  passengers  therein, 
where  the  principal  office  of  said  corpora- 
tion is  located  in  this  State. 

§  27.  Class  14.  For  carrying  on  any  for- 
warding or  w^arehousing  business  in  this 
State,  and  for  the  construction,  owning, 
chartering  or  leasing  of  steamboats,  wharves. 


12 


MAEYLAND. 


Formation  for  what  purposes;  consolidation  —  G.  L.,  Art.  xxiii,  §§  28-39a. 


clocks,  roads,  vehicles  or  other  property  re- 
quired for  the  purpose  of  such  forwarding 
or  warehousing  business,  where  tlie  princi- 
pal office  of  said  coi-poration  is  located  in 
this  State. 

§  28.  Class  15.  For  acquiring  or  construct- 
ing and  maintaining,  selling,  leasing  or 
otherwise  disposing  of,  an.v  bridge,  pier, 
wharf,  floating  or  dry  dock,  or  marine  rail- 
way, in  this  State  where  the  principal  office 
of  said   corporation  is  located   therein. 

S  29.  Class  IG.  For  the  formation  of  sav- 
ings institutions,  trust  companies  and  guar- 
antee companies. 

Banking  privileges  exist  only  by  special  grant. 
§  2.  Director  of  bank  must  be  stockholder.  §  12. 
Taxation  of  trust  and  guaranty  companies.  See 
Act  of  1890,  at  pp.  41-43. 

§  30.  Class  17.  For  the  formation  of  gas 
light  or  electric  light  companies. 

Taxation  of  such  companies.  See  Acts  of  1800, 
at  pp.  41-43. 

§  31.  Class  18.  For  the  formation  of  turn- 
pike and  plankroad  companies,  and  of  pas- 
senger railway  companies,  outside  of  the 
limits  of  the  city  of  Baltimore;  but  no  pas- 
senger railway,  constructed  under  the  pro- 
visions of  this  article,  shall  exceed  twelve 
miles  in  length. 

[Power  of  State  to  annul  franchise  of  plank- 
road  companies.     Road   Co.    v.    State,    19    Md.    239. 

Liability  of  turnpike  company  for  non-perform- 
ance of  duty.  Turnpike  Co.  v.  Cassell,  66  jMd. 
419;  s.  c,  7  Atl.  Rep.  805;  Road  Co.  v.  Crowther, 
63  Md.  .558;  s.  c,  1  Atl.  Rep.  279.  May  be  sued, 
whore.    Id.] 

§  32.  Class  li).  For  establishing  and  main- 
taining lines  of  stages  and  stage  coaclies  for 
the  conveyance  of  passengers  and  malls  of 
the  United  States  within  this  State. 

§  33.  Class  20.  For  the  purpose  of  suppl.v- 
ing  any  city  or  town  in  this  State  with 
pure  water. 

[Fact  that  corporation  formed  for  purpose  of 
supplying  city  with  pure  water,  diverted  water 
of  a  certain  stream  from  Its  customarj-  channel 
prior  to  institution  of  condemnation  proceedings, 
does  not  deprive  corporation  of  right  to  condemn. 
Moores  t.  W.  &  L.  Co.,  79  Md.  391;  s.  c,  29  Atl. 
Rep.   1033.] 

§  34.  Class  21.  For  the  formation  of  so- 
cieties or  associations  for  the  promotion  of 
immigration  into  this  State. 

§  ?>r>.  Class  22.  For  the  acquiring,  devel- 
oping, improving,  using,  working  or  other- 
wise utilizing  or  disposing  of  any  novelty, 
invention  or  process  patented  by  the  United 
States;  and  for  the  sale,  lease  or  other  dis- 
position of  articles  manufactured  under 
such  patent. 

§  :'>(;.  Class  23.  For  the  formation  of  ac- 
cident insurance  companies  on  the  assess- 
ment plan. 


§  37a.  Class  25.  (Added  by  L.  1898,  ch. 
163.)  For  the  formation  of  fire  patrol,  prop- 
erty patrol,  police  patrol,  land  patrol  and 
water  i)atrol  companies. 

§  38.  Any  company  may  be  inconiorated 
for  any  two  or  more  of  the  purposes  afore- 
said, where,  in  the  judgment  of  those  form- 
ing said  company  the  same  may  be  con- 
ducted b}^  one  corporation,  with  advantage 
to  its  general  interests. 

Consolidation  of  two  or  more  companies.  §§  39, 
39a. 

[Mining  and  manufacturing  corporations  may 
combine.    Basshor  v.  Dressel,   34  Md.   5U3.] 

§  39.  Any  corporation  iucori)orated  under 
this  article,  or  any  corporation  heretofore 
formed  and  now  existing,  the  capital  stock 
of  which  has  been  fully  paid  up,  may  unite 
with  any  other  corporation  incorporated  un- 
der this  article,  the  capital  stock  of  which 
has  also  been  fully  paid  up,  where  the  said 
corporations  have  been  originally  incorpo- 
rated in  whole  or  in  part  for  the  same  pur- 
pose, and  may  by  such  union  form  one  new 
corporation;  Provided,  That  a  majority  of 
the  stockholders  of  each  of  the  said  corpo- 
rations forming  such  union  shall  assent 
thereto.  Such  union  or  consolidation  shall 
be  made  upon  such  terms  and  conditions  aa 
shall  be  agreed  upon  by  the  said  corpora- 
tions; and  the  said  new  consolidated  corpo- 
ration shall  have  such  name  and  such  capital 
stock  as  shall  be  agreed  upon  between  the 
corporations  parties  tliereto;  and  Avhen  such 
union  or  consolidation  is  made,  a  certificate 
of  the  said  union  and  of  the  particulars 
thereof  shall  be  executed  by  the  said  corpo- 
rations, and  be  acknowledged  and  recorded 
as  other  certificates  of  incorporations  are  in 
this  article  directed  to  be  acknowledged  and 
recorded. 

See   §  38. 

§  39a.  (Added  April  7,  1892.)  When  the 
aforesaid  certificate  of  union  shall  have  been 
executed,  acknowledged  and  recorded  as 
provided  in  section  .39  of  this  article,  all 
the  property  and  assets  belonging  to  said 
former  separate  corporations  of  whatsoever 
nature  and  description,  and  all  the  poAvers 
and  rights  and  all  the  debts  and  liabilities 
of  said  former  separate  coniorations  of 
whatsoever  nature  and  description,  shall 
upon  such  recording  as  aforesaid,  be  de- 
volved upon  said  new  consolidated  corpora- 
tion, and  every  devise  or  bequest  in  favor 
of  either  of  the  former  separate  corpora- 
tions, and  which  said  former  separate  cor- 
poration.s  would  have  been  capable  of  tak- 
ing, shall  devolve  upon  said  new  consolidated 
corporation,  Avliich  sliall  be  regarded  as  sub- 
stituted by  operation  of  laAv  in  the  room  and 
stead   of   said   former  sciKirate  corporation. 

See   §§  38,  39. 


^LzVRYLAXD. 


13 


Certificate  of  incorporation  —  G.  L.,  Art.  xxiii,  §§  42-44. 


General  Regulations. 

§  42.  Any  five  or  more  persons,  citizens  of 
the  United  States,  and  a  majority  of  them 
citizens  of  this  State.  Avho  may  desire  to 
form  a  corporation  for  any  of  the  purposes 
hereinbefore  referred  to,  shall  make,  sign, 
seal  and  acknov\ledse  before  some  officer 
competent  to  take  tlie  acknowledgment  of 
deeds,  a  certificate  in  writing  in  which  shall 
be  stated: 

1.  The  names  in  full  and  places  of  resi- 
dence of  the  applicants. 

2.  The  proposed  coii)orate  name  of  the 
corporation,  which  shall  always  include  the 
name  of  the  county  or  city  in  which  it  may 
be  formed. 

3.  The  object  or  purposes  for  which  in- 
eoiT)oration  is  sought,  the  time  of  its  exist- 
ence, not  to  exceed  forty  years,  and  the 
articles,  conditions  and  provisions  under 
which  the  incorporation  is  formed;  Provided, 
That  the  limitation  as  to  the  duration  of  ex- 
istence of  corporations  formed  under  this  ar- 
ticle shall  not  apply  to  gaslight  companies. 

4.  The  place  or  places  where  the  opera- 
tions of  the  corporation  are  to  be  carried 
on,  and  the  place  in  this  State  in  which 
the  principal  office  of  the  corporation  will 
be  located. 

5.  The  amount  of  capital  stock  (if  any)  of 
the  corporation. 

6.  The  number  of  shares  of  stock  (if  any) 
and  the  amount  of  each  share. 

7.  The  number  of  trustees,  directors  or 
managers,  and  their  names,  who  shall  man- 
age the  concerns  of  the  corporation  for  the 
first  year. 

Corporations  must  be  formed  under  general 
laws.  Const.,  art.  Ill,  §  54.  Purposes  of  incor- 
poration. §§  14-3S.  Amendments  to  certificate. 
§  47.  Powers.  §§  49-56.  Forfeiture  of  franchises. 
§§  255-2G3.  Dissolution.  §§  264-270.  Increase  or 
reduction  of  stock.  §  74.  Existing  corporation 
may  Incorporate  under  this  section.  §§  81-84. 
All  corporations  subject  to  future  legislation. 
§  85.    Manufacturing  corporation.    §  85. 

[An  act  or  charter  of  incorporation  is  merely 
an  offer  until  consummated  by  acceptance.  State 
V.  R.   R.  Co.,  12  G.   &  J.  400. 

Presumption  of  law  is  that  all  requirements  of 
charter  have  been  complied  with,  where  ooipora- 
tion  has  gone  into  action,  and  rights  have  been 
acquired  under  it,  and  this  is  the  presumption 
against  a  sub.scriber,  sued  for  his  subscription. 
Road  Co.  V.   Creeger,  5  H.   &  J.   122. 

Every  bodv  politic  not  incorporated  by  a  puDlic 
law  must  sliow  authority  under  which  it  ac-ts  as 
a  corporation.  McKim  v.  Odom,  3  Bl.  40*.  ^\  hen 
called  upon  as  defendant,  its  corporate  capacity 
is  admitted.  Id.  Three  classes  of  corporations  de- 
fined.   Id.  '      .      ,    I,  „* 

A  copartnership  may  be  dissolved  by  some  of 
Its  members  becoming,  as  to  some  purposes  as 
partnership,  a  body  politic  under  an  i^ct  of  In- 
corporation.   Cape    Sable    Co.'s    case,    3    Bl.    60b 

It  was  the  intention  of  legislature  that  Act  of 
1868  should  be  a  substitute  for  all  existing  general 
corporations  laws.  Montel  &  Co.  v.  Coal  Co.,  39 
Md.    104;    Strauss   v.    Heiss,    48    id.    J92. 

Defects  in  certificate  of  incorporation  cured 
by  legislative  recognition  of  the  corporation. 
Basshor  v.  Stebbins,  34  Md.  503. 


Conditions  precedent  to  corporate  existence. 
Ins.  Co.  v.  Hart,  31  Md.  59;  Lyons  v.  R.  R.  Co., 
32  Id.  18. 

Xot  necessary  for  all  subscribers  to  certificate 
to  make  required  acknowledgment,  provided  five 
or  more  do  so.  Hughes  v.  Antictam,  etc.,  Co., 
34  Md.  310.  The  particular  business  to  be  carried 
on  need  not  be  stated  in  certificate.  Id.  Acknowl- 
edgment by  president  and  directors  prior  to 
recording,  not  necessary.  Id.  Patent  defects  In 
certificate.     Id. 

Where  a  corporation  is  created  under  a  law 
which  requires  certain  acts  to  be  done  before  it 
can  be  considered  in  esse,  those  acts  must  appear 
to  have  been  done.  In  order  to  establish  corporate 
existence.     Lord    v.    Building    Assn.,    37    Md.    320. 

When  requirements  of  section  42  are  complied 
with,  and  certificate  is  recorded,  the  associates 
become  possessed  of  corporate  franchises  as 
effectually  as  if  same  had  been  by  direct  grant. 
Hager  v.   Cleveland,  30  Md.  476. 

Corporation  created  by  special  act  may  reor- 
ganize under  general  law.  Sprigg  v.  Tel.  Co., 
40  Md.  07. 

Legislature  has  power  to  amend,  by  special  act, 
a  charter  obtained  under  the  general  law.  Koch 
V.  R.   R.  Co.,  58  Md.  603. 

Legislative  act  reorganizing  existence  of  corpora- 
tion cures  all  defects  in  original  certificate.  Koch 
V.   R.  R.  Co.,  75  Md.  222;  s.  c,  23  Atl.  Rep.  463. 

A  charter  can  be  accepted  and  corporation  or- 
ganized only  within  State  creating  It.  Smith  v. 
Mining  Co.,  64  Md.  86;  s.  c,  20  Atl.  Rep.  1032.] 


§  43.  When  said  certificate  is  executed,  it 
shall  be  the  duty  of  the  persons  executing 
the  same  to  submit  it  to  one  of  the  judges 
of  the  judicial  circuit,  within  which  the 
principal  or  any  other  office  of  said  corpora- 
tion is.  under  said  certificate,  to  l)e  located, 
if  it  shall  be  located  in  one  of  the  counties 
of  this  State,  or  to  one  of  the  judges  of  the 
supreme  bench  of  Baltimore  city,  if  the 
principal  office  of  said  corporation  shall  be 
located  in  Baltimore  city,  in  order  that  the 
said  judge  may  determine  whether  the  said 
certificate  is  in  conformity  with  the  law; 
and  such  determination,  when  certified  by 
the  said  judge  as  required  by  the  next  suc- 
ceeding section,  shall  be  conclusive  evidence 
that  such  certificate  does  conform  to  the 
law. 

[Goodman  v.  Jedijah  Lodge,  67  Md.  125;  s.  c,  9 
Atl.   Rep.    13;   13  id.   627.] 

§  44.  If  the  said  judge  shall  so  determine, 
he  shall  certify  his  said  determination  upon 
the  said  certificate,  which  sliall  thereupon 
be  recorded  in  the  office  of  the  clerk  of  the 
circuit  court  for  the  county  in  which  the 
principal  office  of  said  corporation  shall,  by 
the  terms  of  said  certificate,  be  located,  if 
it  shall  be  located  in  one  of  the  counties  of 
this  State,  or  in  the  office  of  the  clerk  of  the 
superior  court  of  Baltimore  city,  if  the  prin- 
cipal office  of  said  corporation  shall  be  lo- 
catetl  therein;  and  the  said  certificate  shall 
be  recorded  in  a  book  provided  for  that 
special  purpose. 

Fees  for  recording.    §  48. 

[The  authoritv  of  a  judge  to  certify  to  the  for- 
mality of  articles  of  incorporation  is  a  question 
of  jurisdiction,   and,  as  such.   Is  a  proper  subject 


14 


MAKYLA^CD. 


Certificate  of  incorporation;  powers  —  G.  L.,  Art.  xxiii,  §§  45-51. 


of  Inquiry  by  the  courts  when  legal  existence  of 
the  corporation  Is  In  issue.  Oler  v.  R.  R.  Co., 
41  Md.  583.] 

§  45.  Wlien  the  said  certificate  shall  have 
been  recorded,  the  i>ersons  who  have  signed 
and  acknowledged  the  same,  and  their  suc- 
cessors shall,  according  to  the  objects,  pur- 
poses, articles,  conditions  and  provisions  in 
said  instrument  contained,  become,  and  be 
a  body  politic  and  corporate,  in  fact  and  in 
law,  by  the  name  stated  in  such  certificate. 

[Person  may  recover  for  work  done  for  corpora- 
tion before  certificate  was  recorded,  if  work  be 
afterward  accepted.  Grape  S.  &  V.  Co.  v.  Small, 
40  Md.    395. 

Pre-requisites  must  be  complied  with  before 
privileges  may  be  exercised.  Grumbine  v.  State, 
CO  Md.  355. 

When  certificate  has  been  recorded,  the  as- 
sociates become  possessed  of  corporate  franchises 
as  effectually  as  if  same  had  been  by  direct  grant. 
Hager  v.  Cleveland,  36  Md.  476.] 

§  4G.  A  copy  of  such  certificate,  or  of  any 
amendments  thereto,  or  of  any  paper  relat- 
ing to  corporations,  which  is  required  by 
law  to  be  recorded,  when  certified  to  be  a 
true  copy  by  the  clerk  of  the  court  in  whose 
office  the  same  Is  recorded,  under  the  seal 
of  his  office,  shall  be  evidence  in  all  legal 
proceedings,  and  in  all  the  courts  of  this 
State. 

Certified  copy  of  by-laws  evidence.    §  4. 

§  47.  If  any  alteration  or  amendment  of 
the  articles  or  provisions  of  the  charter  of 
any  of  said  corporations,  shall  be  made  by 
the  authority  of  the  corporation,  such  altera- 
tion or  amendment  shall  be  made  known, 
acknowledged  and  recorded  in  the  same 
manner  as  prescribed  in  sections  42,  43  and 
44  of  this  article;  and  after  the  said  altera- 
tion or  amendment  shall  be  recorded,  the 
same  shall  be  taken  to  be  a  part  of  the  said 
charter  or  instrument,  as  if  the  same  had 
originally  been  made  a  part  thereof. 


Increase  or  reduction  of  capital  stock. 
Change  In  par  value.    §§  79,  80. 


74-78. 


§  48.  The  usual  fees  for  equal  or  similar 
services  shall  be  received  by  the  respective 
clerks  under  this  article,  and  all  the  ex- 
penses of  procuring  the  charter  of  incor- 
poration and  recording  the  same,  shall  be 
borne  by  the  parties  respectively  applying 
therefor;  and  the  date  and  fact  of  recording 
shall  be  indorsed  by  the  clerk  on  every 
original  instrument. 

§  49.  Every  corporation  incorporated  un- 
der this  article  shall  have  the  following 
powers  and  be  subject  to  the  following  gen- 
eral regulations,  except  in  cases  where  the 
special  provisions  relating  to  any  particular 
corporation  are  inconsistent  with  the  said 
general  regulations. 

Only  powers  conferred  may  be  exercised.  §  56. 
Remedies  for  abuse  of  powers.  §§  255-203.  Bank- 
ing  privileges   not   to   be   exercised.    §  2. 


[The  possession  of  power  by  a  corporation  to  do 
an  act  is  of  itself  possession  of  right  to  provide 
for  doing  of  that  act  by  agents.  Mayor  v.  Howard, 
6  H.    &  J.   3S3. 

Corporation  has  no  power  to  do  what  It  is  in- 
hibited by  its  charter  from  doing.  Albert  v. 
Bank.  2  Md.  159. 

The  creation  of  a  corporation  for  a  specified 
purpose  implies  a  power  to  use  the  necessary 
and  usual  means  to  effect  that  purpose.  Road  Co. 
V.  Young,  1  Md.  476;  Davis  v.  Building  Union, 
32  Md.  295. 

A.cceptance  of  additional  grants  and  powers  to 
existing  corporation  presumed  from  exercise  of 
powers,  or  other  unequivocal  acts,  but  such  pre- 
sumption mav  be  rebutted.  Lyons  v.  R.  R.  Co., 
32  Md.  18;  Xew,  etc.,  Co.  v.  Georges,  etc.,  Co., 
37  id.  537;  see,  also,  Smith  v.  Mining  Co.,  64  id. 
86;  s.  c,  20  Atl.   Rep.   1032.] 

§  50.  Any  such  corporation  shall  have 
power  — 

First.  To  have  succession  by  its  corporate 
name  for  the  period  prescribed  by  law  or 
by  the  certificate  evidencing  its  incorporation 
where  the  said  certificate  is  in  accordance 
Avith  law. 

Requirements  of  certificates.    §  42. 

[In  contracts,  it  is  sufBcient  that  name  of  cor- 
poration be  so  expressed  as  to  distinguish  it  from 
others.    Road  Co.  v.   Creeger,   5  H.   &  J.   122. 

In  actions  by  or  against  corporations,  correct 
statement  of  corporate  name  is  more  strictly  re- 
quired   than    in    contracts    with    them.    Id. 

Change  of  name  of  corporation  by  legislature 
does  not  abate  a  suit  in  equity  brought  by  such 
corporation.  Thomas  v.  School,  7  G.  &  J.  369. 
Objection  that  corporation  sues  by  wrong  name 
is  matter  of  abatement,  and  cannot  be  taken  on 
trial  of  the  general  issue.  Bank  v.  Orme,  3  Gill, 
443. 

A  misnomer  in  a  grant  to  a  corporation  does 
not  avoid  the  grant.  Vansant  v.  Roberts,  3  Md. 
119. 

Omission  of  part  of  corporate  name  In  assign- 
ment of  mortgage.  Chilton  v.  Brooks,  71  Md.  445; 
s.   c,   18  Atl.    Rep.   868.] 

§  51.  Second.  To  sue  and  be  sued,  com- 
plain and  defend  in  any  court  of  law  or 
equity. 

Attachment  against  corporate  stock.  Art.  IX, 
§  18.  Certified  copy  of  by-law  evidence.  §  4. 
Of  certificate.  §  46.  Proceedings  against  corpora- 
tion for  misuse  or  abuse  of  powers.  §§  255-263. 
Suit  for  dissolution  of  corporation.  §§  264  et  seq. 
Pending  suit  of  dissolved  corporation  continued. 
§  276.  Execution  against  stock.  §§  277-287.  Pro- 
cess against  corporations.  §§  295-301.  Proceed- 
ings for  failure  to  pay  taxes.  §§  88a-88j.  Suits 
by  and  against  foreign  corporations.    §  297. 

[Corporation  may  be  charged  in  actions  ex  de- 
licto as  well  as  ex  contractu.  McKim  v.  Odom, 
3  Bl.  407. 

Corporation  can  only  be  called  on  to  answer  by 
its  proper  name.    Binney's  case,  2  Bl.   99. 

Foreign  corporation  may  sue  in  courts  of  Mary- 
land.   Id.;   McKIm   v.    Odom,    supra. 

When  charter  of  corporation  is  legally  null  and 
void,  corporation  Is  no  longer  suable  at  law. 
Bank  V.   Bank,  10  G.  &  J.  346. 

Responsibility  of  steamboat  company  for  trans- 
porting escaped  slave  with  notice.  Xav.  Co.  v. 
Hungorford,   6  G.    &  J.   291. 

Corporation  should  be  sued  In  county  where 
located.    Cape  Sable  Co.'s  case,  3  Bl.   606. 


:^IAKYLAXD. 


15 


Corporate  powers  —  G.  L.,  Art.  xxiii,  §§  52,  53. 


Suit3  against  insolvent  corporation.  Id.  An  ac- 
tion of  assumpsit  may  be  sustained  against  a 
corporation.    Id. 

Expiration  of  charter  during  pendency  of  suit 
by  corporation  can  only  be  availed  of  by  a  plea 
puis  darrein  continuance.  Agnew  v.  Banli,  2  H. 
&   G.  479. 

Rules  of  construction  In  actions  bv  a  corpora- 
tion.   Road  Co.  V.  Creeger,  5  H.  &  J.  122. 

Ordinarily  stockliolder  not  a  competent  witness 
In  suit  brought  by  corporation.  Bank  v.  Ridgely, 
1  H.  &  G.  325. 

The  general  Issue  being  pleaded  In  an  action 
by  a  corporation,  the  plaintiffs  are  not  bound  to 
s.how  that  they  are  a  body  corporate.  Whitting- 
ton  V.  Bank,  5  H.  &  J.  489;  Agnew  v.  Bank,  supra. 

Many  cases  where  single  incorporator  has,  by 
bill  in  equity,  called  corporation  to  account  for 
his  share  of  rents  and  profits.  Binney's  case,  2 
Bl.  99.  Also  where  corporation  has  asked  relief 
against  mismanagement  and  frauds  of  its  officers. 
Id. 

Proceedings  In  equity  against  insolvent  corpora- 
tion admissible  in  suit  against  stockholder  to 
recover  unpaid  installments.  Hall  v.  Ins.  Co., 
5  Gill.   484. 

A  plea,  by  a  corporation,  to  the  jurisdiction  of 
a  Maryland  court,  that  the  corporate  property 
lies  partly  in  another  State,  or  that  its  corporate 
existence  is  derived,  in  part,  from  a  charter  of 
another  State,  is  not  tenable.  State  v.  Ry.  Co., 
18  Md.   193. 

To  maintain  its  cause,  corporation  must  show 
that  it  has  been  effectually  created.  Lord  v. 
Essex  Assn..  37  Md.  320. 

An  action  may  be  maintained  against  corpora- 
tion for  malicious  prosecution,  libel,  false  im- 
prisonment, assault  and  batterv  and  false  repre- 
sentation. Carter  v.  Mach.  Co.,  51  Md.  290.  And 
for  fraud  or  other  wrong  of  an  agent.  R.  R.  Co. 
y.   Bank,  60  Md.   36. 

But  to  make  corporation  answerable  for  acts 
of  its  officer  or  agent,  they  must  have  been  acting 
within  the  scope  of  their  authority.  Tolchester. 
etc.,  Co.  V.  Steinmeier,  72  Md.  313;  s.  c,  20  Atl. 
Rep.   188. 

Turnpike  company  may  be  sued,  where.  Road 
y.  Crowtner.  63  Md.  5.58:  s.  c,  1  Atl.  Rep.  279. 

Maryland  Statutes  of  Limitations,  bar  to  action 
against  stockholder,  when.  Attrill  y.  Huntington, 
70  Md.  191;  s.  c,  16  Atl.  Rep.  651. 

All  actions  In  regard  to  rights  and  Interests  of 
a  corporation  must,  as  a  general  rule,  be  brought 
by  the  corporation  itself.  Davis  v.  Gemmell,  70 
Md.  356;   s.   c,   17  Atl.   Rep.  259.] 


§  52.  Third.  To  make  and  use  a  common 
seal  and  alter  the  same  at  pleasure. 


[Where  seal  of  a  corporation  Is  affixed  by 
proper  officer,  proof  of  it  is  unnecessary.  B.  & 
B.  Co.  y.  Ins.   Co.,  3  Md.  305. 

Acts  of  a  corporation  may  be  evidenced  by 
writing  without  seal,  and  may  be  inferred  from 
other  facts  and  circumstances,  same  as  an  in- 
dividual. Bank  v.  Ridselv,  1  H.  &  G.  .326;  see, 
also,   Mfg.   Co.  v.   Okisko  Co.,   5  Md.   152. 

When  corporation  mav  contract  without  seal. 
Kennedy  v.   Ins.   Co.,   3   H.   &  J.   367. 

A  bill  filed  by  a  corporation  need  not  be  under 
Its  corporate  seal.  Creek  Co.  v.  Detmold,  1  Md. 
Ch.   371. 

The  answer  of  a  corporation  under  Its  corporate 
seal  has  same  force  and  effect  as  evidence  as 
answer  of  an  individual  not  under  oath  would 
have,  and  no  more.  C.  «S:  I.  Co.  v.  Wingert.  8 
Gill,    171;   Bouldin  v.    Mayor,    15  Md.   18. 

That  corporation  bound  itself  by  contract  under 
corporate  seal,  how  proved.  Zihlman  v.  Glass  Co., 
74  Md.  303;  s.  c,  22  Atl.  Rep.  271.  Sealing  is  the 
essential  part  of  execution  of  contract  by  corpo- 
ration.   Id. 

A  Ijill  in  equity  may  be  answered  by  a  corpora- 
tion only  under  its  corporate  seal.  Williams  Co. 
y.  Baking  Co.,  38  Atl.  Rep.  990.] 

1  43 


§  53.  Fourth.  To  acquire  by  purchase  or 
in  any  other  manner,  and  talve,  receive, 
hold,  use,  employ,  manage,  mortgage,  dis- 
pose of.  or  in  any  manner  not  inconsistent 
with  law,  deal  with  any  property,  real,  per- 
sonal or  mixed,  and  situated  in  or  out  of 
this  State,  which  may  be  necessary  or 
proper  to  enable  said  corporation  to  carry 
on  the  operations  or  fulfill  the  purpose's 
named  in  its  certificate  of  inconioration, 
and  generally  to  do  every  other  act  or  thing, 
not  inconsistent  with  law,  which  may  be 
necessary  or  proper  to  promote  the  objects, 
designs  and  purposes  for  which  said  cor- 
poration was  formed. 

Eminent  domain.  Const.,  art.  Ill,  §  40.  Execu- 
tion of  deed.  §  1.  No  loan  to  be  made  to  stock- 
holders. §  69.  Taxation  of  property.  §  302,  and 
art.   LXXXI.    See  note  to  §  50. 

[In  general  corporation  may  alien  all  or  any 
of  its  property  at  pleasure.  Binney's  case,  2  Bl. 
99. 

Corporation  may  transfer  property  to  trustee 
for  benefit  of  creditors,  or  mav  prefer  one  credi- 
tor by  transfer.  State  v.  Bank,  6  G.  &  J.  205; 
Bank  v.   Ellicott.    id.   363. 

Where  ehartt-r  requires  assent  of  three-fourths 
of  stockholders  to  make  a  contract,  or  mortgage, 
it  will  be  deemed  void  unless  such  assent  be 
shown.    Cape  Sable  Co.'s  case.  3  Bl.  606. 

Rules  of  construction  in  contracts,  leases,  bonds 
or  grants  by  corporation.  Road  Co.  y.  Creeger,  5 
H.  &  J.  122. 

Stockholder  loses  his  individuality  so  far  as  the 
transactions  of  the  corporation  are  concerned.  Al- 
bert  y.    Bank,    2   Md.    1.59. 

Corporation  may  borrow  money  to  conduct  its 
affairs  without  express  authority.  Booth  v.  Robin- 
son, 55  Md.  419.  And  power  to  give  mortgage  Is 
necessary  Incident  unless  expi-esslv  restrained  by 
the  charter.  Id.;  S.  B.  &  B.  Co.  v.  Ins.  Co.,  3  Md. 
305. 

Assignment  of  mortgage  by  corporation,  how 
made.  Chilton  v.  Brooks,  71  Md.  445;  18  Atl.  Rep. 
868. 

A  contract  between  the  State  and  a  corporation 
for  benefit  of  a  county  may  be  relinquished  by 
legislature,  whether  the  countv  objects  or  not. 
State  y.  R.  R.  Co.,  12  G.  &  J.  399. 

Deeds  of  corporate  property  by  directors  must 
be  held  to  have  been  ratified  bv  stockholders, 
when.  Stokes  v.  Detrick,  75  Md.  256;  s.  c,  23  Atl. 
Rep.   846. 

Liability  of  new  corporation  In  accepting  deed 
from  corporation  about   to  expire.     Id. 

In  legal  contemplation,  it  is  not  a  matter  of 
concern  to  this  State  whether  property  shall  ac- 
cumulate In  the  hands  of  foreign  corporations 
or  not;  this  Is  a  question  to  be  regulated  by 
each  State  for  Itself.  Vansant  v.  Roberts,  3 
Md.  119. 

Foreign  corporations,  especially  telegraph  com- 
panies, may  do  business  and  hold  property  within 
this  State.  Day  v.  Tel.  Co.,  66  Md.  354;  s.  c,  7 
Atl.    Rep.   608. 

Mortgagor  allowed  set-oflC  against  building  asso- 
ciation.    Hennighausen  v.  Tlscher,  50  Md.  583. 

Director  not  competent  to  become  purchaser 
of  corporate  property,  when.  Hoffman,  etc.,  Co. 
y.  Cumberland,  etc..  Co.,  16  Md.  456. 

Restrictions  Imposed  by  charter  of  a  corporation 
upon  amount  of  property  which  may  be  held, 
cannot  be  taken  advantage  of  collaterally,  but 
only  by  the  State  In  a  direct  proceeding  Instituted 
for"  that  purpose.  Hanson  v.  Sisters,  79  Md.  434; 
s.   c,   32  Atl.   Rep.    1U52. 

Corporation  may,  without  express  authority, 
borrow  money  and  issue  notes  for  the  payment 
thereof.  Helronimus  v.  Sweeney,  34  Atl.  Rep. 
823.] 


16 


MAKYLAND. 


Corporate  powers;  directors  —  G.  L.,  Art.  xxiii,  §§  54-57. 


§  54.  Fifth.  To  appoint  a  president  of  the 
company  from  among  the  directors,  trustees 
or  man.-i-tors,  and  to  appoint  sueli  officers 
and  agents  as  the  business  of  the  corpora- 
tion sliall  require;  to  allow  them  a  suitable 
compensation,  require  security  for  the  faith- 
ful discharge  of  their  duties,  and  regulate 
the  tenure  of  office  of  the  said  officers. 

Accounts  of  oflScers.  §  5.  Removal  of.  §  7. 
OflScer  to  vote  stock.  §  10.  Trustees  and  di- 
rectors. §§  57-59.  Failure  to  elect  officers  not 
to  dissolve  corporation.  §  60.  Service  of  pro- 
cess on  non-resident  officer.     §  298. 

[Liability  of  corporation  to  individual  stock- 
holders for  fraud  or  mismanagement  of  officers. 
Whittington  v.    Bank,  5   H.   &  J.   489. 

Corporation  may  be  bound  by  acts  of  agenf 
though  such  acts  are  not  reduced  to  writing. 
Bank  v.  Ridgelv,  1  H.  &  G.  325;  Bank  v.  Bate- 
man,  7  H.  &  J.  104;  R.  R.  Co.  v.  Bastian,  15 
Md.  404;  Eckenrode  v.  Chem.   Co.,  55  id.  51. 

Bond  of  an  officer  is  limited  to  duration  of 
corporation.      Bank   v.    Ridgely,    supra. 

A  vote  or  resolution  appointing  an  agent  need 
not  be  entered  on  the  minutes,  but  may  be  in- 
ferred from  the  permission,  or  acceptance  of  his 
services.  Burgess  v.  Pue,  2  Gill,  254.  Recording 
of  officer's  bond  not  essential  to  its  validity,  un- 
less  it   be  so   expressly   declared.      Id. 

Persons  acting  publicly  as  officers  of  a  corpora- 
tion are  presumed  to  be  rightfully  in  office.  Id.; 
B.   &  15.   Co.  V.  Ins.  Co.,  3  JId.  305. 

Officers  de  facto  presumed  to  be  succeeded  by 
officers  de  jure.     Smith  v.  Erb,  4  Gill,  437. 

President  or  directors  may  recover  for  services 
rendered  to  corporation.  Mining  Assn.  v.  Mere- 
dith, 49  Md.  389. 

Person  signing  a  note  as  an  officer  of  a  corpora- 
tion may  bind  himself  personally.  Powder  Co. 
V.   Sinsheimer,  48  Md.   411. 

Corporation  not  bound  where  officer  acts  for 
himself.     Winchester  v.    R.    R.    Co.,   4   Md.   231. 

Corporation  may  be  bound  by  agent  not  regu- 
larly appointed.  Appointment  and  authority  of 
agent  may  be  implied.  Eckenrode  v.  Chem.  Co., 
supra. 

To  recover  for  work  done  for  corporation  un- 
der contract  with  it,  express  authority  of  presi- 
dent to  make  such  contract  need  not  be  proved. 
Grape  Sugar  Co.  v.  Small,  40  Md.  395. 

The  president  and  general  manager  of  a  corpo- 
ration held  not  to  have  power,  without  the  con- 
sent of  directors,  on  insolvency  of  corporation,  to 
transfer  assets  to  satisfy  debts  of  one  creditor. 
Iladden  v.   Linville,  38  Atl.   Rep.   37.] 


§  55.  Sixth.  To  make  by-laws,  not  incon- 
sistent with  law,  for  tJie  management  of 
its  property,  the  regulation  of  its  affairs, 
and  for  the  transfer  of  its  stock,  if  any 
such  stock  there  be;  for  the  forfeiture  of 
stoclv  not  paid  for,  and  for  the  disposition 
of  the  proceeds  thereof;  for  tlie  calling  of 
regulai',  special  and  general  meetings  of  the 
directors,  managers  and  trustees  of  said  cor- 
poration, and  fixing  the  place  or  places 
where  the  same  shall  be  held,  and  to  pro- 
vide for  all  other  matters  Avhich  may  be 
regulated  by  by-laws,  and  from  time  to  time 
to  repeal,  amend  or  re-enact  the  same;  but 
every  such  by-law,  and  every  repeal,  amend- 
ment or  re-enactment  thereof,  unless  in  the 
meantime  confirmed  at  a  general  meeting 
of  the  company,  duly  called  for  that  pur- 
pose, shall  only  have  force  until  the  next 
annual  meeting  of  the  company,  and  in  de- 


fault of  confirmation  thereof,  shall,  from 
that  time  only,  cease  to  have  force.  The 
stockholders,  or  members  of  the  corporation, 
may,  at  any  general  meeting,  make  by-laws, 
which  shall  not  be  rescinded  by  tlie  direct- 
ors, managers  or  trustees. 

Certified  copy  of  by-laws  evidence.  §  4.  Stock 
made  transferable  by  by-laws.     §  63. 

[By-laws  need  not  be  In  writing.  Bank  r. 
Ridgely,  1  H.  &  G.  325. 

A  stockholder  having  recognized  and  admitted 
validity  of  by-laws,  not  permitted  to  question 
mode  of  their  adoption.  Morrison  v.  Dorsey,  48 
Md.  461. 

.A  by-law  providing  that  a  stockholder  desiring 
to  sell  his  stock  shall  give  a  written  notice,  that 
the  other  stockholders  may  have  the  option  to 
purchase,  is  an  invalid  restraint  ou  alienation. 
Bloede  Co.  v.   Bloede,  34  Atl.  Rep.   1127. 

A  by-law  creating  a  lien  on  a  member's  share 
for  debts  due  the  corporation  is  valid  except 
against  a  bona  fide  pui'chaser.  Grafflin  Co.  v. 
Woodside,   39  Atl.    Rep.   413.] 

§  56.  No  corporation  shall  possess  or  ex- 
ercise any  corporate  powers,  except  such  as 
are  conferred  bj'^  law,  and  such  as  shall  be 
necessary  to  the  exercise  of  the  powers  so 
acquired. 

Specific  powers.     §§  49-55. 

[Must  look  solely  to  charter  for  outline  of  cor- 
porate powers.  Duncan  v.  Savings  Inst.,  10  G. 
&  J.  308. 

Corporation  can  make  only  such  contracts  as 
are  necessary,  directly  or  indirectly,  to  efifect  the 
object  of  its  creation.  Nav.  Co.  v.  Dandridge, 
8  G.   &  J.   248. 

And  in  an  action  to  enforce  a  contract  against 
it,  it  may  deny  its  competency  to  make  such 
contract.      Id. 

Power  of  agent  of  corporation  discussed.  Id.; 
see  Gist  v.  Drakely,  2  Gill,  330;  Abbott  v.  Packet 
Co.,  1  Md.  Ch.  Dec.  542;  Plank  R.  Co.  v.  Young, 
12  Md.  476. 

Party  may  recover  money  paid  on  ultra  vires 
contract  with  corporation.  Hospital  v.  Foreman, 
29  Md.  524. 

Contract  with  corporation  before  it  came  into 
existence  cannot  be  enforced.  Ins.  Co.  v.  Hart, 
31  Md.  59;  Coal  Co.  v.  Georges,  etc.,  Co.,  37 
id.  537;   see  Grape,   etc.,  Co.   v.   Small,  40  id.  395. 

A  corporation  is  the  creature  of  law,  and  Is 
Incapable  of  exerting  any  other  faculties  than 
those  conferred  by  instrument  of  its  creation. 
Mayor,  etc.,  v.  R.  R.  Co.,  21  Md.  50:  R.  R.  Co. 
V.  Glenn,  28  Id.  287;  Md.  Hosp.  v.  Foreman,  29 
Md.  .524. 

The  powers  of  a  corporation  comprehend  not 
only  express  grants,  but  all  means  necessary  for 
exercise  of  powers  conferred.  Davis  v.  Building 
Union,  32  Md.  295;  State  v.  Coal  Co.,  46  id.  9.] 

§  57.  The  stock,  if  any,  property  and  con- 
cerns of  any  corporation,  for  whose  creation 
provision  is  made  in  this  article,  shall  be 
managed  by  such  number  of  trustees,  di- 
rectors or  managers  as  its  by-laws  or  charter 
shall  prescribe,  said  number  to  be  not  less 
than  four  nor  more  than  twelve,  who  shall 
respectively  be  citizens  of  the  United  States, 
and  a  majority  of  them  citizens  of  this  State; 
or  if  unnaturalized  residents  of  this  State, 
shall  malve  oath  that  they  intend  to  become 
citizens  of  the  United  States  without  un- 
reasonable delay;  and  who  shall,  except  the 
first  year,  be  annually  elected  by  the  stock- 


MARYLAND. 


17 


Directors;  elections;  subscriptions  —  G.  L.,  Art.  xxiii,  §§  58-63. 


holders,  where  there  are  such,  or  by  the 
shareholders  or  members,  where  there  are 
no  stockholders,  at  such  meetiug.  time  and 
place,  and  after  such  notice  as  shall  be  di- 
rected by  the  by-laws  of  the  corporation;  and 
the  election  shall,  except  in  cases  otherwise 
provided  for  herein,  be  made  by  such  of  the 
stockholders,  shareholders  or  members,  as 
the  case  may  be,  who  shall  attend  for  that 
purpose,  either  in  person  or  by  proxy;  and 
where  no  other  notice  is  provided  for  by  the 
by-laws,  public  notice  of  the  time  and  place 
of  holding:  such  election  shall  be  published 
not  less  than  ten  days  previous  thereto,  in 
a  newspaper  printed  nearest  to  the  place 
where  the  principal  office  of  said  coii^ora- 
tion  in  this  State  shall  be  located. 

Director  of  bank  must  be  stockholder.  §  12. 
Directors  not  to  declare  dividend,  when.  §§  67, 
68.     Directors  to  wind  up  affairs.     §  272. 

[There  must  be  positive  affirmative  proof  to 
render  directors  person.nlly  liable  for  misman- 
agement or  fraud.  Booth  v.  Robinson,  55  Md. 
419.] 

§  5S.  In  all  corporations  heretofore  formed 
or  hereafter  to  be  formed  under  the  general 
laws  of  this  State,  or  under  any  special  law, 
having  a  capital  stock,  and  in  which  there 
are  stockholders,  all  elections  shall  be  by 
ballot,  and  each  stockholder  shall  be  entitled 
to  as  many  votes  as  he  owns  shares  of  stock 
in  said  corporation,  and  the  persons  receiv- 
ing the  greatest  number  of  votes  shall  be 
trustees,  managers  or  directors;  but  no 
share  of  stock  shall  be  voted  by  any  stock- 
holder unless  all  instalments  have  been  paid 
thereon  which  may  have  been  called  for  on 
any  part  of  the  stock  of  said  corporation. 
And  in  the  case  of  all  other  corporations  the 
mode  of  electing  trustees,  managers  or  di- 
rectors, shall  be  regulated  by  the  charter  or 
by-laws  of  said  coiiDoration;  Provided,  how- 
ever, That  nothing  herein  contained  shall 
prevent  any  such  corporation  so  formed, 
should  it  elect  so  to  do,  to  provide  by  its 
charter  or  by-laws  for  minority  representa- 
tion in  the  election  of  trustees,  managers  or 
directors. 

Majority  shall  govern.     §  3.     Elections.    §§  6-13. 

[Manipulation  of  stock  to  Increase  number  of 
votes  at  stockholders'  meeting  -n-ill  be  prevented 
by  injunction.  Campbell  v.  Poultney,  6  G.  & 
J.  94.  See  Webb  v.  Ridgelv,  38  Md.  364;  Baile  v. 
College,  47  Id.   124. 

Books  of  corporation  constitute  the  only  evi- 
dence as  to  what  stockholders  are  entitled  to  vote 
at  election  of  directors.  In  re  Election  of  Cedar 
Grove   Cemetery   Co.,    39  Atl.    Rep.    1024.] 

§  59.  When  any  vacancy  shall  happen 
among  the  trustees,  directors  or  managers, 
by  death,  resignation  or  otherwise,  it  shall 
be  filled  for  the  remainder  of  the  year  or 
other  term,  in  such  manner  as  may  be  pro- 
vided by  the  by-laws  of  the  said  corporation. 

§  60.  if  it  shall  happen  at  any  time  that  an 


election  of  trustees,  directors  or  managers 
shall  not  be  made  on  the  day  designated  by 
the  by-laws  of  the  said  corporation,  the  cor- 
poration, for  that  reason,  shall  not  be  dis- 
solved; but  it  shall  be  lawful  on  any  other 
day  to  hold  such  election  in  such  manner  as 
may  be  provided  by  the  by-laws,  and  all 
acts  of  trustees  or  managers  shall  be  valid 
as  against  such  corporation  until  their  suc- 
cessors shall  be  elected. 

§  61.  Subscriptions  to  the  capital  stock  of 
such  of  said  corporations  as  have  capital 
stock,  may  be  made  in  land  or  other  property 
at  a  valuation  agreed  upon  between  the  cor- 
poration and  the  subscriber,  where  the  said 
property  so  subscribed  shall  be  such  as  i*" 
is  proper  that  the  said  corporation  shall  own 
for  the  advancement  of  the  purposes  for 
which  it  was  incorporated,  but  such  sub- 
scriptions shall  not  be  otherwise  received, 
nor  shall  they  be  so  received  unless  the  same 
shall  have  been  previously  authorized  by  the 
stockholders  assembled  in  general  meeting, 
pursuant  to  a  call  to  consider  the  propriety 
of  receiving  the  said  subscription  and  of 
tixing  the  terms  upon  which  it  shall  be 
received. 

Calls.  §  70.  Increase  and  reduction  of  stock. 
§§  74-78.  Par  value  changed.  §§  79,  80.  Execu- 
tion against  stock.  §§  277-287.  Preferred  stock. 
S   294. 

[This  section  does  not  authorize  leasehold  in- 
terest to  be  considered  as  payment.  Basshor  v, 
Dressel,  34  Md.  503;  see  Baile  v.  College,  47  id. 
124;  Weber  v.   Fickey,  52  id.  510. 

Where  promoters  of  a  corporation,  by  false 
devises,  against  shares  of  stock  to  be  issued  as 
full  paid,  as  if  in  consideration  of  property  ac- 
quired by  the  corporation,  when,  in  fact,  the 
property  'was  not  paid  for  by  the  shares,  and  the 
same  are  assisned  to  the  promoters,  who  also 
secured  bonds  ^by  the  first  mortgage  on  the  es- 
tate of  a  corporation,  then  such  promoters  can- 
not recover  as  directors  of  a  corporation  and 
first  mortgage  bondholders  without  paying  the 
amount  due  bv  them  to  the  company  as  stock- 
holders, if  the  rights  of  a  vendor  of  the  property 
to  the  corporation  are  thereby  put  in  jeopardy. 
Hooper  V.  Trust  Co.,  81  Md.  559;  s.  c,  32  Atl. 
Rep.    505.] 

§  62.  Where  property  of  any  kind  is  re- 
ceived by  the  authority  of  the  stockholdei-s 
in  general  meeting  as  aforesaid,  in  payment 
for  stock,  the  books  of  the  company  shall  be 
so  kept  as  to  show  at  all  times  fully  what 
propei-ty  was  received  for  the  said  stock,  at 
what  value  and  the  number  of  shares  of  the 
capital  stock  issued  for  the  same;  in  all  other 
cases  money  only  shall  be  considered  as  pay- 
ment of  a  subscription  to  any  part  of  the 
capital  stock. 

[See  Baile  v.  College,  47  Md.  124;  Weber  v. 
Fickey,  52  id.  510.] 

§  63.  The  Stock  of  any  corporation  created 
under  this  article  shall  be  deemed  personal 
estate,  and  shall  be  transferable  as  shall  be 
prescribed  by  the  by-laws  of  the  corporation; 
and  no  shares  shall  be  transferable  until  all 


18 


MARYLAND. 


Liability  of  stockholders  —  G.  K,  Art.  xxiii,  §  64. 


previous  calls  thoreon  shall  have  been  paid 
In,  or  shall  have  been  declared  forfeited  for 
the  non-payment  of  the  calls  thereon. 

See  §  55.  Stock  liable,  to  execution.  §  277. 
Preferred  stock.  §  294.  Taxation  of  stock.  Art. 
LXXXr,   §§  2,   84,  85,  88a,  88f,  06,   131. 

[It  Is  no  objection  to  recovery  of  unpaid  In- 
stallments, from  person  to  whom  stock  has  been 
transferred  with  his  assent,  that  transfer  was 
made  without  consideration.  Hall  v.  Ins.  Co., 
5   Hill.   484. 

Rights  and  liabilitv  of  transferee  discussed. 
Id.     See  Bend  v.  Bridge  Co.,  6  H.  &  J.  128. 

Trustees  permitting  transfer  of  stock  without 
knowledge  of  owner.  Cohen  v.  Gwyun,  4  Md. 
Ch.   D.  .'?57. 

Transfer  of  its  own  stock  directly  to  a  cor- 
poration will  operate  as  a  merger  of  stock  so 
transferred.  AYilliams  v.  Mfg.  Co.,  3  Md.  Ch. 
Dec.    418. 

Where  stocks  are  sold  before  dividends  are 
declared,  latter  pass,  by  the  sale  and  transfer, 
to  purchaser.  Abercrombie  v.  Riddle,  3  Md.  Ch. 
Dec.  320. 

Liability  of  corporation  to  ward  for  illegal 
transfer  "of  its  stock  by  guardian.  Baltimore  v. 
Norman,   4  Md.   352. 

Where  a  bank  permits  its  stock  to  be  trans- 
ferred under  power  of  attorney,  it  takes  the  risk 
of  the  validity  of  such  power.  Chew  v.  Bank, 
14  Md.   209. 

Shares  of  stock  are  personal  property,  the  title 
to  which  passes  by  transfer  and  delivery.  If 
transfer  is  not  made  on  books  of  company,  trans- 
feree has  an  equitable  title.  R.  R.  Co.  v.  Sewell, 
35  Md.  238. 

Transfer  of  stock  as  a  gift  inter  vivos,  what 
is  necessarv.  Brick  Co.  v.  Mall,  65  Md.  93;  s.  c, 
3   Atl.    Rep.   286.. 

Assignment  and  delivery  of  stock  without  proper 
transfer  passes  equitable  title  only.  Noble  v. 
Turner,  60  Md.  510;  s.  c,  16  Atl.  Rep.  124;  Gem- 
mell  V.  Davis.  75  Md.  546;  s.  c,  23  Atl.  Rep.  1032. 

Transfer  of  stock  of  testator  to  executor;  lia- 
bility of  corporation,  ilarbury  v.  Ehlen,  72  Md. 
206:  s.   c,   19  Atl.   Rep.  648. 

No  lien  exists  at  common  law  in  favor  of  cor- 
poration upon  stocli  to  satisfy  a  debt  due  it  from 
a  shareholder;  and  unless  created  by  statute, 
charter  or  usage,  does  not  exist  at  all,  and  cor- 
poration cannot  prevent  transfer  of  stock.  Gera- 
mell  V.  Davis,  supra.  But  corporation  may  with- 
hold payment  of  a  dividend,  regarding  it  as  a 
set-off.  Id.  Rights  and  duties  of  pledgee  of 
stock.     Id. 

Liability  for  assessments  when  seller  of  stock 
fails  to  have  transfer  of  sale  entered  on  the 
books.  Hutzler  v.  Lord,  64  Md.  534;  s.  c,  3  Atl. 
Rep.    801. 

A  transfer  of  corporate  stock  indorsed  on  the 
certificate,  and  a  delivery  of  the  certificate,  vests 
In  the  purchaser  an  equitable  title.  Bloede  Co.  v. 
Bloede,  34  Atl.  Rep.  1127. 

A  by-law  providing  that  a  stockholder  desiring 
to  sell  shall  give  a  written  notice,  that  the  other 
stockholders  may  have  the  option  to  purchase,  is 
an  invalid  restraint  on  alienation.    Id. 

Where  the  power  to  transfer  stock  is  shown  to 
the  corporation,  it  is  not  bound  to  inquire  whether 
the  transferror  is  attempting  a  fraud.  Hugh'^s  v. 
Bank.   38  Atl.   Rep.   9.i6. 

Measure  of  conioration's  duty  stated  as  to  pro- 
tecting its  stockholders  from  unauthorized  trans- 
fers.   Id.] 

§  61.  All  tlie  stockholders  of  any  such  cor- 
poration shall  be  severally  and  individually 
liable  to  the  creditors  of  the  corporation  of 
which  they  are  stockholders,  to  an  amount 
equal  to  the  amount  of  stock  held  by  them 
respectively,  for  all  debts  and  contracts 
made  by  the  corporation,  until  the  whole 
amount  of  the  capital  stock  fixed  and  lim- 


ited by  the  corporation  shall  have  been  paid 
in,  and  a  certificate  thereof  made  and  filed, 
as  pi'esci'ibed  in  the  following  section,  which 
certificate  may,  however,  be  filed  at  any 
time  after  thirty  days,  mentioned  in  said 
section;  but  no  stockholder  shall  be  indi- 
vidually liable  to  the  creditors  of  such  cor- 
poration, except  to  the  amount  of  his.  her  or 
their  unpaid  subscription  to  the  capital 
stock;  and  the  capital  stock  so  fixed  and 
limited  shall  be  paid  in,  one-fourth  thereof 
in  one  year,  one-fourth  in  two  years,  one- 
fourth  in  three  years,  and  one-fourth,  or  the 
balance,  in  four  years  from  and  after  the 
inconioratiou  of  said  company,  or  such  cor- 
poration may  be  dissolved;  Provided,  how- 
ever, That  it  shall  be  lawful  for  the  trustees, 
directors  or  managers  of  any  such  corpora- 
tion to  collect  and  enforce  the  payment  of 
all  subscriptions  to  the  capital  stock,  as  other 
debts  are  collected  after  notice  being  given, 
as  required  by  section  70  of  this  article; 
and  if  suit  shall  be  brought  by  the  trustees, 
directors  or  managers  of  any  such  coiiwi*a- 
tion,  against  all  delinquent  stockholders  for 
the  full  amount  of  unpaid  subscriptions 
within  four  years  from  the  incorporation  of 
said  company,  such  corpoi-ation  shall  not  be 
dissolved;  And  provided,  furthermore,  That 
the  provisions  of  this  section  shall  not  apply 
to  any  homestead  or  building  association. 

See  Const.,  art.  Ill,  §  30.  Certain  stockholders 
not  liable.  §  66.  List  of  stockholders  to  be  kept. 
§  72.  Dissolution  not  to  affect  individual  lia- 
bility.    §  271. 

[Stockholders  cannot  set  off  debts  of  corpora- 
tion to  them  against  claims  of  other  creditors. 
Matthews  v.  Albert,  24  Md.  527.  If  stockholders 
have  paid  for  their  stock,  and  subsequently  be- 
come creditors  of  the  company,  they  are  clothed 
with  equities  equal  to  other  creditors.  Id.  Stock- 
holders not  liable  for  debts  contracted  subse- 
quent to  their  parting  with  their  stock.  Id. 
Creditor  holding  stock  as  collateral  security  not 
personally  liable.     Id. 

A  single  creditor  of  a  corporation  may  enforce 
liability  of  a  stockholder  by  an  action  at  law. 
Norris  v.   Johnson,   34  Md.   485. 

Extent  of  liability  measured  by  par  value  of 
stock  at  time  debts  were  contracted.  Id.  No 
averment  of  notice  to  stockholder  that  debt  was 
contracted  bv  corporation  necessary  in  declaration. 
Norris  v.  Wrenschall,  34  Md.  402.  Liability  under 
above  section  is  not  in  nature  of  a  penalty,  but 
is  an  obligation  arising  ex  contractu.  Id.  As- 
sessment of  damages  after  judgment  by  default. 
Id. 

Right  of  stockholder  to  invoke  aid  of  court  of 
equity  to  compel  pavment  of  unpaid  subscriptions. 
Fiery  v.  Emmert,  36  Md.  464. 

The  remedv  by  forfeiture  and  sale  of  stock  of 
delinquent  subscriber  does  not  exclude  right  of 
action  for  amount  of  subscription.  Hughes  v. 
Sian.    Co..   .S4   Md.   316. 

In  an  action  under  this  section,  books  of  cor- 
poration not  admissible  in  evidence.  Hager  v. 
Cleveland.  36  Md.  470;  contra,  Weber  v.  Fickey, 
47  id.  106.  Transfer  of  stock  does  not  avoid 
liability.     Hager  v.  Cleveland,   supra. 

Provisions  of  this  section  as  applicable  In  a 
court  of  equitv  as  in  a  court  of  law.  Emmert 
V.  Smith,  40  Md.  12.3.  And  one  cred.'tor  may  pur- 
sue his  action  at  law,  although  another  creditor 
has  filed  a  bill  in  equity.  Garling  v.  Baechtel,  41  i 
Md.  305. 

Stockholder  compelled  to  pay  a  debt  of  the  cor- 
poration,   entitled     to    contribution     from    other 


MARYLAND. 


19 


Certificate  of  paid-up  stock;  dividends;  loans  —  G.  L.,  Art.  xxiii,  §§  65-70. 


stockholders.  Weber  v.  Fickey.  supra.  Action 
of  one  stockholder,  who  is  a  creditor,  against  an- 
other. Id.  Debt  must  have  been  contracted 
while    defendant    was   a    stockholder.      Id. 

Plea  that  stock  was  paid  up  before  debt  was 
contracted  is  a  complete  defense.  Strauss  v. 
Heiss,  48  Md.   292. 

Unpaid  subscriptions  a  trust  fund  for  the  bene- 
fit of  creditors.  Rider  v.  Morrison,  54  Md.  429; 
Crawford  v.  Rohrer,  59  id.  fl04.  But  not  in  the 
hands  of  a  bona  fide  purchaser  of  the  stock, 
without  notice.  Brant  v.  Ehlen,  59  Md.  1.  Brokers 
may  assume  liabilities  of  stookholder.  McKim 
V.  Glenn,  66  Md.  479:  s.  c.  8  Atl.  Rep.  130.  See, 
also,  Basshor  r.  Forbes,  36  Md.  1.54;  Booth  t. 
Campbell,  37  id.  .522;  Weber  v.  Fickey,  52  id.  500; 
Musgrave  v.  Morrison,  54  id.  162;  Frank  v.  Mor- 
rison, 55  id.  406;  Hambleton  r.  Glenn,  72  id.  351; 
s.    c.    20    Atl.    Rep.    121. 

If  a  party  is  induced  to  subscribe  for  shares  of 
stock  upon  the  faith  of  certain  representations 
contained  in  the  prospectus  issued  by  the  com- 
pany, which  representations  are  false,  and  within 
a  reasonable  time  after  a  discovery  of  the  fraud, 
and  before  the  insolvency  of  the  company,  he 
notifies  the  company  that  he  repudiates  the  con- 
tract, these  facts  constitute  a  valid  defense  to 
an  action  to  recover  the  subscription.  Fear  v. 
Bartlett,  81  Md.  435:  s.   c,  32  Atl.   Rep.   .322. 

The  doctrine  that  unpaid  subscriptions  to  capital 
stock  are  a  trust  fund  for  the  benefit  of  its  cred- 
itors does  not  apply  so  as  to  prevent  a  de- 
frauded sliareholder  from  rescinding  his  contract 
before  proceedings  in  insolvency  have  been  in- 
stituted against  the  company.     Id.] 

§  65.  The  president  and  a  majority  of  the 
trustees,  directors  or  managers  of  such  cor- 
poration, within  thirty  days  after  the  pay- 
ment of  the  last  instalment  of  the  capital 
stock,  as  fixed  and  limited  in  the  certificate 
of  Incorporation,  shall  make  a  certificate 
stating  the  amount  of  the  capital  stock  so 
fixed  and  paid  in,  and  of  all  property  re- 
ceived in  payment  for  any  of  said  sub- 
scriptions, and  the  extent  to  which  said  pay- 
ments have  been  so  made  in  property,  which 
certificate  shall  be  signed  and  sworn  to  by 
the  president;  and  he  shall,  within  thirty 
days  thereafter,  file  the  same  with  the  clerk 
of  the  court  in  which  the  certificate  of  in- 
corporation of  said  coriX)ration  was  re- 
corded, to  be  by  said  clerk  recorded. 

Semi-annual    statement   of   condition.      §    73. 

§  G6.  No  person  holding  stock  in  any  such 
corporation,  as  executor,  administi-ator, 
guardian  or  trustee,  and  no  person  holding 
such  stock  as  collateral  security,  shall  be 
personally  subject  to  any  liability  as  stock- 
holders of  sucii  corporation;  but  the  person 
pledging  the  stock  shall  be  considered  as 
holding  the  same,  and  shall  be  liable  as 
stockholder  accordingly;  and  the  estates  and 
funds  in  the  hands  of  such  executor,  ad- 
ministrator, guardian  or  trustee,  shall  be 
liable  in  like  manner  and  to  the  same  extent 
as  the  testator  or  intestate,  or  ward  or  per- 
son interested  in  such  tnist  fund,  would 
have  been  if  he  had  been  living  and  com- 
petent to  act,  and  held  the  same  stock  in  his 
own  name. 

Personal  liability.     §  64,  and  note. 

[Liability  of  corporation  to  cestui  que  trust  on 
stock  held  by  trustees.  Albert  v.  Bank,  2  Md. 
159.] 


§  G7.  If  the  trustees,  managers  or  direct- 
ors of  any  such  corporation  shall  declare  and 
pay  any  dividend  when  the  coiiioration  Is 
insolvent,  or  any  dividend,  the  payment  of 
which  would  render  it  insolvent,  or  would 
diminish  the  amount  of  the  capital  stock, 
they  shall  be  jointly  and  severally  liable  for 
all  the  debts  of  the  corporation  then  exist- 
ing, and  also  for  all  that  shall  thereafter  be 
contracted,  while  they  sliall  I'espectively 
continue  in  office,  even  although  the  whole 
amount  of  the  capital  of  said  corporation 
has  been  paid  in. 

Increase  and  reduction  of  capital  stock.  §  74. 
Of  par  value.     §  79. 

[Oflacers  of  corporation  have  no  right  to  relieve 
the  stock  of  a  particular  member  from  forfeiture 
of  its  dividends.  Bank  v.  Biays,  4  H.  &  J.  338. 
Dividend  "  payable  in  common  stock  of  the  com- 
panv,"  is  income  and  not  capital.  Thomas  v. 
Gregg,   78  Md.  545;  s.  c,  28  Atl.   Rep.  565.] 

§  G8.  If  any  of  the  trustees,  directors  or 
managers  of  such  coi-poration  shall  object  to 
declaring  such  dividend,  or  to  the  payment 
of  the  same,  and  having  voted  against  the 
declaration  thereof,  shall  at  any  time  before 
the  time  fixed  for  the  payment  of  the  same, 
record  a  certificate  of  their  objection  In 
writing  with  the  clerk  of  the  court  in  which 
the  original  certificate  of  incorporation  is 
filed,  they  shall  be  exempt  from  the  liability 
imposed  in  the  preceding  section. 

§  69.  (As  re-enacted  April  7,  1898.)  No 
loan  of  money  shall  be  made  by  any 
such  corporation  to  any  stockholder  therein; 
and  if  any  such  loan  shall  be  made  to  any 
stockholder  the  ottteer  or  otficers  who  shall 
make  it  or  who  shall  assent  thereto  shall,  in 
the  event  of  the  insolvency  of  such  coi^ora- 
tion,  be  jointly  and  severally  liable  for  all 
the  debts  of  the  corporation  contracted  be- 
fore the  making  of  said  loan  to  the  extent 
of  double  the  amount  of,  any  loss  arising  out 
of  said  loan;  this  section  shall  not,  however, 
apply  to  any  building  or  homestead  associa- 
tion "or  any  association  for  the  loan  of  money 
on  real  or  personal  property,  or  to  any 
saviuas  institution  or  other  corporation  re- 
ceiving money  on  deposit  or  authorized  by  its 
charter  to  receive  money  on  deposit. 

§  70.  The  trustees,  directors  or  managers 
of  any  coii>oration  created  under  this  article, 
and  having  a  capital  stock,  may  call  in  and 
demand  fi-om  the  stockholders,  respectively, 
all  sums  of  money  by  them  subscribed,  at 
such  times  and  in  such  payments  and  in- 
stalments as  the  trustees,  directors  or  man- 
agers may  deem  proper,  under  the  penalty 
of  forfeiting  the  shares  of  stock  subscribed, 
and  all  previous  payments  made  thereon,  if 
payment  shall  not  be  made  by  the  stockhold- 
ers within  ninety  days  after  a  personal  de- 
mand, or  after  a  notice  requiring  such 
payment,  published  in  a  newspaper  printed 


20 


MAEYLAND. 


Calls  for  subscription;  statement  —  G.  L.,  Art.  xxiii,  §§  71,  72. 


nearest  to  the  place  where  the  principal  office 
of  the  corporation  is  located. 

Subscriptions  to  stocli.  §  61.  Individual  lia- 
bility.    §  64,  and  note. 

[Corporation  can  enforce  subscription  against 
person  to  whom  subscription  has  been  assigned. 
Bend  v.  The  Susq..  etc.,  Co..  fi  11.  &  .1.  128. 

Certain  irregularities  no  defense  to  payment  of 
subscription  to  stock.  Hollman  v.  Turnpike  Co.. 
9  G.  &  J.  462:  s.  c,  8  id.  7.5. 

As  a  general  rule,  strict  compliance  with  its 
charter  as  to  organization  must  be  shown  by  a 
corporation  seeking  to  enforce  pavment  of  sub- 
scription to  its  stock.  Maltbv  v.  R.  R.  Co.,  16 
Md.  422. 

The  remedy  against  delinquent  subscribers  by 
forfeiture  and  sale  of  their  stock  does  not  ex- 
clude the  right  of  action  for  the  amount  of  their 
subscription.  Hughes  v.  Antietam  Co.,  34  Md.  316. 
Written  notice  by  mail  not  a  compliance  with 
statute.  Id.  Unless  otherwise  provided,  no  valid 
assessment  can  be  made  until  all  stook  is  taken. 
Id.  Subscriber  has  no  right  to  withdraw  sub- 
scription without  consent  of  all  cosubscribers.  Id. 
Unless  it  was  obtained  by  fraud.     Id. 

Conditional  subscription  to  stock  is  a  continuing 
offer  until  withdrawn,  which  is  final  and  abso- 
lute when  accepted.  Taggart  v.  R.  R.  Co..  24 
Md.   .563. 

The  mere  fact  of  subscribing  for  stock  does  not 
constitute  subscriber  a  stockholder.  Busev  v. 
Hooper,  35  Md.  15. 

But  a  promise  to  take  shares  is  an  express 
promise  to  take  them  on  terras  and  conditions 
set  forth  in  subscription  paper.  Id.;  Hughes  v. 
Antietam   Co.,   supra. 

An  action  will  lie  against  corporation  for  re- 
fusing to  issue  certificates  of  stock  to  party 
entitled.  R.  R.  Co.  v.  Sewell.  35  Md.  2.38.  And 
the  action  may  be  brought  by  a  subscriber  or 
his  assignee.    Id. 

Right  of  stockholder  to  invoke  aid  of  court  of 
equity  to  compel  payment  of  unpaid  subscrip- 
tions.    Fiery  v.  Emmert,  36  Md.  464. 

Subscriptions  to  additional,  unauthorized  stock, 
cannot  be  enforced.  Oler  v.  R.  R.  Co.,  41  Md. 
583. 

In  the  absence  of  express  provision  to  the  con- 
trary, valid  calls  cannot  be  made  until  all  shares 
are  taken.  Scarlett  v.  Acad,  of  Music,  43  Md. 
203;  Hager  v.  Cleveland,  36  id.  476. 

Estoppel  of  stockholder,  in  action  to  recover 
subscription,  to  deny  irregularities  of  by-laws 
and  proceedings  of  corporation.  Morrison  v. 
Dorsey,  48  Md.  461. 

Demand  or  notice  by  corporation  is  a  condition 
precedent  to  the  right  to  sue  for  calls  or  assess- 
ments.     Roofing  Co.   V.   Michael,   54  Md.   65. 

No  fiduciary  relation,  other  than  that  of  debtor 
and  creditor,  created  by  subscription  to  stock. 
Morrison  v.   Savage,   .56  Md.  142. 

Unpaid  subscriptions  are  a  trust  fund  for  the 
benefit  of  creditors,  and  any  arrangement  by 
which  stock  is  to  be  nominally  paid  for  will  be 
treated  as  a  sham.  Crawford  v.  Rohrer,  59  Md. 
604.  And  creditor  may  proceed  in  equity  to  en- 
force unpaid  subscriptions,  whether  directors  have 
made  an  assessment  or  not.     Id. 

A  court  may  have  power  and  jurisdiction  to 
a.ssess  unpaid  subscriptions  to  stock  of  insolvent 
corporation.     Glenn  v.  Williams,  60  Md.  93. 

Discharge  in  bankruptcy,  under  United  States > 
law,  no  bar  to  action  for  subscription  to  stock. 
Glenn  v.  Howard,  65  Md.  4<i;  s.  c,  3  Atl.  Rep. 
895.  Nor  discharge  under  In.solvencv  Law  of 
Maryland.  Glenn  v.  Clabaugh,  65  Md'.  65;  s.  c, 
3  Atl.   Rep.   902. 

Payment  for,  and  not  sxibscriptlon  to  only, 
necessary  to  make  subscriber  the  owner  of  stock. 
R.  R.  Co.  V.  Hambleton,  77  Md.  341;  s.  c,  26  Atl. 
Rep.    279. 

Subscription  binding  from  time  of  making  It. 
Webb  V  R.  R.  Co.,  77  Md.  92;  s.  c,  26  Atl.  Rep. 
113.  And  is  not  within  the  Statute  of  Frauds.  Id. 
Subscription  to  stock  may  be  repudiated  If 
obtained  through  fraud  and  subscriber  is  not 
guilty  of  laches.    Savage  v.  Bartlett,  78  Md.  561. 


When  Induced  to  subscribe  to  stock  by  fraud 
of  the  corporation,  subscriber  may  rescind  sub- 
scription before  insolvency  of  the  corporation. 
Fear  v.  Bartlett,  32  Atl.  Rep.  322.] 

§  71.  When  any  person  or  persons  owning 
five  per  cent,  of  the  capital  stoclv  of  any 
corporation  formed  under  the  provisions  of 
this  article  shall  present  to  the  treasurer  or 
chief  finance  officer  thereof,  a  written  re- 
quest for  a  statement  of  the  affairs  of  said 
corporation,  it  shall  be  the  duty  of  such 
treasurer  or  chief  finance  officer  to  make  a 
statement  of  the  affairs  of  said  corporation 
under  oath,  embracing  a  particular  account 
of  all  its  assets  and  liabilities  in  minute  de- 
tail, and  to  deliver  such  statement  to  the 
person  or  persons  who  presented  the  said 
written  request  to  the  said  treasurer  or  chief 
finance  officer  within  twenty  days  after  such 
presentation,  and  keep  on  file  in  his  office 
for  six  months  thereafter  a  copj'  of  such 
statement,  which  shall,  at  all  times  during 
business  hours,  be  exhibited  to  any  stock- 
holder of  said  company  demanding  an  ex- 
amination thereof;  if  such  treasurer  or  chief 
finance  officer,  as  the  case  may  be.  shall 
neglect  or  refuse  to  make  or  deliver  such 
statement  as  aforesaid,  he  shall  forfeit  and 
pay  to  the  person  presenting  said  Avritten  re- 
quest the  sum  of  fifty  dollars,  and  the 
further  sum  of  twenty-five  dollars  for  every 
twenty-four  hours  thereafter  until  such 
statement  shall  be  furnished,  to  be  sued  for 
and  recovered  in  any  court  having  jurisdic- 
tion over  the  person  of  such  defaulting 
officers  and  cognizance  of  said  suit. 

Semi-annual   statement.    §  73. 

[A  statute  of  New  York  (1875,  ch.  611,  §  21), 
imposing  liability  upon  officers  of  corporation  for 
making  false  report,  cannot  be  enforced  in  Mary- 
land, nor  can  an  action  be  maintained  in  Maryland 
upon  judgment  recovered  in  New  York,  for  such 
penalty.  Attrill  v.  Huntington,  70  Md.  191;  s.  c, 
16  Atl.  Rep.   651.] 


§  72.  It  shall  be  the  duty  of  every  cor- 
poi'ation  incorporated  uuder  this  article  to 
cause  a  book  to  be  kept  by  the  treasurer  or 
secretary  thereof,  containing  the  names  of 
all  persons  alphabetically  aiTauged,  who 
are  or  shall  have  been,  within  three  years, 
stockholders  of  said  coi-poration,  and  show- 
ing their  places  of  residence,  the  number  of 
shares  held  by  them  respectively,  and  the 
time  when  they  respectively  became  the 
owners  of  such  shares,  which  book  shall, 
during  the  usual  business  hours  of  every 
business  day,  be  open  for  the  inspection  of 
stockholders  or  creditors  of  the  corporation 
at  the  principal  office  of  the  said  corporation 
in  this  State;  and  every  officer  or  agent  of 
any  such  corporation  Avho  shall  neglect  or 
refuse  to  exhibit  the  same,  shall  be  deemed 
guilty  of  a  misdemeanor,  and  the  corporation 
shall  forfeit  and  pay  to  the  party  injured,  a 
penalty  of  fifty  dollars  for  every  such  neg- 


MARYLAl^D. 


21 


Increase  or  decrease  of  capital  — G.  L.,  Art,  xxiii,  §§  73-79. 


lect  or  refusal,  and  all  the  damages  result- 
ing therefrom  to  be  recovered  in  an  action 
of  debt  before  a  justice  of  the  peace. 

[A  corporation,  by  issuing  certificate  of  stocli:, 
declares  to  tlae  world  that  the  person  In  whose 
name  it  stands  is  the  holder  of  the  stated  number 
of  shares,  and  is  liable  to  any  person  injured 
thereby.     Bank  v.  Mayor,  63  Md.  6.] 

§  73.  It  shall  be  the  duty  of  every  cor- 
poration formed  under  this  article,  having 
a  capital  stock,  to  cause  to  be  made,  in  the 
first  week  in  January  and  July  in  each  and 
every  year,  a  full  and  particular  statement 
of  the  aifairs  of  said  company,  verified  by 
the  oaths  or  affirmations  of  its  president 
and  treasurer,  or  chief  finance  officer,  which 
statement  shall  consist  of  a  particular  ac- 
count of  its  assets  and  liabilities  in  minute 
details,  calculated  to  the  time  of  making  up 
the  statement  as  aforesaid;  each  of  the  said 
statements  so  made  up  shall  be  recorded  in 
a  book  kept  in  the  principal  office  of  the  said 
corporation  in  this  State. 

Stockholder  may  obtain  statement.    §   71. 

§  74.  Any  corporation  formed  under  this 
article,  or  under  any  special  law,  and  having 
a  capital  stock,  may  increase  or  diminish  the 
same  to  any  amount  that  may  be  deemed 
sufficient  and  proper  for  the  purposes  of  the 
corporation,  by  complying  with  the  pro- 
visions of  the  following  sections;  but  every 
corporation  incorporated  under  any  special 
law,  whicla  shall  so  increase  or  diminish 
its  capital  stock,  shall  remain  subject  in 
other  particulars  to  all  the  limitations  con- 
tained in  this  charter,  or  in  any  supplement 
thereto;  and  every  corporation  incorporated 
under  this  article  which  shall  so  diminish 
or  increase  its  stock,  shall  remain  subject  in 
other  particulars  to  the  provisions  of  this 
article. 

Change  -of  par  value.    §  79. 

[Liability  under  section  64  applicable  as  well 
to  increased  stock  as  to  the  original.  Booth 
v.    Campbell,   37   Md.    522.] 

§  75.  Before  any  coiT)oration  shall  be  en- 
titled to  diminish  the  amount  of  its  capital 
stock,  under  the  provision  of  the  preceding 
section,  if  the  amount  of  its  debts  and  lia- 
bilities shall  exceed  the  amoimt  of  the 
capital  to  which  it  is  proposed  to  be  reduced, 
such  amount  of  debts  and  liabilities  shall  be 
satisfied  and  reduced,  so  as  not  to  exceed 
such  diminished  amount  of  capital. 

Insolvent  corporation  not  to  declare  dividends. 
|§  67,  68. 

§  76.  Whenever  any  corporation  shall  de- 
sire to  call  a  meeting  of  the  stockholders,  for 
the  purpose  of  increasing  or  diminishing  the 


amount  of  its  capital  stock,  the  directors, 
managers  or  trustees  shall  publish  a  notice, 
signed  by  at  least  a  majority  of  them,  in 
a  newspaper  published  in  the  county  or 
counties,  or  city  where  the  principal  office 
of  said  corporation  is  located,  if  any  shall 
be  published  therein,  for  at  least  four  sue- 
cessire  weeks,  and  shall  send  or  deposit  a 
written  or  printed  coi)y  thereof  in  the  post- 
office,  addressed  to  each  stockholder  or  mem- 
ber of  such  corporation,  at  his  usual  place 
of  residence,  at  least  three  successive  weelis 
previous  to  the  date  fixed  for  the  holding  of 
such  meeting.  The  said  notice  shall  specify 
the  object  of  the  meeting,  the  time  and  place 
where  such  meeting  shall  be  held,  and  the 
amount  to  which  it  shall  be  proposed  to  in- 
crease or  diminish  the  capital. 

§  77.  If  at  any  time  and  place  specified 
in  said  notice,  stockholders  shall  appear  in 
person  or  by  proxy,  in  number  representing 
not  less  than  two-thirds  of  all  the  shares 
of  stock  of  the  corporation,  the  said  stock- 
holders or  the  said  members,  as  the  case  may 
be,  shall  organize  by  choosing  one  of  the 
trustees,  directors  or  managers,  chairman  of 
the  meeting,  and  also  a  suitable  person  for 
secretary,  and  proceed  to  a  vote  of  those 
present,  in  person  or  by  proxy,  and  the 
vote  of  at  least  two-thirds  of  all  the  shares 
of  the  stock  sliall  be  necessary  to  an  increase 
or  diminution  of  the  amount  of  its  capital 
stock. 

§  78.  If,  on  canvassing  the  votes,  it  shall 
appear  that  a  sufficient  number  of  votes  has 
been  given  in  favor  of  increasing  or  dimin- 
ishing the  amount  of  capital  of  said  corpora- 
tion, a  certificate  of  the  proceedings  showing 
a  compliance  herewith,  the  amount  of  the 
capita]  actually  paid  in,  and  the  amount  to 
which  the  capital  stock  shall  be  increased 
or  diminished,  shall  be  made  out  and  signed 
by  the  chairman,  and  such  certificate  shall 
be  sworn  to  by  the  president,  and  recorded 
in  the  office  of  the  clerk  of  tlie  superior  court 
of  Baltimore  city,  if  the  principal  office  of 
said  corporation  shall  be  therein  located,  or 
in  the  office  of  the  clerk  of  tlie  circuit  court 
for  that  county  in  which  said  principal  office 
is  located. 

§  79.  Where  the  par  value  of  tlie  stock 
of  any  corpoi'atiou  created  under  tlie  gen- 
eral laws  of  the  State  of  Maryland,  has  been, 
or  may  hereafter  be,  reduced  by  losses,  it 
shall  be  competent  for  the  stockliolders 
thereof,  in  general  meeting  assembled,  to  es- 
tablish the  true  value  of  the  stock  of  such 
coii)oratiou;  and  they  may  also  provide  for 
calling  in  and  cancelling  the  whole  or  any 
part  of  such  stock,  and  issuing  other  stock 
instead  tlieieoC,  at  such  par  value  as  they 
may  decide  on,  so  as  to  represent  the  amount 
of  the  true  value  so  established  of  the  stock 
of  such  corporation;  and  they  may  also  pro- 
vide for  creating  and  disposing  of  additional 
stock,  so  as  to  make  up  the  entire  value 
of  the  stock  of  the  corporation,  to  the  amount 


22 


MAEYLAITD. 


Reincoi-poratiou  of  existing  corporations  —  G.  L.,  Art.  xxiii,  §§  8<>-S5. 


desisrnated  in  tlie  ccrtifirate  of  corporation. 
or  for  a  greater  or  less  amount,  as  may  be 
decided  by  the  stocliliolders. 


Change  in  capital  stocl£. 


74-78. 


§  80.  Notice  of  such  meeting  of  stock- 
holders shall  be  given  in  the  manner  re- 
quired by  section  7(>  of  this  article;  and  the 
proceedings  thereafter  shall  be  similar  to 
those  prestTibed  in  sections  77  and  78. 

§  81.  Any  corporation  heretofore  formed 
under  the*  general  laws  of  this  State,  or 
under  any  special  act,  for  any  purpose  for 
which  a  corporation  may  be  formed  under 
this  article,  may  cause  itself  to  be  incorpo- 
rated imder  this  article;  Provided.  The  di- 
rectors, managers  or  trustees  thereof  give 
notice  to  the  stockholders  thereof,  required 
by  section  7()  of  this  article,  containing  the 
particulai-s  therein  set  forth  in  the  manner 
therein  provided;  And  provided.  That  at  the 
meeting  called  in  pursuance  of  such  notice, 
or  at  any  adjourned  meeting,  there  be  pres- 
ent, stockholders  representing,  in  person  or 
by  proxy,  not  less  than  two-thirds  of  all  the 
shares  of  the  stocli  of  the  said  coritoration. 
and  the  meeting  be  organized  in  the  manner 
prescribed  in  section  77  of  this  article. 

Mode  of  Incorporation.  §§  42  et  seq.  Manu- 
facturing corporation  may  change  or  extend  its 
business.  §  143.  Corporations  may  consolidate. 
§§  39,  39a. 

§  82.  The  notice  for  the  assembling  of  a 
meeting  of  the  stockholders  of  any  corpora- 
tion, formed  under  the  general  laws  of  this 
State,  or  under  any  special  act,  for  any  pur- 
pose for  which  a  corporation  may  be  formed 
under  this  article.  Avhich  is  required  to  be 
given  by  section  81  of  this  article,  in  case 
where  it  is  proposed  that  such  corporation 
shall  be  incorporated  imder  this  article, 
shall  be  deemed  and  taken  to  liave  been  and 
to  be  a  conmrate  act.  and  a  sufficient  com- 
pliance with  all  the  requirements  of  said 
section  81,  relating  to  said  notice,  in  all 
cases  where  the  said  notice  has  been  or 
may  be  signed  bj'  the  persons  avIio  were  or 
may  be  directors,  managers  or  trustees  of 
such  corporation  at  the  time  of  signing  such 
notice,  or  by  a  majority  of  them;  I'rovided, 
Tlie  said  notice  contained  or  shall  contain 
the  particulars  directed  by  section  81  to  be 
specified  in  said  notice,  and  shall  have  been 
or  shall  be  published  and  communicated  to 
the  stockholders  of  the  said  corporation  in 
the  manner  directed  by  the  said  section  81. 

§  SS.  If  at  such  meeting  or  any  adjourned 
meeting  of  said  stockholders,  a  sufficient 
number  of  votes  as  aforesaid  shall  be  given 
in  favor  of  causing  said  corporation  to  l)e 
incorporated  under  tliis  article,  th(>n  the  said 
meeting  or  any  adjourned  meeting,  repre- 
senting, a.s  aforesaid,  two-thirds  of  all  tlie 
shares  of  the  said  stock,  shall  determine 
the  number  of  shares  into  which  the  capital 
stock  of  the  new  company  shall  be  divided, 


and  the  rule  of  the  apportionment  thereof, 
and  the  persons  Avho  shall  be  entitled  to  hold 
the  same,  and  al.so  the  name  by  which  said 
new  corporation  sliall  l>*^  known;  and  a  cer- 
tificate shall  be  made  out  and  signed  by  the 
president  of  said  meeting,  sliowing  the  com- 
pliance by  said  corporation,  and  by  the  said 
meeting  of  stockholders,  with  the  require- 
ni.ents  of  this  article  in  that  behalf;  and  the 
said  certificate  shall  also  show  the  proposed 
name  of  the  new  corporation,  which  shall 
always  include  the  name  of  the  county  or 
city  in  which  it  may  be  formed,  the  former 
name  of  said  corporation,  the  objects  or 
purposes  for  which  tlie  new  corporation  is 
sought,  the  terms  of  its  existence  not  to 
exceed  forty  years,  and  the  articles,  condi- 
tions and  provisions  under  which  the  incor- 
poi-ation  is  formed,  the  place  or  phices  of 
Inisiuess  where  the  operations  of  the  cor- 
porations are  to  be  carried  on.  and  the  place 
in  this  State  in  which  the  principal  office  of 
tlie  corporation  Avill  be  locateil,  the  amount 
of  the  capital  stock  -of  the  corporation,  the 
number  of  sliares,  and  the  amount  of  each 
sliare.  and  the  number  of  trustees,  directors 
or  managers  who  shall  manage  the  concerns 
of  the  corporation  for  the  first  year. 

§  84.  The  said  certificate  shall  be  signed 
and  sworn  or  affirmed  to  by  the  chairman 
of  the  said  meeting,  and  shall  be  also  signed 
by  the  president  of  the  said  corporation,  and 
attested  by  its  seal,  and  shall  be  thereupon 
submitted  to  judicial  inspection,  as  required 
l>y  section  4:^  of  this  article,  and  sliall  be 
certified  and  recorded  as  required  by  sec- 
tion 44  of  this  article;  and  thereupon  the 
said  corporation  shall  be  a  body  corporate, 
in  fact  and  in  law,  under  the  name  set  fortli 
in  the  said  certificate,  and  shall  be  subject 
to  all  the  provisions  and  entitled  to  all  the 
powers  and  privileges  conferred  by  this  ar- 
ticle, so  far  as  the  same  are  applicable  to 
the  said  corporation;  and  tlie  former  diarter 
of  said  corporation  shall  be  deemed  to  be 
thereupon  surrendered,  and  all  the  property 
and  assets  belonging  to  the  said  former  cor- 
poration, of  whatsoever  nature  and  descrip- 
tion, and  all  the  debts  and  liabilities  of  the 
said  former  corporation,  of  whatsoever  na- 
ture and  description,  shall,  iipon  such  record- 
ing as  aforesaid,  be  devolved  upon  the  said 
new  corporation,  which  shall,  for  this  pur- 
pose, be  regarded  as  substituted  by  oi>ei'a- 
tion  of  law,  in  the  room  and  stead  of  said 
former  con^oration;  and  all  pending  pro- 
ceedings at  law  or  in  equity,  on  behalf  of 
or  against  said  former  corporations,  may  be 
amended  at  the  instance  of  either  party,  so 
tliat  the  said  new  corporation  may  be  sub- 
stituted as  plaintiff  or  defendant,  as  the 
case  may  require,  in  lieu  and  in  place  of  the 
old  con>oration. 

§  S.'>.  Every  corporation  formed  under  the 
provisions  of  this  article,  shall  be  subject 
to  any  and  all  provisions  and  regulations 
wliich  may  hereafter,  by  any  change  in  or 
amendments  of  the  hnvs  of  this  State,  be 
made  applicable  to  such  coii^oration. 


MAEYLAXD. 


23 


Foieiaru  corporations;  manufacturing  companies  —  G.  L.,  Art.  xxiii,  §§  109a-109e,  1-43. 


Foreign  Corporations. 

§  109a.  (Enacted  April  9.  1898;  L.  1898,  ch. 
270.1  Every  corporation  incoi-porated  by  or 
under  the  laws  of  the  United  States,  or  of 
any  State  or  territory  of  the  United  States 
other  than  the  State  of  Maryland,  or  of  any 
foreign  conntiy,  except  telephone,  banking, 
insiu'ance  and  raih'oad  companies,  electric 
lig-ht  or  constrtiction  companies,  and  oil  or 
pipe  line  companies,  now  doing  business  in 
the  State  of  Maryland,  or  who  shall  desire 
to  commenc-e  busiuess  in  this  State,  shall 
before  transacting  business  in  this  State, 
either  through  an  individual  agent  or  agents 
or  through  the  agency  of  any  corporation,  or- 
ganized under  the  laws  of  this  State,  or  be- 
fore opening  or  continuing  any  office  for  the 
transaction  of  any  business  in  this  State, 
first  file  in  the  office  of  the  secretary  of  State 
Of  ^Maryland,  accompanied  by  a  deposit  fee 
of  twenty-five  dollars,  a  duly  certified  copy 
of  the  charter,  certificate  or  act  of  incorpo- 
ration, under  which  it  claims  the  powers  to 
transact  business  as  a  corporation,  together 
with  a  sworn  statement  fi'om  the  president 
or  other  chief  executive  officer  of  such  cor- 
poration, under  its  official  seal,  setting  forth 
the  amount  of  its  capital  stock  atithorized 
by  law,  and  the  amount  actually  issued,  the 
amount  of  its  assets  and  liabilities,  the  char- 
acter of  the  business  to  be  transacted  in 
this  State,  designating  the  place  or  places 
of  its  principal  office  or  offices  and  the  name 
or  names  of  its  agent  or  agents  to  reside 
in  this  State,  with  the  place  or  places  of 
their  residence,  upon  legal  process  issued  out 
of  any  court  of  this  State,  may  at  any  time 
be  served  in  any  action,  at  the  suit  of  the 
State  of  Maryland,  or  of  any  counly  or 
incorporated  city  or  town  of  this  State,  or  of 
any  citizen  or  citizens  of  this  State,  or  of 
any  corporation  organized  under  the  laws 
of  this  State.  Avhich  said  charter,  certificate 
or  act  of  incorporation,  and  sworn  state- 
ment as  aforesaid,  when  received  by  the  sec- 
retary of  State,  shall  he  recorded  at  length 
by  him  in  a  well  bound  book  to  be  kept  for 
that  piniiose,  and  a  copy  or  copies  thereof 
under  the  hand  and  seal  of  the  secretary 
of  State  shall  be  receivable  in  evidence  in 
any  suit  at  law  or  in  equity,  in  any  of  the 
courts  of  this  State  by  or  against  such  for- 
eign coiT>orations.  for  the  puniose  of  proving 
the  existence  or  act  of  incorporation  of  such 
foreign  coipo ration  as  fidly  as  its  charter 
duly  certified  would  do,  and  also  all  other 
facts  set  forth  therein. 

S  109b.  (Enacted  April  9.  1898;  L.  1898.  ch. 
270.)  At  the  time  of  receiving  said  certifie<l 
copy  of  said  charter,  certificate  or  act  of  in- 
corporation, together  with  the  sworn  state- 
ment, duly  executed  as  required  herein,  to- 
gether with  the  deposit  fee  of  twenty-five 
dollars,  the  secretary  of  State  shall  issue  to 
such  coiix)ration  his  certificate  tmder  his 
hand  and  the  seal  of  his  ottice,  setting  forth 
that  said  coiiwration  has  complied  with  the 


requirements  of  this  act,  that  its  business  is 
such  as  may  be  lawfully  carried  on  by  a  cor- 
poration incoriiorated  under  the  general  laws 
of  this  State,  and  that  it  is  entitled  to  con- 
tinue or  to  commence  business  in  this  State, 
as  the  case  may  be. 

§  109c.  (Enacted  April  9.  1898;  L.  1898,  ch. 
270.)    Any  person  or  officer  of  such  cori)ora- 
tion  who  shall  presume  to  act  as  agent  or 
employe  of  any  such  foreign  corporation,  or 
to  open  or  continue  an  office  for  the  transac- 
tion of  the  business  of  any  such  foreign  cor- 
poration,  before  the  provisions  of  this  act 
have  been  fully  complied  with,  and  before 
said    coiijoration    shall    have    procured    the 
aforesaid   certificate   from   the   secretary   of 
State,  shall  forfeit  and  pay  to  the  State  of 
Maryland  the  sum  of  one  hundred   dollars 
for  each  and  every  day  he  may  act  as  such 
I  agent  or  employe,  or  may  occupy  such  offic* 
'  for  the  transaction  of  such  business,  and  it 
i  shall  be  the  duty  of  tlie  State's  attorney  for 
,  the  city  or  county  in  wliich  such  business  is 
[  transacted,  or  is  proposed  to  be  transacted, 
to  prosecute  for  and  recover  such  i>enalty; 
I  Provided,  That  agents  or  officers  of  foreign 
corporations  doing  business  in  this  State  at 
the  date  of  the  passage  of  this  act  shall  not 
be  held  liable  to  the  penalties   herein  pre- 
scribed until  on  and  after  the  first  daj-  of 
Julv,  1898. 

§  109d.  (Enacted  April  9,  1898;  L.  1898.  ch. 
270.)  No  such  foreign  corporation  shall  be 
permitted  to  maintain  any  action,  either  at 
law  or  in  equity,  in  the  courts  of  this  State, 
until  the  provisions  of  this  act  shall  have 
been  complied  Avith;  Provided,  That  in  the 
case  of  such  corporations  doing  business  in 
this  State  at  the  date  of  the  passage  of 
this  act,  this  section  shall  not  apply  until 
on  and  after  the  first  day  of  July,  1898. 

§  109e.  (Enacted  April  9,  1898;  L.  1898.  ch. 
270.)  T'pou  the  application  of  any  person  in- 
terested, it  shall  be  the  duty  of  the  secretary 
of  State  to  furnish  copies  of  such  charters, 
certificates  or  acts  of  incorporation  and 
sworn  statements  for  which  he  shall  be  enti- 
tled to  demand  and  receive  from  the  person 
so  applying  the  usual  fees  for  transcribing 
the  sauie.  and  he  shall  account  quarterly  to 
the  comptroller  for  the  deposit  fees  received 
by  him  under  the  provisions  of  this  act,  less 
the  costs  and  expenses  of  recording  the 
same. 

Manufacturing  Companies. 

§  143.  Any  corporation  formed  under  this 
article  for  '  manufacturing  purposes,  may 
change  or  extend  its  business  to  any  other 
manufacturing  l)usiuess.  sul>ject  to  the  pro- 
visions and  liabilities  in  this  article  pre- 
scribed, in  reference  to  such  coiT)orations; 
and  whenever  any  such  corporation  shall 
desire  to  change  or  enlarge  its  business,  it 
shall  take  such  steps  and  proceed_in  all  re- 
spects as  is  in  sections  7<».  77.  7S.  70,  SO  and 
81  of  this  article  provided  in  reference  to  the 
increase  or  diminution  or  the  capital  stock 


24 


MAEYLAIs^D. 


Abuse,  misuse  and  non-use  of  powers  —  G.  L.,  xxiii,  §§  255-260. 


of  corporations;  and  if  the  assent  of  two- 
thirds  of  all  the  holders  of  shares  of  stock 
in  the  said  corporation  shall  be  obtained  to 
the  said  proposeil  change,  in  the  manner  set 
forth  in  the  said  sections  of  this  article, 
then  upon  the  making  out  and  recording, 
in  the  manner  therein  directed,  of  a  cer- 
tificate showing  a  compliance  with  all  of 
the  said  provisions  and  preliminaries,  and 
setting  forth  the  business  to  which  the  busi- 
ness of  said  corporation  has  been  changed 
or  enlarged,  then  the  business  which  said 
corporation  may  carry  on  thenceforth,  shall 
be  that  to  which  it  has  been  thus  changed 
or  enlarged;  and  the  company  shall  be  en- 
titled to  all  the  privileges  and  provisions 
and  be  subject  to  all  liabilities  of  this  ar- 
ticle. 


Remedies  for  Abuse,  Misuse  and  Non-use 
of  Corporate  Powers. 

§  255.  -Whenever  the  attorney-general  of 
the  State,  or  the  State's  attorney  for  the  city 
of  Baltimore,  or  for  any  county  in  this  State, 
shall  be  authorized  by  the  governor  to  in- 
stitute proceedings  against  any  corporation 
incorporated  under  the  laws  of  this  State,  to 
ascertain  whether  such  corporation  has  been 
guilty  of  such  misuse,  abuse  or  non-use  of 
Its  corporate  powers  and  franchises,  as  by 
law  would  authorize  and  make  proper  the 
forfeiture  of  its  charter,  corporate  powers 
and  franchises,  the  attorney-general  or 
State's  attorney  so  authorized,  shall  file  in 
the  court  hereafter  designated,  a  petition 
in  the  name  of  the  State,  setting  forth  fully 
and  in  detail  the  alleged  abuse,  misuse  or 
non  U5e,  by  reason  whereof  the  said  forfeit- 
ure is  sought;  and  upon  the  filing  of  such  pe- 
tition, the  court  in  which  it  is  filed,  or  any 
judge  thereof,  shall  lay  a  rule  requiring  the 
said  corporation  to  show  cause,  within  such 
time  as  the  judge  may  deem  proper,  why 
a  decree  of  forfeiture  should  not  issue  as 
prayed  in  said  petition;  a  copy  of  which  rule 
and  of  the  petition  shall  be  served  on  the 
said  corporation  by  a  day  to  be  therein  lim- 
ited, which  shall  be  served  as  other  process 
against  such  corporation  is  directed  to  be 
served. 

[Proceedings  for  forfeiture  of  franchise  for  non- 
user  or  misuser  must  be  instituted  for  tliat 
purpose  by  tlie  government  granting  it.  It  can- 
not be  attaclied  incidentally  or  collaterally.  Canal 
Co.  V.  K.  11.  Co.,  4  G.  &  J.  1.  Such  proceedings 
must  be  by  scire  facias  or  quo  warranto.  Id. 
General  subject  of  forfeiture  discussed.  Id.;  see, 
also,  Bank  v.  Bank,  10  G.  &  J.  34«;  Regents  v. 
Williams,  9  id.  305;  Hamilton  v.  R.  R.  Co.,  1 
Md.  553;  Road  Co.  v.  State,  19  id.  239;  Taggart 
V.  R.  R.  Co.,  -^-i  id.  563;  Coal  €o.  v.  C.  &  I.  Co.,  37 
id.  537;  Lord  v.  Building  Assn.,  id.  320;  Booth  v. 
Campbell,  id.  522;  I'owder  Co.  v.  Sinsheimer,  4G 
id.  315;  State  v.  Coal  Co.,  id.  5;  Dramatic  Club 
V.  State,  74  id.  297;  «.  c,  22  Atl.  Rep.  08.  Change 
of  venue  not  allowed  in  proceedings  under  this 
section.    Id. 

So  long  as  charter  exists,  property  of  company 
cannot  be  taken  from  them  upon  the  allegation 
that  it  was  acquired  by  an  almse  of  their  chartered 
privileges.     Hamilton    v.    K.    K.    Co.,    supra. 


Rights  of  minoritv  stockholders.  Mottu  v.  Prim- 
rose, 23  Md.  482;  Davis  v.  Gemmell,  73  id.  530; 
s.  c,  21  Atl.  Rep.  712.  Will  be  protected  l)y  court 
of  equity,  when.  Davis  v.  Power  &  Light  Co.,  77 
Md.  .35;  s.  c,  25  Atl.  Rep.  9S2;  Shaw  v.  Davis,  78 
Md.  308;  s.  c,  28  Atl    Rep.  619.] 

§  256.  The  said  corporation,  by  the  day 
named  in  said  order,  imless  further  time 
be  granted  by  the  court,  shall  file  an  an- 
swer to  such  petition,  fully  setting  forth 
all  the  defenses  upon  which  it  intends  to 
rely  on  resisting  such  application,  which 
shall  be  verified  by  the  affirmation  or  affida- 
vit of  some  officer  of  the  said  corporation. 

§  257.  The  petitioners  may  thereupon  plead 
to  or  traverse  all  or  any  of  the  material 
averments  set  forth  in  the  said  answer,  and 
the  said  defendant  shall  take  issue  or  demur 
to  said  plea,  or  traverse  within  five  days 
thereafter. 

§  258.  If  issue  or  issues  be  joined  on  such 
proceedings,  the  same  shall  stand  for  trial 
at  such  time  as  the  court  shall  direct;  and 
the  said  issue  or  issues  shall  be  tried  by 
a  jury  if  either  party  desire  it;  otherwise 
they  shall  be  heard  and  determined  by  the 
court.  If,  from  the  findings  of  the  jury  or 
upon  consideration  and  determination  of  the 
case  by  the  court,  the  court  shall  be  of  opin- 
ion that  legal  cause  of  forfeiture  has  been 
shown,  and  the  public  interests  require  that 
the  said  forfeiture  should  be  declared,  a  de- 
cree of  forfeiture  shall  be  entered;  and  tne 
charter  of  said  corporation  shall  thereby  be 
annulled  and  vacated,  and  all  its  corporate 
franchises  and  powers  shall  cease,  and  lience- 
forth  be  void;  and  the  court  shall  thereupon 
appoint  a  receiver  or  receivers  of  the  estate 
and  assets  of  said  coi-poration,  in  the  same 
manner  and  with  like  powers,  as  provided 
in  sections  268  and  269  of  this  article,  in 
reference  to  dissolution  of  corporations  on 
bill  filed  therefor  on  their  own  motion. 

§  259.  If  any  corporation,  upon  whom  the 
aforesaid  petition  and  rule  to  show  cause 
have  been  served,  shall  neglect  to  file  an 
answer  to  the  petition  at  the  time  appointed 
by  the  said  court,  the  court  shall  thereupon 
proceed  to  hear  the  said  application  ex  parte, 
within  five  days  thereafter;  and  if  it  shall 
be  of  opinion  that  good  cause  of  forfeiture 
is  shown,  it  shall  proceed  forthwith  to  decree 
the  same  as  is  provided  in  the  preceding 
section. 

§  260.  If  the  court,  either  upon  a  hearing 
ex  parte,  as  provided  in  section  259,  or  upon 
a  hearing  after  answer,  as  provided  in  sec- 
tions 257  and  258,  shall  be  of  opinion  that 
no  cause  of  forfeiture  has  been  sliown,  or 
that  the  public  interests  do  not  demand  that 
such  forfeiture  should  be  decreed,  even 
tliough  legal  cause  therefor  has  been  shown, 
it  shall  dismiss  the  petition  and  award  costs 
in  favor  of  the  corporation  proceede^^l  against, 
in  its  discretion;  and  if  the  court  shall  de- 
termine that  legal  cause  of  forfeiture  has 
been  shown,  it  may,  in  its  discretion,  before 
passing  a  final  decree  of  forfeiture,  pass 
orders  requiring  the  said  corporation,  within 


1 


MAEYLAND. 


25 


Abuse,  etc.,  of  powers;  dissolution  —  G.  L.,  Art.  xxiii,  §§  261-264. 


a  time  to  be  therein  fixed,  to  remedy  the 
grievance  complained  of,  and  may  suspend 
the  passage  of  the  final  decree  of  forfeiture 
until  the  time  so  fixed,  and  may  afterwards 
refuse  to  pass  such  decree,  if  the  grievance 
shall  have  been  remedied  by  the  time  so 
fixed. 

§  201.  The  petition  for  forfeiture,  herein- 
before mentioned,  shall  be  filed  in  the  cir- 
cuit court  for  the  county  in  w^hich  the  cer- 
tificate of  incoiiDoration  of  said  corporation 
was  filed,  if  said  corporation  shall  have  been 
incorporated  under  the  laws  requii-ing  the 
filing  of  such  certificate,  or  under  this  ar- 
ticle; and  in  the  case  of  all  other  coriwra- 
tions  such  petition  shall  be  filed  in  the  county 
in  which  either  the  principal  office  of  said 
corporation  was  last  located,  or  in  which 
the  principal  business  of  said  corporation 
was  last  carried  on;  but  if  the  corporation 
to  be  proceeded  against  has  filed  the  certifi- 
cate of  incorporation  in  Baltimore  city,  or 
if  not  Incorporated  under  the  laws  requiring 
such  certificate  to  be  filed,  the  said  corpora- 
tion had  its  principal  office  last  in  said  city, 
or  had  there  last  earned  on  its  principal 
business,  then  and  in  such  cases  the  said  pe- 
tition shall  be  filed  in  the  superior  court 
of  Baltimore  city. 

§  262.  From  any  judgment  or  determina- 
tion of  the  court  had  on  petitions  filed  for 
forfeiture  under  this  article,  either  party 
may  appeal  to  the  court  of  appeals,  subject 
to  such  I'egulations  and  provisions  relating 
to  the  taking  and  prosecution  of  said  ap- 
peals as  shall  be  prescribed  by  the  said 
court  of  appeals. 

§  263.  The  governor  of  this  State  shall 
have  power,  upon  application  in  writing 
made  to  him  by  any  citizen  thereof,  in  the 
exercise  of  his  own  discretion,  to  direct  the 
attorney-general,  or  State's  attorney  for  any 
county  in  this  State,  or  for  the  city  of  Balti- 
more, to  file  a  bill  in  the  circuit  court  of 
Baltimore  city,  or  in  the  circuit  court  for 
any  county,  in  the  name  of  the  State,  against 
any  corporation  incorporated  under  the  laws 
of  this  State,  for  the  purpose  of  restraining, 
by  injunction,  any  such  corporation  from  as- 
suming or  exercising  any  franchise,  liberty  or 
privilege,  or  transacting  any  business  not 
allowed  by  the  charter,  certificate  or 
amended  certificate  of  incorporation  of  said 
corporation,  or  not  by  law  allowed  to  be 
assumed  or  exercised  by  said  corix)ration; 
and  in  the  same  manner,  and  by  like  au- 
thority, a  bill  may  be  filed  to  restrain  any  in- 
dividuals from  exercising  any  coiiDorate 
rights,  privileges  or  franchises  not  gi'anted 
to  them  by  any  law  of  this  State;  and  such 
bill,  when  filed  against  a  corporation,  shall 
be  filed  in  the  circuit  court  of  Baltimore 
city,  if  the  principal  office  or  place  of  busi- 
ness operations  of  said  corporation  shall  be 
located  therein,  or  in  the  circuit  court  for 
the  county  in  which  the  principal  office  or 
place  of  the  business  operations  of  said  cor- 
poration shall  be  located;  and  if  the  said  bill 


is  filed  against  any  individuals,  it  shall  be 
filed  in  the  city  or  county  in  which  some 
one  of  the  individuals  sought  to  be  restrained 
may  reside;  and  upon  the  filing  of  any  such 
bill,  the  court  in  which  it  shall  be  filed  shall 
have  power  to  issue  the  injunction  either 
before  or  after  hearing,  and  under  and  on 
such  terms  as  it  may  prescribe,  and  gen- 
erally shall  have  and  exercise  all  the  powers 
of  a  court  of  equity  over  the  subject-matter 
of  said  bill;  and  all  provisions  of  the  laws 
of  this  State,  relating  to  the  granting,  con- 
tinuing or  dissolving  of  injunctions  in  other 
cases,  and  providing  for  appeals  to  the  court 
of  appeals,  which  may  be  applicable,  shall 
apply  to  proceedings  under  this  section. 


Dissolution  of  Corporations. 

§  264.  (As  amended  April  6,  1S94.)  When- 
ever any  coi-poration  in  this  State  shall  have 
been  determined  by  legal  proceedings  to  be 
insolvent,  or  shall  be  proven  to  be  insolvent 
by  proof  offered  under  any  bill  filed  under 
the  provisions  of  this  section,  it  shall  be 
deemed  to  have  surrendered  its  corporate 
rights,  privileges  and  franchises,  and  may  be 
adjudged  to  be  dissolved  after  the  hearing, 
according  to  the  practice  of  courts  of  equity 
in  this  State,  upon  a  bill  filed  for  that  pur- 
pose in  the  circuit  court  of  Baltimore  city  or 
in  the  circuit  court  No.  2  of  Baltimore  city, 
if  the  principal  office  of  the  corporation  is 
located  therein,  or  in  the  circuit  court  of 
any  county,  if  the  principal  office  or  place 
of  business  of  said  corporation  be  therein 
located,  or  if  the  certificate  of  its  incorpora- 
tion be  recorded  therein;  and  such  bill  may 
be  filed  by  any  stockholder,  shareholder  or 
creditor  of  said  corporation,  or  by  the  attor- 
ney-general of  the  State  of  Maryland,  or 
by  the  State's  attorney  of  the  city  or  county 
in  which  the  principal  office  of  said  coi"po- 
ration  is  located.  But  this  section  shall  not 
apply  to  any  railroad  company  chartered 
by  this  State. 


Proceedings   for  forfeiture. 


255-263. 


[A  corporation,  by  the  very  nature  of  Its  exist- 
ence, is  subject  to  dissolution  by  a  surrender  of 
its  franchises,  and  by  a  forfeiture  of  them  for  mis- 
user or  non-user.  Turnpike  Co.  v.  State,  19  Md. 
239 

Prior  to  Act  of  1888  (Code,  art.  XLVII,  §  15), 
corporation  not  subject  to  insolvent  laws.  Mach. 
Co.  V.  Speed,  72  Md.  22;  s.  c,  18  Atl.  Rep.  863. 
See  Frank  v.  Morrison,  58  Md.  423. 

Above  section,  as  amended,  construed.  Bartoa 
V.  Fraternal  Alliance,  36  Atl.  Rep.  658. 

Averment  in  answer  to  a  bill  dissolving  a  cor- 
poration on  the  ground  of  insolvency,  held  not 
an  admission  of  insolvency.    Id. 

In  a  suit  dissolving  an  alleged  insolvent  corpora- 
tion, heard  on  a  bill  and  answer,  a  denial  of 
insolvency  will  not  avail  if  the  admissions  of 
the  answer  show  insolvency.    Id. 

In  the  absence  of  statute,  equity  cannot  dissolve 
a  corporation.    Id. 

Evidence  held  to  show  no  cause  for  extending 
time  for  presenting  claim  against  an  insolvent 
corporation,  though  petitioners  were  non-residents. 
Abraham  v.  Trust  &  Deposit  Co.,  37  Atl.  Rep. 
646.] 


26 


:\rAEYLAXD. 


Dissolution  —  G.  L.,  Art.  xxiii,  §§  264a-267. 


§  264a.  (Enat-ted  April  4,  180(5.)  Whenever 
any  corporation  niontioned  in  section  2(>4 
of  this  article  other  than  railroad  companies 
chartered  by  this  State,  shall  have  been  de- 
termined or  proven  to  be  insolvent,  as  in 
said  section  204  stated,  all  payments,  con- 
veyances and  assijinments  of  the  money, 
property,  debts  or  claims  of  said  corpora- 
tion and  all  preferences,  howsoever  made  by 
it  or  by  any  of  its  officers  on  its  behalf 
which  Avould  be  void  or  fraudulent  if  the 
same  had  been  made  by  a  natural  person 
who  had  become  an  insolvent  under  article 
47  of  the  Code  of  Public  General  Laws,  shall, 
to  the  like  extent  and  with  lilvc  remedies, 
be  fraudulent  and  void  when  made  by  such 
corporation  or  by  any  of  its  otticers  on  its 
behalf,  and  whenever  any  such  coi-poration 
shall  have  l)eeu  adjudged  to  be  dissolved  as 
provided  in  the  next  precediuir  section  of 
this  article,  all  of  its  property  and  assets  of 
every  description  shall  be  distributed  to  the 
creditors  of  said  corporation  in  the  same 
manner  that  the  property  and  assets  of  an  in- 
solvent debtor  are  distrit)uted  under  the  pro- 
visions of  article  XLVII  of  the  Code  of  Pub- 
lic General  Laws,  but  no  discharge  shall  be 
granted  to  the  said  corporation,  and  the 
receiver  of  such  coriioration  shall  have  the 
same  power  and  authority  to  maintain  suits 
and  proceedings,  to  set  aside  preferences  and 
void  or  fraudulent  transfers  and  payments, 
conveyances  and  assignments  by  said  cor- 
poration or  by  any  of  its  officers  on  its  be- 
half in  the  same  manner  and  to  the  same 
extent  as  the  permanent  trustee  of  an  insol- 
vent debtor  has  under  article  XLVII  of  the 
Code  of  Public  General  I^aws.  in  reference 
to  preferences  and  void  or  fraudulent  trans- 
fers, payments,  conveyances  and  assign- 
ments, when  made  by  a  natural  person  who 
has  become  an  insolvent  debtor,  and  the  date 
of  the  filing  of  the  bill  against  such  corpo- 
ration, upon  which  it  may  be  dissolved,  shall 
be  taken  and  treated  for  the  purpose  of  de- 
termining tlie  validity  of  preferences  and  for 
all  other  purposes  as  the  date  of  the  filing 
the  petition  in  insolvency  by  or  against  a 
natural  person. 

g  2<>5.  Whenever  the  directors,  trustees  or 
managei's  of  any  corporation,  or  a  majority 
of  them,  shall,  for  any  reason,  deem  it  bene- 
ficial for  the  interests  of  the  stockholders 
or  others  interested  in  said  corporation,  that 
the  same  shall  be  dissolved,  they  sliall  call 
a  general  meeting  of  the  stockholders,  share- 
holders or  members  of  the  conwration,  at 
such  time  and  place,  and  after  such  notice 
as  the  by-laws  of  said  company  shall  pre- 
scribe for  that  purpose;  and  if  at  such  gen- 
eral meeting  a  majority  in  interest  of  all 
the  stockholders  in  any  coiT'Oration  having 
a  capital  stock,  or  a  majority  of  the  share- 
holders or  members  in  other  class  of  cor- 
porations, shall,  by  their  votes,  declare  their 
wish  that  said  corporation  shall  be  dissolved, 
a  bill  for  its  dissolution  shall  forthwith  be 
filed,   in  the  name  of  said  corporation  and 


on  its  behalf,  in  the  circuit  court  of  Balti- 
more city,  if  its  principal  office  or  place  of 
business  be  in  said  city,  or  in  the  circuit 
court  for  the  county  in  Avhich  its  principal 
office  or  place  of  business  may  be  situated. 

rrooeedings  for  forfeiture.  §§  255-263;  see  §  274, 
uote. 

[Winding  up  corporation  by  legislative  enact- 
ment.    Banlv  V.    Boaston,   7  C.   &  J.   421. 

Kcfciver  may  maintain  action  to  recover  un- 
piii<l  balance  on  stocli  subscription.  Stillman  v. 
Douglicrty,   44  Md.   380. 

Also  a  trustee.    Glenn  v.  Williams,  60  Md.  93. 

Corporation  may  be  virtually  extinguished  by 
all  stock  being  owned  by  one.  Bellona  Com- 
pany's  case,    3   Bl.    442. 

oiie  person  becoming  sole  owner  of  all  the 
stock  of  a  private  corporation,  may  conduct  the 
business  as  a  private  individual,  without  cor- 
porate formalities.  Swift  v.  Smith,  65  Md.  428; 
s.   c,   5  Atl.   Rep.  534. 

Neither  directors  nor  majority  of  stockholders 
have  power,  upon  dissolution  of  corporation,  to 
sell  its  property  to  another  corporation  and  com- 
pel shareholders  to  take  stock  in  that  company. 
Glvmont  v.  Toler,  80  Md.  278;  s.  c,  30  Atl.  Rep. 
65i.] 

§  266.  Eveiy  such  bill  shall  contain  a  state- 
ment of  the  reasons  why  the  dissolution  of 
the  said  con)oration  is  prayed  for  and 
sought;  and  there  shall  also  be  tiled  with  it  — 

First.  A  full  and  true  inventory  of  all  the 
assets  of  such  corporation,  and  of  all  the 
books,  securities,  and  vouchers  relating 
thereto. 

Second.  A  true  account  of  the  capital  stock 
of  such  coiiwration,  and  a  list  of  all  the 
stockholders,  their  residences,  and  the  num- 
ber of  shares  belonging  to  each,  the  amount 
paid  on  each  of  said  shares,  and  the  amount 
still  due. 

Third.  A  statement  of  all  the  incum- 
brances on  the  property  of  the  coi-poration, 
and  a  full  list  of  all  its  creditors  and  their 
respective  residences,  and  the  amount  due 
to  each.  All  of  the  said  statements  shall 
be  verified  by  the  oatli  or  affirmation  of 
either  the  president  treasurer,  secreiarj-,  or 
some  other  chief  officer,  or  of  some  stock- 
holder of  the  said  corporation. 

[Frank  v.   Morrison,   58  Md.  440.] 

§  2G7.  Upon  the  filing  of  said  bill,  accom- 
panied by  the  aforesaid  papers,  the  court 
shall  pass  an  order  requiring  all  persons  in- 
terested in  such  corporations,  to  show  cause, 
if  any  they  have,  why  such  corporation 
should  not  be  dissolved,  on  or  before  a  cer- 
tain day  to  be  named  in  said  order,  which 
order  shall  be  published  for  such  time  as  the 
court  shall  direct,  in  some  newspaper  pub- 
lished in  the  county,  or  city  of  Baltimore, 
as  the  case  may  be,  in  which  such  court  ia 
held;  and  upon  any  answer  being  filed  to 
the  said  bill,  by  any  creditors  or  stockholders 
of  such  corporation,  the  court  may  author- 
ize evidence  to  be  taken,  on  application  of 
the  plaintiffs  or  defendants,  in  the  manner 
usual  in  courts  of  equity. 

[Frank  v.   Morrison,  58  Md.   440.] 


MAEYLAIsTD. 


27 


Dissolution  —  G.  L.,  Art.  xxiii,  §§  268-273. 


§  268.  If  the  court  shall,  upon  considera- 
tion of  the  bill,  or  of  the  bill,  answers  and 
proof,  if  any  answers  have  been  filed  or 
proof  taken,  be  of  opinion  that  the  corpora- 
tion is  insolvent,  or  that  for  any  reason  a 
dissolution  of  the  said  coi-poration  will  be 
beneficial  to  the  stockholders,  and  not  in- 
jurious to  the  public  interests,  a  decree  shall 
be  entered  dissolving  the  said  coiiioration, 
and  appointin.g-  one  or  more  receivers  of  its 
estate  and  effects,  and  such  coi-poration  shall 
thereupon  be  dissolved;  any  of  the  directors, 
trustees,  managers  or  other  officers,  or  any 
of  the  stockholders  of  any  corporation,  may 
be  appointed  its  receivers,  or  such  other 
I)erson  or  persons  as  the  courts  may  select. 

[Quei'p,  nre  the  debts  of  corporation  extin- 
guished bv  rlinsolution  of  charter?  Asnew  v. 
Banlt,  2  H.  &  G.  479;  Banls  v.  Bank,  10 ^G.  &  J. 
35.5. 

It  Is  not  against  public  policy  to  appoint  a 
receiver  over  the  property  of  corporations.  State 
V.  Ry.  Co.,  18  Md.  103. 

But  courts  exercise  the  power  with  great  cir- 
cumspection. Davis  V.  Power  &  Light  Co.,  77  Md. 
35:   s.   c.   25  Atl.   Rep.   982. 

ifinoritv  stockholders  in  dissolved  corporation 
not  entitled  to  have  receiver  appointed,  when. 
R.  R.  Co.  V.  Cannon,  72  Md.  493;  s.  c,  20  Atl. 
Rep.    123. 

See   Frank   v.   Morrison.   58   ^fd.    440. 

When  the  acts  of  the  officers  of  a  corporation 
are  fraudulent,  illegal  or  ultra  vires,  any  stock- 
holder is  entitled  to  ask  for  the  protection  of  the 
court  of  eouitv.  De  Puv  v.  Trans.  Co.,  82  Md. 
408:  s.  c.  .33  Atl.   Rep.  889:  34  id.  910. 

Sufficiency  of  showing  fraud  and  unlawful  acts 
of  a  part  of  the  officers  of  a  corporation  to  justify, 
and  appointment  of  a  receiver  on  the  application 
of  a  stockholder.    Id.] 

§  269.  Where  i-eceivers  of  the  estate  or 
effects  of  any  con^oration  shall  be  appointed. 
by  a  court,  upon  or  before  the  dissolution 
of  any  corporation,  they  shall  be  vested 
with  all  the  estate  and  assets  of  every  kind 
belonging  to  such  corporation,  from  the  time 
of  their  qualifying  as  receivers,  and  shall 
be  trustees  thereof  for  the  benefit  of  the 
creditors  of  such  corporation  and  its  stock- 
holders; and  they  shall  proceed  to  wind  up 
the  affairs  of  such  corporation,  under  the  di- 
rection of  the  court  by  which  they  shall 
have  been  appointed,  and  shall  have  all 
powers  which  shall  be  necessai-y  for  that 
purpose. 

Suits  by  receivers.    §   274,   and   note. 

[Actions  bv  receivers.  Frank  v.  Morrison.  58 
Md.  440.  Receiver  not  personally  liable,  when. 
Galther  v.  Stookbridge,  67  Md.  222;  s.  c,  9  Atl. 
Rep.   632:   10  id.   309. 

When  propertv  of  the  corporation  has  been 
placed  in  the  hands  of  a  receiver,  all  expenses 
for  safe-keeping  and  preservation  are  properly 
pavable  out  of  the  income,  or  If  there  be  none, 
then  out  of  the  proceeds  of  the  corpus  of  the 
estate  when  sold.  Hooper  v.  Trust  Co.,  81  Md. 
559;   s.   c.   .32   Atl.    Rep.  .50.5. 

A  suit  by  a  receiver,  or  by  the  creditors  of  a 
corporation,  to  enforce  payment  of  unpaid  sub- 
scriptions, to  the  capital  stock,  is  governed  by 
the  law  of  the  domicile  of  the  corporation.    Id.l 

§  270.  All    sales,    assignments,    transfers, 
mortgages  or  other  dispositions  or  convey- 


ances of  any  part  of  the  assets  of  the  cor- 
poration, made  after  the  filing  of  a  bill  for 
a  dis.solution  thereof,  under  the  provisions 
of  this  article;  and  all  judgments  confessed 
by  said  corporation,  after  that  time,  shall 
be  absolutely  void  as  against  the  said  re- 
ceivers. 

[Frank  v.  Morrison,  58  Md.  440.] 

§  271.  No  dissolution  of  any  corporation 
shall  relieve  its  stockholders  from  the  ob- 
ligations and  liabilities  imposed  on  them  by 
section  64  of  this  article;  and  if  the  said 
corporation  shall  be  dissolved  before  its  capi- 
tal stock  shall  have  been  paid  in,  the  lia- 
bility of  its  stockholders  shall  continue  to 
the  receivers  or  to  the  creditors  of  the  cor- 
poi-ation  who  were  such  prior  to  its  dissolu- 
tion, in  all  respects  as  if  the  same  had  not 
been  dissolved. 


Personal   liability  of  stockholders.    §§  64-66. 

[Frank  v.  Morrison,  supra:  Hall  v.  Ins.  Co.,  5 
Gill.  484:  Stillman  r.  Doughertv,  44  Md.  380;  Glenn 
V.  Williams.  60  id.  93. 

Assets  of  a  corporation  are  not  a  trust  fund 
for  its  creditors  unle.ss  the  corporation  is  Insol- 
vent.   Fear  v.   Bartlett,   .32  Atl.   Rep.   322.] 

§  272.  Upon  the  dis.solution,  in  any  manner 
not  otherwise  provided  for.  of  any  corpora- 
tion created  or  to  be  created  under  the  laws 
of  this  State,  and  unless  other  persons  shall 
be  appointed  by  some  court  of  competent 
authority,  the  directors  or  managers  of  the 
affairs  of  such  corporation,  at  the  time  of 
its  dissolution,  by  whatever  name  they  may 
be  known  in  law,  shall  be  the  trustees  of 
the  creditors  and  stockholders  of  the  corpo- 
ration dissolved,  and  shall  have  full  power 
to  settle  the  affairs  of  the  coi^oration,  and 
to  pay  its  debts,  and  shall  divide  among  the 
stockholders  the  moneys  and  other  property 
that  shall  remain  after  the  payment  of  the 
debts  and  uecessaiy  expenses;  and  the  said 
trustees  shall  be  jointly  and  severally  re- 
sponsible to  the  creditors  and  stockholders 
of  such  corporation,  to  the  extent  of  its  prop- 
erty and  effects  that  shall  come  into  their 
hands. 

§  273.  The  dissolution  of  a  corporation  by 
the  decree  of  a  competent  court,  shall  not 
abate  any  suit  or  proceeding  in  favor  of  such 
corporation,  which  sliall  have  been  pending 
at  the  time  of  such  dissolution;  but  all  such 
suits  or  proceedings  may  be  continued  by 
the  receivers,  who  shall  have  been  appointed 
for  such  coiToration,  or  by  the  trustees  on 
whom  the  estate  and  effects  of  sucli  corpo- 
ration shall  have  devolved,  in  the  name  of 
such  corporation,  or  in  the  names  of  such 
receivers  or  trustees,  who  may,  in  the  dis- 
cretion and  under  the  direction  of  the  court 
in  which  the  suit  shall  be  pending,  be  sub- 
stituted as  plaintiffs,  subject  to  such  order 


28 


makyla:n^d. 


Dissolution;  execution  against  stock  —  G.  L.,  Art.  xxiii,  §§  274-279. 


as  the  court  may  deem  expedient  in  relation 
to  the  payment  or  security  of  costs. 

[When  the  fact  of  incorporation  is  shown  by 
phuntiff,  the  burcU-n  of  showing;  a  dissolution  is 
thrown  upon  defendant.  Regents  v.  "Williams,  9 
G.  iV:  J.  3U5;  see  Franli  v.  Morrison,  58  Md.  440.] 

§  274.  Whenever  a  receiver  of  the  prop- 
erty or  effects  of  a  corporation  shall  be  ai>- 
poiiited  before  the  dissolution  or  afterwards, 
new  suits  may  be  brought  and  carried  on 
by  any  such  receivers,  either  in  their  own 
names  and  capacities  as  such  receivers,  or 
in  the  name  of  the  coriwration  for  which 
they  shall  have  been  appointed;  but  no  new 
suit  shall  be  brought  in  the  name  of  a  cor- 
poration after  it  shall  have  been  dissolved, 
or  after  the  expiration  of  its  charter. 

See  §  265,  and  note. 

[Action  maintained  under  above  section.  Hayes 
V.  Brotzman,  46  Md.  519.  No  necessity  to  show 
special   authority   from   the  court.    Id. 

Stocliholder  estopped  from  setting  up  Irregu- 
larities as  defense  to  suit  by  receiver,  when. 
Morrison  v.  Dorsey,  48  Md.  461;  Musgrave  v. 
Morrison,  54  id.  161. 

Statute  of  Limitations  no  bar  to  action  by  re- 
ceiver,   when.    Frank   v.    Morrison,   55   Md.    899. 

Actions  bv  receivers  against  subscribers  and 
members.    Frank  v.  Morrison,  58  Md.  423.] 

§  275.  No  suit  commenced  in  the  name  of 
any  such  receiver  shall  be  abated  by  his 
removal  or  death;  but  the  same  may  be  con- 
tinued in  the  name  of  his  successor,  or  of 
the  corporation,  if  its  charter  has  not  ex- 
pired or  been  dissolved,  as  may  be  directed 
by  the  court  in  which  the  suit  shall  be 
pending. 

§  276.  The  court  in  which  any  suit  or  pro- 
ceeding against  a  corporation  which  shall 
have  been  dissolved  by  the  expiration  of 
its  charter,  or  otherwise,  shall  be  pending 
at  the  time  of  such  dissolution,  shall  have 
power,  on  the  application  of  either  party 
thereto,  to  make  an  order  for  the  continu- 
ance of  such  suit  or  proceeding,  and  the  same 
may  thereafter  be  continued  until  final  judg- 
ment or  decree  shall  be  had  therein,  which 
shall  have  the  like  effect  upon  the  rights  of 
the  parties  as  if  such  corporation  had  not 
been  dissolved. 

See  Act  of  1892,  at  p.  45. 

[Expiration  of  charter  during  pendency  of  suit 
can  only  be  availed  of  by  a  plea  puis  darrein  con- 
tinuance.   Agnew  V.   Bank,  2  H.   &  G.  479.] 

Execution  against  the   Stock   of   Corpora- 
tions. 

§  277.  Any  interest  which  any  defendant 
In  a  judgment  or  decree  rendered  by  a  court 
of  law  or  equity,  or  in  a  proceeding  by  at- 
tachment on  original  process,  has  in  the  capi- 
tal, joint  stock  or  debts  of  a  corporation 
transferable  on  its  books,  shall  be  liable  to 
execution  or  attachment,  and  the  same  pro- 
ceedings shall  be  had  as  in  other  cases,  ex- 


cept when  they  are  varied  by  the  following 
sections:  Provided,  That  all  executions  or 
attachments  levied  or  laid  upon  the  shares 
or  interests  of  any  defendant  in  the  capital, 
joint  stock  or  debts  of  a  corporation  standing 
on  its  books  in  his  name,  shall  only  affect 
the  interest  which  such  defendant  had  in 
such  capital,  joint  stock  or  debts  at  the  time 
of  levying  such  execution  or  attachment,  and 
shall  not  in  any  way  affect  the  right,  title 
or  interest  acquired  by  any  bona  fide  pur- 
chaser or  pledgee  for  value  to  or  in  the 
capital,  joint  stock  or  debts  of  such  corpo- 
ration standing  on  its  books  in  the  name  of 
such  defendant,  by  a  sale  or  pledge  thereof 
by  such  defendant  by  a  delivery  of  the  cer- 
tificate representing  such  capital,  joint  stock 
or  debts,  with  the  power  of  attorney  to 
transfer  the  same  made  prior  to  the  levying 
of  such  execution  or  attachment,  and  that 
nothing  contained  in  the  succeeding  sections 
of  this  article  shall  be  construed  to  apply 
to  any  such  capital,  joint  stock  or  debts  so 
sold  or  pledged,  or  to  prohibit  or  prevent  any 
such  corporation  or  purchaser  or  pledgee 
from  transferring  the  said  capital,  joint 
stock  or  debts  represented  by  such  cex'tifi- 
cate  upon  the  books  of  the  corporation  in 
the  same  manner  and  to  the  same  effect  as 
if  no  such  execution  or  attachment  had  been 
levied. 

Attachment  against  stock.    Art.   IX,    §   18. 

§  278.  The  sheriff  or  other  oflScer,  upon 
being  instructed  to  levy  such  writ  on  any 
such  stock  or  debt,  shall  deliver  to  the  presi- 
dent or  chief  officer,  or  leave  at  the  place  of 
business  of  such  corporation,  a  notice  in 
writing,  stating  that  he  has  seized  the  stock 
or  debt  of  the  defendant,  (naming  him,)  and 
the  purpose  for  which  he  has  seized  the 
same,  and  shall  retain  a  copy  of  such  notice, 
and  return  it  with  the  writ. 

§  279.  Upon  the  service  of  such  notice,  the 
sheriff  may  require  the  president,  or  any 
other  officer  of  the  corporation,  to  certify  to 
him  in  writing  the  number  of  shares  of  stock, 
and  the  amount  of  transferable  debt  on  its 
books,  standing  in  the  name  of  the  defend- 
ant at  the  time  of  said  notice;  and  if  any 
president  or  other  officer,  so  required,  shall 
refuse  or  neglect  for  twenty-four  hours  to 
deliver  such  certificate,  the  sheriff  or  other 
officer  shall  certify  the  fact  to  the  court  to 
which  the  writ  is  returnable,  or  to  any  judge 
thereof;  and  the  said  court  or  judge  may 
order  an  attachment  for  contempt  against 
such  president  or  other  officer,  and  may  com- 
pel him  to  answer  upon  oath  on  oral  exam- 
ination as  to  the  number  of  shares  of  stock 
and  amount  of  debt  standing  on  the  books 
of  the  corporation,  in  the  name  of  the  de- 
fendant, at  the  time  of  service  of  such  no- 
tice, and  may  compel  the  production  of  the 
books  of  said  corporation,  and  also  fine  the 
president  or  other  officer  for  not  giving  the 
required  certificate. 


MARYLAND. 


29 


Execution  against  stock;  police  —  G.  L.,  Art.  xxiii,  §§  280-293. 


§  2S0.  When  the  sheriff  has  ascertained  the 
number  of  shares  of  stoclc.  and  amount  of 
such  debt  standing  in  the  name  of  the  de- 
fendant, he  shall  make  a  schedule  of  such 
shares  or  debt,  or  so  much  thereof  as  will 
be  amply  sufficient  to  secure  the  sum  of 
money  he  is  required  to  levy,  and  costs,  and 
shall  give  notice  to  the  corporation  that  the 
stock  or  debt  not  included  in  this  schedule 
is  i-eleased. 

§  2S1.  If  the  levy  be  made  under  a  fieri 
facias,  the  sheriff  shall  advertise  and  sell 
the  stock  or  debt  as  if  the  same  were  real 
estate. 

§  282.  If  any  corporation  or  its  officers, 
after  service  of  notice  of  seizure  as  aforesaid, 
shall  transfer  or  permit  to  be  transferi'ed, 
any  shares  of  stock  or  any  debt  standing 
at  the  time  of  service  in  the  name  of  the 
defendant,  unless  the  same  is  released,  as 
provided  in  the  succeeding  section,  such  cor- 
poration shall  pay  to  the  plaintiff  in  the 
writ  imder  which  such  notice  was  given, 
the  full  market  value  of  the  stock  or  debt  so 
transferred,   to  be  recovered  by   suit. 

§  2S.3.  If  the  proceedings  under  such  writ 
be  ended  by  countermand,  payment  or  any 
other  cause  before  a  sale,  the  stock  seized 
thereunder  shall  be  released,  and  the  sheriff 
shall  give  notice  thereof  in  writing  to  the 
corporation. 

§  284.  If  the  sheriff  shall  make  sale  of  any 
shares  of  stock  or  transferable  debt,  whether 
he  continues  in  office  or  not,  or  whether  he 
has  returned  the  writ  under  which  the  sale 
was  made  or  not,  he  shall  transfer  the  said 
stock  or  debt  so  sold  on  the  books  of  the 
corporation  to  the  purchaser;  or  if  the  sheriff 
making  such  sale  shall  die  or  remove  from 
the  county  without  making  such  transfer, 
the  court  to  which  the  writ  was  returnable 
may  appoint  a  person  to  make  the  same. 

§  285.  If  any  coi^poratiou,  or  any  of  its 
officers,  shaU  refuse  to  permit  any  transfer 
authorized  to  be  made  by  the  preceding 
section,  the  coui't  to  which  the  writ,  by 
virtue  of  which  such  stoclc  or  debt  was  sold, 
Avas  returnable,  or  any  judge  thereof  in  va- 
cation, may  punish  by  process  of  contempt 
all  persons  so  refusing  to  permit  such  trans- 
fer, and  may  also  cause  the  proper  book  of 
such  corporation  to  be  brought  before  such 
court  or  judge,  and  the  transfer  to  be  made; 
and  the  corporation  shall  be  liable  for  all 
damages  sustained  by  reason  of  a  refusal 
to  permit  such  ti'ansfer. 

§  286.  The  purchaser  may  refuse  to  accept 
the  transfer,  of  any  stock  or  transferable 
debt,  unless  it  be  made  within  thirty  days 
after  the  sale,  and  may  bring  an  action  on 
the  case  against  the  sheriff',  officers  or  cor- 
poration by  whose  default  the  said  transfer 
was  delayed  or  omitted,  and  may  recover  the 
value  of  the  stock  or  debt  at  the  time  the 
transfer  should  have  been  made,  or  at  any 
time  afterwards,  before  the  rendering  of  the 
verdict  in  his  said  suit. 


§  287.  Any  pereon  whom  the  court  may 
appoint  to  make  any  transfer,  shall  be  en- 
titled to  the  sum  of  one  dollar,  to  be  paid 
by  the  purchaser,  and  recovered  by  him 
from  the  person  who  ought  to  have  made 
the  transfer. 

Police. 

§  288.  Corporations  owning  or  using  any 
railroad,  steamboat,  canal,  furnace,  colliery 
or  rolling-mill  in  this  State,  may  jointly  or 
severally  apply  to  the  governor'to  commis- 
sion such  persons  as  the  said  corporation  or 
corporations  may  designate,  to  act  as  police- 
men for  the  protection  of  the  property  of 
said  corporation  or  corporatiftns,  and  for  the 
preservation  of  peace  and  good  order  on  their 
respective  premises,  railroad  trains  or  steam- 
boats. 

§  289.  The  governor,  upon  such  applica- 
tion, may,  if  he  thinks  it  proper  so  to  do, 
appoint  such  persons,  or  so  many  of  them 
as  he  may  deem  proper,  to  be  such  police- 
men; and  shall  issue  to  each  person  so  ap- 
pointed a  commission,  and  shall  transmit 
such  commission  to  such  clerk's  office  in 
the  State  as  may,  by  such  corpora iiou  or 
corporations,  be  designated,  and  he  may  re- 
voke and  annul  any  such  appointuieiiis  at 
his  pleasure. 

§  290.  Every  policeman  so  appointed  shall, 
before  entering  upon  the  duties  of  his  office, 
take  and  subscribe  before  a  justice  of  the 
peace  of  the  county  or  city  in  which  his 
commission  may  be  received,  the  oath  or 
alhrmation  prescribed  by  the  fourth  section 
of  the  first  article  of  the  Constitution,  which 
oath  or  affirmation  shall  be  recorded  in  the 
clerk's  office  of  such  countj'  or  city;  and 
every  such  policeman  so  appointed,  after  the 
recording  of  the  oath  or  affirmation  to  be  by 
him  taken  as  aforesaid,  shall  possess  and 
exercise,  in  the  counties  and  cities  in  which 
the  railroads,  canals,  collieries,  furnaces, 
rolling-mills  and  premises  of  the  corporation 
for  which  he  may  have  been  appointed  are 
respectively  situated,  all  the  authority  and 
powers  held  and  exercised  by  constables  at 
common  law  and  under  the  statutes  of  this 
State,  and  also  all  the  authority  and  powers 
conferred  by  law  on  policemen  in  the  city 
of  Baltimore. 

§  291.  Every  such  policeman  shall,  when 
on  duty,  except  when  on  detective  duty, 
wear  a  metallic  shield,  witli  the  word  "  po- 
lice "  inscribed  thereon,  and  said  shield  shall 
always  be  worn  in  plain  view,  except  when 
he  is  employed  as  a  detective. 

§  292.  The  compensation  of  every  such  po- 
liceman shall  be  paid  by  the  party  or  par- 
ties upon  whose  recommendation  he  was  ap- 
pointed, and  neitlier  the  State  nor  any 
county  therein  shall  be  responsible  for  any 
part  of  such  compensation. 

§  293.  Whenever  the  services  of  any  police- 
man so  appointed  as  aforesaid  shall  no  longer 
be  required,  a  notice  in  writing  to  that  etl'ect 
shall  be  given  by  the  corporation  or  cor- 


30 


:m^vrylaxd. 


Preferred  stock:  service  of  process  —  G.  L.,  Art.  xxiii,  §§  294— 21M). 


poratioiis  at  whose  instance  be  was  ap- 
pointed, and  such  notice  sliall  be  filed  in  tbe 
cleric's  olfice  where  the  commission  and  oath 
or  affirmation  of  sncb  policeman  shall  have 
been  recorded.  Avhich  notice  shall  be  noted 
by  such  clerk  upon  the  margin  of  the  record 
where  such  commission  and  oath  or  affirma- 
tion are  recorded,  and  thereupon  the  power 
of  such  policeman  sliall  cease  and  be  deter- 
mined. 

Preferred  Stock. 

§  294.  Every  corporation  incorporated  un- 
der the  laws  of  this  Statc\  which  has  the 
power  to  issue  bonds  as  evidences  of  in- 
debtedness, and  to  secure  the  same  by  mort- 
gage of  the  property  of  such  conioration.  or 
which  has  the  power  to  obtain  such  money 
upon  mortgage,  may,  whenever  in  the  judg- 
ment of  said  corporation  it  is  expedient  to 
do  so,  in  place  of  issuing  audi  bonds  and 
securing  the  same  by  a  mortgage  of  the 
property  of  the  said  corporation,  or  instead 
of  obtaining  money  upon  mortgage,  issue  a 
preferred  stock  for  any  amount  for  which 
the  said  corporation  may  be  authorized  to 
issue  Its  bonds,  or  for  any  amount  which 
the  said  corporation  may  be  authorized  to 
obtain  upon  mortgage  of  its  property,  and 
may  dispose  of  the  said  stock  by  sale,  on 
such  terms  as  it  may  pi'escribe,  or  by  per- 
mitting the  same  to  be  subscriljed  for,  as 
In  the  judgment  of  said  corporation  may 
be  deemed  expedient;  and  eveiy  corporation 
creating  such  preferred  stock  as  aforesaid, 
may  execute  an  agi-eement  under  seal,  to  be 
acknowledged  as  conveyances  of  land  are  re- 
quired to  be  acknowledged,  and  recorded  in 
the  office  of  the  clerk  of  the  circuit  court 
for  the  county  where  the  principal  office  of 
such  corjjoration  shall  be  situated,  or  in  the 
office  of  the  clerk  of  the  superior  court  of 
Baltimore  city,  in  case  such  office  shall  be 
Bituated  in  said  city,  guaranteeing  to  the 
purchasers  of,  or  subscribers  to,  such  pre- 
ferred stock,  a  perpetual  dividend  of  six  per 
centum  per  annum  out  of  the  profits  of  the 
said  corporation,  payable  yearly  or  half 
yearly,  as  said  corporation  shall  determine, 
before  any  dividend  Is  distributed  to  any  of 
the  stockholders  of  the  said  corporation, 
other  than  the  holders  of  said  preferred  stock 
so  created;  and  the  holders  thereof  shall 
have  all  the  Incidents,  rights,  privileges  and 
immunities,  and  liabilities  to  which  the 
capital  stock  of  said  corporation,  or  the 
holders  thereof,  may  be  entitled  or  subject; 
Provided,  however,  That  no  corporation 
shall  exercise  any  power  imder  this  section, 
unless  the  cremation  of  such  preferrc^d  stock 
shall  be  authorized  by  a  general  meeting  of 
the  stockholders  of  such  coi-poration;  and 
the  said  prefen-ed  stock  shall  be  and  con- 
stitute a  lien  on  the  franchises  and  property 
af  such  corporation,  and  have  priority  over 
any  subsequently  created  mortgage,  or  other 
incumbrance. 


Process. 

§  29.").  Any  corporation  not  chartered  by 
the  laws  of  this  State,  which  shall  transact 
business  therein,  shall  be  deemed  to  hold  and 
exercise  franchises  within  this  State,  and 
shall  be  liable  to  suit  in  any  of  the  courts  of 
this  State,  on  any  dealings  or  transactions 
therein. 

See  §  297,  note.  Taxation  upon  revenues  of 
foreign  corporation.  Const.,  art.  Ill,  §  58;  Act 
of  ISOO,  at  pp.  41-4.3.  Foreign  corporations.  See 
§§   109a-109e. 

[Corporations  created  by  act  of  Congress  can 
he  located  within  liniit  of  a  State.  State  v. 
Buchanan,  5  H.   &  J.   362. 

Domicile  of  corporation;  jurisdiction  of  United 
States   courts.     Express  Co.    v.   Trego,   35   Md.    47. 

Li;il)ility  of  a  foreign  insurance  company  to  be 
sued  in  this  State  bj'  a  non-resident.  Ins.  Co.  v. 
Gillett,   54  Md.   212. 

New  York  corporation  doing  business  in  Mary- 
land, how  summoned.  Wagner  v.  Shank,  59  Md. 
313. 

Controversy  between  bona  flde  stockholders  and 
those  claiming  to  be  stockholders  must  be  de- 
termined by  the  courts  of  the  State  by  which  the 
corporation"  was  created.  And  corporation  must 
be  made  a  party.    \Vilkins  v.  Thorne,  00  Md.  253. 

Courts  of  Maryland  will  not  interfere  with  In- 
ternal management  of  a  foreign  corporation.  Con- 
troversies must  be  settled  in  State  creating  it. 
Mining  Co.  v.  Field,  64  Md.  151;  s.  c,  20  Atl. 
Rep.    10.39. 

Under  above  section,  a  foreign  corporation  hav- 
ing no  place  of  business  in  the  State,  and  having 
had  no  dealings  therein,  except  the  purchase  of 
property  at  a  sheriff's  sale,  could  not  be  served 
witli  a  writ  of  replevin  for  such  property  by  ser- 
vice on  its  agent,  temporarily  within  the  State. 
Crook  V.   Girard  Co.,  39  Atl.   Rep.   94.] 


§  296.  (As  re-enacted  April  7,  1892.)  Pro- 
cess issued  by  any  court  or  justice  of  the 
peace  of  this  State  against  any  corporation 
incoi-porated  under  its  laws  may  be  served 
on  any  president,  director,  manager,  ticket 
agent  or  person  selling  tickets  for  passen- 
gers of  any  railroad  company  or  other  offi- 
cer of  such  corporation,  and  if  neither  the 
president  nor  any  of  the  directors,  managers, 
ticket  agents  or  other  officers  of  such  cor- 
poration reside  in  this  State  such  process 
may  be  served  anywhere  within  this  State 
on  any  agent,  attorney  or  other  person  in 
the  service  of  such  coi-poration.  Provided 
That  in  every  case  the  officer  serving  the 
process  shall  leave  a  copy  of  such  process 
with  the  person  upon  Avhom  the  same  is 
"  served."  And  Avhcnever  any  trust  or  guar- 
antee company  which  shall  be  authorized 
and  empowered  under  the  laws  of  this  State 
to  insure  the  fidelity  of  persons  holding 
places  of  trust  or  responsibility  in,  to  or 
under  any  State,  county,  city  corporation, 
company,  person  or  persons  whatsoever;  or 
to  become  security  for  the  faithful  per- 
formance of  any  trust,  office,  duty,  contract 
or  agreement,  and  to  supercede  any  judg- 
ments, or  to  go  upon  any  appeal  or  other 
bond,  then  any  such  trust  or  gnai'antee  com- 
pany shall  be  liable  to  be  sued  in  any  of 
the  counties  of  this  State  or  in  the  city  of 


MAEYLAND. 


31 


Suits  against  corporations  —  G.  L.,  Art.  xxiii,  §§  297-300. 


Baltimore  wherever  any  such  bond  shall 
be  given  or  liability  incurred  by  such  trust 
or  gunrantee  company,  and  process  shall  be 
served  upon  any  such  trust  or  guarantee 
company,  as  is  hereinbefore  provided  for 
by  this  section,  and  such  process  shall  be 
issued  to  the  sheriff  of  any  county  or  the 
city  of  Baltimore,  and  shall  be  made  re- 
turnable to  the  clerk  of  the  court  of  the 
county  or  city  of  Baltimore  from  which 
same  issued,  and  with  the  exceptions  herein 
provided  for  as  to  trust  and  guarantee  com- 
panies, all  suits  which  shall  hereafter  be 
brought  against  any  corporation  which  has 
been  or  may  be  incorporated  under  the 
general  incorporation  laws  of  this  State 
shall  be  brought  in  the  counties  or  city  of 
Baltimore,  as  the  case  may  be,  in  which  the 
certificate  of  incorporation  is  required  to  be 
and  has  been  recorded. 

Corporation  may  be  sued.  §  51.  Execution 
against  stock.  §§  277-287.  Proceedings  for  for- 
feitures.   §§    255-263.    For    dissolution.    §§    264-276. 

[Sheriff's  return  should  show  affirmatively  upon 
what  person  or  persons  the  writ  was  served,  so 
that  the  court  can  determine  whether  the  service 
was  upon  the  company.  R.  R.  Co.  v.  Rider,  45 
Md.   24. 

The  attorney  of  the  company  not  an  otlicer 
within  meaning  of  this  section  and  service  upon 
him   not   sufficient.    Id. 

Authority  of  attornej"  to  waive  service  and  enter 
appearance.    Id. 

Turnpike  company  may  be  sued,  where.  Bait., 
etc.,  Road  v.  Crowther,  63  Md.  572;  s.  c,  1  Atl. 
Rep.   279.] 

§  297.  Suits  may  be  brought  in  any  court 
of  this  State,  or  before  a  justice  of  the 
peace,  against  any  corjKtration  not  incor- 
porated under  its  laws,  but  deemed  to  hold 
and  exercise  franchises  herein,  or  against 
any  joint-stock  company  or  association  doing 
business  in  this  State  by  a  resident  of  this 
State,  for  any  cause  of  action;  and  by  a 
plaintiff  not  a  resident  of  this  State,  when 
the  cause  of  action  has  arisen,  or  the  sub-  j 
ject  of  the  action  shall  be  situated  in  this 
State;  and  process  in  such  suits  may  be  [ 
served  as  provided  in  the  preceding  sec- 
tion, and  also  upon  any  agent  of  such  cor- 
poration or  joint-stock  company  or  associa- 
tion; and  in  case  of  service  of  process  on 
an  agent,  notice  of  such  process  shall  be 
left  at  the  principal  ofBce  of  said  corpora- 
tion, joint-stock  company  or  association,  if 
there  be  such  ofRce  in  this  State;  Provided, 
Nothing  in  this  article  shall  prevent  or  affect 
the  issue  of  attachments  against  corpora- 
tions as  now  or  hereafter  allowed  by  law. 

See  §§  295,  296,  note.  Foreign  corporations.  See 
§§  109a-109e. 

[Foreign  corporation  may  sue  In  courts  of  Mary- 
land. Blnney's  case,  2  Bl.  99;  McKlm  v.  Odom, 
3  id.  407.  Construction  of  section  279.  Myer  v. 
Ins.  Co.,  40  Md.  595;  Cromwell  v.  Ins.  Co.,  49  id. 
366;  Ins.  Co.  v.  Bachus,  51  Id.  28;  Wagner  v. 
Shank,    59    id.    322. 

Courts  of  Maryland  will  not  interfere  In  con- 
troversies  relating  only   to   the   Internal   manage- 

44 


ment  of  foreign  corporation.  Such  controversies 
must  be  settled  by  the  courts  of  the  State  creat- 
ing it.  Mining  Co.  v.  Field,  64  Md.  151;  s.  c,  20 
Atl.   Rep.   1039. 

A  Kew  York  corporation  being  insolvent,  its 
creditor  may  take  any  assets  found  within  juris- 
diction of  this  State.  Day  v.  Tel.  Co.,  66  Md. 
354;  s.  c,   7  Atl.  Rep.  608.] 


§  298.  If  any  corporation  or  joint-stock 
companies  embraced  in  the  preceding  sec- 
tion, after  any  liabilities  shall  occur  within 
this  State,  or  after  any  contract  shall  have 
been  made  by  it  with  any  resident  of  this 
State,  shall  cease  to  have  any  agent  in  this 
State,  and  no  president,  director  or  manager 
of  such  corporation,  or  joint-stock  company 
or  association,  can  be  found  in  this  State, 
then  in  such  case  service  of  any  writ  or 
process  issuing  from  the  courts  of  this  State, 
on  the  person  who  was  the  last  agent  of 
such  corporation  or  joint-stock  company  in 
this  State,  shall  be  deemed  sufficient  service, 
if  a  copy  of  such  process  be  served  on  the 
president  or  manager,  or  two  directors  of 
such  corporation  or  joint-stock  company, 
wherever  they  may  be  found,  and  an  affi- 
davit of  such  service  be  made  before  any 
person  authorized  by  the  laws  of  this  State 
to  take  the  acknowledgments  of  deeds. 

[See  R.    R.    Co.   v.    Rider.   45   Md.   24.] 

§  299.  If  any  corporation  whatever,  upon 
which  process  has  been  served  as  herein- 
before prescribed,  shall  fail  to  appear  dur- 
ing the  term  or  rule  day  for  the  return  of 
process  to  which  such  process  shall  be  re- 
turned, or  by  the  second  day  of  the  succeed- 
ing term  or  rule  daj'  for  the  return  of 
process,  judgment  by  default  shall  be  en- 
tered against  such  corporation,  and  the 
amount  of  the  claim  of  the  plaintiff  shall 
be  ascertained  by  a  jury  of  inquiry  or  other- 
wise, as  in  other  cases  of  judgment  by  de- 
fault. 

§  300.  When  a  judgment  has  been  re- 
covered against  a  corporation,  and  an  exe- 
cution on  such  judgment  returned  nulla 
bona,  the  person  or  body  corporate  entitled 
to  such  judgment  may  file  a  bill  in  equity 
against  all  or  any  persons  who  may  be  in 
any  manner  indebted  to  said  corporation, 
either  for  the  stock  thereof  or  on  any  other 
account;  and  if  the  court  shall  find  such  per- 
son or  persons  to  be  indebted  to  said  cor- 
poration, a  decree  shall  pass  directing  such 
person  so  found  to  be  indebted  to  bring  the 
money  into  court,  to  be  distributed  ratably 
among  the  creditors  of  such  cori^oration,  in 
the  same  manner  that  distribution  is  made 
on  a  creditor's  bill;  and  any  of  the  defend- 
ants to  said  bill  may  pray  a  trial  at  law 
of  any  issue  of  fact  in  said  case,  which 
issue  shall  be  sent  to  a  court  of  law  for 
trial;  and  the  plaintiff  may  require,  by  said 
bill  or  by  another  bill,  the  officers  of  such 
corporation  to  discover,  under  oath,  who  are 
indebted  to  said  corporation,  and  the  amount 
and  consideration  of  such  indebtedness;  and 


32 


MARYLAND. 


Taxation;  employment  of  children  —  G.  L.,  Art.  xxiii,  §§  301-3;  xxvii,  §§  139.  140.  148,  149. 


for  the  purpose  of  such  discovery,  all  or  any 
of  the  officers  of  said  corporation  may  be 
made  defendants,  and  any  of  the  parties 
in  said  causes  shall  be  entitled  to  an  appeal, 
as  allowed  in  cases  in  equity;  and  the  said 
bill  may  be  filed  in  the  circuit  court  for  any 
county  in  which  any  of  the  directors  of 
such  corporation  reside,  or  in  the  county 
in  Avhich  said  corporation  last  had  its  prin- 
cipal otfice  or  place  of  business,  or  in  the 
circuit  court  of  Baltimore  city,  if  any  of 
said  directors  there  reside,  or  if  said  cor- 
poration last  had  in  said  city  its  principal 
office  or  place  of  business. 

S  301.  It  shall  be  sufficient  in  any  suit, 
pleading  or  process,  either  at  law  or  in 
equity,  or  before  any  justice  of  the  peace, 
by  or  against  any  joint-stock  company  or 
association,  to  describe  the  said  joint-stock 
company  or  association  by  the  name  or 
title  by  which  it  is  commonly  known,  or 
by  or  under  which  its  business  is  trans- 
acted. 

[Xame  more  strictly  required  in  pleadings  than 
In  a  contract.  T.  R.  Co.  v.  Creeger,  5  H.  &  J. 
122. 

Corporation  should  be  described  in  pleading  by 
the  name  by  which  it  is  commonly  known,  or 
under  which  its  business  is  transacted.  Powha- 
tan Co.  V.  Potomac  Co.,  36  Md.  238.] 

Taxation. 

§  302.  Nothing  in  this  article  contained 
shall  be  so  construed  as  to  bring  within  any 
supposed  exemption  from  taxation.  State, 
county  or  mimicipal,  in  the  charter  of  any 
company  desiring  to  take  advantage  of  any 
of  the  provisions  in  this  article  contained, 
any  property,  real,  personal  or  mixed, 
owned  under  or  by  virtue  of  any  of  the 
provisions  of  this  article,  or  any  stock  pre- 
ferred or  otherwise,  or  any  bonds  or  other 
evidence  of  debt  issued  imder  or  by  virtue 
of  any  of  the  provisions  of  this  article. 

Taxation  upon  revenues  of  foreign  corporation. 
Const.,  art.  Ill,  §  58.  Taxation  upon  corporations 
In  general.  G.  L.,  art.  LXXXI,  §§  2-144.  Upon 
certain  corporations.  See  Acts  of  1890,  at  pp. 
41-43. 

[Taxation  of  real  estate  of  corporation.  Return 
of  oflBcer,  etc.  See  Mayor,  etc.  v.  Canton  Co., 
63  Md.   218. 

Taxation  of  stock.  Coal  Co.  v.  Comrs.,  59  Md. 
195.] 

General  Applicability. 

§  303.  All  corporations  heretofore  formed 
under  the  general  laws  of  this  State,  relat- 
ing to  corporations,  or  under  any  special 
law,  are  hereby  declared  to  be  entitled  to 
the  benefit  of  and  to  be  subject  to  all  the 
regulations  in  this  article  contained,  for  the 
government  of  the  corporation  herein  re- 
ferred to,  so  far  as  the  same  be  applicable 
to  said  several  corporations  heretofore 
formed  as  aforesaid;  and  shall  also  have 
the  benefit  and  be  subject  to  the  processes, 


remedies  or  proceedings  by  this  article 
authorized  to  l)e  taken  by  or  against  the 
corporations  herein  referred  to,  so  far  as  the 
same  be  applicable  to  the  several  coi*pora- 
tions  heretofore  formed  as  afoi'esaid 

Existing   corporations   may   reincorporate.    §   81. 

[Goodman  v.  Jedidjah  Lodge,  67  Md.  125;  s.  c, 
9  Atl.  Rep.  13;  13  id.  627.] 

ARTICLE  XXVII. 

Crimes  and  Punishments. 

See.   139.  Hours   of   labor   of  children. 

140.  Longer  employment  of  children;  penalty. 

148.  Manufactiiriug  establishments  to  be  kept 

clean. 

149.  Penalty  for  violation   of  preceding. 

§  1.39.  No  child  under  the  age  of  sixteen 
years  shall  be  employed  in  laboring  by  any 
person,  firm,  or  corporation,  in  any  cotton, 
woolen  or  other  manufacturing  establish- 
ment in  this  State  more  than  ten  hours  in 
any  one  day. 

§  140.  Any  such  person,  firm  or  corpora- 
tion who  shall  employ  any  child  under  six- 
teen years  of  age,  contrary  to  the  provisions 
of  the  preceding  section,  and  any  superin- 
tendent, ovei-seer  or  other  agent  of  any 
sucli  person,  firm  or  corporation,  and  any 
parent  or  guardian  of  such  minor,  who  per- 
mits such  minor  to  work  or  be  so  employed 
contrary  to  the  provisions  of  said  section, 
shall,  for  each  offense,  be  punished  by  a  fine 
not  exceeding  fifty  dollars  for  each  and 
every  case,  to  be  recovered  on  complaint  in 
any  court  of  competent  jurisdiction;  and 
all  prosecutions  for  offenses  under  this  sec- 
tion shall  be  begun  within  one  year  from  the 
commission  thereof. 

§  148.  All  factories,  manufacturing  es- 
tablishments or  workshops  in  this  State, 
shall  be  kept  in  a  cleanly  condition  and  free 
from  effluvia  arising  from  any  drain,  privy 
or  other  nuisance;  and  no  factory,  manufac- 
turing establishment  or  workshop  shall  be 
so  overcrowded  while  work  is  carried  on 
therein  as  to  be  injurious  to  the  health  of 
tlie  persons  emploj'ed  therein;  and  every 
such  factory,  manufacturing  establishment 
or  workshop  shall  be  well  and  sufficiently 
lighted  and  ventilated  in  such  a  manner  as 
to  I'ender  harmless,  as  far  as  practicable, 
all  the  gases,  vapors,  dust  or  other  im- 
purities generated  in  the  course  of  the 
manufacturing  process  or  handicraft  car- 
ried on  therein,  which  may  be  injurious  to 
health. 

§  149.  Any  person,  firm  or  corpoi'ation, 
managing  or  conducting  any  factory,  manu- 
facturing establishment  or  workshop  in  this 
State,  who  shall  neglect  any  of  the  require- 
ments of  the  preceding  section,  or  do  or 
permit  to  be  done  in  the  factory,  manufac- 
turing establishment  or  workshop  conducted 
or  managed  by  him,  her,  them  or  it.  any  act 
contrary  to  the  provisions  of  said  section. 


MARYLAXD. 


33 


EA-ideuco  —  G.  L.,  Art,  sxxv,  §  38a;  Pleadings  —  Art.  Ixxv,  §§  23,  108;  Tax.— Art.  Ixxxi,  §  2. 


shall  be  guilty  of  a  misdemeanor,  and  shall, 
upon  conviction  thereof  in  a  court  of  com- 
petent jurisdiction,  be  fined  one  hundred  and 
fifty  dollars  for  each  offense  so  committed. 

ARTICLE  XXXV. 

Evidence. 
Sec.  oSa.  Foreign   incorporation,   evidence  of. 

§  3Sa.  (Enacted  April  14,  1898;  L.  1898,  eh. 
478.)  The  copy  of  the  record  or  register  of 
any  corporation.  Avhich  the  laws  of  any  for- 
eign country  where  the  same  may  be  incor- 
porated, require  to  be  recorded  or  registered, 
and  which  has  been  recorded  agreeably  to 
such  laws,  and  which  is  certified  under  the 
hand  of  the  keeper  of  such  record  or  register 
and  the  seal  of  the  court  or  office  in  which 
said  record  or  register  is  kept,  and  which  is 
also  certified  to  be  in  due  form  and  by  the 
proper  officer,  making  reference  to  the  act 
under  which  corporations  are  formed  under 
the  laws  of  such  foreign  country,  shall  be 
good  and  sufficient  evidence  in  any  court  of 
this  State  to  prove  such  incorporation. 

(Approved  April  14,  1898.) 


ARTICLE  LXXV. 

Pleadings,   Practice   and   Process    at   Law. 

Sec.  23.  Forms   of  pleadings. 

Sub-sec.  108.  Incorporation,     when    to    be 
taken  as  admitted. 

§  23.  The  forms  of  pleadings  which  fol- 
low shall  be  sufficient;  and  the  like  forms 
may  be  used,  with  such  modifications  as 
may  be  necessary  to  meet  the  facts  of  the 
case;  but  nothing  herein  contained  shall 
render  it  erroneous  or  irregular  to  depart 
from    said    forms    so    long    as    substance    is 

-expressed. 

*  *  *  *  *  *  * 

108.  Whenever  the  *  *  *  incorpora- 
tion of  any  alleged  corporation,  *  *  *  is 
alleged  in  the  pleadings  in  any  action  or 
matter  at  law,  the  same  shall  be  taken  as 
admitted  for  the  purpose  of  said  action  or 
matter,  unless  the  same  shall  be  denied  by 
the  next  succeeding  pleading  of  the  opposite 
party  or  parties. 


ARTICLE  LXXXI. 

Revenue  and  Taxes. 

Sec.      2.      "What    propertr    shall     be   taxed;     pay- 
ment  of  taxes  by  corporation. 
4.      Shares  of  stock  exempt,  -when. 
64a.    Sale   of  corporate   property   for  taxes, 
disposition  of  proceeds. 

84.  State  tax  on  capital  stock  for  previous 

vear  to   be   paid. 

85.  If  'no    capital    stock.    State    tax    to    be 

paid  on  assessment. 

87.  Taxes  on  corporate  bonds,  how  to  be 

paid. 

88.  Taxes    on    bonds    of    railroads    wholly 

within  this  State. 


Sec.    88a. 

88A. 

88B. 

88C. 

88D. 

88E. 

88F. 
8SG. 
8SH. 

881. 

88J. 

96. 

131. 

141. 

142. 

143. 

144. 

178. 
194. 

201. 


Corporations  required  to  pay  bonus  on 
capital    stock. 

reualty  for  neglect  to  pay  taxes;  suit 
to   be  brought. 

Failure  of  corporation  to  appear;  pro- 
ceedings. 

Certificate  of  comptroller  prima  facie 
evidence. 

Attorney  to  bring  suit  selected  bv  the 
comptroller. 

Continued  default  by  corporation;  for- 
feiture of  franchise. 

Bonus  required  on  capital   stock. 

Failure  to  pay;  duty  of  comptroller. 

Suit  for  recovery  of  bonus,  where 
brought. 

Continued  to  pay;  forfeiture  of  fran- 
chise. 

Certificate  of  comptroller  prima  facie 
evidence. 

(Previously  existing  corporation  not  re- 
lieved from  any  bonus.) 

Stock,  bonds,  etc.,  excluded  from  as- 
sessment in  the  several  counties  so 
far  as  relates  to  State  tax. 

Situs,  for  purpose  of  taxation,  of  stock 
of   non-residents. 

Real  property  of  corporations  to  be  re- 
turned for  taxation. 

Assessment  of  corporation  whose  capi- 
tal is  invested  in  taxable  securities. 

Abatement  of  plant  of  manufacturing 
corporations. 

Return  of  State  tax  commissioner;  noti- 
fication to  corporation;  appeal. 

Taxation  of  shares  of  stock. 

Taxation  of  bonds  and  other  evidence 
of  debt  issued  by  corporations. 

Same. 


§  2.  (As  re-enacted  and  amended  March  30, 
189t).)  *  *  *  All  real  properties  in  this 
State  belonging  to  any  l)auk  incorporated 
under  the  laws  of  this  State  or  of  any  other 
State  or  belonging  to  any  national  bank  lo- 
cated in  this  State,  or  to  any  company  or  cor- 
poration incorporated  by  or  under  the  laws 
of  this  State,  or  of  any  other  State,  or  under 
the  laws  of  the  United  States,  or  of  any 
territory,  or  under  the  laws  of  the  United 
States  relating  to  the  District  of  Columbia, 
or  belonging  to  any  joint-stoclc  company 
doing  business  in  this  State,  is  and  shall 
be  valued  and  assessed  for  the  piu-pose  of 
State,  county  and  municipal  taxation  as  the 
property  of  such  bank,  company,  corpora- 
tion or  joint-stock  company,  and  such  bank, 
company,  corporation  or  joint-stock  com- 
pany shall  pay  such  respective  taxes  thereoH. 
All  money  belonging  to  residents  of  this 
State,  which  shall  be  the  proceeds  of  the 
sale  of  stocks,  bonds  or  other  property  dis- 
posed of  for  the  purpose  of  evading  and 
escaping  taxation;  all  shares  or  interest  in 
any  joint-stock  company,  and  all  shares  of 
stock  in  any  bank  incorporated  imder  the 
laws  of  this  State,  or  any  national  bank  lo- 
cated in  this  State,  or  in  any  corporation  in- 
corporated under  the  laws  of  the  State,  shall 
be  valued  and  assessed  for  the  purpose  of 
State,  county  and  municipal  taxation,  to  the 
owners  thereof  in  the  county  or  city  in  this 
State  in  which  said  owners  may,  respect- 
ively, reside:  the  taxalile  value  of  such 
shares  shall  be  ascertained  and  determined, 
and  the  taxes  thereon  levied  and  collected 
as  is  now  or  may  be  hereafter  provided  by 
law. 


34 


^[ARYLAND. 


Taxation  —  G.  L.,  Art.  Ixxxi,  §§  4,  64a,  84,  85,  87. 


All  personal  jiropeiiiy  in  which  any  resident 
of  this  State  has  an  equitable  interest  with 
the  legal  title  to  the  same  in  some  other 
person  or  corporation  who  is  a  non-resident 
shall  be  valued  and  assessed  for  the  pur- 
poses of  State,  county  and  municipal  taxa- 
tion to  the  equitable  owner  thereof  in  the 
county  or  city  in  which  he,  she  or  it  resides, 
and  such  equitable  owner  or  owners  shall 
pay  the  taxes  thereon. 

All  shares  of  stocli  or  shares  in  any  bank 
other  than  a  national  bank,  or  in  any 
company  or  corporation  incorporated  by 
or  located  in,  and  doing  business  in  any 
other  State  or  District  of  Columbia,  or 
in  any  territory  or  foreign  country  owned 
by  i-esidents  of  this  State,  shall  be 
valued  and  assessed  for  the  purposes  of 
State,  county  and  municipal  taxation, 
to  the  owners  thereof  in  the  county  or 
city  in  which  said  owners  may,  respectively, 
reside.  All  bonds  made  or  issued  by  any 
State  or  District  of  Columbia  or  territory 
or  by  any  corporation  whatsoever  belonging 
to  the  residents  of  this  State,  all  investments 
in  private  securities  of  evex-y  kind  and  de- 
scription belonging  to  residents  of  this  State, 
the  real  property  located  in  this  State,  and 
the  personal  property  owned  by  any  corpora- 
tion incorporated  by  this  State,  not  having 
a  capital  divided  into  shares,  or  having 
shares  of  capital  stock  which  are  wholly  or 
in  part  exempted  from  taxation  by  this 
State  when  such  real  or  personal  property 
so  owned  by  said  corporation  is  not  pro- 
tected from  taxation,  by  the  exemption  of 
said  shares  of  stock  from  taxation,  shall  be 
valued  and  assessed  for  the  purpose  of  State, 
county  and  municipal  taxation  to  the  owners 
thereof,  in  the  county  or  city  in  which  such 
owners  may  respectively  reside;    *    *    * 

Taxation  upon  revenue  of  foreign  corporations. 
Const.,  art.  Ill,  §  58.  Property  of  corporations 
not  to  be  exempt  from  taxation.  G.  L.,  art.  XXIII, 
§  302.  Taxation  upon  certain  corporations.  See 
Acts  of  ISiX),  at  pp.  41-43.  Corporation  not  to  be 
dissolved  until  taxes  paid.     Act  1892,  at  p.  45. 

[Assessment  and  Taxation  Act  of  1841  constitu- 
tional.    State  v.  irayhew.  2  Gill.  487. 

Also  Taxation  Act  of  1843.     Id. 

Taxation  of  both  the  shares  of  stock  and  the 
property  of  a  bank  is  double  taxation,  and  un- 
constitutional. Conirs  V.  Bank,  48  Md.  117;  Gor- 
don V.   Mayor,   5  Gill,  231. 

But  the  property  of  a  bank  being  exempt,  the 
taxation  of  the  stock  is  constitutional.  State  v. 
Mayhew,  supra;  contra,  State  v.  Wilson,  52  Md. 
638. 

Tax  decisions.  See  O'Xeal  v.  Bridge  Co.,  18 
Md.  1;  Appeal  Tax  Court  v.  R.  R.  Co.,  50  id.  276; 
Same  v.  Academy,  id.  322:  Same  v.  Patterson, 
id.  354;  Same  v.  Gill,  id.  377;  Same  v.  R.  R.  Co., 
id.  397;  Same  v.  Ry.  Co.,  id.  417;  Bonaparte  v. 
State,  63  id.  472.] 

§  4.  (As  amended  March  30,  189G.)  The  pro- 
visions of  this  article  shall  not  apply  to 
*  *  *  the  personal  property  of  any  cor- 
poration incorporated  by  this  State,  and  hav- 
ing capital  stock  divided  into  shares,  when 


said  shares  of  said  corporation  are  subject 
to   taxation   under   the   laws   of   this   State, 

§  G4A.  (Enacted  April  4,  189G.)  Whenever 
a  sale  of  either  real  or  ijersoual  property  of  a 
I  corporation,  from  which  State  taxes  are  due 
j  and  payable,  shall  be  made  by  any  sheriff, 
I  constable,    trustee,  receiver  or  other  minis- 
terial officer,  under  judicial  process  or  other- 
wise, all  sums  due  and  in  arrears  for  State 
ta.xes  from  the  corporation  whose  property 
is  sold,  siiall  be  first  paid  and  satisfied,  after 
the  necessary  expenses  incident  to  tlie  sale; 
and  the  officer  or  person  selling  said  prop- 
erty, shall  pay  the  same  to  the  person  whose 
dutj^  it  is  to  collect  or  receive  said  taxes, 
under  the  laws  of  this  State. 

§  84.  The  president  or  other  proper  officer 
of  the  banks.  State  and  national,  and  other 
incorporated  institutions  and  companies, 
chartered  l^y  this  State,  or  located  and  doing 
business  therein,  shall  annually,  on  the  sec- 
ond day  of  January,  pay  to  the  treasurer  of 
the  State,  the  State  tax  imposed  upon  the 
shares  of  capital  stock  of  said  banks,  insti- 
tutions or  companies  for  the  previous  year, 
whether  they  or  any  of  them  have  or  have 
not  declared  any  dividend  or  earned  any 
profits,  and  without  regard  to  the  place  of 
residence  of  stockholders. 

Stock  in  personal  estate.  G.  L.,  art.  XXIII,  §  63. 
List  of  stockholders  to  be  kept  by  secretary.  Id., 
§  72.  Bonus  to  be  paid  on  capital  stock.  §  88a 
et  seq. ;  §  88F  et  seq.,  post.    See  §  2,  supra,  note. 

[Tax  cannot  be  recovered  back,  whether  legal 
or  illegal,  if  voluntarily  paid.  Morris  v.  Mavor, 
5  Gill,   244. 

State  has  no  right  to  violate  a  contract  made 
with  a  corporation,  exempting  its  propertv  from 
taxation.     The  Tax  cases,  12  G.   &  J.  118. 

The  shares  of  stock  of  .corporation  are  liable 
to  be  assessed  at  their  cash  value,  at  the  time 
of  the  assessment.  Ins.  Co.  v.  Mayor,  23  Md. 
296. 

The  shareholders,  and  not  the  corporation,  as- 
an  entirety,  are  the  owners  of  its  capital  stock. 
Id. 

Right  of  the  State  to  a  mandamus  to  compel 
payment,  by  officers  of  corporation,  of  assessment 
on  its  capital  stock.     Emery  v.  State,  41  Md.  38. 

To  whom  taxes  are  pavable.  Id.;  Barney  v. 
State,  42  Md.  480.] 

§  85.  In  all  cases  where  any  incorporated 
institution  or  company  has  no  capital  stock, 
so  called,  the  property  and  assets  of  said 
company,  of  whatever  nature,  shall  be  as- 
sessed, and  the  president  or  other  proper 
officer  thereof  shall  pay  to  the  treasurer  the 
tax  due  upon  said  property  and  assets,  at 
the  time  aforesaid,  and  also  to  the  collector 
of  the  county  or  city,  the  amount  of  all 
taxes  due  on  said  property  and  assets,  to 
said  county  or  city. 

[State  V.  Sterling,  20  Md.  502.] 

§  87.  The  president  or  other  proper  officer 
of  any  incorporated  institution  or  company 
of  this  State  which  shall  have  issued  any 
bonds,  certificates  or  evidences  of  debt,  bear- 


^^FAEYLA^S^D. 


35 


Taxation  —  G.  L..  Art.  Ixxxi,  §§  88,  88a,  88A. 


Ing  interest,  shall,  on  or  before  the  first  day 
of  July  in  every  year,  maJie  return  to  the 
comptroller,  of  the  aggregate  amount  of  said 
bonds,  certificates  or  other  evidences  of 
debts  held  by  or  belonging  to  the  residents 
of  this  State,  and  pay  to  the  treasurer  on 
said  day,  out  of  the  interest  due  to  the  hold- 
ers thereof,  the  State  tax  thereon;  and  shall 
also  furnish  to  the  county  commissioners  or 
appeal  tax  court  of  the  county  or  city,  an- 
nually, on  or  before  the  first  day  of  March, 
a  list  of  the  holders  of  said  bonds,  certifi- 
cates or  evidences  of  debt,  residing  in  said 
county  or  city,  when  such  residence  is 
known,  and  when  the  residence  of  the  holder 
is  unknown,  to  the  county  commissioners  of 
the  county  where  such  corporation  is  situate, 
or  to  the  appeal  tax  court,  if  situate  in  Bal- 
timore city;  if  any  such  officer  shall  fail 
to  perform  the  duty  imposed  by  this*  section, 
he  shall,  upon  indictment  and  conviction 
thereof  in  the  court  having  criminal  jurisdic- 
tion, be  fined  not  less  than  five  himdred  dol- 
lars, and  imprisoned  not  less  than  one  month, 
and  imtil  this  fine  is  paid:  all  bonds,  cer- 
tificates or  evidences  of  debt  issued  by  any 
such  incorporated  institution  or  company  in 
this  State,  shall  be  presumed  to  be  held  and 
to  belong  to  residents  of  this  State;  but  if 
the  holder  of  any  such  bonds,  certificates  or 
evidences  of  debt  shall  certify  upon  oath, 
duly  administered  according  to  law,  to  the 
said  president  or  other  proper  officer,  that 
said  holder  is  the  bona  fide  owner  of  such 
bonds,  certificates  or  evidences  of  debt,  and 
that  he  is  a  bona  fide  resident  of  any  other 
State  or  county,  then  such  president  or  other 
proper  officer  shall  report  the  fact  of  such 
holding  by  such  non-resident  or  non-resi- 
dents, and  shall  deduct  from  the  amount  of 
bonds,  certificates  or  other  evidences  of  debt 
to  be  taxed,  all  such  bonds,  certificates  or 
evidences  of  debt  so  owned  by  non-residents 
of  this  State  as  aforesaid,  and  shall  not  be 
liable  for  the  taxes  on  the  same. 

§  88.  All  bonds  and  certificates  of  debt 
bearing  interest,  issued  by  any  railroad 
corporation  or  other  corporation  of  this 
State,  secured  by  mortgage  of  property 
wholly  within  this  State,  shall  be  sub- 
ject to  assessment  and  taxation  to  the 
owner  or  owners  thereof  in  the  same 
manner  as  like  bonds  or  certificates  of 
debt  bearing  interest  and  secured  by  mort- 
gage of  property  partly  in  this  State  and 
partly  in  some  other  State  or  States  are  now 
subject  under  the  laws  of  this  State;  and 
it  shall  be  the  duty  of  the  county  commis- 
sioners of  the  several  counties,  and  the  ap- 
peal tax  court  of  Baltimore  city,  to  assess 
all  such  bonds  or  certificates  of  debt  to  the 
owner  or  owners  thereof  resident  in  their 
several  counties,  or  in  the  city  of  Baltimore, 
respectivelv. 

§  88a.  (Enacted  April  8,  1890.)  Every  cor- 
poration incorporated  since  January  first, 
eighteen  hundred  and  ninety,  under  any  gen- 
eral   or    special    law    of    this    State,    except 


cemetery  companies,  incorporated  for  relig- 
ious or  purely  charitable  and  benevolent, 
and  railroad  companies  shall  pay  to  the  State 
treasurer,  for  the  use  of  this  State,  a  bonus 
of  one-eighth  of  one  per  centum  Upon  the 
amount  of  capital  stock  which  said  com- 
pany is  authorized  to  have,  in  two  equal  in- 
stalments, and  a  like  bonus  upon  any 
subsequent  increase  thereof;  the  first  in- 
stalment shall  be  due  and  payable  upon  the 
incorporation  of  said  company,  or  the  in- 
crease of  the  capital  thereof,  and  the  second 
instalment  one  year  thereafter;  and  no  com- 
pany as  aforesaid  shall  have  or  exercise  any 
corporate  powers  until  the  first  instalment 
of  said  bonus  has  been  paid  to  the  State 
treasurer;  whenever  the  capital  stock  of  any 
of  said  companies,  or  any  company  of  the 
like  character  heretofore  incorporated  shall 
be  increased,  a  bonus  of  one-sixth  of  one  per 
centum  upon  the  amount  of  said  increase, 
shall  be  paid  to  the  State  treasurer  in  two 
equal  instalments,  the  first  to  be  due  and 
payable  upon  the  recording  of  the  certificate 
of  such  increase,  or  upon  the  passage  of  any 
special  act  authorizing  such  increase,  and 
the  second  instalment  shall  be  due  and  pay- 
able one  year  therafter. 

[Under  above  section  a  person  sued  by  a  cor- 
poration not  having  paid  such  bonus  may  .object 
that  it  has  no  capacity  to  sue.  And  the  bunus 
cannot  be  paid  so  as  to  acquire  the  riglit  after 
commencement  of  the  suit.  Maryland  T.  vS:  I. 
Works  v.  West  End  Imp.  Co.,  39  Atl.  Rep.  620.] 

§  88A.  (Enacted  April  3,  1890.)  If  any  cor- 
poration of  this  State  from  which  State 
taxes  shall  be  due  and  payable  on  the  as- 
sessed value  of  its  shares  of  capital  stock, 
shall  fail  or  neglect  to  pay  the  same  to  the 
treasurer  of  the  State  before  the  first  day  of 
November  of  the  year  for  which  such  taxe"s 
have  been  assessed  and  levied;  such  corpo- 
ration shall  for  such  failure  and  neglect 
forfeit  and  pay  to  the  State  of  Maryland  an 
additional  amount  of  five  per  centum  as 
penalty  or  damages,  to  be  added  to  the  said 
State  taxes  so  due  and  unpaid,  and  it  shall 
be  the  duty  of  the  comptroller  to  add  the 
said  penalty  or  damages  to  the  said  account, 
and  forthwith  to  make  out  said  account  and 
certify  the  same  under  the  seal  of  his  office, 
and  to  cause  suit  to  be  l)rought  for  such 
State  taxes  and  such  penalty  or  damages  in 
the  circuit  court  for  the  county  in  which  the 
principal  office  of  said  corporation  is  located, 
or  in  the  superior  court  of  Baltimore  city, 
or  the  court  of  common  pleas  of  the  city  of 
Baltimore,  if  the  principal  office  of  such 
corporation  be  located  in  said  city,  and  the 
said  suit  shall  stand  for  trial  at  the  first 
term  after  service  of  the  writ  shall  have 
been  made  on  such  corporations;  and  ser- 
vice of  the  writ  aforesaid  on  any  officer  of 
such  corporation  shall  be  deemed  and  taken 
as  sufficient  service  on  such  corporation. 

§  88B.  (Enacted  April  3,  1890.)  If  upon  the 
return  of  the  writ  issued  against  such  corpo- 


36 


MARYLAND. 


Taxation  —  Art.  Ixxxi,  §§  88C-88H. 


ration,  and  the  said  corporation  being  duly 
summoned  as  aforesaid,  such  corporation 
shall  fail  to  appear  by  attorney  or  agent 
upon  the  first  call  of  the  doclvot,  it  shall  be 
the  duty  of  the  court  to  cause  the  personal 
appearance  of  the  said  corporation  to  be 
entered,  and  the  cause  shall  stand  for  trial 
or  hearing  and  judgment  sliall  be  reudered 
as  if  said  corporation  had  appeared  by  at- 
torney, and  if  such  corporation  shall  appear 
by  attorney  or  agent  and  either  party  shall 
desire  a  trial  by  jury,  it  shall  be  the  duty 
of  the  court  to  cause  the  issues  to  be  framed 
and  a  jury  to  be  empaneled  for  the  trial 
thereof,  and  if  the  verdict  of  the  jury  shall 
be  for  the  State,  judgment  shall  be  entered 
without  stay  for  the  amount  of  the  State 
taxes  so  due  as  aforesaid,  and  the  five  per 
cent,  additional  as  damages  with  interest 
and  costs,  and  a  fee  of  ten  dollars  shall  be 
allowed  the  attorney  for  the  State,  to  be 
taxed  in  the  plaintiff's  costs  in  said  suit,  and 
execution  shall  be  issued  on  such  judgment 
if  the  same  be  not  paid  into  the  treasury 
within  twenty  days  after  the  rendition 
thereof. 

§  880.  (Enacted  April  3.  1890.)  The  cer- 
tificate of  the  comptroller  under  seal,  of  the 
amount  of  such  State  taxes  so  due  as  afoi-e- 
said,  and  of  such  penalty  or  damages,  shall 
be  prima  facie  evidence  to  entitle  the  State 
to  judgment  for  said  penalty  or  damages  in 
every  case  in  which  such  State  taxes  shall 
be  so  in  arrear  and  unpaid  and  for  which 
such  suit  shall  be  so  brought  as  aforesaid. 

§  88D.  (Enacted  April  3,  1890.)  The  comp- 
troller of  the  treasury  may  select  any  at- 
torney in  whom  he  may  have  confidence,  to 
bring  such  suit  and  conduct  the  same  to 
judgment  and  execution;  but  such  attorney 
shall  have  no  power  to  receive  or  receipt  for 
the  money  so  due  the  State,  and  no  acquit- 
tance shall  be  good  to  discharge  any  such 
corporation  from  such  taxes,  but  the  receipt 
of  the  State  treasurer  for  such  amount  so 
due  as  aforesaid,  or  the  proper  ofiicer  to 
whom  execution  may  be  issued  on  such 
judgment  as  aforesaid;  if  any  such  attorney 
or  person  other  than  the  State  treasurer  or 
the  proper  officer  to  whom  execution  may 
issue  on  such  judgment  shall  or  presume  in 
any  such  case  to  receive  and  give  receipt 
for  such  amount  so  due  the  State,  such  at- 
torney or  other  person  shall  be  guilty  of  a 
misdemeanor,  and  shall  upon  conviction,  be 
fined  doidile  the  amount  so  received  and 
receipted  for,  and  shall  stand  committed 
until  such  fine  and  the  costs  thereon  are 
fully  paid. 

§  88E.  (Enacted  April  3,  1890.)  If  after 
suit  brought  and  judgment  rendered  as 
aforesaid,  any  such  corporation  shall  still 
continue  in  arrear  and  shall  fail  or  neglect 
to  pay  its  State  taxes  so  due  as  aforesaid, 
for  the  space  of  two  years  after  the  same 
shall  be  in  arrears,  such  failure  and  neglect 
shall  be  deemed  to  amount  to  and  shall  con- 
stitute a  forfeiture  of  the  charter  of  such 


corporation,  and  such  charter  shall  be  de- 
creed to  be  so  forfeited  and  annulled  ipso 
facto. 

§  88F.  (Enacted  March  21,  1894.)  Every 
corporation  which  shall  be  incorporated  after 
the  date  of  the  passage  of  this  act  under 
any  general  or  special  law  of  this  State,  ex- 
cept cemetery  companies,  companies  created 
for  purely  benevolent  and  charitable  pur- 
poses, railroad  companies  and  building  or 
homestead  associations  Incorporated  under 
article  twenty-three  of  the  Code  of  Public 
General  Laws,  title  "  Coi'porations,"  sub- 
title "  Provisions  for  the  Formation  of  Cor- 
porations," section  eighteen,  class  (5),  shall 
pay  to  the  State  treasurer  for  the  use  of  the 
State  a  bonus  of  one-eighth  of  one  per  cen- 
tum upon  the  amount  of  capital  stock  which 
said  company  is  authorized  to  have,  and  a 
lilie  bonus  upon  the  amount  of  any  subse- 
quent increase  of  capital  stock  the  com- 
pany is  authorized  to  have;  said  bonus  upon 
the  original  capital  stock  shall  l)e  due  and 
payable  upon  the  incorporation  of  said  com- 
pany, and  upon  the  increase  upon  the  re- 
cording of  the  certificate  of  such  increase  or 
the  passage  of  any  special  act  authorizing 
such  increase;  and  no  company  as  aforesaid 
which  shall  be  incorporated  after  the  date 
of  the  passage  of  this  act  shall  have  or  ex- 
ercise any  corporate  powers  until  said  bonus 
has  been  paid  to  the  State  treasurer:  when- 
ever any  company  of  the  character  afore- 
said, incorporated  prior  to  the  date  of  the 
passage  of  this  act,  shall  be  authorized  to 
increase  its  capital  stock,  it  shall  pay  a  tax 
of  one-eighth  of  one  per  centum  to  the  State 
treasurer  for  the  use  of  the  State  upon  the 
amoimt  of  increase  said  company  is  author- 
ized to  have;  said  bonus  shall  be  due  and 
payable  upon  the  recording  of  the  certificate 
of  increase  authorized  or  upon  the  passage 
of  any  special  act  authorizing  such  increase. 

rUnder  a1)ove  section,  a  corporation  not  paying^ 
the  bonus  lias  no  capacity  to  sue,  though  §  S8H 
proviflos  that  the  State  may  sue  the  corporation 
to  recover  the  bonus.  Marvhind  T.  &  I.  Co..  3& 
Atl.  Rep.  620.] 

§  88G.  (Enacted  March  21,  1894.)  If  any 
corporation  or  company  from  which  said 
bonus  shall  be  due,  shall  fail  or  neglect  to 
pay  the  same  to  the  treasurer  of  the  State 
for  the  space  of  two  months  after  the  same 
has  been  due  and  payable  as  aforesaid,  it 
shall  be  the  duty  of  the  comptroller  to  make 
out  said  account  against  said  corporation, 
and  certify  the  same  under  the  seal  of  his 
office  and  transmit  the  same  to  some  attor- 
ney in  whom  he  has  confidence,  and  to  cause 
suit  to  be  brought  for  the  recovery  of  said 
bonus;  but  no  acquittance  shall  be  good  to 
discharge  such  corporation  from  such  bonus, 
but  the  receipt  of  the  treasurer  of  the  State 
or  the  proper  officer  to  whom  execution  or 
judgment  may  issue. 

§  88H.  (Enacted  March  21,  1894.)  Suit  for 
the  recovery  of  such  bonus  shall  be  brought 


MARYLAND. 

Taxation  —  G.  L.,  Art.  Ixxxi,  §§  881,  88 J,  OG,  131,  141 


37 


In  the  county  where  the  incorporation  papers 
of  such  corporation  are  recorded  or  where 
the  principal  office  of  such  company  is  lo- 
cated, or  in  the  city  of  Baltimore,  if  the  in- 
corporation papers  of  such  company  are 
there  recorded,  or  the  principal  office  of  such 
company  is  there  located,  and  the  service 
of  the  writ  of  summons  upon  any  officer  or 
agent  of  such  company,  or  upon  any  stock- 
holder or  incorporator  in  such  company, 
shall  be  deemed  and  talien  as  sufficient  ser- 
vice on  such  corporation  upon  the  return  of 
the  writ  issued  against  such  corporation;  and 
such  corporation  being  summoned  as  afore- 
said, the  cause  shall  stand  for  trial  or  hear- 
ing according  to  the  laws  and  the  respective 
rules  of  courts  of  this  State;  and  if  judgment 
shall  be  rendered  against  such  corporation,  a 
fee  of  ten  dollars  shall  be  allowed  the  at- 
torney for  the  State,  to  be  taxed  in  the  plain- 
tiff's costs. 

§  881.  (Enacted  March  21,  1894.)  If,  after 
suit  brought  and  judgment  rendered  as 
aforesaid,  any  corporation  from  which  said 
bonus  shall  be  due  as  aforesaid,  shall  con- 
tinue in  arrears  and  shall  fail  or  neglect  to 
pay  said  bonus  to  the  State  treasurer,  for 
the  space  of  two  years  after  the  same  shall 
be  so  in  arrears,  such  failure  and  neglect 
shall  be  deemed  to  amount  to  and  shall  con- 
stitute a  forfeiture  of  the  charter  of  such 
corporation,  and  said  charter  shall  be  de- 
creed to  be  so  forfeited  and  annulled  ipso 
facto;  and  that  any  and  all  corporate  powers 
exercised  by  any  such  building  or  home- 
stead association  formed  since  January  first, 
1890,  and  prior  to  the  date  of  the  passage 
of  this  act,  are  hereby  given  validity  and 
full  force. 

§  88 J.  (Enacted  March  21,  1894.)  The  cer- 
tificate of  the  comptroller,  under  the  s^al 
of  his  office,  shall  be  prima  facie  evidence 
of  the  amount  of  bonus  due  as  aforesaid, 
to  entitle  the  State  to  judgment  for  said 
bonus  and  costs  of  suit. 

[§  2.  And  be  It  enacted,  That  all  acts  and  parts 
of  acts  inconsistent  -with  the  provisions  of  this 
act  (§§  88F-88J)  be  and  the  same  are  hereby  re- 
pealed; Provided,  however.  That  no  corporation 
incorporated  prior  to  the  date  of  the  passage  of 
this  act  shall  in  any  manner  by  this  act  be  re- 
lieved or  released  from  the  payment  of  any  bonus 
now  due  and  owing  by  it  or  which  shall  become 
due  and  payable  by  it  prior  to  the  date  of  the 
passage  of  this  act.  under  the  provisions  of  chap- 
ter five  hundred  and  thirty-six  of  the  acts  of 
the  general  assembly  of  Maryland,  the  year 
eighteen  hundred  and  ninety  (§  8Sa),  excepting, 
nevertheless,  such  classes  of  corporations  as  will 
be  exempt  from  the  operation  of  this  act,  which 
said  classes  of  corporations  heretofore  formed  shall 
be  exempt  from  the  operation  of  this  act  in  like 
manner  as  such  classes  of  corporations  hereafter 
to  be  formed.] 

§  96.  *  *  *  The  capital  stock  and  bonds, 
certificates  or  other  evidences  of  debt,  bear- 
ing interest,  issued  by  incorporated  com- 
panies or  institutions  of  this  State,  shall  be 
exchided  from  the  assessment  in  the  several 
counties  and   citv   of   Baltimore,   so   far  as 


relates  to  the  State  tax,  the  payment  of  said 
tax  thereon  being  hereinbefore  provided  for. 

,.  [^ee  State  v.  Mayhew;  Barney  v.  State,  supra; 
§§  2  and  81.] 

Stock  owned  by  Non-Residents. 

§  131.  For  the  purpose  of  valuing  the  stock 
of  banking  and  other  private  corporations 
I  held  by  non-resident  stockholders,  it  is  hereby 
I  declared  and  understood  that  it  is  stock  of 
banking,  insurance  or  other  corporations 
I  usually  termed  moneyed  institutions,  is  situ- 
ate at  the  place  at  which  the  principal  office 
for  the  transacting  the  business  of  such  cor- 
poration is  situate;  the  stock  of  a  turnpike, 
railroad,  steamboat,  canal  or  other  improve- 
ment corporation  is  situate  at  the  place 
where  its  principal  office  for  the  transaction 
of  business  shall  be  established,  if  the  said 
office  be  within  the  limits  of  this  State,  and 
shall  be  so  assessed,  and  if  not,  then  the  as- 
sessable property  of  such  corporation  shall 
be  valued  and  assessed  in  the  county  or 
counties  in  which  said  property  is  situate, 
and  in  the  city  of  Baltimore  so  far  as  it  is 
situate  in  said  city;  and  the  stock  of  mining, 
manufacturing  and  other  like  corporations, 
situate  at  the  place  where  the  works  of  such 
corporation,  or  the  greater  part  of  their 
operations,  respectively,  shall  be  conducted, 
shall  be  assessed  in  like  manner  in  the 
county  or  city  where  such  works  are  situate. 

[Stock  owned  by  non-residents  in  street  car 
company  taxable  in  Baltimore.  Mayor  v.  R.  R. 
Co.,  57  Md.  31. 

Construction  of  section.  Coal  Co.  v.  Comrs.,  59 
Md.   18(5. 

See  O'Neal  v.  Bridge  Co.,  18  Md.  1.] 

§  141.  (As  amended  March  30,  1896.)  At  the 
time  of  making  the  returns  of  stockholders 
to  the  county  commissioners  and  appeal  tax 
court  of  Baltimore  city,  as  required  by  law, 
the  president  or  other  proper  officer  of  every 
bank  or  other  incorpoi-ated  institution  in- 
corporated under  the  laws  of  this  State  or 
doing  business  therein,  and  of  every  joint- 
stock  company  doing  business  in  this  State, 
shall  furnish  to  the  county  commissioners  of 
each  county  in  which  such  bank  or  other  in- 
corporated institution  or  joint-stock  com- 
pany shall  own  or  possess  any  real  property, 
and  to  the  appeal  tax  court  of  Baltimore  city, 
if  such  bank  or  other  incorporated  institu- 
tion or  joint-stock  company  shall  own  or 
possess  any  real  property  in  said  city,  a  true 
statement  of  such  real  property  situated  or 
located  in  such  county  or  city,  and  such  real 
property  shall  be  valued  and  assessed  by 
said  county  commissioners  and  appeal  tax 
court,  respectively,  to  the  said  bank  or  in- 
corporated institution  or  joint-stock  company 
so  owning  the  same,  and  the  said  county 
commissioners  and  appeal  tax  court  shall 
give  duplicate  certificates  of  such  valuation 
and  assessment  to  such  president  or  other 
officer,  who  shall  transmit  one  of  such  du- 
plicate  certificates   with   his   return   to   the 


38 


]\LVIIYLAND. 


Taxation  —  G.  L.,  Art.  Ixxxi,  §  142. 


State  tax  commissioner,  and  State,  county 
and  municipal  taxes  shall  be  levied  upon 
and  paid  by  such  bank  or  other  incorporated 
institution  or  by  such  joint-stock  company 
on  such  assessment  in  the  same  manner  as 
the  same  are  levied  upon  and  paid  by  in- 
dividual owners  of  real  property  in  such 
county  or  city;  the  respective  taxable  value 
of  the  shares  of  stock  in  such  banks,  corpo- 
rations and  joint-stock  companies  shall  be 
ascertained  by  the  State  tax  commissioner 
in  the  manner  following: 

He  shall  deduct  the  assessed  value  of  such 
real  property  belonging  to  the  said  respect- 
ive banks,  corporations  or  joint-stock  com- 
panies from  the  aggregate  value  of  all  shares 
of  such  respective  banks,  corpox'ations  or 
joint-stock  companies  and  divide  the  re- 
mainder by  the  number  of  shares  of  the 
capital  stock  or  share  of  such  respective 
banks,  corporations  or  joint-stock  companies 
and  the  quotient  shall  be  the  taxable  value 
of  each  of  such  respective  shares  for  State 
purposes,  and  all  State  taxes  thereon  shall 
be  paid  as  provided  now  or  hereafter  by 
law.  and  when  the  valuation  and  assessment 
of  the  shares  of  the  capital  stock  or  shares 
of  such  bauks,  corporations  or  joint-stock 
companies  shall  have  been  finally  determined 
or  made  for  State  purposes,  the  State  tax 
commissioner  shall  certify  to  the  county 
commissioners  of  each  county  where  any  of 
the  stockholders  or  shareholders  may  reside, 
and  to  the  appeal  tax  court  of  Baltimore 
city  if  any  of  said  stockholders  or  share- 
holders reside  in  said  city,  and  to  the  county 
commissioners  of  the  county  in  which  such 
bank,  corporation  or  joint-stock  company  is 
situated,  or  to  the  appeal  tax  court  of  Balti- 
more city  if  it  is  situated  in  said  city,  the 
assessed  taxable  value  of  such  respective 
shares  of  stocks,  or  shares  so  ascertamed  as 
aforesaid.  And  the  said  taxable  value  of 
such  respective  shares  of  stock  or  shares  in 
such  banks,  corporations  or  joint-stock  com- 
panies owned  by  residents  of  this  State,  and 
taxable  within  this  State,  shall  for  county 
and  municipal  purposes  be  valued  to  the 
owner  thereof,  in  the  county  or  city  in  this 
State  in  which  such  owner  shall  respectively 
reside,  and  the  said  taxable  value  of  such  of 
said  stock  or  shares  as  Is  held  by  non- 
residents of  this  State,  shall,  for  county  and 
municipal  purposes,  be  valued  to  the  owners 
thereof  in  the  county  or  city  in  which  said 
bank,  corporation  or  joint-stock  company  is 
situated;  but  all  county  or  municipal  taxes 
assessed  upon  said  respective  taxable  value 
of  such  respective  shares  of  stock  or  shares 
shall  be  collected  from  such  bank,  corpora- 
tion or  joint-stock  company,  and  when  so 
paid,  shall  or  may  be  charged  by  such  bank, 
corporation  or  joint-stock  company  to  the 
account  of  such  stockholders  or  shareholders, 
respectively;  but  it  is  expressly  provided 
that  all  railroad  companies  working  their 
roads  by  steam  power  incorporated  by  or 
under  the  laws  of  this  State  or  any  other 


State,  territory.  District  of  Columbia  or  for- 
eign country,  and  doing  business  in  this 
State,  shall,  respectively,  be  subject  to  the 
annual  State  tax  upon  their  respective  gross 
receipts  within  the  State,  prescribed  by  sec- 
tion 14G*  of  this  article,  which  shall  be  paid 
and  collected  in  a  manner  provided  now  or 
hereafter  by  law,  and  the  real  aud  personal 
taxable  property  belonging  to  such  respective 
railroad  companies  shall  be  subject  to  county 
aud  municipal  taxation  in  this  State  in  the 
respective  counties  and  cities  in  which  such 
property  is  located;  and  where  such  i-e- 
spective  railroad  companies  are  subject  to 
such  gross  receipts  tax  for  State  purposes 
their  shares  of  stock  and  I'eal  or  personal 
property  shall  not  be  subject  to  taxation  for 
State  purposes,  and  when  such  real  and  per- 
sonal property  of  such  respective  railroad 
companies  is  subject  to  county  and  municipal 
taxation  their  resi^ective  shares  of  stock 
shall  not  be  subject  to  county  and  municipal 
taxation,  but  the  capital  stock  and  property 
of  all  other  corporations  which  are  subject 
to  a  tax  upon  their  gross  receipts,  other  than 
railroad  companies,  shall  be  valued,  assessed 
and  taxed  for  State,  county,  and  municipal 
purposes  like  the  capital  stock  aud  property 
of  other  corporations  under  this  article. 

§  142.  Any  corporation  having  a  capital 
stock  divided  into  shai'es,  and  owning  as  an 
investment  of  part  of  its  capital  any  of  the 
stock  debt  of  this  State,  upon  which  the 
State  tax  has  been  deducted  by  the  treasurer, 
or  of  the  stock  debt  of  the  city  of  Baltimore 
on  which  the  State  taxes  have  been  paid 
or  are  payable  by  said  city,  or  shares  in  any 
bank  or  other  corporation  of  this  State  upon 
which  the  State  and  county  or  city  taxes 
are  levied  and  paid,  or  are  payable  by  such 
bank  or  other  corporation,  may  report  the 
same  in  detail  under  the  oath  of  the  presi- 
dent, cashier,  treasurer  or  other  proper  offi- 
cer, to  the  State  tax  commissioner,  and  the 
amoimt  of  such  stock  debt  or  debts,  or  the 
assessed  value  of  such  capital  stock  so 
owned,  and  upon  which  such  taxes  are  paid 
or  payable  as  aforesaid,  shall  be  allowed  as 
a  credit  in  the  settlement  of  the  taxes  on 
the  shares  of  capital  stock  of  such  corpora- 
tion so  owning  the  same;  and  any  corpora- 
tion not  having  capital  stock  divided  into 
shares,  and  owning  as  an  investment  of  part 
of  its  assets  any  of  the  stock  debt  of  this 
State  upon  which  the  State  tax  has  been  de- 
ducted by  the  treasurer,  or  the  stock  debt  of 
the  city  of  Baltimore  on  which  the  State 
taxes  have  been  paid  or  are  payable  by  said 
city,  or  shares  of  the  capital  stock  of  any 
bank  or  other  corporation  of  this  State, 
upon  which  the  State  and  county  or  city 
taxes  are  levied  and  paid,  or  are  payable  by 
such  bank  or  other  corporation,  may  report 
the  same  in  detail,  under  the  oath  of  its 
president,  cashier,  treasurer  or  other  proper 
officer,  to  the  State  tax  commissioner;  and 

*Tax  upon  gross  receipts  of  railroad  companies. 


MARYLAXD. 


39 


Taxation  — G.   L.,  Art.   Ixxxi,   §§  143,  144,   ITS. 


the  amount  of  sucli  stock  debt  or  debts,  or 
the  assessed  value  of  such  shares  of  capital 
stock  so  owned,  and  upon  which  such  taxes 
have  been  paid,  or  are  payable  as  aforesaid, 
shall  be  allowed  as  a  credit  in  the  settlement 
of  the  taxes  on  the  assets  of  such  corpora- 
tion so  owning  the  same;  but  no  credit  shall 
be  allowed  to  any  such  corporations  by  rea- 
son of  any  investment  on  which  the  taxes 
are  not  paid  or  payable  as  aforesaid;  nor 
shall  such  credits  be  allowed  in  any  case 
where  the  officer  making  such  return  for 
such  corporation  shall  fail  to  state  in  such 
return  that  said  investments  are  owned  by 
the  corporation  of  which  he  is  such  officer, 
and  are  not  held  by  such  corporation  as  a 
security  for  any  loan,  or  as  a  collateral  se- 
curity for  any  payment  or  other  purpose. 

§  143.  The  president,  or  other  proper  offi- 
cers of  every  corporation  actually  engaged 
in  the  business  of  manufacturing  in  the  city 
of  Baltimore,  or  in  any  county  where  the 
tools  and  machinery  of  manufacturers  have 
been  exempted  from  county  taxation,  in  ad- 
dition to  the  retin-n  provided  to  be  made 
by  the  preceding  section,  shall  furnish  to 
the  appeal  tax  court  of  Baltimore  city,  or  to 
the  county  commissioners  of  such  county,  a 
true  statement  of  the  mechanical  tools, 
whether  worked  by  hand  or  by  steam,  or 
other  motive  power,  and  of  any  machinery, 
manufacturing  apparatus,  or  engines  owned 
by  such  corporation  and  actually  employed 
and  used  in  the  business  of  manufacturing 
in  said  city  or  county;  and  the  property  so 
returned  shall  be  valued  and  assessed  by 
said  appeal  tax  court,  or  by  the  county  com- 
missioners; and  the  said  appeal  tax  court 
or  county  commissioners  shall  give  dupli- 
cate certificates  of  such  valuation  to  such 
president,  or  other  officer,  who  shall  trans- 
mit one  of  such  certificates,  with  his  return, 
to  the  State  tax  commissioner;  and  the  State 
tax  commissioner,  in  addition  to  the  valua- 
tion Avhich  he  is  required  to  make  for  State 
taxation,  shall  make  a  further  valuation  of 
the  stock  of  said  corporation,  by  deducting 
from  the  value  of  each  share,  as  assessed 
for  State  taxation,  the  proportionate  amount 
of  the  value  of  tools  and  machinery,  as  as- 
sessed by  the  said  appeal  tax  court  or  county 
commissioners;  and  the  valuation  of  the 
shares  thus  determined  shall  be  that  for  all 
shares  taxable  in  the  city  of  Baltimore  for 
city  taxes,  if  the  said  corporation  is  located 
in  Baltimore  city,  or  for  the  county  taxes, 
if  the  county  wherein  the  corporation  is  lo- 
cated has  exempted  manufactui-ers'  tools  and 
machinery  from  taxation. 

[Gasometers  and  pas  mains  or  pipes  belongine 
to  a  jras  companv,  not  part  of  the  "  machinery." 
Cias  Co.  Y.  Mavor.  62  Md.  5S8.  Electrio  lijiht  com- 
pany held  not  "a  manufacturing  corporation  within 
an  "  ordinance  exempting  such  industry  from 
municip.ll  taxation.  Light  &  Power  Co.  v.  City, 
36  Atl.   Rep.   646.] 

§  144.  As  soon  as  the  State  tax  commis- 
sioner shall  have  valued  and  assessed  the 


shares  in  the  several  banks  and  other  cor- 
porations in  this  State,  he  shall  certify  and 
return  the  said  valuation  to  the  comptroller 
of  the  treasury,  who  shall  at  once  proceed 
to  notify  the  president,  cashier  or  other 
proper  officer  of  such  banks  or  other  cor- 
porations, of  the  said  valuation  and  assess- 
ment of  their  shares,  respectively,  by  trans- 
mitting to  such  president  or  other  officer,  an 
account  of  the  State  taxes  due  from  such 
bank  or  other  corporation  under  such  valua- 
tion and  assessment,  by  mail,  under  cover 
fairly  directed  to  such  president  or  other 
officer,  and  shall  note  in  a  l3ook  the  date  of 
placing  in  the  mail  the  envelope  or  cover  con- 
taining such  account.  If  no  appeal  be  taken 
within  thirty  days  from  such  transmission, 
the  said  valuation  and  assessment  shall  be 
final;  but  any  such  bank  or  corporation  may, 
within  thirty  days  after  such  notification, 
appeal  from  such  valuation  to  the  comptrol- 
ler of  the  treasury  and  State  treasurer,  stat- 
ing in  such  appeal  the  reasons  and  grounds 
of  such  appeal;  and  said  comptroller  and 
treasurer  shall  consider  the  same,  and  if 
the  comptroller  and  treasurer  shall  both  be 
of  the  opinion  that  such  valuation  and  as- 
sessment so  made  by  the  State  tax  commis- 
sioner is  erroneous,  and  ought  to  be  changed, 
they  shall  change  the  same  accordingly,  and 
the  valuation  and  assessment  so  agreed  upon 
by  the  comptroller  and  treasurer  shall  be 
final:  but  if  either  the  comptroller  or  treas- 
urer shall  agree  with  the  State  tax  commis- 
sioner as  to  the  correctness  of  the  valuation 
so  made  by  him,  then  such  appeal  shall  be 
dismissed,  and  the  original  valuation  shall 
be  and  remain  as  the  true  valuation  of  such 
shares. 

§  178.  (Enacted  March  30,  ISm.)  *  *  * 
All  shares  of  stock  in  any  national  bank, 
corporation,  association  or  company  incor- 
porated imder  the  laws  of  this  State,  and 
belonging  to  any  non-resident  owner,  and 
all  other  personal  property  located  in  this 
State  belonging  to  any  non-resident  owner 
shall  be  valued  and  assessed  to  the  owner 
thereof,  in  the  assessment  district  in  which 
said  bank,  corporation,  association  or  com- 
pany may  have  its  principal  i>lace  of  business 
in  this  State,  or  in  which  said  personal  prop- 
erty may  be  so  located;  *  *  *  in  valuing 
the  stock  or  shares  of,  in  any  bank,  com- 
pany, association  or  corporation,  the  num- 
ber of  shares  of  such  stock-  in  such  bank, 
company,  association  or  corporation  owned 
by  the  persons  to  whom  the  same  are  valued 
shall  be  stated,  together  with  the  respective 
taxable  value  of  each,  as  ascertained  liy  the 
State  tax  commissioner.    *    *    * 

[Taxes  levied  on  the  shares  of  a  corporation 
become  a  debt  not  nffccted  by  the  insolvency  of 
the  corporation  thereafter.  R.  R.  Co.  v.  Mercan- 
tile Co.,  34  Atl.   Rep.  778.] 

§  194.  (Enacted  March  30,  1896.)  All  bonds, 
certificates  of  indebtedness  or  evidences  of 
debt,  of  wliatsoever  form  made  or  issued  l\v 
any  public  or  private  corporation,   incorpo- 


40 


MARYLAND. 


Taxation  — G.   L.,  Art.  Ixxxi,  §  201. 


rated  by  or  under  the  laws  of  this  State, 
or  of  any  other  State,  territory,  district  or 
foreign  country,  or  issued  by  any  State  (ex- 
cept the  State  of  Maryland),  territory,  dis- 
trict or  foreign  country,  not  exempt  from 
taxation  by  the  laws  of  this  State  and  owned 
by  residents  of  Maryland;  and  all  certificates 
of  indebtedness  issued  by  any  iudividual  or 
firm,  shall  be  subject  to  valuation  and  as- 
sessment to  the  owner  thereof  in  the  county 
or  city  in  which  such  owners  may  respect- 
ively reside;  and  they  shall  be  assessed  and 
valued  according  to  the  rate  of  interest 
therein  stipulated  to  be  paid;  that  is  to  say, 
such  of  said  bonds,  certificates  of  indebted- 
ness or  evidences  of  debt  as  bear  an  in- 
terest of  six  per  centum,  shall  be  assessed 
at  fifty  per  centum  of  their  face  value;  such 
as  bear  an  interest  of  five  per  centum,  shall 
be  assessed  at  forty-one  and  two-thirds  per 
centum  of  their  face  value;  such  as  bear  an 
interest  of  four  and  a  half  per  centum,  at 
thirty-seven  and  one-half  per  centum  of  their 
face  value;  such  as  bear  an  interest  of  four 
per  centum,  at  thirty-three  and  one-third 
per  centum  of  their  face  value;  such  as  bear' 
an  interest  of  three  and  one-half  per  centum, 
at  twenty-nine  and  one-sixth  per  centum  of 
their  face  value,  and  such  as  bear  an  in- 
terest of  three  per  centum,  at  twenty-five  per 
centum  of  their  face  value,  and  such  as  bear 
an  interest  at  a  rate  not  named  in  this  section 
shall  be  assessed  and  valued  at  a  corre- 
spondingly reduced  valuation,  if  the  rate  of 
interest  be  less  than  six  per  centum,  and  at 
a  correspondingly  increased  valuation,  if  the 
rate  of  interest  be  above  six  per  centum,  and 
such  upon  Avhich  no  interest  shall  be  actually 
paid,  shall  not  be  valued  and  assessed  at  all. 
All  shares  of  stock  or  shares  in  any  bank, 
other  than  a  national  bank,  or  in  any  com- 
pany or  corporation  incorporated  by,  or  lo- 
cated in,  and  doing  business  in  any  other 
State,  District  of  Columbia,  or  in  any  terri- 
tory or  foreign  country  owned  by  residents 
of  this  State,  shall  be  valued  and  assessed, 
for  the  purposes  of  State,  county  and  mu- 
nicipal taxation  to  the  owner  or  owners 
thereof  in  the  county  or  city  in  which  such 
owner  or  owners  may  respectively  reside; 
and  the  said  shares  shall  be  assessed  and 
valued,  provided  that  such  company,  corpo- 
ration or  bank  was  incorporated  or  located 
prior  to  the  first  day  of  January,  eighteen 
hundred  and  ninety-six,  according  to  the 
annual  rate  of  dividend  paid  upon  such 
shares  of  stock  during  the  year  preceding 
such  assessment  and  valuation,  that  is  to 
say,  such  of  said  shares  of  stoclv  as  paid  a 
dividend  during  the  said  preceding  year  of 
six  per  centum  shall  be  assessed  at  fiftj-  per 
centum  of  their  face  value;  such  as  paid  a 
dividend  of  five  per  centum,  shall  be  as- 
sessed at  forty-one  and  two-thirds  per  cen- 
tum of  their  face  value;  such  as  paid  a 
dividend  of  four  and  one-half  per  centum, 
at  thirty-seven  and  one-half  per  centum  of 
their  face  value;  such  as  paid  a  dividend  of 
four  per    centum,    at  thirty-three  and  one- 


third  per  centum  of  their  face  value;  such 
as  paid  a  dividend  of  three  and  one-half  per 
centum,  at  twenty-nine  and  one-sixth  per 
centum  of  their  face  value;  such  as  paid  a 
dividend  of  three  per  centum  at  twenty-five 
per  centum  of  their  face  value,  and  such  as 
paid  a  dividend  during  the  year  preceding 
said  assessment,  at  a  rate  not  named  in  this 
section,  shall  be  valued,  and  assessed  at  a 
correspondingly  reduced  valuation,  if  the 
rate  of  dividend  be  less  than  six  per  centum, 
and  at  a  correspondingly  increased  valua- 
tion, if  the  rate  of  dividend  is  above  the  six 
per  centum,  and  upon  which  no  dividend 
has  been  actuallj-  paid  during  the  year  pre- 
ceding such  assessment,  shall  not  be  valued 
and  assessed  at  all. 

And  all  assessors  and  other  tax  otfieials. 
whose  duty  it  shall  be  by  law  to  make  or 
revise  assessments  or  valuations  of  such  se- 
curities as  hereinbefore  described,  shall 
make  such  assessments  or  valuations  in  ac- 
cordance with  the  provisions  of  this  act, 
any  laAv  to  the  contrary  notwithstandiuir. 

§  201.  (Enacted  March  30,  1896.)  All  l^ouds 
certificates  of  indebtedness,  or  evidence  of 
debt,  in  whatsoever  form,  made  or  issued 
by  any  public  or  private  corporation,  Incor- 
porated by  this  State,  or  any  other  State  or 
territory,  district  or  foreign  country,  or  is- 
sued by  any  State  (except  the  State  of  Mary- 
land), territory,  district,  or  foreign  country, 
not  exempt  from  taxation  by  the  laws  of 
this  State  and  owned  by  residents  of  Mary- 
land, shall  be  subject  to  valuation  and  as- 
sessment to  the  owner  thereof  in  the  comity 
or  city  in  which  such  owners  may,  respect- 
ively, reside,  and  they  shall  be  assessed  at 
their  actual  value  in  the  market;  and  such 
upon  which  no  interest  shall  be  actually 
paid,  shall  not  be  valued  at  all,  and  upon 
such  valuation  the  regular  rate  of  taxation 
for  State  ptirposes  shall  be  paid,  and  there 
shall  also  be  paid  on  such  valuation  thirty 
cents  (and  no  more)  on  each  one  hundred 
dollars  for  county,  city  and  municipal  taxa- 
tion in  such  county  or  city  of  this  State  in 
which  the  owner  may  reside.  All  shares  Of 
stock  or  shares  in  any  bank,  other  than  a 
national  bank,  or  in  any  company  or  corpo- 
ration incorporated  by  or  located  in  or  doing 
business  in  any  other  State,  or  District  of 
Columbia,  or  in  any  territory  or  foreign 
coimtry,  owned  by  residents  of  this  State, 
shall  be  valued  and  assessed  for  the  purpose 
of  State,  coimty  and  municipal  taxation, 
to  the  owners  thereof,  in  the  county  or  city 
in  which  such  owners  may  reside,  and  said 
shares  shall  be  assessed  and  valued  at  their 
actual  value  in  the  market,  and  upon  which 
no  dividend  shall  be  actually  paid,  shall  not 
be  valued  at  all;  and  upon  the  valuation  so 
made,  the  regular  rate  of  taxation  for  State 
purposes  shall  be  paid,  and  there  shall  also 
be  paid  on  such  valuation,  thirty  cents  land 
no  more),  on  each  one  hundred  dollars,  for 
county,  city  and  mtinicipal  taxation  in  such 
county  or  city  of  this  State  in  which  the 
owners  maj'  reside. 


MAEYLAXD. 


41 


Hours  of  labor  —  G.  L.,  Art.  c,  §§  1-3. 


ARTICLE  C. 

Work,  Hours  of,  in  Factories. 

Sec.  1.  More    thau    ten    hours'   work    per  day   of 
employes   prohibited. 

2.  Special     arrauj,'ements     by     contract     for 

longer   work,    when   permitted. 

3.  Penalty. 

Section  1.  No  corporation  or  manufactur- 
iuir  company  engaged  in  manufacturing 
eitlier  cotton  or  woolen  yarns,  fabrics  or 
domestics  of  any  kind,  incorporated  under 
the  laws  of  this  State,  and  no  officer,  agent 
or  servant  of  such  named  corporation  or 
manufacturing  company,  and  no  person  or 
firm,  owning  or  operating  such  corporation 
or  manufacturing  company  within  the  limits 
of  this  State,  and  no  agent  or  sei-vant  of 
such  firm  or  person,  shall  require,  permit 
or  suffer  its,  his  or  their  employes  in  its, 
his  or  their  service,  or  under  his,  its  or 
their  control,  to  work  for  more  than  ten  hours 
during  each  or  any  day  of  twenty-four  hours, 
for  one  full  day's  work,  and  shall  make 
no  contract  or  agreement  with  such  em- 
ployes, or  any  of  them,  providing  fhat  they 
or  he  shall  work  for  more  than  ten  hours 
for  one  day's  work  during  each  or  any  day 
of  twenty-four  hours,  and  said  ten  hours 
shall  constitute  one  full  day's  work. 

§  2.  Any  such  named  corporation  or 
manufacturing  company  within  the  limits 
of   this   State   shall  be   allowed,    under   the 


provisions  of  this  section,  the  privilege  of 
working  male  employes,  over  the  age  of 
twenty-one  years,  over  the  limit  of  ten 
hours,  for  the  express  purpose  only  of  mak- 
ing repairs  and  improvements,  and  getting 
fires  made,  steam  up  and  the  machinery 
ready  for  use  In  their  works,  which  can- 
not be  done  during  the  limits  of  the  ten 
hours,  the  extra  compensation  for  all  such 
work  to  be  settled  between  such  corpora- 
tion and  manufacturing  companies  and  the 
employes;  Provided,  that  notliing  in  this 
article  shall  be  so  construed  as  to  prohibit 
any  employer  from  making  a  contract  with 
his  male  employes,  over  the  age  of  twenty- 
one  years,  to  work  by  the  hour  for  such 
time  as  may  be  agreed  upon. 

§   3.  If  any    such    cori)oration     or   manu- 
facturing company  within  the  limits  of  this 
I  State,   or   any   officer,   agent   or   servant   of 
j  such    corporation    or     manufacturing     com- 
pany  in    this    State,     shall    do   any    act    in 
,  violation   of  any   of   the   provisions   of   this 
article  he  or  they  shall  be  deemed  to  have 
j  been   guilty   of   a   misdemeanor,   and   shall, 
'  on  conviction  thereof  in  a  court  of  competent 
jurisdiction,  be  fined  not  less  than  one  hun- 
dred dollars  for  each  and  every  offense  so 
committed,  together  with    the  cost  of  such 
prosecution,  one-half  of  said  fine  to  go  to  the 
informer  and  one-half  to    the    school  fund 
of  the  county   in  which  said  offense   shall 
have  been  committed. 


LEGISLATIVE  ACTS  RELATING  TO  CORPORATIONS  ENACTED 
SUBSEQUENTLY  TO  1888. 


1.  To  provide  for  State  taxation  on  the  revenues 

of  certain  domestic  corporations. 

2.  Same;   certain  foreign  corporations. 

3.  To    provide    that    no    corporation    shall    be    dis- 

solved until  all  taxes  are  paid. 

Act  1. 

AN  ACT  to  provide  for  State  taxation  on 
the  revenues  of  raUroad  telegraph  or 
cable,  express  or  transportation,  tele- 
phone, parlor  car,  sleeping  car.  safe  de- 
posit, trust,  guaranty,  fidelity,  oil  or  pipe 
line,  title  insurance,  electric  light  or 
electric  construction  companies  incorpo- 
rated under  any  general  or  special  law  of 
this  State  and  doing  business  therein. 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  Maryland,  That  a  State  tax 
of  one  per  centum  be  and  is  hereby  levied 
annually  upon  the  gross  receipts  of  all 
railroad  companies  worked  by  steam  in- 
corporated by  or  under  the  authority  of  this 
State  and  doing  business  therein;  a  State 
tax  of  one  per  centum  is  hereby  levied  an- 
nually upon  the  gross  receipts  of  every 
telegraph  or  cable  express  or  transporta- 
tion company  incorporated  under  any  general 
or  special  law  of  this  State  and  doing  busi- 


ness therein;  a  State  tax  of  two  per  centum 
is  hereby  levied  annually  upon  the  gross 
receipts  of  all  telephone,  parlor  car.  sleep- 
ing car,  safe  deposit,  trust,  guaranty  and 
fidelity  companies  incorporated  under  any 
general  or  special  law  of  this  State  aud 
doing  business  therein;  a  State  tax  of  one 
per  centum  is  hereby  levied  annually  upon 
the  gross  receipts  of  all  oil  or  pipe  line 
companies  and  all  title  insurance  com- 
panies incorporated  under  any  general  or 
special  law  of  this  State  and  doing  business 
therein,  and  one-half  of  one  per  centum 
upon  the  annual  gross  receipts  of  all  elec- 
tric light  or  electric  construction  companies 
incorporated  under  any  general  or  special 
law  of  this  State  and  doing  business  therein; 
if  any  such  railroad  company  has  part  of  its 
road  'in  this  State  and  a  part  thereof  in  an- 
other State  or  States,  such  company  shall 
return  a  statement  of  its  gross  receipts  over 
its  whole  line  or  road  together  with  a  state- 
ment of  the  whole  length  of  its  line  m  this 
State,  and  such  company  shall  pay  to  the 
State  at  the  said  rates  hereinbefore  pre- 
scribed upon  such  proportion  of  fts  gross 
earnings  as  the  length  of  its  line  in  this 
State  bears  to  the  whole  length  of  its  line. 


42 


MAEYLAJSTD. 


Taxation  on  revenues  of  corporations  —  Act,  April  8,  1890. 


and  similar  statements  shall  be  made  by 
each  oil  or  pipe  line  company  and  each 
sleeping  car,  parlor  car,  express,  trans- 
portation or  cable  company,  so  that  the 
proportion  of  said  gross  earnings  of  said 
companies  respectively  accruing  from  their 
business  within  this  State  may  be  accurately 
ascertained,  or  said  ascertainment  may  be 
made  in  any  other  mode  satisfactory  to  the 
State  tax  commissioner;  the  said  gross  re- 
ceipt taxes  shall  be  due  and  payable  at  the 
treasury  on  or  before  the  first  day  of  July 
in  each  year. 

§  2.  And  be  it  enacted,  That  it  shall  be 
the  duty  of  each  and  every  such  corporation 
or  company  so  doing  business  in  this  State 
on  or  before  the  fifteenth  day  of  April  next, 
and  on  or  before  the  fifteenth  day  of  April 
in  each  and  every  year  thereafter  to  make 
a  report  under  oath  of  its  president,  treas- 
urer or  other  proper  officer,  to  the  State  tax 
commissioner  showing  its  total  receipts  or 
revenues  accruing  from  business  done  in 
this  State  for  the  year  ending  on  the  pre- 
ceding thirty-first  day  of  January,  and  it 
shall  be  the  duty  of  the  State  tax  commis- 
sioner to  file  such  report  in  his  office,  and 
on  or  before  the  first  day  of  June  next,  and 
on  or  before  the  first  day  of  June  in  each 
and  every  year  thereafter,  to  calculate  the 
State  tax  due  from  such  corporation  or  com- 
pany on  its  gross  receipts  or  revenue  afore- 
said for  such  year,  and  to  transmit  the 
amount  of  such  State  tax  to  the  comptroller 
of  the  treasury,  to  be  collected  and  received 
into  the  State  treasury  as  other  State  taxes 
are  received  into  the  treasury  of  this  State. 

§  3.  And  be  it  enacted.  That  if  any  officer 
of  any  such  corporation  or  company  re- 
quired to  make  a  report  as  aforesaid  shall 
in  such  report  or  return  make  a  false  state- 
ment he  shall  be  deemed  guilty  of  perjury, 
and  if  any  such  coiijoration  or  company  so 
doing  business  in  this  State,  shall  neglect 
or  refuse  to  malce  such  report  or  return  to 
the  State  tax  commissioner  within  the  time 
specified  as  aforesaid  in  any  year,  it  shall 
be  the  duty  of  said  tax  commissioner  to  as- 
certain in  any  manner  he  may  judge  to  be 
most  available  and  certain,  and  to  fix  the 
amount  of  such  gross  receipts  and  revenues 
of  such  corporation  or  company  for  such 
year,  and  to  calculate  and  assess  the  State 
tax  on  the  amount  of  such  gross  receipts  or 
revenues  as  so  ascertained  and  fixed,  and  to 
transmit  the  amount  of  such  tax  to  the  comp- 
troller in  the  same  manner  as  if  such  cor- 
poration or  company  had  made  its  i-eport 
or  return  according  to  the  provisions  of  this 
act,  and  it  shall  be  the  duty  of  such  cor- 
poration or  company  to  pay  to  the  State 
treasurer  the  amount  of  such  State  tax  on  or 
before  the  first  day  of  July  in  each  and 
every  year. 

§  4.  And  be  it  enacted,  That  it  shall  be 
the  duty  of  the  comptroller  of  the  treasui*y 
to  receive  such  accounts  of  State  taxes  so 


transmitted  to  him  by  the  State  tax  com- 
missioner and  forthwith  to  proceed  to  notify 
each  such  corporation  or  company  of  the 
amount  such  State  tax  by  transmitting 
by  mail  to  the  president,  treasurer  or  other 
proper  otficer  of  such  corporation  or  com- 
pany, an  account  of  such  State  taxes,  en- 
closed in  an  envelope  or  cover,  having 
thereon  a  proper  j)ostage  stamp,  and 
carefully  directed  to  such  president, 
treasurer  or  other  officer,  and  shall 
note  in  a  book  kept  for  that  purpose 
the  date  of  placing  in  the  mail  the 
envelope  or  cover  containing  such  account; 
if  no  appeal  be  taken  within  thirty  days 
from  the  date  of  such  notification  the  said 
ascertainment  and  assessment  sliall  be 
final,  but  any  such  corporation  or  company 
may  within  thirty  days  after  such  notifica- 
tion appeal  from  such  ascertainment  and 
assessment  to  the  comptroller  of  the  treas- 
ury and  State  treasurer,  stating  in  such 
appeal  the  reasons  and  grounds  for  such 
appeal,  and  the  said  comptroller  and  treas- 
urer shall  as  soon  as  possible  consider  the 
same,  and  if  the  comptroller  and  treasurer 
shall  both  be  of  opinion  that  such  ascer- 
tainment and  assessment  of  the  State  tax 
commissioner  is  erroneous  and  ought  to  be 
changed,  they  shall  change  the  same  ac- 
cordingly and  the  ascertainment  and  assess- 
ment so  agreed  upon  by  the  comptroller  and 
treasurer  shall  be  final;  but  if  either  the 
comptroller  or  treasurer  shall  agree  with 
the  tax  commissioner  as  to  the  correctness 
of  the  ascertainment  and  assessment  so 
made  by  him  then  the  appeal  shall  be  dis- 
missed and  the  original  ascertainment  and 
assessment  shall  be  and  remain  as  the  true 
ascertainment  and  assessment  for  such 
year. 

§  5.  And  be  it  enacted.  That  the  State 
tax  commissioner  be  and  he  is  hereby  au- 
thorized and  empowered  to  examine  under 
oath,  to  be  by  him  administered,  any  officer 
or  agent  of  any  svich  corporation  or  com- 
pany touching  the  business  in  this  State  of 
such  corporation  or  company,  and  the  re- 
ceipts and  revenues  accruing  therefrom,  and 
any  such  officer  or  agent  refusing  to  be 
sworn,  or  refusing  to  testify  his  or  her 
knowledge  touching  the  said  subject-matter, 
shall  forfeit  and  pay  to  the  State  of  Mary- 
land, the  Slim  of  five  hundred  dollars  for 
each  such  refusal,  to  be  recovered  by  action 
at  law,  in  the  name  of  the  State,  against 
such  officer  or  agent  in  any  cotu't  of  this 
State  having  jurisdiction;  the  said  State 
tax  commissioner  may  also  examine  under 
oath  any  other  person  whom  he  may  be 
advised  or  may  believe  has  knowledge  and 
information  in  the  premises,  and  any  such 
person  refusing  to  be  sworn  or  refusing  to 
testify  his  or  her  knowledge  in  the  premises, 
shall  forfeit  and  pay  to  the  State  of  Mary- 
land, the  sum  of  five  dollars  for  each 
such  refusal,  to  be  recovered  by  action  at 
law,    in    the   name   of    the     State,     against 


IklARYLAND. 


43 


Taxation  on  revenues  of  corporations  —  Act,  April  8,  1890. 


such  persons  so  refusing,  before  a  justice  of 
the  peace  having  jurisdiction;  and  it  shall 
be  the  duty  of  the  State's  attorney  of  the 
county  or  city  where  such  refusal  has  oc- 
curred on  the  information  of  tlie  State  tax 
commissioner,  to  bring  suit  for  the  recovery 
of  such  forfeitures  as  often  as  they  may 
have  occurred. 

§  6.  And  be  it  enacted,  That  if  any  such 
corporation  or  company  from  whom  such 
taxes  shall  be  due  and  payable  on  its  gross 
receipts  or  revenues  as  aforesaid,  shall 
fail  or  neglect  to  pay  the  same  to  the  ti-eas- 
urer  of  the  State  for  the  space  of  one  month 
after  the  same  shall  be  due  and  payable  as 
aforesaid,  such  corporation  or  company  snail 
for  such  failure  or  neglect  forfeit  and  pay 
to  the  State  of  Maryland  an  additional 
amount  of  five  per  centum  as  penalty  or 
damages,  to  be  added  to  the  said  taxes  so 
due  and  unpaid,  and  it  shall  be  the  duty  of 
the  comptroller  to  add  the  same  to  the  said 
account,  and  forthwith  to  make  out  said 
account  and  certify  the  same  under  the  seal 
of  his  office,  and  to  cause  suit  to  be  brought 
for  said  taxes  in  the  circuit  court  for  the 
county  where  the  principal  office  of  such 
corporation  or  company  is  located,  or  in  the 
superior  court  of  the  city  of  Baltimore,  the 
court  of  common  pleas  or  the  Baltimore 
city  court,  if  such  principal  office  be  located 
in  the  said  city,  and  the  said  suit  shall 
stand  for  trial  at  the  first  term  after  the 
service  of  the  writ  shall  have  been  made 
on  such  corporation  or  company,  and  service 
of  the  writ  aforesaid  on  any  officer,  agent 
or  employe  of  said  corporation  or  company, 
shall  be  deemed  and  taken  as  sufficient  ser- 
vice on  such  company. 

§  7.  And  be  it  enacted,  That  if  upon  the 
return  of  the  writ  issued  against  such  cor- 
poration or  company,  and  the  said  corpora- 
tion or  company  being  duly  summoned  as 
aforesaid,  such  corporation  or  company  shall 
fail  to  appear  by  attorney  or  agent  upon 
the  first  of  the  docket,  it  shall  be  the 
duty  of  the  court  to  cause  the  personal 
appearance  of  said  corporation  or  company 
,to  be  entered,  and  the  cause  shall  stand  for 
trial  or  hearing  and  shall  proceed  and  judg- 
ment shall  be  rendered  as  if  such  corpora- 
tion or  company  had  appeared  by  attorney, 
and  if  such  coi-poration  or  company  shall 
appear  by  attorney  or  agent,  and  either 
party  shall  desire  or  require  a  trial  by  jury. 
It  shall  be  the  duty  of  the  court  to  cause 
Issues  to  be  framed,  and  a  jury  to  be  em- 
paneled for  the  trial  thereof,  and  if  the  ver- 
dict of  the  jury  shall  be  for  the  State,  judg- 
ment shall  be  entered  without  stay  for  the 
amount  of  taxes  so  due  as  aforesaid,  and  the 
five  per  cent,  additional  as  damages  with 
interest  and  costs,  and  a  fee  of  fifty  dollars 
shall  be  allowed  the  attorney  for  the  State 
to  be  taxed  in  the  plaintiff's  costs  in  said 
suit,  and  execution  shall  be  issued  on  such 
judgment  if  the  same  be  not  paid  into  the 
treasury  within  thirty  days  after  the  rendi- 
tion thereof. 


§  8.  And  be  it  enacted,  That  the  certificate 
of  the  comptroller  under  the  seal  of  his 
office,  of  the  amount  of  taxes  so  due  as 
aforesaid,  and  of  the  said  penalty  or  dam- 
ages shall  be  prima  facie  evidence  to  en- 
title the  State  to  judgment  for  said  amount 
of  State  taxes,  and  said  penalty  or  damages 
in  any  case  in  which  suit  may  be  brought  for 
the  recovery  of  such  State  taxes  as  afore- 
said. 

§  9.  And  be  it  enacted,  That  this  act  shall 
take  effect  from  and  after  the  date  of  its 
passage,  and  all  acts  or  parts  of  acts  in 
conflict  herewith  be,  and  the  same  are 
hereby  repealed. 

(Approved  April  8,  1890.) 

[Hekl,  that  tliis  act  applios  to  all  corporatlous 
created  after  Ajiril  8tli,  as  well  as  to  those  formed 
since  January  1st  anil  liefore  April  8th.  Park  Co 
V.   State,   80  Md.  4  48;  s.   c,   31  Atl.   Rep.  298.] 

Act  2. 

AN  ACT  to  provide  for  State  taxation  on 
the  revenues  of  certain  foreign  corpora- 
tions mentioned  in  this  act,  accruing  from 
business  done  in  the  State  of  Maryland. 

Section  1.  Be  it  enacted  bj^  the  general 
assembly  of  Maryland,  That  every  telephone 
company,  electric  light  or  electric  construc- 
tion company,  parlor,  palace  or  sleeping 
car  company,  oil  or  pipe  line  company, 
guano,  phosphate  or  fertilizer  company,  in- 
corporated by  or  under  the  laws  of  the 
United  States,  or  of  any  other  State  or 
Territory  of  the  United  States,  or  of  any 
foreign  country,  and  wishing  to  do  business 
in  tlie  State  of  Maryland  before  proceeding 
to  transact  any  business  in  this  State,  either 
through  an  individual  agent  or  agents,  or 
through  the  agency  of  any  corporation 
organized  under  the  laws  of  this  State,  or 
to  open  any  oflice  for  the  transaction  of  any 
business  in  this  State,  sliall  first  file  in  the 
office  of  the  State  tax  commissioner  a  certi- 
fied copy  of  the  charter,  certificate  or  act 
of  incorporation,  under  which  it  claims  the 
power  to  transact  business  as  a  corporation, 
and  shall  also  file  in  the  office  of  the  secre- 
tary of  State  of  Maryland,  a  certificate  of 
the  appointment  by  such  company  or  cor- 
poration, of  at  least  two  agents  to  reside 
in  this  State,  upon  whom  legal  process 
issued  out  of  any  court  of  this  State,  may  at 
any  time  be  served  in  any  action,  at  the 
suit  of  the  State  of  Maryland,  or  of  any 
county  or  incorporated  city  or  town  of  this 
State,  or  of  any  citizen  or  citizens  of  this 
State,  or  of  any  corporation  organized  under 
the  laws  of  this  State,  which  certificate 
shall  state  fully  the  names  of  the  agents 
to  reside  in  this  State  and  shall  be  certified 
by  such  foreign  corporation,  under  the  seal 
of  such  foreign  corporation  and  the  signa- 
ture of  its  president  or  other  proper  officer, 
and  shall  Ayhen  received  by  the  secretary 
of  State  be  recorded  by  him  in  a  book  to  be 
kept  for  that  purpose,    from   which   record 


44 


JVIAKYLAiSTD. 


Taxation  of  revenues  of  foreign  corporations  —  Act,  April  8,  1890. 


the  said  secretary  of  State  shall  be  able 
to  certify  the  appointment  of  such  agents 
at  any  time;  at  the  time  of  receiving  such 
certificate  the  secretary  of  State  shall  give 
to  such  company  a  receipt  for  such  cer- 
tificate, which  receipt  shall  enable  such  for- 
eign corporation  to  commence  business  in 
this  State. 

§  2.  And  be  it  further  enacted,  That  any 
person  or  any  oflicor  of  any  such  corpora- 
tion vrho  shall  presume  to  act  as  agent  or 
employe  of  auj-  such  foreign  corporation, 
or  to  open  an  office  for  the  transaction  of 
the  business  of  any  such  foreign  corpora- 
tion, by  emploj'ing  or  using  the  patent  rights, 
plant  or  property  of  such  foreign  corpora- 
tion in  this  State  in  any  manner  as  renter 
or  bailee,  or  in  any  other  manner  under  any 
contract  with  such  foreign  corporation  be- 
fore the  provisions  contained  in  the  first 
section  of  this  act  have  been  complied  with, 
shall  forfeit  and  pay  to  the  State  of  Mary- 
land the  sum  of  one  hundred  dollars  for  each 
and  every  day  he  may  act  as  such  agent  or 
employe,  or  may  occupy  such  olBce  for  the 
transaction  of  such  business,  before  such 
provisions  of  the  first  section  of  this  act 
shall  have  been  complied  with  by  such 
foreign  corporation,  and  it  shall  be  the  duty 
of  the  State's  attorney  of  the  city  or  county 
in  which  such  business  is  transacted,  or 
is  proposed  to  be  transacted,  to  prosecute 
and  recover  such  penalty,  and  it  shall  be 
the  duty  of  the  State  tax  commissioner  to 
inform  the  State's  attorney  of  any  violation 
of  this  act  of  which  he  may  be  advised,  and 
to  require  him  to  proceed  to  recover  the 
penalty  for  such  violations  as  prescribed  in 
this  act. 

§  3.  And  be  it  further  enacted,  That  each 
and  every  such  foreign  corporation  or  com- 
pany shall  on  or  before  the  fifteenth  day  of 
April  next,  and  on  or  before  the  fifteenth 
day  of  April  in  each  year  hereafter,  make 
a  report  under  the  oath  of  its  president, 
treasurer  or  other  proper  officer  to  the  State 
tax  commissioner,  setting  forth  and  show- 
ing the  total  gross  receipts  in  this  State 
of  sxich  corporation  or  company  for  the 
year  ending  on  the  preceding  thirty-first 
day  of  December,  either  from  business  done 
in  this  State  on  its  own  account  or  through 
its  individual  agent  or  agents  or  from 
royalty  on  its  patent  rights,  plant  or  prop- 
erty employed  or  hired  or  rented  by  any 
person  or  persons  in  this  State,  or  by  any 
corporation  organized  under  the  laws  of 
this  State,  under  any  contract  with  such 
foreign  corporation,  or  from  business  done 
in  this  State  by  any  corporation  organized 
under  the  laws  of  this  State,  and  of  which 
such  foreign  corporation  may  be  a  stock- 
holder, and  which  may  be  employing  in  any 
manner  or  under  any  contract  with  such 
foreign  corporation,  and  using  the  patent 
rights,  plant  or  property  of  such  foreign 
corporation  for  profit  in  this  State. 


§  4.  (Repealed  and  re-enacted  March  30, 
1892.)  And  be  it  further  enacted.  That 
every  such  telephone  company  shall  pay  to 
the  State  treasurer  a  tax  of  two  per  centum 
upon  the  gross  amount  of  its  receipts  in  this 
State,  each  such  oil  or  pipe  line  company 
shall  pay  to  the  State  treasurer  a  tax  of 
one  per  centum  upon  its  gross  receipts  in 
this  State;  that  each  such  electric  light  or 
electric  construction  company  or  corpora- 
tion shall  pay  to  the  treasurer  of  the  State 
a  tax  at  the  rate  of  one-half  of  one  per 
centum  on  the  amount  of  gross  receipts  or 
revenues  of  such  corporation  in  this  State; 
that  each  parlor,  palace  or  sleeping  car  com- 
pany shall  pay  to  the  State  treasurer  a  tax 
at  the  rate  of  two  per  centum  upon  the 
gross  receipts  of  such  corporation  or  com- 
pany in  this  State;  that  each  such  guano, 
phosphate  or  fertilizer  company  shall  pay 
to  the  State  treasurer  a  tax  at  the  rate  of 
one-half  of  one  per  centum  upon  the  amount 
of  the  gross  receipts  of  such  company  so 
returned  or  ascertained  as  provided  for  in 
this  act.  If  any  such  oil  or  pipe  line  com- 
pany has  part  of  its  transportation  line  in 
this  State,  and  part  thereof  in  another  State 
or  States,  such  company  shall  return  a  state- 
ment of  its  gross  receipts  for  transportation 
of  oi)  or  petroleum  over  its  whole  line, 
together  with  a  statement  of  the  whole 
length  of  its  line  and  the  length  of  its 
line  in  this  State,  and  such  company 
shall  pay  to  this  State  at  the  afore- 
said rate  upon  such  proportion  of  its  said 
gross  receipts  as  the  length  of  its  line  m 
this  State  bears  to  the  Avhole  length  of  its 
line;  if  any  such  parlor,  palace  or  sleeping 
car  company  uses  or  permits  the  use  of  its 
ears  on  any  railroad,  part  of  which  is  in  this 
Stale  and  part  thereof  in  another  State  or 
States  such  company  shall  return  a  state- 
ment of  its  gross  receipts  accruing  from 
such  use  over  the  whole  line  of  road  or 
roads  on  which  its  cars  are  so  used  with 
a  statement  of  the  whole  length  of  such 
lines  together  with  a  statement  of  the 
length  of  such  lines  in  this  State,  and  such 
company  shall  ]iay  to  the  State  at  the  said 
rates  hereinb(^foi-o  prescribed  xiyion  such 
proportion  of  its  gross  earnings  as  the  length 
of  the  lines  so  used  by  it  in  this  State  bears 
to  the  whole  length  of  the  lines  so  used  by 
it  so  that  the  proportion  of  said  gross  earn- 
ings of  said  companies  respectively  accru- 
ing from  their  business  within  this  State 
may  be  accurately  ascertained,  or  said  as- 
certainment may  be  made  in  any  other  mode 
satisfactory  to  the  State  tax  commissioner. 

§  5.  And  be  it  further  enacted.  That  upon 
the  receipt  of  such  report  by  the  State  tax 
commissioner  of  the  gross  receipts  in  this 
State  of  any  such  foreign  corporation  or  com- 
pany, the  said  State  tax  commissioner  shall 
cause  the  same  to  be  filed  in  his  office,  and 
shall  on  or  before  the  first  day  of  June  in 
each    year    calculate    the  amount  of  gross 


MARYLAND. 


45 


Taxation  of  revenues  of  foreign  corporations  —  Act,  April  8,  1890. 


receipt  tax  to  be  paid  by  the  said  foreign 
corporation  or  company  at  tlie  rate  herein- 
before mentioned,  to  the  treasurer  of  the 
State,  and  shall  send  the  said  amount  due 
to  the  State  to  the  comptroller  of  the  treas- 
ury to  be  received  as  other  State  taxes  are 
now  received  into  the  treasury  of  this  State. 

§  6.  And  be  it  further  enacted,  That  if 
any  officer  of  any  such  company  or  corpora- 
tion required  by  this  act  to  make  a  return 
as  aforesaid,  shall  in  such  return  make  a 
false  statement,  he  shall  be  deemed  guilty 
of  perjury;  if  any  such  corporation  shall 
neglect  or  refuse  to  make  such  return  within 
the  time  limited  as  aforesaid,  the  State  tax 
commissioner  shall  ascertain  by  any  means 
which  he  may  find  most  practicable  and 
available,  the  amount  of  such  gross  re- 
ceipts and  shall  fix  the  amount  of  the  same 
for  the  year,  and  unless  altered  upon  ap- 
peal by  the  State  board  of  appeal  as  herein- 
after provided,  such  amount  so  fixed  by  him 
shall  stand  as  the  basis  of  taxation  of  such 
corporation  for  such  year  under  this  act. 

§  7.  And  be  it  further  enacted.  That  the 
State  tax  commissioner  be  and  he  is  hereby 
authorized  and  empowered  to  examine  upon 
oath  any  officer,  agent  or  employe  of  any 
such  foreign  corporation  in  this  State,  or 
any  officer  of  any  corporation  of  this  State 
which  may  employ  or  use  in  any  manner  the 
patent  rights,  plant  or  property  of  any  such 
foreign  corporation  for  profit  in  this  State-, 
touching  the  said  business  and  the  gross 
receipts  in  this  State  accruing  from  the 
same,  and  any  such  officer,  agent  or  em- 
ploye refusing  to  be  sworn,  or  refusing  to 
testify  in  the  premises,  or  to  give  the  in- 
formation asked  for  by  said  State  tax  com- 
missioner, shall  forfeit  and  pay  to  the  State 
of  Maryland  the  sum  of  five  hundred  dol- 
lars for  every  such  refusal;  the  State  tax 
commissioner  is  also  hereby  authorized  and 
empowered  to  examine  upon  oath  any  per- 
son whom  he  may  be  advised  has  informa- 
tion and  knowledge  touching  such  business 
and  the  gross  receipts  accruing  from  th^ 
same  in  this  State,  and  any  such  person  re- 
fusing to  be  sworn  or  refusing  to  testify 
in  the  premises,  shall  forfeit  and  pay  to 
the  State  of  Maryland  the  sum  of  five 
dollars  for  every  such  refusal. 

§  8.  And  be  it  further  enacted,  That  when 
the  State  tax  commissioner  shall  have  ascer- 
tained the  amount  of  the  gross  receipts  of 
any  such  foreign  corporation  doing  business 
in  this  State,  and  the  amount  of  State  tax 
on  the  same,  he  shall  on  or  before  the  first 
day  of  June  in  each  year  cause  an  account 
of  the  same  to  be  filed  or  placed  in  the 
office  of  the  comptroller  of  the  treasury, 
and  the  comptroller  of  the  treasury  shall 
proceed  at  once  to  notify  the  president, 
treasurer  or  other  officer  or  agent  of  such 
foreign  corporation  doing  business  in  this 
State,  of  the  amount  of  State  tax  due  fi-om 
such    corporation,  by  transmitting    to    such 


president,  treasurer  or  other  proper  officer 
or  agent  of  such  foreign  corporation,  an 
account  of  the  State  taxes  due  from  such 
foreign  corporation,  by  mail  under  cover 
having  thereon  a  proper  postage  stamp,  and 
plainly  directed  to  such  president,  treasurer 
or  other  officer  or  agent  of  such  foreign  cor- 
poration; and  shall  note  in  a  book  the  date 
of  placing  in  the  mail  the  envelope  or  cover 
containing  such  account;  if  no  appeal  be 
taken  within  tliirty  days  from  such  trans- 
mission, the  said  assessment  shall  be  finil; 
but  any  such  corporation  may,  Avithin  thirty 
days  from  such  notification,  apiieal  from 
such  assessment  to  the  comptroller  of  the 
treasury  and  State  treasurer,  stating  in  such 
appeal  the  reasons  and  grounds  of  such 
appeal,  and  said  comptroller  and  treasurer 
shall  consider  the  same,  and  if  after  full 
hearing  the  said  comptroller  and  treasurer 
shall  both  be  of  opinion  that  such  assess- 
ment and  ascertainment  so  made  by  said 
State  tax  commissioner  is  erroneous  and 
ought  to  be  changed,  they  shall  change  the 
same  accordingly,  and  the  assessment  so 
agreed  upon  by  the  comptroller  and  treas- 
urer shall  be  final;  but  if  either  the  comp- 
troller or  treasurer  shall  agree  Avith  the 
State  tax  commissioner  as  to  the  correct- 
ness of  the  assessment  and  ascertainment 
so  made  by  him,  then  such  appeal  shall 
be  dismissed  and  the  original  assessment 
and  ascertainment  shall  be  and  remain  as 
the  true  assessment  and  ascertainment  of 
such  gross  receipts  and  the  State  tax  on  the 
same  for  said  year. 

§  9.  And  be  it  further  enacted.  That  if 
any  such  corporation  or  company  shall 
neglect  or  refuse  to  pay  to  the  State  treas- 
urer the  tax  imposed  by  this  act  for  the 
space  of  sixty  days  after  the  amount  of 
such  tax  has  been  so  finally  ascertained  and 
determined  and  has  been  so  transmitted  by 
mail  to  its  president  or  other  officer  as 
directed  in  this  act,  such  corporation  shall 
for  such  offense  forfeit  and  pay  to  the  State 
of  Maryland  an  additional  amount  of  ten 
per  centum  as  penalty  or  damages  to  be 
added  to  the  said  taxes  so  due  and  unpaid, 
and  it  shall  be  the  duty  of  the  comptroller 
to  add  the  same  to  the  said  account,  and 
forthwith  to  make  out  said  account  and 
cei-tify  the  same  under  the  seal  of  his  office, 
and  to  cause  suit  to  be  brought  for  said  tax 
in  the  circuit  court  of  the  county  where 
the  principal  office  of  the  said  corporation 
in  this  State  is  located,  or  in  the  superior 
court  for  Baltimore  city,  if  such  principal 
office  be  located  in  said  city,  and  the  said 
suit  shall  stand  for  trial  at  the  first  term, 
after  service  of  the  writ  shall  have  been 
made  on  said  corporation  or  company,  and 
service  of  the  writ  aforesaid  on  any  officer, 
agent  or  employe  of  such  corporation,  shall 
be  deemed  and  taken  as  a  sufficient  service 
on  such  corporation. 

§   10.  And  be  it  further  enacted,   That   if 


46 


MAKYLAI^D. 


Taxation  «jn  reveuues  of  foreign  corporations;  dissolution  —  Acts,  Apr.  8,  1890,  Apr.  7,  1892. 


upon  the  return  of  the  writ  issued  against 
such  corporation,  and  such  corporation  be- 
ing dulj'  summoned  as  aforesaid,  such  cor- 
poration shall  fail  to  appear  by  attorney  or 
agent  upon  the  call  of  the  docket,  it  shall 
be  the  duty  of  the  court  to  cause  the  per- 
sonal appearance  of  said  corporation  to  be 
entered,  and  the  cause  shall  stand  for  trial 
on  hearing,  and  judgment  shall  be  rendered 
as  if  the  said  corporation  had  appeared  by 
attorney;  and  if  such  corporation  shall  ap- 
pear by  attorney  or  agent,  and  either  party 
shall  desire  a  trial  by  jury,  it  shall  be  the 
duty  of  the  court  to  cause  issues  to  be 
framed,  and  a  jurj'  to  be  empaneled  for 
the  trial  thereof;  and  if  the  verdict  of  the 
jury  shall  be  for  the  State,  judgment  shall 
be  entered  without  stay,  for  the  amount  of 
tax  so  due  as  aforesaid,  and  ten  per  cent, 
additional  as  damages,  with  interest  and 
costs,  and  a  fee  of  fifty  dollars  shall  be 
allowed  the  attorney  for  the  State,  to  be 
taxed  in  the  plaintiff's  costs  in  said  suit, 
and  execution  shall  be  issued  on  said  judg- 
ment, if  the  same  be  not  paid  into  the  treas- 
ury within  twenty  days  after  the  rendition 
thereof. 

§  11.  And  be  it  further  enacted,  That  the 
certificate  of  the  comptroller,  under  the 
seal  of  his  office,  of  the  amouut  of  tax  so 
due    and    damages    as    aforesaid,    shall    be 


prima  facie  evidence  to  entitle  the  State  to 
judgment  for  said  amount,  and  said  penalty 
or  damages  as  charged. 

§  12.  And  be  it  further  enacted,  That  this 
act  shall  take  effect  from  and  after  the  date 
of  its  passage. 

(Approved  April  8,  1890.) 

See  Const.,  art.   Ill,  §  58. 
Act  3. 

AN  ACT  providing  that  no  corporation  shall 
be  dissolved  by  decree  of  any  court  of 
this  State  until  all  taxes  due  the  State 
shall  be  fully  paid  or  adjusted, 

Section  1.  Be  it  enacted  by  the  general 
assembly  of  Maryland,  That  no  corporation, 
made  taxable  by  any  law  of  this  State, 
shall  hereafter  be  dissolved  under  the  de- 
cree of  any  court  of  this  State  until  all 
taxes  due  the  State  have  been  fully  paid  or 
adjusted  and  the  certificate  of  the  comp- 
troller of  the  treasury  to  this  effect  filed 
in  the  proper  court  with  the  proceedings  of 
dissolution. 

§  2.  And  be  it  enacted.  That  this  act  shall 
take  effect  from  the  date  of  its  passage. 

(Approved  April  7,  1892.) 

See  G.  L.,  art.  XXIII,  §  276. 


INDEX  TO  MARYLAITD. 


ACKNOWLEDGMENT:  Page, 

of  deeds  by  corporation 8 

ACTIONS: 

foreign  corporations  when  not  to  maintain 23 

designation  of  person  for  service  of  process 23 

for  forfeiture  of  charter  or  franchise  24,  25 

not  abated  by  dissolution  27 

service  of  process  upon  corporations 30 

against  guaranty  and  trust  companies 30,  31 

foreign   corporations    31 

judgment  by  default   31 

returned  nulla  bona    31 

against  stockholders  and  directors 31 

ADMINISTRATOR: 

liability  of,  as  stockholder 19 

AMENDMENT: 

of  certificate  of  incorporation   14 

ATTACHMENT: 

corporation  when  made  defendant  7 

stock  subject  to    7,  28 

BANKING  PRIVILEGES: 

corporations  not  to  exercise 9 

BANKS: 

charters  not  to  be  granted  except  on  certain  conditions   5 

directors'  oath  of  ownership  of  stock 10 

taxation  of    33 

BOOKS: 

containing  names  of  stockholders,  etc 20 

to  be  open  to  inspection 20 

BY-LAWS: 

when  used  in  evidence   ^ 

to  provide   what    ^" 

number  of  directors   1" 

manner  of  election  of  directors   !• 

CANAL: 

county  not  to  aid  in  building " 

CAPITAL  STOCK: 

fully  paid,  of  corporations  consolidating 1" 

amount  of,  certificate  to  state 13 

subscriptions  to,  paid  in  property ^ ' 

books  to  show  property   -" 

payments,  how  made   

directors  to  demand  payment J^ 

liability  of  stockholders  until  paid 1^ 

certificate  of  full  payment ^^ 

increase  or  decrease  of  

meetings    

certificate  to  be  recorded ^1 

by  manufacturing  corporation   ^ 

45 


48  INDEX  TO  MARYLAND. 

CAPITAL  STOCK  — (Continned):  Page. 

boons  on,  to  be  paid  to  state 35,  36 

franchise  void  until  paid  35,  36 

penalty  for  failnre  to  pay 35,  36 

CERTIFICATE  OF  INCORPORATION: 

contentji  and  acknowledgment 13 

approval  of  judges    13 

certificate  to  be  indorsed  13 

to  be  recorded    13 

copy  of,  as  evidence 14 

alteration  or  amendment  14 

fees  for  recording   14 

of  old  corporation,  re-incorporated  22 

foreign  corporation  to  file 23,  44 

CHARTERS: 

subject  to  repeal  or  amendment 6 

of  foreign  corporations,  to  be  filed 23 

forfeiture,  proceedings  for   24,  25 

for  failure  to  pay  taxes 36 

CHILDREN: 

hours  of  employment 32 

penalty  for  unlawful  employment  32 

CONSOLIDATION: 

of  corporations 12 

capital  stock  must  be  fully  paid 12 

agreement  to  be  executed  12 

certificate  to  be  recorded  12 

liabilities  and  assets  devolve   12 

CORPORATIONS: 

to  be  organized  under  general  laws 5 

who  may  form   10 

purposes  for  which  formed    11-12 

powers     1 4-16 

incorporation  of  existing    22 

COUNTY: 

credit  of,  not  to  be  loaned 6 

CREDIT: 

of  state  not  to  be  loaned  5 

of  county  not  to  be  loaned 6 

DEBTS,  CORPORATE: 

liability  of  stockholders  for   18 

of  executors,  administrators,  etc 19 

of  pledgor   19 

DEEDS: 

acknowledgment  of,  by  corporation    8 

DIRECTORS: 

quorum  of   9 

accounts  of  transactions    9 

open  to  inspection   9 

statement  of  affairs    9 

general  meetings,  call  of  9 

removal   9 

of  banks,  oath  of  ownership  of  stock 10 

number  of,  certificate  to  state 13 

by-laws  may  prescribe  16 

citizens  of  United  States  16 

majority  citizens  of  state  16 

election  of   ^ ' 


IXDEX  TO  MARYLA^^D.  49 

DIRECTORS  —  (Continaed):  p 

election  of,  notice  of,  publication -.^ 

to  be  by  ballot "      -  ^ 

failure  to  hold   ^  _ 

vacancies,  how  filled  ^  - 

certificate  of  payment  of  capital  stock 29 

dividends,  liability  for  unlawful -.q 

certificate  of  objection  ,g 

loans  to  stockholders,  liability  for -.g 

subscriptions,  demand  payment   jo 

voluntary  dissolution  2R 

when  trustees  for  creditors  and  stockholders 27 

DISSOLUTION: 

of  insolvent  corporation,  bill  filed 25 

property  to  be  distributed  1 1  ^ 26 

receiver,  powers  of  26 

voluntary,  stockholders  may  vote ; 26 

bill  to  be  filed   26 


contents  of  bill 

order  to  show  cause 


26 
26 


answer  of  stockholders  or  creditors 26 

decree;  appointment  of  receivers 27 

receivers  trustees  for  creditors  and  stockholders 27 

stockholders  not  relieved  from  liability 27 

directors,  when  trustees  on 27 

suits  not  to  abate  27 

decree,  taxes  to  be  paid 45 

DIVIDENDS: 

unlawful,   when    J9 

liability  of  directors   19 

certificate  of  objection  J9 

on   preferred   stock,   guaranty    30 

ELECTION: 

of  officers,  etc.,  canvass  of  votes,  notice 9,  10 

oath  of  stockholders  10 

vote  on  stock  owned  by  corporation 10 

proxies,  oath  to  be  taken 10 

pledgor,  right  to  vote 10 

of  directors   IC,  17 

notice  to  be  published  17 

failure  to  hold  17 

to  be  by  ballot 17 

number  of  votes 17 

ELECTRIC  C031PANIES: 

taxation  of  gross  receipts   41 

EMPLOYES: 

hours  of  employment  of  children 32 

in  factories   46 

EVIDENCE: 

copies  of  by-laws  9 

of  certificate  of  incorporation   14 

charter  and  statement  of  foreign  corporation 23 

records  or  register  of  foreign  corporation 33 

EXECUTION: 

interest  in  capital  stock  subject  to 28 

not  to  afifect  interest  of  pledgee 28 


50  INDEX  TO  MARYLAND. 

EXECUTION— ^Continued):  Page. 

notice  of  levy  on  stock 28 

stock  not  to  be  sold  after 29 

officer  of  corporation  to  furnish  statement 28 

schedule  of  stock  29 

sheriff  may  sell  shares ; 29 

transfer  upon  sale  under  29 

EXECUTOR: 

liability  of,  as  stockholder 19 

EXISTENCE,  CORPORATE: 

certificate  to  state   13 

EXPRESS  COMPANIES: 

taxation  on  gross  receipts   41 

FACTORIES: 

to  be  kept  clean 32 

penalty  for  failure  to  keep  clean  32 

hours  of  employment  in  46 

FEES: 

for  recording  articles  of  incorporation   14 

statement  of  foreign  corporation   23 

FIDELITY  COMPANIES: 

taxation  of  gross  receipts 41 

FOREIGN  CORPORATIONS: 

taxation,  laws  to  regulate  6 

defendant  in  attachment   7 

charter  to  be  filed 23 

statement  to  be  recorded 23 

fees 23 

charter  and  statement  as  evidence  23 

secretary  of  state  to  issue  certificate  to 23 

business  when  not  to  be  transacted 23 

actions  when  not  to  be  maintained 23 

may  be  brought  against   31 

service  of  process,  when  officer  or  agent  cannot  be  found 31 

records  or  register  as  evidence 33 

stock  and  bonds,  taxation   40 

certain,  charter,  etc.,  to  be  recorded  4S 

certificate  issued  to 43 

gross  receipts,  taxation 43,  44 

FORFEITURE: 

of  franchise  or  charter,  petition  for 24 

petition,  where  filed   25 

answer  by  corporation   24 

proceedings  on  trial   24 

decree  24 

appeals 24 

for  failure  to  pay  taxes 36 

FRANCHISE: 

forfeiture,  petition  for   24 

petition,  where  filed   25 

answer  of  corporation   24 

proceedings  on  trial       24 

decree 24 

appeal   25 

for  failure  to  pay  taxes 36 

injunction  to  restrain  unlawful  use 25 


INDEX  TO  MARYLAND.  51 

GOVERNOR:  P„ge 

direct  proceedings  to  restrain  unlawful  exercise  of  corporate  powers  ,  .  25 

GUARDIAN: 

liability  of.  as  stockholder j^g 

INCORPORATION: 

of  existing  corporation,  meetings  for 22 

notice    22 

certificate  required,   contents   22 

liabilities  and  assets  devolve   22 

INJUNCTION: 

to  restrain  unlawful  exercise  of  franchise,  etc 25 

governor  to  direct  proceedings 25 

INSOLVENT   CORPORATION: 

dissolution   of    25 

payments,  conveyances,  etc.,  void   26 

receivers,  powers  of   26 

JUDGMENT    (See  Execution;  Actions): 

against  corporations,  by  default 31 

returned  nulla  bona,  actions  against  stockholders,  etc 31,  82 

LABORERS.    (See   Employes.) 
LAWS: 

general,  for  creation  of  corporations 5 

LOANS: 

to  stockholders,  liability  for   19 

MANAGERS.     (See  Directors.) 

MANUFACTURING  CORPORATIONS: 

extension   of   business   by    23 

increase  or  decrease  of  capital  stock   23 

MEETINGS: 

general,  upon  call  of  stockholders  9 

notice  to  be  published   9 

removal  of  directors  or  president 9 

for  election  of  officers,  canvass  of  votes  9,  10 

oath  of  stockholders  .  . .  .* 10 

pledgor  of  stock,  right  to  vote 10 

of  directors,  by-laws  to  regulate  16 

adoption   of   by-laws    J 6 

decrease  or  increase  of  capital  stock 21 

to  establish  value  of  stock 21 

reincorporation  under  general  law   22 

voluntary    dissolution    26 

MONOPOLIES: 

not  permitted    "^ 

MORTGAGE: 


corporation    may 


15 


NAME  OF  CORPORATION: 

certificate   to   state    ^^ 

reincorporated,  certificate  to  state    22 

OFFICERS: 

election,  canvass  of  votes,  notice ^'    1^ 

oath  of  stockholders  

vote  on  stock  owned  by  corporation 1^ 

proxies,  oath  to  be  taken 

pledgor,  right  to  vote   


52  INDEX  TO  MARYLAND. 

OFFICERS  —  (Continued) :                                                                                                           Page- 
corporation  may  appoint   16 

compensation  16 

decisions   respecting    16 

loans  to  stockholders,  liability  for 19 

OIL  OR  PIPE  LINE  COMPANIES: 

taxation  of  gross  receipts 41 

of  foreign  corporations    43 

PARLOR  CAR  COMPANIES: 

taxation  on  gross  receipts  41 

of  foreign  corporations   43 

PERSON: 

word  includes  corporation   ^ 

PERSONAL  PROPERTY: 

corporation  may  hold  or  convey 15 

stock   deemed    17 

PLACE  OF  BUSINESS: 

certificate  to  state 13 

statement  of  foreign  corporation  to  state 23 

PLEADINGS: 

alleging  incorporation   33 

PLEDGE: 

of  stock,  right  of  pledgor  to  vote 10 

liability  for  corporate  debts   19 

POLICEMEN: 

appointment  of,  for  protection  of  corporate  property  29 

POWERS: 

of  corporation 14-16 

express  and  implied    16 

misuse  or  non-use,  remedies  24 

PREFERRED  STOCK: 

corporation  may  issue 30 

dividends   guaranteed    30 

rights  of  holders    30 

PRESIDENT    (See  Officers): 

call  of  general  meetings 9 

removal 9 

corporation  may  appoint  16 

PROCESS: 

service  of,  upon  corporations 30 

on  guaranty  and  trust  companies 30,  31 

on  foreign  corporations,  when  officer  or  agent  cannot  be  found 31 

failure  of  corporation  to  appear 31 

PROPERTY: 

when  not  to  be  taken  5 

corporation  may  hold  and  convey   15 

by-laws  to  regulate  management  of 16 

PURPOSES: 

for  which  corporation  may  be  formed 11,  12 

certificate  to  state 33 

PROXY: 

oath  of  ownership  required  10 

QUORUM: 

of  board  of  directors 9 

RAILROAD: 

county  not  to  aid  in  building 6 

taxation  on  gross  receipts  41 


INDEX  TO  MARYLAND.  53 

REAL  PROPERTY:  Page. 

corporation  may  hold  or  convey 15 

RECEIVERS: 

of  insolvent  corporations,  powers 26 

corporations   voluntarily   dissolved    27,  28 

SAFE  DEPOSIT  COMPANIES: 

taxation  of  gross  receipts 41 

SEAL,   COMMON: 

corporation  may  have 14 

SERVICE: 

of  process,  person  designated  by  foreign  corporation 23 

upon  corporations   30 

upon  foreign  corporation  when  officer  or  agent  cannot  be  found 31 

SLEEPING  CAR  COMPANIES: 

taxation  of  gross  receipts 41 

STATE: 

credit  of,  not  to  be  loaned 5 

STATEMENT: 

of  condition  of  corporation,  treasurer  to  make 20 

to  be  exhibited 20 

refusal  to  make,  penalty  20 

of  assets  and  liabilities,  semi-annual   ' 21 

of  foreign  corporation,  to  be  recorded 23 

STOCK: 

subject  to  attachment 7 

oath  of  ownership  required,  on  election  10 

when  taken  by  officer  of  corporation 10 

pledged,   pledgor  owner    10 

certificate  required  to  vote 10 

by-laws  to  regulate  transfer  of 16 

forfeiture  16 

share  entitled  to  vote   17 

installments  must  be  paid   17 

deemed  personal  property    17 

not  transferable  until  installments  are  paid  17 

pledgor  liable  for  debts   19 

forfeiture  for  non-payment  of  subscriptions 19 

books  to  be  kept   20 

open  to  inspection  20 

value  of,  established   21 

cancellation    21 

shares  of,  subject  to  execution 28 

notice  of  levy  upon  28 

statement  to  be  furnished 28 

sheriff   to   schedule    28 


sale  of,  under  execution 


29 


9Q 

transfer  upon   sale    ~ 

30 

" '. '  ■ 30 

[[,,,..[ 30 

owned  bv  non-residents,  where  taxed  


Of) 

preferred,  issue  of  

agreement  guaranteeing  dividends  ^^ 

rights  of  holders   

QQ 

shares  subject  to  taxation    "" 

38 

situation  of,  for  taxation  ^ 

deduction  of  valuation  of  real  property ^° 

valuation  bv  tax  commissioner '" 

capital,  fully  paid,  of  corporations  consolidating  ^^ 

amount  of.  certificate  to  state  

17 
subscriptions  to,  paid  in  property   


54  INDEX  TO  MARYLAND. 

STOCK  —  (Continued):  Page. 

capital,  subscriptions  to,  books  to  show  property 17 

directors  to  demand  payment   19 

liability  of  stockholders,  until  paid  18 

payments,  how  made  18 

certificate  of  full  payment J9 

increase  or  decrease  of  21 

decrease,  debts  to  be  paid   21 

increase  or  decrease,  meetings,  how  called  21 

conduct  of  meetings  21 

certificate  to  be  recorded   21 

by  manufacturing  corporation   23 

bonus  on,  to  be  paid  to  state 35,  36 

franchise  void  until  paid   35,  36 

penalty  for  failure  to  pay   35,  36 

STOCKHOLDERS: 

liability  of,  of  banks 5 

call  of  general  meetings 9 

removal  of  directors  and  president  9 

canvass  of  votes,  notice  of 9,  10 

oath  of,  to  entitle  to  vote 10 

when  a  corporation 10 

election  of  directors    17 

notice  of,  to  be  published 17 

number  of  votes   17 

liability  of,  for  corporate  debts 18 

of  executors,   administrators,   etc 19 

of  pledgors   19 

loans  to,  liability  for 19 

statement  of  condition   20 

penalty  for  failure  to  present 20 

books  containing  names,  etc 20 

open  to  inspection   20 

increase  or  decrease  of  capital  stock 21 

incorporation  of  existing  corporation 22 

voluntary   dissolution    26 

preferred  stock,  rights  of 30 

SUBSCRIPTIONS: 

to  stock,  payable  in  property 17 

books  to  show  property  17 

liability  of  stockholders   18 

payment,  how  enforced IS,  19 

certificate  of  payment   19 

directors  to  demand  payment 19 

forfeiture  for  non-payment   19 

SUCCESSION: 

corporation  to  have  right  of 14 

SUE  AND  BE  SUED: 

corporation    may    14 

TAXATION: 

of  foreign  corporation,  laws  to  regulate 6 

real  property  of  corporation   33 

money  proceeds  of  sale  of  stock 33 

shares  of  stock 33 

bonds  of  corporation   33 

personal  property  of  corporation,  when  exempt  34 

property  sold  subject  to 34 

payment  by  corporation,  how  made 34 


INDEX  TO  MARYLAl^D.  55 

TAXATION  -  (Continued) :  p^^^ 

property  of  corporation  having  no  capital  stock 34 

bonda  of  corporation,  how  assessed 34 

return  of,  to  be  made  to  comptroller 34  35 

secured  by  mortgage  on  property  in  state 35 

bonus  on  capital  stock    35  35 

franchise  void  until  paid   35  35 

state,  proceedings  against  corporations  for  failure  to  pay 35,  36 

certificate  of  comptroller,  evidence  36 

proceedings,  how  conducted   36 

forfeiture  of  charter,  for  failure  to  pay 36 

stock,  where  situated  for   37 

real  property,  how  assessed   37 

valuation   statement    37 

duplicate  certificates  of  valuation , 37 

deduction  of  valuation  of 38 

shares  owned  by  non-residents  38 

credit  on  account  of  stock,  debt  of  state 38 

manufacturing  plants  in  Baltimore  39 

valuation  of  shares  by  tax  commissioner 39 

shares  valued  and  assessed  to  non-resident  owners 39 

bonds  of  corporations,  where  assessed  39,  40 

shares  owned  by  nonresidents   38 

bonds  of  foreign  corporations 40 

on  gross  receipts  of  certain  corporations  41 

statements  to  be  returned  41 

duties  of  ofiicers   '. 41 

assessment,  how  made 42 

tax  commissioner  may  examine  officers 42 

neglect  to  pay 42 

enforcement 4- 

of  foreign  corporations 43 

TELEGRAPH  AND  TELEPHONE  CORPORATIONS: 

taxation  on  gross  receipts  41 

of  foreign  corporations 43 

TITLE  INSURANCE  COMPANIES: 

taxation  of  gross  receipts 41 

TRANSFER: 

of  stock,  installments  must  be  paid ^ ' 

not  affected  by  execution   -° 

oq 
on  sale  under  execution 

TRUST  AND  GUARANTY  COMPANIES: 

41 
taxation  of  gross  receipts   

TRUSTEES    (See  Directors): 

19 
liability  of,  as  stockholders   

VACANCY: 

17 
in  office  of  director  

VOTES    (See  Elections): 

9  10 

canvass  of,  notice  to  be  given   ' 

oath  of  right  to  cast 

when  stock  owned  by  corporation 

proxies,  oath  to  be  taken 

pledgor,  right  to  cast   

to  be  by  ballot  _ 

shares  entitled  to 


•^ 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 

Los  Angeles 

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